Fitch Ratings has affirmed PT Bank BTPN Tbk's National Long-Term Rating at 'AAA(idn)' and National Short-Term Rating at 'F1+(idn)'.

The Outlook is Stable. Fitch has also affirmed the bank's bond programme and issuance from the programme at 'AAA(idn)'.

'AAA' National Long-Term Ratings denote the highest rating assigned by the agency in its National Rating scale for that country. This rating is assigned to issuers or obligations with the lowest expectation of default risk relative to all other issuers or obligations in the same country or monetary union.

'F1' National Short-Term Ratings indicate the strongest capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. Under the agency's National Rating scale, this rating is assigned to the lowest default risk relative to others in the same country or monetary union. Where the liquidity profile is particularly strong, a '+' is added to the assigned rating.

KEY RATING DRIVERS

BTPN's National Ratings are support-driven and reflect Fitch's view that the bank's higher-rated parent, Sumitomo Mitsui Banking Corporation (SMBC, A/Negative/a), has high propensity and ability to provide timely extraordinary support to its subsidiary, should it be needed. BTPN's rating is driven by its parent's IDR as we believe that extraordinary support, if required, would flow from the Japanese government through SMBC to BTPN. However, in our opinion, potential support will most likely come from the parent's own financial resources. BTPN is 92.43%-owned by SMBC.

Fitch believes SMBC has a strong ability to support its Indonesian subsidiary as reflected in its high credit rating and BTPN's small size compared to SMBC. Its total assets accounted for only 0.6% of its parent's consolidated assets at end-September 2020.

Fitch's view on SMBC's propensity to provide support to BTPN is based on synergies between the parent and subsidiary from their alignment in key areas (operational, risk management, and key personnel), reputational damage to the parent if the subsidiary were to default, and the parent's majority ownership.

BTPN's National Long-Term Rating is not driven by its standalone profile, which reflects its moderate franchise as a mid-sized Indonesian bank, better asset quality than its peers, moderate profitability, and capitalisation and funding and liquidity profiles that benefit from support from SMBC.

ISSUE RATINGS

The ratings on the banks' rupiah-denominated senior bonds are at the same level as the bank's National Long-Term Ratings, in accordance with Fitch criteria as they represent direct, senior obligations of the bank and rank equally with the bank's other senior obligations.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Downward pressure on BTPN's ratings may arise from a perceived weakening of support from the parent, SMBC, including from major changes to ownership. A downgrade of SMBC's Viability Rating is likely to lead to only a one-notch downgrade in its Issuer Default Rating (IDR), which is unlikely to put pressure on BTPN's ratings. A downgrade in SMBC's IDR by three or more notches would result in a downgrade of BTPN's National Long-Term Rating, although Fitch believes this to be a remote prospect in the near to medium term.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

There is no rating upside as the ratings are already at the highest point on the National Rating scale.

ISSUE RATINGS

Any changes in the bank's National Rating would affect the ratings on the bond programme and issuance from the programme.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

BTPN's support-driven ratings are credit-linked to SMBC's ratings based on our expectation of extraordinary support from the parent.

RATING ACTIONS

ENTITY/DEBT	RATING		PRIOR
PT Bank BTPN Tbk	Natl LT	AAA(idn) 	Affirmed		AAA(idn)
Natl ST	F1+(idn) 	Affirmed		F1+(idn)

senior unsecured

Natl LT	AAA(idn) 	Affirmed		AAA(idn)

VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

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