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Asia-Pacific Financial Institutions Monitor 3Q 2021: Inching Toward The Positive

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Asia-Pacific Financial Institutions Monitor 3Q 2021: Inching Toward The Positive

Asia-Pacific banks are, perhaps, at the end of the beginning of their COVID recovery. This tracks international trends. During the worst of the outbreak we wondered if the virus might exert strains similar to that seen during the global financial crisis. S&P Global Ratings now believes a robust global economic recovery is helping many Asia-Pacific banking systems normalize faster than we expected a few quarters ago.

Our regional economist recently revised slightly lower our full-year 2021 Asia-Pacific growth forecast to 7.1%, from 7.3%. We previously characterized the risks to the economic outlook as balanced and this was apparent in our new forecasts, which reflected regional progress in managing the pandemic (see table 1 and "Economic Research: Asia-Pacific's Recovery Regains Its Footing," published June 24, 2021 on RatingsDirect). The revised forecasts consider the following key assumptions:

  • Vaccine coverage in Asia-Pacific will reach the 70% level in three waves, with the last group of countries (or wave) hitting the level only by 2023 or later; the World Health Organization says nations need to hit the threshold to stop the pandemic.
  • Monetary policy tightening in some Asia-Pacific economies will start in late 2021 and early 2022, but will unfold gradually.
  • Oil price increases will moderate, and on average, prices will be about 10% lower in 2022 compared with the second half of 2021

Asia-Pacific Net Outlook Bias Is Still Negative

We believe that downside risks are moderating for some Asia-Pacific banking systems on the back of economic recovery and increasing vaccine coverage against COVID infections. Financial institutions and sovereigns have grappled with the effects of COVID for more than one year. Our regional net outlook bias is still negative but is clawing its way back toward the positive. At May 31, 2021, the net outlook bias had improved to -6%; at Oct. 31, 2020 it was -18%. In part during the past quarter, this was driven by positive rating actions on several financial institutions in Australia.

Second only to Japan, Australia accounts for the greatest number of ratings across the 19 Asia-Pacific banking jurisdictions in which we rate financial institutions. In Australia, the outlooks on systemically important banks were revised to stable from negative, following an equivalent rating action on the Commonwealth of Australia, on June 7, 2021. On April 27, 2021, the ratings on (non-systemically important) regional and other financial institutions were revised to positive due to improving system-wide funding trends. Positive rating actions on many Taiwanese financial institutions also contributed to the improved regional trend (see table 3).

Banking Trends Ex-Asia-Pacific Are Also Improving

The global trend toward normalization was well exemplified in our revision of the outlooks on 23 European banking groups to stable or positive (from negative or stable) in a single day in June (see "As Near-Term Risks Ease, The Relentless Profitability Battle Lingers For European Bank," June 25, 2021.)

In almost every case for these groups, the ratings had been on negative outlook since the second quarter of 2020. The negative outlook related to doubts about the effect of the pandemic on asset quality and capitalization, business model and profitability challenges, or both.

Reported asset quality will likely deteriorate across Europe as fiscal support ebbs, but we now see the challenge as highly manageable for most banks. Capitalization will likely remain robust. Cyclical and structural factors continue to weigh on many European banks' profitability. As a result, we have taken mixed rating actions, revising the outlooks on many to stable, but also downgrading a small number.

We have also taken rating actions on U.S. banks and consumer-focused lenders that reflect an improving bank regulatory record, the good financial performance of the banking system prior to and during the pandemic, and strengthened funding. We also think that the economic risks facing U.S. banks due to COVID-19 have receded (see "Various Rating Actions Taken On Large U.S. Banks And Consumer-Focused Banks Based On Favorable Industry Trends," May 24, 2021).

Banks Should Avoid A 'Cliff Effect', But Mind The Hot Spots

We recently revised our estimates for Asia-Pacific banking sector credit losses, and now believe that credit losses will remain well below our expected long-term average in most countries. This is despite last year's severe economic hardship created by the pandemic.

This solidifies our view that downside risks are moderating among Asia-Pacific banks. Sturdy provisioning by lenders during the health crisis will help. Asset quality stress among the region's financial institutions was at historically low levels before the pandemic struck. The spike in credit losses in 2020--while striking--was off a low base.

