Moody’s gives Sumitomo Mitsui CD program A1

Moody's Japan K.K. said it assigned provisional A1/provisional Prime-1 ratings to Sumitomo Mitsui Banking Corp., Hong Kong Branch's HK$15 billion certificates of deposit (CD) program, through which it can issue senior unsecured CD with a tenor of more than seven days.

The outlook is stable.

The agency also assigned long-term and short-term counterparty risk assessments of A1(cr) and P-1(cr) to SMBC Hong Kong Branch, in line with Moody's bank rating methodology.

Sumitomo Mitsui Banking Corp. (SMBC, deposits A1/senior unsecured A1 stable, baseline credit assessment (BCA) a3) is the main operating bank of Sumitomo Mitsui Financial Group, Inc. (SMFG, senior unsecured A1 stable).

Moody’s said SMBC's A1 ratings incorporate a two-notch uplift from the bank's baseline credit assessment of a3, due to Moody's assessment that there is a very high probability that the bank will receive support from the Government of Japan (A1 stable) in times of stress, given the bank's importance to Japan's financial system.

The a3 standalone baseline credit assessment reflects the bank's: (a) Strong liquidity; (b) improving capital base; (c) relatively high volatility in its profitability; and (d) high concentration risk in Japanese corporate credit, and its equity risk relative to its earnings and capital.

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