Fitch puts Bank Permata on watch

Fitch Ratings said it placed PT Bank Permata Tbk.’s national long-term rating of AAA(idn) on rating watch negative.

The rating action follows an announcement by Bangkok Bank PCL on Dec. 12 it had entered into conditional share purchase agreements with Standard Chartered Bank and PT Astra International Tbk. to acquire their 89.1% shareholding interests in Permata, subject to regulatory approval. BBL will seek to acquire Permata’s remaining shares through a public tender.

“Permata’s national ratings are driven by institutional support, reflected by our view that SCB has the ability and high propensity to provide timely extraordinary support to its subsidiary, if needed. We believe that Permata will continue to benefit from institutional support, albeit from a different source, and the RWN reflects the possibility that the likelihood of receiving support could be lower after completion of the transaction,” said Fitch in a press release.

BBL’s ability to provide support is reflected in its viability rating, which is two notches lower than Standard Chartered’s rating. Permata’s ratings will also be driven by Fitch’s assessment of BBL’s propensity to provide support.

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