27th Apr 2018 18:00
LONDON (Alliance News) - Moody's Investor Service on Friday affirmed HSBC Holdings PLC's A2 senior unsecured debt rating and also upgraded its outlook on the rating.
Moody's has changed the outlook to stable from negative.
The rationale behind the rating, according to Moody's is: HSBC's "strong" international franchise and "conservative" risk appetite; its "subdued earnings" in the UK, France and the US; its "conservative funding profile"; and its "sizeable" capital markets business, which focuses on "less risky plain-vanilla" products and corporate-led financing.
"The affirmation of HSBCH's ratings reflects Moody's view of the risks to the holding company's bond holders resulting from Hong Kong's new banking resolution framework, as well as HSBCH's future growth and funding plans" said Alessandro Roccati, senior vice president at Moody's.
"Moody's considers Hong Kong's new banking resolution framework as a fully-compliant operational resolution regime," added Roccati.
Moody's could upgrade the rating if HSBC's macro profile were to increase and asset risk and profitability were to improve materially, as well as the maintenance of capital and liquidity at a high level.
The rating could be downgraded in the case of a major risk management failure or further weakening in its major operating environments.
Shares in HSBC Holdings closed up 1.4% Friday at 719.60 pence each.
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