Moody’s gives Sumitomo deposits Aa3

Moody's Japan K.K. said it assigned an Aa3 rating to the A$400 million floating-rate transferable deposits due Sept. 4, 2017 issued by Sumitomo Mitsui Banking Corp. Sydney Branch.

The outlook is stable.

This is a takedown from he $4 billion debt issuance program, which is rated provisional Aa3.

Moody’s said the Aa3 ratings incorporate a three-notch uplift from the bank's baseline credit assessment of a3, due to the assessment of the very high probability of systemic support in times of stress, given the bank's importance to Japan's financial system.

The a3 standalone baseline credit assessment reflects the agency’s overall assessment of the bank's: (a) Valuable franchise in Japan's retail and wholesale banking markets; (b) strong liquidity; (c) improving capital base; (d) higher volatility historically evident in its profitability; and (e) high concentration risk in Japanese corporate credit, and its equity risk relative to its earnings and capital.

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