Moody's on March 19 placed the A3 long-term deposit rating, "baa2" baseline and adjusted baseline credit assessments and A2(cr)/Prime-1(cr) long- and short-term counterparty risk assessments of Netherlands-based GarantiBank International NV on review for downgrade.
At the same time, Moody's affirmed the lender's Prime-2 short-term deposit rating.
The action follows the downgrade on Turkey's government bond rating to Ba2 from Ba1, with stable outlook, prompted by the continuing decline of institutional strength and increased risk of external shock due to high external debt and political risk, the rating agency said.
The agency noted that the review on the bank's baseline and adjusted baseline credit assessments stem from increases asset risk from Turkey's weakened economy and the "contagion risk" between the bank and its immediate parent, Turkey-based Türkiye Garanti Bankasi AS.
Spain-based Banco Bilbao Vizcaya Argentaria SA is the ultimate parent of GarantiBank International and Türkiye Garanti Bankasi.