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Asia-Pacific Financial Institutions Monitor 4Q 2021: Evergrande, Southeast Asia Risks, And The Digital Dilemma

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Asia-Pacific Financial Institutions Monitor 4Q 2021: Evergrande, Southeast Asia Risks, And The Digital Dilemma

A shaky Chinese property sector and lower growth forecasts in Southeast Asia loom as threats to a stabilizing prognosis for Asia-Pacific banks.

Our net rating outlook bias for Asia-Pacific financial institutions is clawing its way out of deeply negative territory toward neutral ground. As of Aug. 31, 2021, the net outlook bias had improved to about -1%: this is up from -6% as of May 31, 2021; and -18% as of Oct. 31, 2020, during the depths of COVID-19.

The stabilizing trend, however, belies the potential for downside risks to intensify and in turn affect ratings. The past quarter was tough for banks in some jurisdictions. Notably, the spillover effects from property sector risks in China are heightened as the malaise engulfing Evergrande plays out. And in Southeast Asia our economic growth outlook is weaker. Recent negative government intervention in some jurisdictions has added to negative sentiment, which has affected our view of banks. Regionwide, there is the potential for the recently improved outlook trend to wane. It could even reverse.

Meanwhile, Asia-Pacific banking sectors face seismic shifts: digitalization technologies are affecting the financial services industry, and investor sentiment strongly favors ESG-positive initiatives. These developments may yet have a more influential impact on our outlook for banking sector creditworthiness across the region.

Our Economic Outlook Is Weaker

Our full-year 2021 Asia-Pacific growth forecast was recently revised to 6.7%, from 7.1%. This reflects several factors, chief among them: slower consumer activity and a spate of regulatory actions in China, the repercussions across the region of lower growth in China, and the effects of the delta variant outbreak in Southeast Asia. The pace of activity is slowing as the delta variant of the coronavirus has hindered growth; shutdowns are crimping mobility and spending, reducing production and confidence. That said, the tolerance for outbreaks is growing as vaccination rates rise. The risks to our baseline forecast are on the downside, reflecting uncertainties around the path of the pandemic and the extent to which China reins in its private enterprises (see "Economic Outlook Asia-Pacific Q4 2021: Growth Slows On COVID-19 And Rising China Uncertainty," Sept. 27, 2021).

Southeast Asian Banking Systems Under Pressure

For many emerging markets across Asia-Pacific, such as Thailand, the Philippines, Malaysia, Vietnam, Indonesia, and India, the path to recovery of banking systems remains laborious. Obstacles include: the risk of fresh COVID outbreaks from increasing delta variant caseloads, slow vaccination pace, and debt-burdened individuals and small and midsize enterprises. Most recently, we revised our economic risk trend for Malaysia to negative, from stable. Malaysia now joins Indonesia, Thailand, and the Philippines, which were already on negative trend. Banks face further pressures in some jurisdictions from negative government intervention, which means they must bear the cost of extensions in forbearance measures. During the quarter, we made downward revisions to our industry risk assessments for both Malaysia and Thailand to reflect these strains (see the BICRA Actions section below).

Evergrande--The Aftermath Is Still To Play Out

We believe the Chinese banking sector can digest a default by China Evergrande Group, a large Chinese property developer, with no significant disruption. But we are very cautious of the potential knock-on effects that could yet play out. An Evergrande failure alone would not destabilize the banking system. However, if such an event were followed by the defaults of a few more highly leveraged major developers, it could evolve into a challenging situation.

The banking sector's direct exposure to Evergrande appears well distributed. The developer's lending--mostly project loans--is largely secured. Some banks are also indirectly exposed to Evergrande via the wealth management products that they originated. Banks could be on the hook to share the loss should these products fail.

The Chinese banking sector has a reasonable buffer to absorb any Evergrande fallout. Exposure to property developers across the industry was about 8% of total loans at the end of 2020. These loans were mostly made with a minimum 70% loan to value at origination(see "Credit FAQ: Evergrande Default Contagion Risk--Ripple Or Wave?," Sept. 20, 2021).

