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Moody's affirms ratings of 6 Japanese banks, revises Shoko Chukin Bank outlook

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Moody's affirms ratings of 6 Japanese banks, revises Shoko Chukin Bank outlook

Moody's affirmed the ratings of six Japanese banks and their subsidiaries and revised the outlook for Shoko Chukin Bank Ltd. to stable from negative.

The rating agency said Aug. 29 that it affirmed the A1 long-term deposit ratings of Shoko Chukin Bank, Japan Trustee Services Bank Ltd., Norinchukin Bank, Shinkin Central Bank, Sumitomo Mitsui Trust Bank Ltd. and Trust & Custody Services Bank Ltd. The rating agency also affirmed the A1 senior unsecured debt ratings of Norinchukin Bank and Sumitomo Mitsui Trust Bank.

The outlooks for the remaining five banks were maintained at stable.

The affirmations reflect Moody's assessment that the Japanese government will provide support to the banks in times of stress due to their importance to the domestic financial system. The agency said the banks are either less exposed to the increasingly challenging operating environment in the country, or have the ability to adapt to the environment and maintain profitability.

Moody's believes that Japan Trustee Services Bank, Sumitomo Mitsui and Trust & Custody Services Bank's business flow will remain stable and undamaged by the continued ultra-low interest rates in Japan, and its assessment of Norinchukin Bank's strong capital and liquidity remains unchanged.

In revising its outlook for Shoko Chukin Bank, Moody's said it believes that the sizable government ownership and the extensive involvement of the government in the bank's business will remain unchanged for the foreseeable future.