Moody's alters Haitong trend to negative

Moody's Investors Service said it changed Haitong International Securities Group Ltd.'s outlook to negative from stable and affirmed its Baa2 local-currency and foreign-currency long-term ratings. The agency also affirmed the Baa2 senior unsecured foreign-currency rating on the Haitong’s bonds.

“The entity-level outlook on Haitong International was changed to negative from stable, reflecting Haitong International's higher-than-peers risk appetite and weaker-than-expected risk management that resulted in a deterioration of its profitability which Moody's expects to remain under pressure over the next 12-18 months. The outlook change also reflects the weakening funding profile,” the agency said in a press release.

Moody’s noted Haitong has posted net losses for three consecutive quarters, the cumulative losses for the nine months to Sept. 30, amounted to HK$2.5 billion, or about 9% of its total shareholders' equity at the end of 2021.

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