Moody's affirms Standard Chartered Bank

Moody's Investors Service said it affirmed the ratings of Standard Chartered Bank on the news of its plan to acquire at least 81% of Karachi, Pakistan-based Union Bank Ltd.

Ratings affected include Standard Chartered's A2 senior unsecured debt and long-term bank deposits ratings; A3 subordinated debt and junior subordinated debt ratings; Baa1 preferred stock rating and P-1 short-term and other short-term bank deposits ratings.

The outlook is stable.

Moody's said the affirmation reflects the small size of the acquisition relative to Standard Chartered's growing earning power. The purchase price for 100% of Union Bank is anticipated to be slightly less than half of Standard Chartered's recently announced $1.1 billion net income for the first half of 2006.

At current earning levels, Standard Chartered will retain enough earnings to fully restore its capital adequacy ratios by the end of 2006, despite the substantial goodwill in the purchase price, the agency added.

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