China Minsheng Banking Corp. Ltd. is one of Evergrande's main banks, but it has also been cutting its exposure to Evergrande in the past year. We have a positive outlook on Minsheng Bank because we expect its capitalization to improve. We will continue to monitor the appropriateness of keeping a positive outlook as more details of its exposure to Evergrande emerge.

China Huarong Downgraded Amid Weakening Asset Quality

On Sept. 9, 2021, we lowered the long-term issuer credit ratings on China Huarong and China Huarong International Holdings Ltd. to 'BBB' from 'BBB+'. The outlook on the ratings on China Huarong and its subsidiaries is negative. This reflects our view that the group's leverage is still under pressure, given uncertainties over its recapitalization and asset disposal plan, in addition to falling regulatory barriers to entry for the distressed asset management sector.

We expect the asset quality of China Huarong Asset Management Co. Ltd. to remain weak over the next two years, while its capital and leverage should recover with new capital from strategic investors and the disposal of noncore assets. The importance of China Huarong Financial Leasing Co. Ltd. to the group will reduce as the group refocuses on its core business. We also lowered the long-term issuer credit rating on Huarong Financial Leasing to 'BBB-' from 'BBB+' (see "Research Update: China Huarong And Subsidiaries Downgraded Amid Weakening Asset Quality; Outlook Negative," Sept. 9, 2021).

Not All Doom And Gloom For The Chinese Banking Sector

We view an anticipated slower trajectory for debt growth and property prices as a fundamentally positive development for the banking sector. Meanwhile, GDP levels and GDP per capita continue to expand at solid rates, adding to buffers against credit risks in the economy. These factors could eventually lead us to assess economic risk more favorably for the China banking sector, should the policy direction remain clear and be consistently executed (see "Outlook Revisions On Four China Banks Reflect Slower Debt And Property Price Growth," Aug. 9, 2021). We revised our economic risk trend on the Chinese banking sector to positive from stable reflecting a one-in-three chance our economic risk score within our Banking Industry and Country Risk Assessment (BICRA) for China will improve by one category over the next two years. A key factor, however, will be the extent to which the banking sector can contend with short-term stress affecting the property sector at current bank rating and outlook levels.

The recent revision of the economic risk trend caused us to revise the outlooks on three China-based banks to positive from stable, and the outlook to stable from negative for a fourth bank. We affirmed the issuer credit ratings on all four entities. We also affirmed the issuer credit rating on China Merchants Bank Co. Ltd., where the outlook remains on positive.

Digitalization Takes Center Stage

The digitalization ecosystem across financial markets and the financial services sector is developing rapidly and could eventually have a profound effect on banks. A recent initial report (see "Digitalization Of Markets: Framing The Emerging Ecosystem," Sept. 16, 2021) provides a high-level framework for understanding the evolving digital landscape and ecosystem, including catalysts and obstacles for its advancement and credit implications. It presents a compilation of short reports on various key aspects of the digitalization of markets, including the technology that powers digitalization, the global regulatory and policy landscape, the decentralized finance (DeFi) ecosystem, tokenization, altcoins, and nonfungible tokens (NFTs), to name a few.

Central Banks In Asia-Pacific: Cracking The CBDC Code

One aspect of digitalization in Asia-Pacific in the spotlight is central bank digital currencies (CBDCs). S&P Global Ratings expects most central banks, including those in Asia-Pacific, will start cautiously, should they decide to offer central bank-backed digital payment options. We don't believe monetary authorities will rush into digital pathways that drive banks off-road. However, developments in the region are accelerating.

Central banks will likely lean toward a model whereby banks and other financial intermediaries continue to play a strong intermediation role, rather than one managed by the central banks themselves. The future credit impact on Asia-Pacific banks seems to hinge upon the design and objective that central banks are chasing. Transition to reality for central banks is a work in progress. And they face tough choices as models evolve.

