[ET Net News Agency, 19 May 2020] -S&P Global Ratings today affirmed its 'AA-'
long-term and 'A-1+' short-term issuer credit ratings on the Hongkong and Shanghai Banking
Corp. Ltd. (HBAP). The outlook is stable.
The credit rating agency also affirmed its issue ratings on its senior unsecured debts
at 'AA-'. At the same time, S&P affirmed its 'A+' long-term and 'A-1' short-term issuer
credit ratings on HSBC Bank (China) Co. Ltd. The outlook is stable.
It said HBAP is likely to manage its asset quality and credit costs reasonably well,
backed by its tightened underwriting and risk management amid the challenging operating
environment under COVID 19.
Weaker earnings that will arise from higher credit charges will be exacerbated by the
lower-than-anticipated interest rate environment. That said, S&P expects HBAP's dominant
market position in Hong Kong, solid capitalization, and robust funding and liquidity
profiles to underpin its stand-alone credit profile (SACP).
S&P has recently lowered the issuer credit ratings on HBAP's London-based parent, HSBC
Holdings PLC (00005), but the potential for extraordinary support from the Hong Kong
government and HBAP's higher SACP than its parent, results in a higher rating for HBAP
than core subsidiaries of the HSBC group outside Asia-Pacific. (KL)