Moody's downgraded OCBC Wing Hang Bank (China) Ltd.'s standalone baselinecredit assessment while affirming the bank's deposit ratings following themerger between OCBCBank (China) Ltd. and Wing Hang Bank (China) Ltd.
The bank's standalone baseline credit assessment wasdowngraded to "a3" from "a2" and its adjusted baselinecredit assessment was affirmed at "aa3". Further, the rating agencyaffirmed the bank's Aa3/P-1 deposit ratings.
The outlook on the bank and its long-term deposit ratingsremains negative, Moody's said July 22.
The downgrade of the bank's baseline credit assessment takesinto account the bank's greater exposure to China following the merger. Moody'salso took into account its expectation that the bank will confront greaterasset quality challenges in a more difficult operating environment.
Meanwhile, the affirmation of the bank's deposit ratingstakes into account the high likelihood of support from the bank's parent,Oversea-Chinese Banking Corp.Ltd., in the event of need.
OCBC Wing Hang Bank's ratings could be downgraded if thereis a weakening of parental support. A deterioration in operating conditions andincrease in economic imbalances in Hong Kong may also lead to a lowerstandalone assessment.
Moody's does not expect any upward pressure on the bank'sratings given the negative outlook.