S&P lowers Bank of East Asia view to negative

Standard & Poor’s said that it has revised the outlook on the long-term issuer credit ratings on Bank of East Asia Ltd. to negative, along with the outlook on its Chinese subsidiary, Bank of East Asia (China) Ltd.

The agency also said it affirmed both banks’ A long-term and A-1 short-term issuer credit ratings.

S&P also said it affirmed the cnAA+ long-term and cnA-1 short-term Greater China regional scale ratings on the banks.

The outlook revision reflects rising economic risks in China and Hong Kong, which are the group’s main markets, the agency said.

S&P said it sees a one-in-three chance of a downgrade of the banks over the next two years due to a potential heightening of economic risks in China and Hong Kong.

The agency also said it considered the possibility of the bank growing faster in China, in contrary to current expectation of a fairly stable geographic loan mix, which may put negative pressure on the group’s BBB+ anchor rating.

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