Moody's on April 4 placed Türkiye Halk Bankasi AS's Ba1 long-term foreign-currency senior unsecured debt and long-term local-currency deposit ratings, along with its Ba2 long-term foreign-currency deposit rating, under review for downgrade. The previous outlook on the ratings was negative.
The rating agency also placed the Turkish lender's baseline credit assessment and adjusted baseline credit assessment of "ba2" and its long-term counterparty risk assessment of Ba1(cr) under review for downgrade.
At the same time, Moody's affirmed the bank's short-term local- and foreign-currency bank deposit ratings at Not-Prime, and its short-term counterparty risk assessment at Not-Prime(cr).
The agency's review will focus on the potential effect on Halkbank's financial fundamentals of the U.S. authorities' investigation regarding the bank's operations, which led to the arrest of Deputy General Manager Mehmet Hakan Atilla.
Moody's believes the legal risk from the investigation may add pressure to the bank's financial fundamentals, owing to the challenging operating environment in Turkey.