Moody’s lowers two Singapore banks

Moody's Investors Service said it downgraded DBS Bank (Hong Kong) Ltd.'s baseline credit assessment to A3 from A2, along with its adjusted baseline credit assessment to A1 from Aa3, long-term deposit ratings to A1 from Aa3 and counterparty risk assessment to Aa3(cr) from Aa2(cr).

The agency also said it affirmed OCBC Wing Hang Bank Ltd.'s baseline credit assessment of A3 and downgraded its adjusted baseline credit assessment to A1 from Aa3, long-term deposit ratings to A1 from Aa3, junior subordinated debt to A3(hyb) from A2(hyb) and counterparty risk assessment to Aa3(cr) from Aa2(cr).

The outlook on the two banks' ratings also were revised to stable from negative.

The actions follow recent similar rating actions on the parent banks of these banks – DBS Bank Ltd. and Oversea-Chinese Banking Corp. Ltd., Moody’s said.

The ratings on these banks consider the very strong support from their respective parents and the parents' reduced capacity to provide support as reflected by the downgrade of their baseline credit assessments to A1 from Aa3, the agency explained.

These banks are facing asset quality pressures due to rising impaired loan ratios since 2015, Moody’s said.

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