Moody's downgrades HSBC Bank Middle East.Byline: Dubai Moody's has downgraded the bank financial strength rating (BFSR BFSR Battle Field Surveillance Radar (India) ) of HSBC Bank Middle East HSBC Bank Middle East Limited is the largest and most widely represented international bank in the Middle East. HSBC was voted Best Wealth Management Initiative in the GCC for its HSBC Premier service by readers of The Banker Middle East magazine. (HBME) to C from C+ and its long-term local currency debt rating and foreign currency deposit and debt ratings to Aa3 from Aa2. The rating outlook is now stable. This rating action concludes the rating review initiated on March 17. HBME is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) Holdings, registered in the Channel Islands, with operations in the Middle East. The new BFSR of C maps to a Baseline Credit Assessment of A3. The three-notch uplift from this Baseline Credit Assessment to the Aa3 long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and deposit ratings reflects Moody's continued assessment of a very high probability of support for HMBE from its parent in case of need. Today's downgrade reflects Moody's expectation that HBME will encounter pressure on its asset quality and profitability in the countries in which it operates and especially in the UAE (Uninterruptible Application Error) The name given to a crash in Windows 3.0. In subsequent versions of Windows, a crash was called a "General Protection Fault," "Application Error" or "Illegal Operation." See crash in Windows and abend. , which accounts for the majority (around 70 per cent) of the bank's operations. They also take into consideration the recent deterioration in HBME's loan book, both in its corporate loans and in its weakening retail banking exposures. Moody's has also stress-tested the loan book for further delinquencies over the next 12-18 months. 'Our stress tests show that HBME's BFSR of C should be able to withstand the deteriorating credit cycle. No further downgrades of this rating from the C level are therefore expected over the next 12-18 months except in the event of continued large corporate defaults that could cause higher-than-anticipated rises in the bank's non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. and loan loss provision expenses,' stated John Tofarides, analyst at Moody's Middle East and lead analyst for HBME. The ratings of HSBC Bank Middle East Limited (UAE Branch) were also downgraded to the following: - Global local currency deposit ratings: Aa3 - Foreign currency deposit ratings: Aa3 The bank's short-term local currency and foreign currency deposit ratings remain unchanged at Prime-1.- TradeArabia News Service Copyright 2008 www.tradearabia.com Copyright 2009 Al Hilal Publishing & Marketing Group Provided by Syndigate.info an Albawaba.com company |
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