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Moody's downgrades Netherlands-based GarantiBank International

Moody's on May 14 downgraded Netherlands-based GarantiBank International NV's long-term bank deposit rating to Baa1 from A3 and revised the outlook on the rating to stable from rating under review.

Moody's also downgraded the Türkiye Garanti Bankasi AS unit's baseline credit assessment to "baa3" from "baa2."

The Dutch bank's Prime-2 short-term bank deposit rating, "baa2" adjusted baseline credit assessment and A2(cr)/Prime-1(cr) long- and short-term counterparty risk assessments were affirmed.

Moody's ratings actions conclude its review for downgrade on GarantiBank International's long-term deposit rating and baseline credit assessment that was initiated March 19.

The downgrade of the lender's baseline credit assessment is based on its exposure to the weakened operating environment in Turkey and the contagion risk between the bank and its immediate parent Türkiye Garanti Bankasi. However, the rating agency expects a moderate probability of support for GarantiBank International from its ultimate parent company Banco Bilbao Vizcaya Argentaria SA.

The stable outlook on GarantiBank International reflects Moody's expectation that the bank's risk profile will continue to benefit from greater risk aversion under the constraints of Spain-based BBVA.