Moody’s continues to review for downgrade ratings of Standard Chartered Bank Korea
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Moody’s expects to conclude the review in March 2016, after incorporating SCB’s efforts to turn around SCBK’s performance, as well as the detailed results of SCBK’s parent, Standard Chartered Bank’s (SCB, FC deposits Aa2 rating under review for downgrade, BCA a2 rating under review for downgrade) performance for 2015.
These results will be available in late February.
Moody’s had originally placed the long-term ratings of SCBK on review on 9 November 2015. Please refer to “Moody’s reviews for downgrade Standard Chartered Bank Korea’s ratings” published on 9 November 2015.
Moody’s notes that SCB is restructuring its poorly performing Korean retail and commercial banking businesses, introducing some uncertainty as to the future of SCBK’s operations.
The ratings review of SCBK will consider whether: (1) these initiatives have the potential to change SCBK’s stand-alone credit profile, as expressed by its BCA; and/or (2) to change the strategic importance of SCBK to SCB and therefore potentially to affect the strength of support from SCB.
The following ratings are on review for downgrade:
– Local- and foreign-currency long-term deposit ratings of A1
– Foreign currency senior unsecured MTN rating of (P)A1
– Local- and foreign-currency short-term deposit ratings of P-1
– Foreign currency commercial paper and other short-term ratings of P-1/(P)P-1
– Long-term and short-term counterparty risk assessment of A1(cr) and P-1(cr)
– BCA of baa2, and adjusted BCA of a3
The principal methodology used in these ratings/analysis was Banks published in January 2016. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology.
SCBK is headquartered in Seoul, with total assets of KRW61.7 trillion or USD54 billion as of June 2015.
Questions & Answers
Q.When does Moody's expect to conclude its review of Standard Chartered Bank Korea's ratings?
When does Moody's expect to conclude its review of Standard Chartered Bank Korea's ratings?
Moody's anticipates finalising the review in March 2016. This timing is dependent on assessing SCBK's performance improvement efforts and the 2015 results of its parent, Standard Chartered Bank, which will be available in late February.
Q.What are the main factors Moody's is considering in its review of SCBK's ratings?
What are the main factors Moody's is considering in its review of SCBK's ratings?
Moody's is evaluating whether SCB's restructuring initiatives could alter SCBK's stand-alone credit profile or change its strategic importance to SCB. The potential impact on support from the parent bank is also a key consideration.
Q.Which specific ratings for Standard Chartered Bank Korea are currently under review for a downgrade?
Which specific ratings for Standard Chartered Bank Korea are currently under review for a downgrade?
The ratings under review include A1 local and foreign-currency long-term deposit ratings, (P)A1 foreign currency senior unsecured MTN ratings, and P-1 local and foreign-currency short-term deposit ratings. Its BCA of baa2 and adjusted BCA of a3 are also under review.