Fitch Ratings downgraded the long-term default ratings of HSBC USA Inc., unit HSBC Bank USA NA and HSBC Bank Canada to A+ from AA-.

The rating agency maintained its Rating Watch Negative status on the companies.

Fitch said the downgrades follow the downgrade of parent company HSBC Holdings PLC's ratings, making the ratings of the three companies equal to that of their parent company. The rating agency believes the parent's international network separates the bank from peers in a positive way, regarding its franchise, business model and earnings capacity.

But Fitch noted that HSBC Holdings has reduced its group and U.S. return targets and is expected to materially restructure its operations to address continuing earnings weakness and capital inefficiency at the U.S. business unit and the European non-ring-fenced bank, HSBC Bank PLC. This restructuring plan, expected to be announced by February 2020, shows weaknesses in HSBC Holdings' business model and the earnings capacity of its geographic footprint, according to the rating agency.