Moody's assigned long- and short-term issuer ratings of A3/P-2 to ING Bank (Australia) Ltd., with a stable outlook.
The rating agency also assigned the bank long- and short-term counterparty risk assessments of A2(cr)/P-2(cr), and long- and short-term counterparty risk ratings of A2/P-1. The bank's baseline credit assessment is "baa1", and its adjusted baseline creadit assessment is "a3."
The A3 issuer rating reflects the bank's very strong asset quality, healthy capital and improved funding profile, the agency said. The rating also incorporates the bank's modest position in a mature banking market and its potential to expand into higher margin businesses.
Moody's said the bank could face moderate pressure on its capital as it continues to grow its exposure to personal, business and wholesale banking loans to diversify its portfolio from housing loans. However, Moody's does not expect a material weakening of the bank's capital ratios given its flexibility to reduce dividend payouts to its parent, ING Bank NV.
Further, the rating agency said there is a very high probability that ING Bank (Australia) will receive support from its parent given their shared branding, which creates reputational incentive.