Fitch downgrades Turkey's Halkbank after U.S. indictment for sanction-breaking

Ratings agency Fitch on Monday downgraded Turkey’s state-run Halkbank and applied a “rating watch negative”, Turkish business news site Patronlar Dünyası reported.

Manhattan prosecutors issued an indictment on Oct. 15 against Halkbank on charges of engaging in a multi-billion-dollar scheme to evade U.S. sanctions on Iran, fraud and money laundering.

Halkbank faces punitive measures for breaking Iran sanctions after months of pressure from Turkey and advisers to U.S. President Donald Trump to drop the charges.

The downgrade warning on the rating "reflects the uncertainty surrounding the sufficiency and timeliness of support from the Turkish authorities in case a fine or other punitive measures are imposed on Halkbank," Patronlar Dünyası quoted Fitch as saying.

Halkbank executive Mehmet Hakan Atilla, who was sentenced by a U.S. judge in May 2018 for his part in the sanctions-breaking cheme, completed his sentence in July this year and has returned to Turkey where he was appointed as the chair of the Istanbul Stock Exchange this week.