Still, Asia-Pacific has its hot spots. India, Malaysia, Thailand and Philippines continue to struggle to contain COVID, while the early exiters such as China, Taiwan, and Singapore have also seen a pickup in infections. We estimate that Chinese banks will need to tackle about US$1.2 trillion in credit costs accumulated in the years 2020-2022, racked up because of COVID and other asset-quality difficulties.

Indonesia is among the hardest hit countries by the pandemic in Southeast Asia. Regulatory forbearance that allowed restructured loans to be classified as performing until end-March 2022 has mitigated damage to banks. India's economic disruption following the country's COVID second wave will stall the recovery of the banking sector.

Risks emanating from significant property exposures are also a cause for concern. We revised our economic risks trend as negative for New Zealand because of soaring house prices. New Zealand financial institutions could face greater risk of a sharp fall in house prices, which could potentially result in higher credit losses, particularly if the growth continues unabated (see "New Zealand Financial Institutions Face Rising Risks From A Resurgent Housing Market," June 25, 2021.)

Further, we are monitoring elevating risks related to inflationary pressures and potentially higher interest rates. While we expect central banks to keep policy rates low to support fuller recoveries, creditors could reset their risk-return expectations. Investors' fear of rising inflation may trigger a disorderly reset, driving up risk premiums. Multiyear structural risks relating to climate change and technology may also create disruptions. We highlighted these risks, and others, in our commentary "Credit Conditions Asia-Pacific Q3 2021: One Region, Two Recoveries," June 29, 2021).

In the past, we have seen economic turmoil has followed capital outflows from emerging markets due to a rising U.S. dollar interest rate. The risk could be higher when a large amount of investment is being made from developed to emerging countries in the midst of an accommodative monetary policy worldwide.  

While credit losses as a percentage of loans will likely shrink in nearly all Asia-Pacific banking jurisdictions over the next two years, China is a weighty exception. The country has taken much of its pain upfront, with close to US$300 billion in bank credit losses in 2020. However, the fallout is not over. We estimate these costs will climb by about one-third in 2021 as forbearance measures unwind and asset quality pressures from economic transitions increasingly take hold.

In India and Indonesia, where banks have suffered higher asset distress in recent years, the credit losses are set to trend closer to our expected long-term average in the coming years (see "Intervention Worked: Credit Losses Set To Decline For Most Asia-Pacific Banks," June 1, 2021).

The Credit Costs Of Major Japanese Banks Set To Slowly Subside

Japan's five major banking groups could be in for a long wait before a doubling of credit costs in the past year recedes to pre-pandemic levels. Japan's five major banking groups are Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Resona Holdings Inc., and Sumitomo Mitsui Trust Holdings Inc. We rate Resona Bank Ltd. and Sumitomo Mitsui Trust Bank Ltd.

We expect that the groups' aggregate credit costs will decrease to about ¥650 billion in fiscal 2022 (ending March 31, 2023). We derive these estimates from our macroeconomic assumptions. Each group's earnings will grow 5%-10% annually under our base-case scenario, with asset quality and capital levels remaining stable (see "Industry Report Card: Japan Major Bank Credit Costs To Subside Slowly," June 14, 2021).

Japan's five rated major securities groups in fiscal 2021 are likely to fall short of their fiscal 2020 revenue highs even as favorable conditions continue. The five Japan-based securities groups we rate are SMBC Nikko Securities Inc., Daiwa Securities Group Inc., Nomura, Mizuho Securities Co. Ltd., and Mitsubishi UFJ Securities Holdings Co. Ltd. The overseas business profits are highly volatile and significant losses can occur relative to their scale, which are risk factors. With impressive recent performance unlikely to last and structural factors pressuring profitability, securing sustainable profits from retail businesses is key (see "Industry Report Card: Japan Brokerages Enjoyed Tailwinds, Now Structural Reform Is Key," May 28, 2021).

The Rise Of The Digital Wave

Malaysia has an unprecedented opportunity to digitalize its banking services with new lenders poised to enter the market. We don't expect an immediate shake-up to the competitive landscape. Instead, incremental changes are likely to lead to a more dynamic, diversified industry.

