Moody's revises HSBC ratings.MANAMA: Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. yesterday 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+. It also reviewed its long-term local currency debt rating and foreign currency deposit and debt ratings to Aa3 from Aa2. The rating outlook is now stable. Yesterday's rating action concludes the rating review initiated on March 17. HBME is a wholly-owned subsidiary 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. The 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," said Moody's Middle East lead analyst for HBME John Tofarides. "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." Copyright 2009 Gulf Daily News Provided by Syndigate.info an Albawaba.com company |
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