China units of Hang Seng Bank and HSBC downgraded
Finance | 21 Sep 2017 5:43 pm
Ratings agency Standard & Poors has lowered the long-term credit rating of Hang Seng Bank (China) and HSBC Bank (China) Co, with a stable outlook.
S&P said today it lowered the long-term credit of Hang Seng Ban (China) to 'A+' from 'AA-' and short-term rating to 'A-1' from 'A-1+. The long-term credit rating of HSBC Bank (China) Co was lowered to 'A+' from 'AA-', while the our short-term rating was lowere to 'A-1' from 'A-1+
S&P also lowered the long-term credit rating of DBS Bank (China) to 'A+' from 'AA-' and the short-term rating to 'A-1' from 'A-1+'.
These banks, which primarily operate in China, are unlikely to avoid default if China were to default on its sovereign debt, S&P said. "Our ratings on these banks are capped by our sovereign credit ratings on China. Our stable outlook on the three rated foreign banks in China reflects our stable outlook on the sovereign credit rating on China. Given that the banks primarily operate in China, we consider they are unlikely to withstand a stressed scenario if China's sovereign were to default. We do not expect the banks to be rated above the sovereign. Nevertheless, we expect the banks to remain a core subsidiary of their respective parent groups at least over the coming few years.''