Not all players will benefit equally. Of the eight local banking groups and a handful of foreign banks that dominate the market, the two largest appear best placed to fend off the new competition. That's because Malayan Banking Bhd. (Maybank) and CIMB Group Holdings Bhd. already have established digital infrastructure, diversified earnings, and large customer bases (see "The Future Of Banking: Can Digital-Only Banks Crack Malaysia?" April 13, 2021).

The gradual global shift from cash to electronic payments will make business increasingly difficult for banks that are digital laggards (see "The Future Of Banking: Digital Wallets Will Replace Cash In Pockets," June 14, 2021).

Payments aren't the only space engulfed by the digital wave. Online deposit platforms have been attracting record levels of household cash during the pandemic. Digital deposit platforms are an efficient funding alternative for banks that lack direct access to domestic or international retail deposits, and a way for others to reduce excess deposits. However, we view mediated deposits as less stable. Customers on deposit platforms are more prone to moving their money around when rates change than traditional bank customers, who are more loyal to their institution (see "The Future Of Banking: One-Click Deposits (Risks Included)," April 8, 2021).

Basel Committee Capital Reforms Have Helped Banks Through COVID

The Basel Committee's decade-long endeavor to reduce bank risks helped institutions pass the COVID test. The capital base of the largest banks has about doubled over that past 10 years. According to the Bank for International Settlements, between June 30, 2011, and Dec. 31, 2019, the common equity Tier 1 capital base of the largest 100 banks increased 99%, or by around €1.9 trillion. This comes on top of a large reduction in a number of banks' riskier exposures during that period.

The reforms, however, have only been partly successful in improving the comparability of regulatory capital metrics. We believe the final standards--finished but delayed--will help. The Basel Committee also has its eye on updating regulatory standards to include environmental and digital risks. Given the lack of standardization in data, methodologies, and disclosure, as well as evolving national and regional initiatives, we believe the Basel Committee can play a crucial role in harmonizing climate-related regulatory efforts and enhancing market transparency (see "The Basel Capital Compromise For Banks: Better Buffers, Elusive Comparability," published June 3, 2021).

China's Bond Market--The Last Great Frontier

China's ambitious measures are likely to open one of the world's largest bond markets to prompt a global migration. We assume a foreign ownership share of about 10% by the end of this decade. That would put foreign investor holdings of Chinese bonds at between US$4 trillion and US$5 trillion by 2030.

International investors will need to navigate an opaque market as they enter. Global fund managers largely do not cover the 6,000-plus Chinese debt issuers. Meanwhile, domestic credit ratings provide limited differentiation of credit risks.

A rising share of foreign institutional investors may foster more transparency and risk-based pricing. This could result in a more efficient financial system that diverts capital to its most productive use (see "China's Bond Market--The Last Great Frontier," April 15, 2021).

Extra Transparency On ESG Factors May Be Ratings Drivers

External stakeholders have demonstrated an increasing desire for more information about how environmental, social, and governance (ESG) factors drive our credit ratings. We remain committed to providing transparency as to how we incorporate ESG factors into our ratings methodology and analytics.

We include qualitative ESG insights in many of our credit rating reports. We also provide information on ESG factors when they are key drivers of our rating actions. We intend to introduce alpha-numerical ESG Credit Indicators to further explain the influence of ESG factors on our credit rating analysis (see "S&P Global Ratings Proposes Additional Transparency On ESG Factors As Drivers Of Credit Ratings," April 21, 2021).

Comments Requested On Proposed Financial Institutions And BICRA Methodologies

We are requesting comments on proposed revisions to our global framework for rating financial institutions and for determining a Banking Industry Country Risk Assessment (BICRA). See "Request For Comment: Financial Institutions Rating Methodology," and "Request For Comment: Banking Industry Country Risk Assessment Methodology And Assumptions," both published on June 8, 2021.

We're proposing updates to our criteria to consolidate our bank and nonbank financial institutions methodologies. The proposed updates don't change the fundamental analytical framework. They may enhance the consistency of our terminology and approaches, to incorporate relevant developments since the publication of the existing articles (including newer or emerging risks), and to be able to communicate more clearly on the drivers of rating changes. For more, see "What's Behind The Proposals To Update Our Financial Institutions And BICRA Methodologies," June 8, 2021.

