Moody's on June 7 downgraded and placed on review for further downgrade the ratings of 17 Turkish banks and placed on review for downgrade the ratings of two finance firms, citing a deteriorating operating environment in Turkey.
The reviews by Moody's will factor in potential further deterioration of the operating environment and its impact on the banks' stand-alone credit strength, support from the parent companies and weakening capacity of the government to provide support. It came after the agency placed Turkey's sovereign bond ratings under review for downgrade.
Moody's placed on review for downgrade Ekspo Faktoring AS's B2 long-term corporate family and issuer ratings and its Ba1.tr national scale long-term issuer rating. Also placed on review for downgrade were Optima Faktoring AS's B3 long-term corporate family and issuer ratings and B3.tr national scale long-term issuer rating. The B2 and B3 ratings previously carried a stable outlook.
Meanwhile, the agency also downgraded the baseline credit assessments of ING Bank AS, Alternatifbank AS, Türkiye Vakiflar Bankasi TAO to "b2" from "b1" and the adjusted baseline credit assessments of ING Bank, QNB Finansbank AS, Alternatifbank and Türk Ekonomi Bankasi AS to "ba2" from "ba1."
ING Bank's, QNB Finansbank's, Alternatifbank's and Turk Ekonomi Bankasi's Ba3/Ba2 long-term foreign- and local-currency bank deposits, which previously carried a stable outlook, were placed on review for downgrade. A similar action was taken on the Ba3 long-term foreign-currency bank deposits of T.C. Ziraat Bankasi AS, Türkiye Garanti Bankasi AS, Türkiye Is Bankasi AS, Akbank TAS, DenizBank AS and Yapi ve Kredi Bankasi AS. The Aa1.tr/TR-1 long- and short-term bank deposits of ING Bank and Alternatifbank were also placed under review for downgrade.
The Ba1(cr) long-term counterparty risk assessments of ING Bank, QNB Finansbank, Alternatifbank and Turk Ekonomi Bankas were placed on review for downgrade. The NP short-term bank deposits and the NP(cr) short-term counterparty risk assessments of ING Bank, Denizbank, HSBC Bank AS, Odea Bank AS, Sekerbank TAS, Turk Ekonomi Bankasi, Turkiye Vakiflar Bankasi and Yapi ve Kredi Bankasi were affirmed.
Additionally, the baseline credit assessments of Ziraat Bankasi, QNB Finansbank, Turkiye Garanti Bankasi, Turkiye Is Bankasi, Akbank, Denizbank, Türk Eximbank, Odea Bank, Turk Ekonomi Bankasi, Türkiye Sinai Kalkinma Bankasi AS and Yapi ve Kredi Bankasi were downgraded to "b1" from "ba3." The adjusted baseline credit assessments were downgraded to "ba2" from "ba1" for QNB Finansbank, ING Bank, Alternatifbank and Turk Ekonomi Bankasi and to "b1" from "ba3" for Ziraat Bankasi, Turkiye Is Bankasi, Akbank, Türk Eximbank, HSBC Bank, Odea Bank and Turkiye Sinai Kalkinma Bankasi.
Also on review for downgrade are the Ba1(cr) long-term counterparty risk assessments of Alternatifbank, QNB Finansbank and Turk Ekonomi Bankasi. The Ba2 senior unsecured regular debt, previously carrying a stable outlook, was also placed on review for downgrade.
The senior unsecured debt was downgraded to Ba3 from Ba2 and placed on Rating under Review from a previously stable outlook for Ziraat Bankasi, Turkiye Garanti Bankasi, Turkiye Is Bankasi, Akbank, Türk Eximbank, Turkiye Sinai Kalkinma Bankasi, Turkiye Vakiflar Bankasi and Yapi ve Kredi Bankasi. The Ba2(cr) long-term counterparty risk assessments of Ziraat Bankasi, Turkiye Is Bankasi, Akbank, Türk Eximbank and Turkiye Sinai Kalkinma Bankasi are also on a similar review.
Türkiye Halk Bankasi AS's long-term local- and foreign-currency bank deposits were downgraded to B1 from Ba2 with a stable outlook and were placed on review for further downgrade. The bank's long-term counterparty risk assessment was downgraded to Ba3(cr) from Ba2(cr), while the baseline and adjusted baseline credit assessments were downgraded to "b3" from "b2." The senior unsecured debt was also downgraded to B1 from Ba3 and placed on review for further downgrade. Meanwhile, the bank's short-term bank deposits of Not-Prime and the short-term counterparty risk assessments of NP(cr) were affirmed.
