S&P lowers Haitong outlook

S&P said it revised its outlook on Haitong Bank SA to negative from stable and affirmed the long- and short-term ratings on Haitong Bank at BB-/B.

“The revision of our outlook on Haitong Bank to negative from stable reflects our view that the bank's progress in reshaping its business model and returning to profitability may take longer than expected, and consequently its internal capital generation capacity might be further eroded,” S&P said in a news release.

The ratings on Haitong Bank stand three notches above its B- unsupported group credit profile. This is because S&P continues to consider the bank as a strategically important subsidiary of Haitong Securities Co. Ltd. (BBB/stable/A-2) and therefore believes it will likely benefit from financial assistance if needed. Haitong Bank continues to benefit from its parent's management commitment and financial support in the form of funding and capital. Moreover, Haitong Bank is integral to its parent's long-term strategy to expand outside its core region.

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