Table 1

The Region's Real GDP Is Rebounding Smartly in 2021
Change from March 2021 forecast (percentage point)
(% year over year) 2020 2021e 2022e 2023e 2024e 2021e 2022e 2023e
Australia -2.4 4.9 3.3 2.6 2.5 0.9 0 0
China 2.3 8.3 5.1 5 4.8 0.3 0 0
Hong Kong -6.1 6.5 2.5 2 1.9 2.3 -1.1 0
India -7.3 9.5 7.8 5.7 6.5 -1.5 1.7 -0.6
Indonesia -2.1 4.4 5.2 5.3 4.8 -0.1 -0.2 0.2
Japan -4.7 2.5 2.1 1 0.9 -0.2 0.1 0
Malaysia -5.6 4.1 6.3 5 4.7 -2.1 0.7 0
New Zealand -1.2 4.6 2.8 2.9 2.8 0.4 -0.2 0
Philippines -9.6 6 7.5 7.3 7.5 -1.9 0.3 0.1
Singapore -5.4 6.2 3.8 2.8 2.6 0.4 0.1 0
South Korea -0.9 4 2.8 2.5 2.5 0.4 -0.3 0
Taiwan 3.1 5.6 2.7 2.5 2.5 1.4 0 0.1
Thailand -6.1 2.8 4.9 4.6 2.9 -1.4 0.4 1
Vietnam 2.9 7.3 7.5 7.1 6.8 -1.2 0.3 0.2
Asia Pacific -1.5 7.1 5.2 4.6 4.5 -0.2 0.3 0
Note: For India, 2020 = FY 2020 / 21 end March 31, 2021; 2021 = FY 2021 / 22, 2022 = FY 2022 / 23, 2023 = FY 2023 / 24, 2024 = FY 2024 / 25. FY--Fiscal year. e--Estimate. Source: S&P Global Ratings.

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Recent BICRA Changes And Full Reports

Over the past quarter (through June 30, 2021), we have made the following changes to our Banking Industry Country Risk Assessments (BICRAs) in the Asia-Pacific region.

Australia  We have revised our economic risk trend for Australia to stable from negative. The downside to economic risks facing Australian financial institutions due to the COVID-19 outbreak and containment measures has eased, in our opinion. Australia is recovering faster than most advanced economies after the pandemic and subsequent government lockdowns delivered an economic shock. It has to date successfully contained the spread of COVID-19 after a second wave in Victoria, the country's second-most populous state, in 2020.

The national economy is now recovering strongly. This follows the first recession in the country in almost 30 years. The government's fiscal stimulus supported the economy after COVID-19 hit and is helping the subsequent recovery.

The coming reduction in fiscal support from the government and the ending of bank loan deferrals won't likely derail this recovery. Systemwide credit losses in the next two years should remain at about 15 basis points of gross loans, broadly in line with our expected long-term average. Property prices have started to appreciate again following a modest correction in 2020 on the back of economic recovery and improved consumer and business sentiment. Economic growth and low interest rates will likely continue to drive property price appreciation in the next two years. That said, regulators would likely take timely action to mitigate risks to financial system stability from a house price resurgence and high household debt.

We have also revised our industry risk trend for Australia to positive from stable. Strong growth in customer deposits and substantial monetary support from the Reserve Bank of Australia since the COVID-19 outbreak have alleviated funding and liquidity risks for the Australian banks.

The Australian banking system's funding profile has been improving in the past 10 years on the back of growing customer deposits and falling offshore borrowings. Stronger systemwide funding metrics could be sustained despite a likely modest weakening in the next three years as the COVID-19-driven rise in customer deposits in 2020 unwinds and the central bank's term funding facility matures.

Korea  We have revised our industry risk trend for Korea to positive from stable. In our view, Korean banks' steady efforts over the past several years to strengthen their risk management will likely underpin improvements in their profitability. A modest decline in credit costs and a slight rise in net interest margins, supported by increased low-cost deposits, should improve Korean banks' profitability. The economic recovery from the pandemic will also provide more stable operating conditions for banks.