China is leading from the front. The country is already well-progressed in pilot trials for its retail CBDC in 2020 and is better-progressed compared with other jurisdictions in Asia-Pacific, and globally. For many banking systems in the region, CBDCs are still in an exploratory stage. Nonetheless, the pace of regulatory developments is evolving and should increase as central bankers collaborate and monitor actions of front-runners such as China (see "The Future Of Banking: Central Bank Digital Currencies In Asia-Pacific--Pathways Are Plenty, Destination Is Uncertain," Oct. 5, 2021).

ESG Risks--Increasingly Front of Mind

Investors have an increasingly strong interest in environmental, social, and governance (ESG) credit factors. S&P Global Ratings recently released its general criteria to articulate the principles that S&P Global Ratings applies to incorporate ESG credit factors into its credit ratings analysis. We do this through the application of our sector-specific criteria when we think the ESG factors are, or may be, relevant and material to our credit ratings. The methodology enhances the transparency of how ESG factors can influence creditworthiness. The criteria apply to our ratings on all issuers and issues (see "General Criteria: Environmental, Social, And Governance Principles In Credit Ratings," Oct. 10, 2021).

LIBOR Transition Likely To Be Manageable For Asia-Pacific Banks

A particular focus for us in coming months will be how banking jurisdictions and individual banks can effect their transition away from LIBOR. S&P Global Ratings believes Asia-Pacific banks are largely prepared for a smooth transition away from LIBOR, the London Interbank Offer rate. By the end of December 2021, the ICE Benchmark Administration (IBA) will stop publishing LIBOR panel rates for 30 settings across U.S. dollar, pound sterling, Japanese yen, euro, and Swiss franc currencies. Five U.S. dollar settings will continue until the end of June 2023.

To avoid disruption to legacy contracts that reference the one-, three-, and six-month sterling and Japanese yen LIBOR settings, the U.K.'s Financial Conduct Authority will require the IBA to publish these settings under a synthetic methodology, based on term risk-free rates, for an additional year. We view this as a positive development as it will help lower transitioning risk in Asia-Pacific.

Singapore is ahead of the pack when it comes to alternative refence rate transitioning, in our view. Other Asia-Pacific jurisdictions have made varied progress. We do not anticipate taking any rating actions on banks in this region due to the LIBOR transition (see "Asia-Pacific Banks Ready For Life After LIBOR," Oct. 7, 2021)

Global Banks Show Tantalizing Signs Of Stability

Post the onset of COVID-19, the global banking sector is gradually clawing its way back to normalcy. Authorities' strong support for households and corporates over the course of the pandemic has clearly helped banks. Lenders were also well positioned going into the outbreak, after banks bolstered their capital, provisioning, funding, and liquidity buffers in the wake of the global financial crisis (see "Global Banking Country Outlook Midyear 2021: Tantalizing Signs Of Stability" and "Global Banks Outlook Midyear 2021: Clawing Back To Normalcy," July 22, 2021.

Bank Capital Buffers Hold Steady

Further, across the Asia-Pacific and indeed global banking sector, we expect risk-adjusted capital (RAC) ratios to remain relatively stable. This mainly reflects a gradual recognition of credit losses globally, except in some regions such as North America and Brazil, where the bulk of credit losses has already been recognized, and Australia where banks are returning excess capital. Among European banks, RAC ratios may fall moderately this year, not at least as banks restart distributions to shareholders, but even then RAC ratios may well remain above the end of 2019 levels for many banks (see "100 Banks: Capital Ratios Show Resilience To The Pandemic," Sept. 28, 2021).

