S&P Global Ratings and Fitch Ratings assigned ratings to Standard Chartered Bank (Singapore) Ltd. following the U.K.-based parent's plan to fully consolidate its business operations in Singapore.
Standard Chartered Plc proposed transferring most of the assets and liabilities of its Singapore branch into Standard Chartered Bank (Singapore) in the next 12 to 18 months. The proposed merger is subject to regulatory approvals.
Fitch said Feb. 22 that it assigned the lender an expected viability rating of "a(EXP)" and affirmed its long- and short-term issuer default ratings at A and F1, respectively. The outlook is stable.
The bank's ratings reflect the view that there is an extremely high probability that it would remain supported by the parent.
A change in the parent's viability rating could lead to a similar action towards the Singapore lender's issuer default ratings. A material improvement in the parent's franchise could result in an upgrade in the expected viability ratings.
Meanwhile, S&P Global Ratings assigned Standard Chartered Bank (Singapore) a preliminary long- and short-term issuer credit ratings of A and A-1, respectively, with a stable outlook, according to a same-day release.
The ratings action reflects S&P's view that the group's branch operations will be transferred to the Singapore subsidiary by the end of 2018, as well as the expectation that the bank would become a core subsidiary of the parent and be of moderate systemic importance to Singapore's banking system.
The stable outlook, meanwhile, reflects the view that the Singaporean lender will receive timely support from its parent or the government when needed. An improved stand-alone creditworthiness or group creditworthiness could raise the bank's preliminary rating.
Both Fitch and S&P expect to assign their respective final ratings to the Singaporean lender once the transfer is complete.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.