S&P Global Ratings on Sept. 10 affirmed Axa Bank Belgium SA's A+/A-1 long- and short-term issuer credit ratings and revised the outlook on the Axa SA unit to negative from stable.
The outlook revision reflects a potential downgrade of the bank's ratings in the next 18 months to 24 months and takes into account Axa Bank Belgium's high sensitivity to the interest rate environment, considering its retail focus and lower business diversification compared to large universal banks that dominate the Belgian market.
Given the expected lower-for-longer interest rate environment, S&P Global Ratings said there is a risk that Axa Bank Belgium's profitability could weaken to very modest levels in the next two years, making it no longer comparable to similarly rated A+ peers, and that it could fail to meet the returns expected by its parent.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.