New Zealand  On June 25, 2021, we revised our economic risk trend for New Zealand to negative from stable. New Zealand financial institutions could face greater risk of a disorderly correction in house prices if the sharp growth persists and prices continue to build. This could result in higher credit losses for New Zealand financial institutions.

The government's fiscal stimulus supported the economy after COVID-19 hit and is helping the subsequent recovery. Despite the fiscal stimulus winding down and the end of the moratorium on mortgage lending and lending to small and midsize enterprises on March 31, 2021, we expect that credit losses over the next two years at New Zealand banks will remain relatively low at about 0.30% of gross loans and advances.

We have published the following comprehensive BICRA reports in the past quarter in Asia-Pacific.

Webcasts: Asia-Pacific Banking Insights

In the last quarter, we have held the following webcasts to share our views on Asia-Pacific and other banking topics. The replays are available on

https://www.spglobal.com/ratings/en/events/webcast-replays/index#

  • Credit Losses Set To Decline For Most Asia-Pacific Banks, June 30, 2021
  • Proposed Update To Our Financial Institutions And BICRA Methodologies (Mandarin Chinese Session), June 17, 2021
  • Proposed Update To Our Financial Institutions And BICRA Methodologies (Korean Session), June 17, 2021
  • Monthly Asia-Pacific Credit Focus - June 15, June 15, 2021
  • Proposed Update To Our Financial Institutions And BICRA Methodologies (Japanese Session), June 15, 2021
  • Proposed Update To Our Financial Institutions And BICRA Methodologies (APAC Session), June 10, 2021
  • Economic Recovery Drives Stable Outlook On Australia 8-Jun-21
  • The Future Of Banking Virtual Seminar, June 6, 2021
  • What A Drawn Out Second COVID Wave Means For India?, May 7, 2021
  • Latest Outlook For Asia-Pacific Financial Institutions Sector: Views From The Bottom Of The U, May 5, 2021
  • Improving Funding And Economy Buoy Australian Banks, April 28, 2021
  • Malaysian Banking Sector Update: A Delayed Asset Quality Recovery Beyond 2021, April 14, 2021

