S&P Global Ratings on Dec. 9 put LGT Bank AG's A+/A-1 long- and short-term counterparty credit ratings on CreditWatch with negative implications.
The ratings action follows parent LGT Group Foundation's announcement that it plans to acquire ABN AMRO Group NV's private banking business in Hong Kong, Singapore and Dubai.
The rating agency believes the acquisition could put LGT Bank's financial metrics under undue pressure such that they may deviate from the current rating level. It noted that the transaction could weaken LGT Bank's risk-adjusted capital ratio to below the 7% threshold for maintaining the agency's current assessment of its capital and earnings as adequate.
S&P expects to resolve the CreditWatch within three months.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.