SEARCH:
feed

Moody’s places Investec Bank (Australia) on Review for Possible Downgrade

By k on May 27, 2009

Sydney, May 27, 2009 -- Moody's Investors Service has placed Investec Bank
(Australia) Limited on review for possible downgrade, following a
significant increase in impaired assets and weaker earnings for the bank,
as reported in the recent Investec Group results. Ratings included in the
review are the bank's bank financial strength rating (BFSR) of C-,
long-term senior unsecured debt and deposit ratings of Baa1,
subordinated debt rating of Baa2, and short-term ratings of Prime-2.

"The review on Investec Bank (Australia)'s ratings follows a deterioration
in the bank's financial profile which was larger than expected, relative
to the current level of deterioration in the economic environment," said
Marina Ip, an Assistant Vice President with Moody's Sydney office.

"The bank has been impacted by a number of forces, including reduced
revenues due to a sharp fall in principal transaction flow, rising
impairment levels related to its historical focus on property amidst a
slowing property market, and higher provisions made against certain
investments. Although to some extent, the decline in earnings was driven
by the bank's conservative practice of holding a high level of surplus
liquid assets, as these securities provide a lower return" Ip adds.

Investec Bank (Australia) maintains solid capital ratios which remain in
Moody's highest rating category for this metric, which provide a cushion
against future impairment charges. However, the bank does have a
relatively high credit concentrations which need to be considered in this
context.

The bank has a very strong liquidity position, which almost entirely
covers its wholesale borrowings.

The review will focus on assessing the potential for further impairment,
as well as initiatives the bank are adopting to adjust towards a more
stable business model. The building of alternative business lines which
can provide more predictable and reliable income will be a positive
factor to the rating, as internal capital generation will most likely be
the source of additional core capital for Investec Bank (Australia).

Investec Bank (Australia)'s deposit and debt ratings will depend on its
BFSR, which measures the bank's stand-alone credit profile. As Investec
Bank (Australia) is currently rated higher than its parent, Investec Bank
plc (rated Baa3), there is no uplift to its baseline credit assessment of
Baa1.

The last rating action on Investec Bank (Australia) Limited was on 1
December 2008, when the institution-level backed Prime-1 ratings
relating to the interim government guarantee (which was subsequently
replaced by the new government guarantee scheme) were withdrawn.

The principal methodologies used in rating Investec Bank (Australia)
Limited were "Bank Financial Strength Ratings: Global Methodology" and
"Incorporation of Joint-Default Analysis into Moody's Bank Rating
Methodology", both of which can be found at www.moodys.com in the Credit
Policy & Methodologies directory, in the Ratings Methodologies
subdirectory. Other methodologies and factors that may have been
considered in the process of rating Investec Bank (Australia) Limited
can also be found in the Credit Policy & Methodologies directory.

Investec Bank (Australia) Limited is headquartered in Sydney, New South
Wales, Australia. It reported assets of AUD5.1billion (approximately
USD3.5billion) at 31 March 2009.

Related posts:

  1. Moody’s places NRI’s B1 on review for possible upgrade Tokyo, August 07, 2009 — Moody’s Investors Service has placed...
  2. Moody’s assigns Prime-1 ratings to Citibank N.A. (Sydney Branch)’s US$1bln Sydney, July 03, 2009 -- Moody's Investors Service has...
  3. Moody’s assigns Backed-Aaa to Kiwibank’s A$250mln Fixed Rate Notes Notes Sydney, October 16, 2009 -- Moody's Investors Service has assigned...
  4. Moody’s affirms Shinsei Bank’s A3 rating with negative outlook Tokyo, July 02, 2009 -- Moody's Investors Service has affirmed...
  5. Moody’s reviews Restay Hotels TMK deal for possible downgrade Approximately JPY 2.2 billion in a mezzanine specified loan and...

Related posts brought to you by Yet Another Related Posts Plugin.

Readers Comments





Business News »

Security act invocation to affect confidence in short run: Thai central bank

March 10, 2010

Security act invocation to affect confidence in short run: Thai central bank thumbnail

BANGKOK, March 10 (TNA) – The Cabinet decision to Implement Thailand’s Internal Security Act (ISA) in the capital and its environs to prevent any eruption of violence during the Red Shirt protests later this week may negatively affect investor confidence and domestic spending, according to the Bank of Thailand (BoT), but it will last only [...]

Bank And Finance »

Bank of Thailand keeps interest unchanged at 1.25%

March 10, 2010

Bank of Thailand keeps interest unchanged at 1.25% thumbnail

BANGKOK, March 10 (TNA) –  The Bank of Thailand (BoT) on Wednesday decided to maintain its policy interest rate at 1.25 per cent per annum and will consider adjusting it to normal levels during the next meeting on April 21 if no incident likely to severely affect the economy occurs.
The Monetary Policy Committee (MPC) decision [...]

General News »

ICT launches crisis alert center to monitor protests

March 10, 2010

BANGKOK, 10 March 2010 (NNT) – The Ministry of Information and Communication Technology (ICT) has launched a crisis alert center following mass protests of the anti-Government group United Front for Democracy Against Dictatorship (UDD).
According to ICT Minister Second Lieutenant, Ranongruk Suwunchwee, the hotline 1212 is a 24-hour alert center for crisis. The center will strictly [...]

Economy »

4 Map Ta Phut projects resume work

March 10, 2010

BANGKOK, 10 March 2010 (NNT) - The Office of Natural Resources and Environmental Policy and Planning (ONEP) has resolved to permit the construction of four more Map Ta Phut industrial projects, previously suspended by the court’s injunction.
Mr Sorayud Petchtrakul, Assistant to the Industry Minister and Chairman of committee in charge of seeking solutions to Map [...]

Energy »

More energy needed: more solutions wanted

March 10, 2010

BANGKOK, 10 March 2010 (NNT) - The Ministry of Energy hosts the ‘Fuel Options for Electricity Generation’ seminar to discuss possible energy alternatives for Thailand
Minister of Energy, Dr Wannarat Channukul, presided over the opening ceremony advising public and private sectors to not emphasize development on a certain alternative energy source too much. Disruption of energy [...]

Politics »

Korbsak named as chief coordinator with UDD

March 10, 2010

BANGKOK, 10 March 2010 (NNT) - Secretary General to the Prime Minister Korbsak Sabhavasu has been appointed chairman of the working panel to coordinate with UDD core figures.
The appointment was made by the Internal Security Operations Command (ISOC) during its meeting on Wednesday chaired by Prime Minister Abhisit Vejjajiva. The meeting reviewed security measures to [...]