Fitch Ratings has affirmed
The Outlook is Stable. We have also affirmed its Short-Term IDR at 'F1+'. Fitch has also assigned a Shareholder Support Rating (SSR) of 'a' to ABCI, in line with our updated Non-Bank Financial Institutions Criteria, dated
ABCI, domiciled in
We have also affirmed the ratings on
Key Rating Drivers
IDRS
ABCI's Long-Term IDR is driven by Fitch's belief that extraordinary support from
ABCI shares the parent group's brand name, and enjoys strong synergies with the parent group through leveraging
The Stable Outlook on the Long-Term IDR reflects our expectation that ABCI's role as a core subsidiary and the probability it will receive extraordinary support from
ABCI's Short-Term IDR is mapped to 'F1+', the higher of the two options for its Long-Term IDR, reflecting our expectations that support is more certain in the near term.
Fitch considers ABCI's Standalone Credit Profile to be sub-investment grade in light of its modest franchise in a competitive industry, business volatility, reliance on wholesale funding, and exposure to risks from its large investment portfolio, which is sensitive to capital-market movements and could undermine performance in market downturns.
ESG - Governance: ABCI has an ESG Relevance Score of '4' for Financial Transparency, as the disclosure of risks from its investment portfolio is considered less transparent, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. ABCI's ESG Relevance Score for Governance Structure has been revised to '3' from '4', in line with that of
Rating Sensitivities
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A rating downgrade for ABCI could be triggered by a weakening in the linkage with the parent, which could result from significant dilution of
Factors that could, individually or collectively, lead to positive rating action/upgrade:
ABCI's rating is equalised with those on
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
SENIOR DEBT
The ratings on the two medium-term note programmes under Inventive Global Investments are in line with the rating on
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A downgrade of the IDRs on
Any change in Fitch's view on the effectiveness of the deed of guarantee given by ABC Hong Kong branch or ABCI may also result in a downgrade of the ratings on the programmes.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
An upgrade of
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
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