LowIV Macro Policy & Sovereign Debt19 October 2026, Monday · 10:52 TRT (UTC+3)
Fitch expects asset quality to deteriorate in leasing and factoring
Fitch said on 19 October that asset quality risk at Turkish leasing and factoring companies would rise through 2026 and 2027. Leasing leverage climbed from 3.8 times at the end of 2025 to 4.9 times, while factoring volume grew 33% in the first half to 1.1 trillion lira.
On the report relayed by Bloomberg HT, new business volume in leasing rose 48% year on year in dollar terms in the first half of 2026. Sale-and-leaseback accounted for 38% of new transactions, a structure Fitch treats as riskier because it hangs on commercial property valuations and residual values. The non-performing loan ratio fell to 1.9%, though the agency expects it to climb again by the end of 2026 and 2027. Return on equity held around 30%.
Factoring turnover rose 33% in the first six months to 1.1 trillion lira, and Fitch forecasts 32% growth for the full year. As Karar notes, that growth tracks inflation closely, so the real increase stays limited. The non-performing loan ratio is 2.3%, return on assets slipped from 8.1% in 2025 to 6.4% and leverage rose to 4.1 times.
Fitch sees the direct effect of the recent market turmoil as limited: leasing companies hold small securities portfolios, while bank-owned factoring firms draw on shareholder support. The indirect channel is open, however. Fitch argues that rising lira rates and widening CDS spreads could lift these companies' funding costs. On 30 September the banking regulator transferred the management of two factoring companies to the deposit insurance fund over the fund investigation.
Talay assessment
Bottom line
Fitch does not see an abrupt break in non-bank finance, but it marks a period of narrowing margins and rising leverage. The indirect channel from the fund crisis is funding cost: while lira rates and CDS stay high, the leasing and factoring credit smaller firms rely on gets dearer. The most likely path is non-performing loans edging up towards 2027.
Likely effects
- SME financingNegative1–6 months
As funding costs rise, leasing and factoring companies lift their pricing, and working capital tightens for smaller firms with weak access to banks.
- Credit riskNegative6 months+
A 38% share of sale-and-leaseback ties the sector to commercial property valuations, and a price correction could accelerate non-performing loans.
- Bank balance sheetsUncertain1–6 months
Bank-owned factoring firms are shielded by shareholder support, so the risk concentrates in small players with no bank behind them.
Possibilities, ranked
- 1Slow deterioration60%
Non-performing loan ratios rise gradually into 2027 and profitability falls, without a systemic problem emerging.
Watch: Leasing and factoring non-performing loan ratios in the regulator's monthly sector data
- 2Funding squeeze25%
CDS and lira rates keep climbing and refinancing becomes harder for factoring firms without a bank parent.
Watch: Türkiye's five-year CDS staying above 250 basis points
- 3Easing brings relief15%
CBRT reductions lower funding costs and the deterioration in asset quality stays contained.
Watch: The 22 October rate decision and those that follow
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Leasing leverage▼ 4.9x
- Factoring volume (H1)▲ TL1.1trn
- Factoring return on assets▼ 6.4%