Moody's placed the long-term deposit ratings of 14 Japanese banks on review for downgrade.
The rating agency said Aug. 29 that it placed the A2 long-term deposit ratings of 77 Bank Ltd., The Daishi Bank Ltd, Gunma Bank Ltd., Hiroshima Bank Ltd., Joyo Bank Ltd., San-in Godo Bank Ltd. and Resona Holdings Inc.'s units, Resona Bank Ltd. and Saitama Resona Bank Ltd., on review for downgrade.
Among others, the A1 long-term deposit ratings of Chiba Bank Ltd., Chugoku Bank Ltd., Bank of Yokohama Ltd., and Japan Post Bank Co. Ltd., as well as the A3 long-term deposit rating of Bank of Fukuoka Ltd. and Hyakujushi Bank Ltd. were placed on review for downgrade. At the same time, the rating agency said it affirmed the long-term deposit ratings of Shizuoka Bank Ltd. and Shinhan Bank Japan at A1 and A2, respectively. Further, it placed the A2 long-term local issuer ratings of Concordia Financial Group Ltd., as well as Bank of Yokohama's A1 issuer rating, on review for downgrade.
The outlooks of Daishi Bank, Gunma Bank and Chugoku Bank are negative. The outlooks on all the remaining banks are stable.
In addition, the "baa1" baseline credit assessments and adjusted BCAs of 77 Bank, Daishi Bank, Gunma Bank, Hiroshima Bank, Joyo Bank, San-in Godo Bank, Japan Post Bank, Resona Bank and Saitama Resona Bank were placed on review for downgrade. The "a3" BCAs and adjusted BCAs of Chiba Bank, Chugoku Bank, Bank of Yokohama were placed on review for downgrade. In additon, Moody's put on review for downgrade the "baa2" BCAs and adjusted BCAs of Bank of Fukuoka and Hyakujushi Bank, and the "a2" assessments of Shizuoka Bank. Shinhan Bank Japan's BCA of "baa2" and adjusted BCA of "a3" were also placed on review for downgrade.
The rating agency said the action is driven by the inability of Japanese banks to maintain profits without taking on more risk amid a challenging operating environment in the country.
