S&P lowers Shanghai Pudong Development Bank

S&P said it lowered the long-term issuer credit rating on Shanghai Pudong Development Bank Co. Ltd. to BBB from BBB+.

The agency also said it affirmed the A-2 short-term issuer credit rating on the bank.

S&P also said it lowered the Greater China regional scale ratings on the bank to cnA/cnA-2 from cnA+/cnA-1, along with the issue ratings on the debts that the bank issued, guaranteed or supported through letter of credits.

The outlook is stable.

The downgrades reflect the bank’s pressured capitalization, which is expected to remain strained over the next 12- to 24-months, S&P said.

The bank's capital and earnings position also weakened following its accelerated credit growth through investment receivables and continued strong issuance of off-balance-sheet wealth management products in 2015, the agency added.

The issuer credit rating on the bank is two notches higher than the bank's stand-alone credit profile of BB+ to reflect the bank's moderate systemic importance in a highly supportive system, S&P said.

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