Table 2

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Table 3

Issuer Credit Ratings And Component Scores For The Top 60 Asia-Pacific Banks
Institution Opco L-T ICR/outlook Anchor Business position Capital and earnings Risk position Funding and liquidity SACP or Group SACP Type of support No. of notches of support Additional factor adjustment
Australia
Australia and New Zealand Banking Group Ltd. AA-/Stable bbb+ Strong Strong Adequate Avg/Adequate a Sys. Imp. 2 0
Commonwealth Bank of Australia AA-/Stable bbb+ Strong Strong Adequate Avg/Adequate a Sys. Imp. 2 0
Macquarie Bank Ltd. A+/Stable bbb+ Adequate Strong Adequate Avg/Adequate a- Sys. Imp. 2 0
National Australia Bank Ltd. AA-/Stable bbb+ Strong Strong Adequate Avg/Adequate a Sys. Imp. 2 0
Westpac Banking Corp. AA-/Stable bbb+ Strong Strong Adequate Avg/Adequate a Sys. Imp. 2 0
China
Agricultural Bank of China Ltd. A/Stable bb+ Very Strong Adequate Adequate Above Avg/Strong bbb+ GRE 2 0
Bank of China Ltd. A/Stable bbb- Very Strong Adequate Adequate Above Avg/Strong a- GRE 1 0
Bank of Communications Co. Ltd. A-/Stable bb+ Strong Adequate Adequate Above Avg/Adequate bbb- GRE 3 0
China CITIC Bank Co. Ltd. BBB+/Stable bb+ Adequate Weak Adequate Avg/Adequate bb Group 4 0
China Construction Bank Corp. A/Stable bb+ Very Strong Adequate Adequate Above Avg/Strong bbb+ GRE 2 0
China Merchants Bank Co. Ltd. BBB+/Positive bb+ Strong Moderate Strong Above Avg/Adequate bbb Sys. Imp. 1 0
China Minsheng Banking Corp. Ltd. BBB-/Stable bb+ Adequate Weak Adequate Avg/Adequate bb Sys. Imp. 2 0
Hua Xia Bank Co. Ltd. BBB-/Stable bb+ Adequate Moderate Moderate Avg/Adequate bb GRE 2 0
Industrial and Commercial Bank of China Ltd. A/Stable bb+ Very Strong Adequate Adequate Above Avg/Strong bbb+ GRE 2 0
Postal Savings Bank Of China Co. Ltd. A/Stable bb+ Strong Moderate Adequate Above Avg/Strong bbb GRE 3 0
Shanghai Pudong Development Bank Co. Ltd. BBB/Stable bb+ Adequate Weak Adequate Avg/Adequate bb GRE 3 0
Hong Kong
Bank of China (Hong Kong) Ltd. A+/Stable bbb+ Strong Strong Adequate Above Avg/Strong a+ Sys. Imp. 1 (1)
Standard Chartered Bank (Hong Kong) Ltd. A+/Stable bbb+ Adequate Strong Adequate Above Avg/Strong a Sys. Imp. 1 0
The Bank of East Asia Ltd. A-/Stable bbb+ Adequate Adequate Adequate Avg/Adequate bbb+ Sys. Imp. 1 0
The Hongkong and Shanghai Banking Corp. Ltd. AA-/Stable bbb+ Strong Strong Adequate Above Avg/Strong a+ Sys. Imp. 1 0
India
Axis Bank Ltd. BB+/Stable bb+ Strong Adequate Moderate Avg/Adequate bb+ None 0 0
Bank of India BB+/Stable bb+ Adequate Moderate Weak Above Avg/Strong bb GRE 1 0
HDFC Bank Ltd. BBB-/Stable bb+ Strong Adequate Strong Above Avg/Strong bbb+ None 0 (2)
ICICI Bank Ltd. § BBB-/Stable bb+ Strong Strong Moderate Avg/Adequate bbb- None 0 0
State Bank of India BBB-/Stable bb+ Strong Moderate Moderate Above Avg/Strong bbb- None 0 0
Indonesia
PT Bank Mandiri (Persero) BBB-/Negative bb+ Strong Strong Moderate Avg/Strong bbb- None 0 0
PT Bank Rakyat Indonesia (Persero) Tbk. BBB-/Negative bb+ Strong Strong Moderate Avg/Strong bbb- None 0 0
Japan
Chiba Bank Ltd. A-/Stable bbb+ Adequate Adequate Strong Avg/Strong a- None 0 0
Mitsubishi UFJ Financial Group Inc.* A/Stable bbb+ Strong Adequate Adequate Above Avg/Strong a None 0 0
Mizuho Financial Group Inc.* A/Stable bbb+ Strong Adequate Adequate Above Avg/Strong a None 0 0
Nomura Holdings Inc.* A-/Stable bbb+ Moderate Strong Moderate Avg/Adequate bbb Sys. Imp. 2 0
