Bank of America Corp.’s Merrill Lynch is reviewing its buy recommendation on Turkiye Halk Bankasi AS after chief executive officer Suleyman Aslan was taken into custody as part of a corruption probe two days ago.
“We intend to re-assess our view on the stock once we obtain enough certainty on the current investigation by the eligible authorities,” according to an e-mailed statement from Merrill Lynch today. “We are no longer in a position to form a recommendation on the shares of the bank.”
Halkbank, as the company is known, has slumped 18 percent since Turkish media reported the arrests, the biggest loss in more than two years. Aslan was detained along with dozens more in a probe into gold smuggling, money laundering and bribery in government tenders, according to the state-run Anatolia news agency. Aslan is among 51 people still being detained, Deputy Prime Minister Bulent Arinc said at a news conference yesterday.
Halkbank has not made a formal statement to investors since confirming to the Istanbul bourse on Dec. 17 that documents and information had been requested in relation to the probe.
The stock fell 6.2 percent to 12.9 liras at 3:22 p.m. in Istanbul, heading for the lowest level in more than three months.
Twenty-eight of 31 analysts recommend buying Halkbank’s shares and none say sell, according to data compiled by Bloomberg. The average 12-month price estimate is 19.28 liras.