Moody's affirmed HSBC Bank Malaysia Bhd.'s A1 long-term local-currency deposit rating and revised the outlook on the rating to negative from stable.
The rating agency affirmed the bank's A3 long-term foreign-currency deposit rating and maintained the outlook on the rating at stable. It also affirmed the bank's "baa1" baseline credit assessment and "a1" adjusted baseline credit assessment. The bank's short-term local- and foreign-currency deposit ratings were affirmed at P-1 and P-2, respectively.
The outlook revision follows Moody's similar action on the lender's parent, Hongkong & Shanghai Banking Corp. Ltd., which reflects the negative impacts of the social unrest in Hong Kong and trade tensions between the U.S. and China on the bank's operating environment.
Moody's expects the Malaysian bank's capitalization to remain stable over the next 12 to 18 months, as loan growth will likely be subdued amid slowing domestic economic activity.