Moody’s downgrades HSBC Turkey

Moody's Investors Service said it downgraded the long-term local and foreign currency deposit ratings of HSBC Bank AS (Turkey) to Ba2 from Ba1 with a negative outlook.

The short-term local and foreign currency deposit ratings at Not-Prime were affirmed. The NSR deposit rating was downgraded to A3.tr from A2.tr with a negative outlook and the short-term deposit rating of TR-2 was affirmed.

The standalone baseline credit assessment (BCA) was downgraded to b1 from ba3, the adjusted BCA was downgraded to ba2 from ba1 and the counterparty risk assessment was cut to Ba1(cr)/Not-Prime(cr) from Baa3(cr)/Prime-3(cr).

Moody’s said the action on HSBC Turkey primarily reflects profitability pressures, high asset risk and reduced Tier 1 capitalization. At the same time, these trends remain partially counterbalanced by the bank's resilient funding profile supported by the parent group, strong liquidity and our expectation of a high probability of affiliate support in case of need.

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