Norinchukin Bank A/Negative bbb+ Adequate Adequate Moderate Above Avg/Strong bbb+ Sys. Imp. 2 0
Resona Holdings* A/Stable bbb+ Adequate Adequate Adequate Above Avg/Strong a- Sys. Imp. 1 0
Shinkin Central Bank A/Stable bbb+ Adequate Adequate Adequate Avg/Strong bbb+ Sys. Imp. 2 0
Shizuoka Bank Ltd. A-/Stable bbb+ Adequate Strong Adequate Avg/Strong a- None 0 0
Sumitomo Mitsui Financial Group Inc.* A/Stable bbb+ Strong Adequate Adequate Above Avg/Strong a None 0 0
Sumitomo Mitsui Trust Holdings* A/Stable bbb+ Strong Adequate Adequate Avg/Strong a- Sys. Imp. 1 0
Korea
Industrial Bank of Korea AA-/Stable bbb+ Adequate Adequate Adequate Avg/Adequate bbb+ GRE 4 0
KEB Hana Bank A+/Stable bbb+ Strong Adequate Adequate Avg/Adequate a- Sys. Imp. 2 0
Kookmin Bank A+/Stable bbb+ Strong Adequate Adequate Avg/Adequate a- Sys. Imp. 2 0
Korea Development Bank§ AA/Stable bbb+ Moderate Moderate Weak Below Avg/Adequate bb- GRE 10 0
Nonghyup Bank A+/Stable bbb+ Strong Adequate Moderate Above Avg/Adequate bbb+ GRE 3 0
Shinhan Bank A+/Stable bbb+ Strong Adequate Adequate Avg/Adequate a- Sys. Imp. 2 0
Woori Bank A+/Stable bbb+ Strong Adequate Adequate Avg/Adequate a- Sys. Imp. 2 0
Malaysia
Public Bank Bhd. A-/Negative bbb Strong Adequate Strong Above Avg/Strong a None 0 (1)
Malayan Banking Bhd. A-/Negative bbb Strong Adequate Adequate Above Avg/Strong a- None 0 0
CIMB Bank Bhd. A-/Negative bbb Strong Adequate Adequate Above Avg/Strong a- None 0 0
New Zealand
ANZ Bank New Zealand Ltd. AA-/Stable bbb Strong Strong Adequate Avg/Adequate a- Group 3 0
ASB Bank Ltd. AA-/Stable bbb Strong Strong Adequate Avg/Adequate a- Group 3 0
Bank of New Zealand AA-/Stable bbb Strong Adequate Adequate Avg/Adequate bbb+ Group 4 0
Westpac New Zealand Ltd. AA-/Negative bbb Strong Strong Adequate Avg/Adequate a- Group 3 0
Singapore
DBS Bank Ltd. AA-/Stable bbb+ Strong Adequate Adequate Above Avg/Strong a Sys. Imp. 2 0
Oversea-Chinese Banking Corp. Ltd. AA-/Stable bbb+ Strong Adequate Adequate Above Avg/Strong a Sys. Imp. 2 0
United Overseas Bank Ltd. AA-/Stable bbb+ Strong Adequate Adequate Above Avg/Strong a Sys. Imp. 2 0
Taiwan
CTBC Bank Co. Ltd. A/Stable bbb Strong Strong Adequate Avg/Strong a- Sys. Imp. 1 0
Mega International Commercial Bank Co. Ltd. A+/Stable bbb Strong Strong Adequate Avg/Adequate a- Sys. Imp. 2 0
Thailand
Bangkok Bank Public Co. Ltd. BBB+/Stable bb+ Strong Adequate Adequate Above Avg/Strong bbb Sys. Imp. 1 0
KASIKORNBANK PCL BBB+/WatchNeg bb+ Strong Adequate Adequate Avg/Strong bbb- Sys. Imp. 2 0
Krung Thai Bank Public Co. Ltd. BBB/WatchNeg bb+ Adequate Adequate Adequate Avg/Adequate bb+ Sys. Imp. 2 0
Siam Commercial Bank Public Co. Ltd. BBB+/Negative bb+ Strong Adequate Adequate Avg/Strong bbb- Sys. Imp. 2 0
Note: Data as of June 18, 2021. For the "Type of Support" column "None" includes some banks where ratings uplift because of support factors may be possible but none is currently included. For example, this column includes some systemically important banks where systemic importance results in no rating uplift. *Holding company; the rating reflects that on the main operating company. ICR--Issuer credit rating. GRE--Government-related entity. SACP--Stand-alone credit profile. Sys. Imp.--Systemically important. ALAC--Additional loss-absorbing capacity. N/A--Not applicable. Sov --Capped by the sovereign rating. §This ICR applies to the foreign currency rating only.