Table 1

Real GDP Forecast
Change from June 2021 forecast (percentage point)
(% year over year) 2020 2021 2022 2023 2024 2021 2022 2023
Australia -2.4 4.2 3.3 2.8 2.5 -0.7 0.0 0.2
China 2.3 8.0 5.1 5.0 4.8 -0.3 0.0 0.0
Hong Kong -6.1 6.5 2.5 2.0 1.9 0.0 0.0 0.0
India -7.3 9.5 7.8 5.7 6.5 0.0 0.0 0.0
Indonesia -2.1 3.4 5.6 4.8 4.8 -1.0 0.4 -0.5
Japan -4.7 2.3 2.2 1.2 1.1 -0.2 0.1 0.2
Malaysia -5.6 3.2 6.0 5.2 4.6 -0.9 -0.3 0.2
New Zealand -1.2 5.4 2.7 2.8 2.7 0.8 -0.1 -0.1
Philippines -9.6 4.3 7.7 7.4 7.3 -1.7 0.2 0.1
Singapore -5.4 6.6 4.0 3.1 2.8 0.4 0.2 0.3
South Korea -0.9 4.0 2.8 2.5 2.4 0.0 0.0 0.0
Taiwan 3.1 5.5 2.9 2.6 2.5 -0.1 0.2 0.1
Thailand -6.1 1.1 3.6 4.2 2.9 -1.7 -1.3 -0.4
Vietnam 2.9 4.2 7.1 7.0 6.7 -3.1 -0.4 -0.1
Asia Pacific -1.5 6.7 5.2 4.6 4.5 -0.4 0.0 0.0
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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Ratings Methodology News

Recent BICRA Changes And Full Reports

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

Malaysia

We have revised our economic risk trend for Malaysia to negative from stable. In our view, downside systemic risks for Malaysian banks are on the rise. Banks are also facing rising risk in the competitive environment due to negative government intervention. We now see a one-in-three possibility that Malaysian banks could underperform our base-case asset quality expectations in the next 12-24 months.

We have also revised our industry risk score for Malaysia to '4' from '3'. We see an increased risk of negative government intervention in the Malaysian banking industry. The risk is reflected in the repeated government intervention in relief measures given out by domestic banks such as the recent announcement to waive off fourth-quarter interest for B50 (bottom 50% of individual borrowers by income) customers. Such interventions could recur, given the ongoing political instability, and impede the banking sector's ability to operate commercially.

Sri Lanka

We have revised our industry risk trend for Sri Lanka to negative from stable. This reflects the risk that the deteriorating sovereign situation could weaken the banking system's funding profile. In our base case, domestic deposit holders' trust and confidence in the banking system will remain intact. Deposit growth remained strong in the first six months of 2021, at an annualized rate of 16%. However, we may revise downward our assessment of the funding profile if we believe the stability of domestic deposits is affected. In our view, the downside risk to the banking industry will reduce only after the sovereign situation stabilizes.

Thailand

We have revised our industry risk score for Thailand to '5' from '4'. Thailand's lenient regulatory norms, including the relaxation of loan classification, will likely raise systemic risk for its banks. Such regulatory norms will prolong the recognition of underlying problem loans for the Thai banking system. The lax relief measures and the recent extension of relaxed loan classification norms to end 2023 could further distort the Thai banking industry's impaired loan ratio.

China

We have revised our economic risk trend for China to positive from stable. We see a one-in-three chance our economic risk score within our BICRA for China will improve by one category over the next two years. Policies to slow debt growth and control property prices appear to be working. GDP levels and GDP per capita continue to expand at solid rates, adding to buffers against credit risks in the economy. These factors could lead us to assess economic risk more favorably for the China banking sector, should the policy direction remain clear and be consistently executed.

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

Webcasts: Asia-Pacific Banking Insights

In the past 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#

  • Global Credit Conditions--Shifting Horizons Beyond COVID (APAC), Sept. 30, 2021
  • Rising Downside Risks For Malaysian Banks, Sept. 29, 2021
  • Evergrande Default Contagion Risk: What It Means For China Sovereign And Banks, Sept. 21, 2021
  • Spotlight on China: Evergrande, Huarong and China's Recent Policy Measures, Sept. 20, 2021
  • India Credit Spotlight 2021, Sept. 8, 2021
  • How China's Changing State Support Drove Our Rating Actions On Corporates And Financial Institutions, Sept. 2, 2021
  • Competitive Pressures Fuel Australian Mutual Lender Consolidation, Sept. 1, 2021
  • Hong Kong's COVID-19 Recovery: Economy, Government, Financial Institutions, And Insurance Sectors Outlook, Aug. 18, 2021
  • Korea's COVID-19 Recovery Economy, Sovereign And Financial Institutions Outlook, Aug. 4, 2021
  • Global Banking Outlook Midyear 2021--Tantalizing Signs Of Stability (APAC Session), July 28, 2021
  • Spotlight on Emerging Markets: Indonesia's COVID-19 Struggle, July 16, 2021
  • Credit Losses Set To Decline For Most Asia-Pacific Banks, June 30, 2021

