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Moody's lowers outlook on HSBC, Hang Seng Bank

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Moody's lowers outlook on HSBC, Hang Seng Bank

Moody's lowered the outlook on Hongkong & Shanghai Banking Corp. Ltd. and Hang Seng Bank Ltd.'s long-term foreign currency deposit ratings to negative from stable following a similar action on the Hong Kong government.

The credit rating agency said in a Sept. 17 report that it also affirmed the lenders' long-term local and foreign currency deposit ratings at Aa2, the same level as the Hong Kong government's rating. The outlook on the banks' long-term local currency deposit ratings remains stable.

Moody's notes the negative outlook on HSBC and Hang Seng Bank's foreign currency deposit ratings is the result of the likely lowering of Hong Kong's foreign currency deposit ceiling, if the city's government's rating is downgraded to Aa3 from Aa2.

Further, the agency said, the banks' foreign currency deposit ratings could be downgraded if the Hong Kong government's rating is similarly lowered.