Table 4

Recent Rating Actions: Asia Pacific Banks
Release date Org legal name Org country From To
6/18/2021 ICICI Bank Ltd. India BBB-/Negative/A-3 BBB-/Stable/A-3
6/17/2021 Baiduri Bank Berhad Brunei Darussalam BBB+/Stable/A-2 BBB+/Positive/A-2
6/16/2021 Woori Bank Korea, Republic of A/Positive/A-1 A+/Stable/A-1
6/16/2021 Woori Global Markets Asia Ltd. Hong Kong A/Positive/A-1 A+/Stable/A-1
6/7/2021 Westpac Banking Corp. Australia AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 Commonwealth Bank of Australia Australia AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 Macquarie Bank Ltd. Australia A+/Negative/A-1 A+/Stable/A-1
6/7/2021 ASB Bank Ltd. New Zealand AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 ASB Finance Ltd. New Zealand AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 CBA Funding (NZ) Ltd. Australia AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 Macquarie International Finance Ltd. Australia A/Negative/A-1 A/Stable/A-1
6/7/2021 National Australia Bank Ltd. Australia AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 Australia and New Zealand Banking Group Ltd. Australia AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 Bank of New Zealand New Zealand AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 ANZ Bank New Zealand Ltd. New Zealand AA-/Negative/A-1+ AA-/Stable/A-1+
6/7/2021 Australia and New Zealand Bank (China) Co. Ltd. China A+/Negative/A-1 A+/Stable/A-1
5/31/2021 Shinsei Bank, Limited Japan BBB/Stable/A-2 BBB/Positive/A-2
5/26/2021 KGI Bank Taiwan BBB/Positive/A-2 BBB+/Stable/A-2
5/24/2021 J.P. Morgan Securities Australia Limited Australia A+/Stable/A-1 A+/Positive/A-1
5/24/2021 Bank for Foreign Trade of Vietnam Vietnam BB-/Stable/B BB-/Positive/B
5/23/2021 Shinhan Bank Vietnam Vietnam BB/Stable/B BB/Positive/B
5/21/2021 Seven Bank, Ltd. Japan A+/WatchNeg/A-1 A/Negative/A-1
4/27/2021 Cuscal Ltd. Australia A+/Stable/A-1 A+/Positive/A-1
4/27/2021 Credit Union Australia Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Greater Bank Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Newcastle Permanent Building Society Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Australian Central Credit Union Ltd Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Bank Australia Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Teachers Mutual Bank Limited Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Beyond Bank Australia Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Police Bank Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 G&C Mutual Bank Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 QPCU Ltd. Australia BBB-/Stable/A-3 BBB-/Positive/A-3
4/27/2021 Defence Bank Limited Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Queensland Country Bank Ltd. Australia BBB/Stable/A-2 BBB/Positive/A-2
4/27/2021 Bank of Queensland Ltd. Australia BBB+/Stable/A-2 BBB+/Positive/A-2
4/27/2021 Bendigo and Adelaide Bank Ltd. Australia BBB+/Stable/A-2 BBB+/Positive/A-2
4/23/2021 Taiwan Cooperative Bank Ltd. Taiwan A/Stable/A-1 A/Positive/A-1
4/23/2021 Mega International Commercial Bank Co. Ltd. Taiwan A/Stable/A-1 A+/Stable/A-1
4/23/2021 Chang Hwa Commercial Bank Ltd. Taiwan A-/Stable/A-2 A-/Positive/A-2
4/23/2021 Bank of Taiwan Taiwan A+/Stable/A-1 AA-/Positive/A-1+
4/23/2021 First Commercial Bank Ltd. Taiwan A-/Stable/A-2 A-/Positive/A-2
4/23/2021 Taipei Fubon Commercial Bank Co. Ltd. Taiwan A-/Stable/A-2 A-/Positive/A-2
4/23/2021 Land Bank of Taiwan Taiwan A-/Stable/A-2 A/Stable/A-1
4/23/2021 Cathay United Bank Co. Ltd. Taiwan A-/Stable/A-2 A-/Positive/A-2
4/23/2021 Citigroup Pty Ltd. Australia A/Stable/A-1 A/WatchNeg/A-1
4/23/2021 E.SUN Commercial Bank Limited Taiwan A-/Stable/A-2 A-/Positive/A-2
4/23/2021 Hua Nan Commercial Bank Ltd. Taiwan A-/Stable/A-2 A-/Positive/A-2
4/22/2021 China Merchants Bank Co. Ltd. China BBB+/Stable/A-2 BBB+/Positive/A-2
*Recent rating actions are for the period April 1, 2021 to June 18, 2021. The list refers to banks and bank holding companies (banks) where the rating has been upgraded or downgraded, or the outlook has been changed. Banks where the ratings have been affirmed or the outlooks have not been changed are not included in the list. ICICI Bank rating listed above is a foreign currency rating.

Editing: Jasper Moiseiwitsch

Design: Evy Cheung

This report does not constitute a rating action.

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This report does not constitute a rating action.

S&P Global Ratings Australia Pty Ltd holds Australian financial services license number 337565 under the Corporations Act 2001. S&P Global Ratings' credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act).

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