The change in HBAU's ratings outlook to negative from stable follows a similar change in the ratings outlook to negative for the bank's parent, HBAP.
Moody's incorporates three notches of affiliate support uplift into the A1 long-term ratings of HBAU, given Moody's assessment of a very high likelihood of support from HBAP.
Moody's currently measures HSBC Holdings' a1 intrinsic financial strength using the weighted-average of the baseline credit assessments (BCAs) of its two main operating entities, HSBC Bank and HBAP
. This approach is consistent with the way capital is managed across the HSBC group, whereby subsidiaries normally pay surplus capital to the holding company in the form of a dividend, which is subsequently down-streamed to those entities requiring additional capital.
HSBC Life (International) is a fully-owned unit of HBAP
.Country: TaiwanSector: InsuranceTarget: HSBC Life (International) Limited's unit in TaiwanBuyer: Allianz SE , Allianz Taiwan Life Insurance Co LtdVendor: HSBC Holdings plc , HSBC Life (International) LimitedDeal size in USD: 18mType: DivestmentStatus: Agreed
The deposit ratings of HSBCM were affirmed because of the respective affirmation of HBAP's aa3 adjusted Baseline Credit Assessment, which Moody's uses as an anchor to derive parental support for its Malaysian subsidiary.
Moody's incorporates three notches of affiliate support uplift into the A1 local currency deposit rating of HSBCM, given Moody's assessment of a very high likelihood of support from HBAP.
In a separate rating action, Moody's has today changed the outlook to negative from stable on the ratings for HBAP, which is the group's main operating entity in the Asia-Pacific region.
A strengthening of HSBC Holdings' intrinsic financial strength is unlikely over the next 12-18 months, as evidenced by the negative ratings outlook for HBAP, one of its key components.