The table below presents S&P Global Ratings' views about key risks and risk trends for banking sectors in Asia-Pacific countries where we rate banks. For more detailed information, please refer to the latest BICRA on a given country. According to our methodology, BICRAs fall into groups from '1' to '10', ranging from what we view as the lowest-risk banking systems (group '1') to the highest-risk (group '10').

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-/Positive bb+ Strong Adequate Adequate Above Avg/Adequate bbb- GRE 3 0
China CITIC Bank Co. Ltd. BBB+/Positive 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-/Positive 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 Strong Adequate Avg/Adequate a- Group 3 0
Westpac New Zealand Ltd. AA-/Stable 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
Data as of Sept. 30, 2021. "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 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
30/08/2021 Guangzhou Finance Holdings Group Co. Ltd. China BBB+/Negative/A-2 BBB+/Stable/A-2
9/08/2021 China CITIC Bank Corporation Limited China BBB+/Stable/A-2 BBB+/Positive/A-2
9/08/2021 China Guangfa Bank Co. Ltd. China BBB-/Negative/A-3 BBB-/Stable/A-3
9/08/2021 Bank of Communications Co. Ltd. China A-/Stable/A-2 A-/Positive/A-2
9/08/2021 China Minsheng Banking Corp., Ltd. China BBB-/Stable/A-3 BBB-/Positive/A-3
9/08/2021 Bank of Communications (Hong Kong) Limited Hong Kong A-/Stable/A-2 A-/Positive/A-2
5/08/2021 Indian Bank India BBB-/Negative/A-3 BBB-/Stable/A-3
1/07/2021 Westpac New Zealand Ltd. New Zealand AA-/Negative/A-1+ AA-/Stable/A-1+
1/07/2021 Members Equity Bank Ltd. Australia BBB/WatchPos/A-2 BBB+/Positive/A-2
*Recent rating actions are for the period July 1, 2021 to Sept. 30, 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: Lex Hall

Design: Evy Cheung

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).

Primary Credit Analyst:Gavin J Gunning, Melbourne + 61 3 9631 2092;
gavin.gunning@spglobal.com
Secondary Contacts:Vera Chaplin, Melbourne + 61 3 9631 2058;
vera.chaplin@spglobal.com
Ryoji Yoshizawa, Tokyo + 81 3 4550 8453;
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Sharad Jain, Melbourne + 61 3 9631 2077;
sharad.jain@spglobal.com
Geeta Chugh, Mumbai + 912233421910;
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Harry Hu, CFA, Hong Kong + 852 2533 3571;
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Ivan Tan, Singapore + 65 6239 6335;
ivan.tan@spglobal.com
Nico N DeLange, Sydney + 61 2 9255 9887;
nico.delange@spglobal.com
Daehyun Kim, CFA, Hong Kong + 852 2533 3508;
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HongTaik Chung, CFA, Hong Kong + 852 2533 3597;
hongtaik.chung@spglobal.com
Eunice Fan, Taipei +886-2-2175-6818;
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Chizuru Tateno, Tokyo + 81 3 4550 8578;
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Fern Wang, CFA, Hong Kong (852) 2533-3536;
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Ryan Tsang, CFA, Hong Kong + 852 2533 3532;
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Lisa Barrett, Melbourne + 61 3 9631 2081;
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Research Assistant:Priyal Shah, CFA, Mumbai

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