Fitch affirms OCBC Bank’s ratings; outlook stable
Fitch Ratings has affirmed Singapore-based Oversea-Chinese Banking Corporation’s (OCBC) ratings at Long-term foreign currency Issuer Default Rating (IDR) ‘AA-’ (AA minus), Short-term foreign currency IDR ‘F1+’, Individual rating ‘B’, Support ‘2′, Support Rating Floor ‘BBB+’ and subordinated Tier-2 and preference shares ratings at ‘A+’, following a review of the bank.
The Outlook on the ratings is Stable.
Fitch notes that although the operating environment in OCBC’s main markets - Singapore and Malaysia - may be less benign in the future as a result of the expected slowdown in the US, the bank’s credit profile should stay sufficiently strong to maintain its ratings at their current level. Thanks to a benign credit environment in recent years and also due to active management of its asset quality, the bank’s non-performing loan (NPL) ratio continued to improve and had declined to 2.4% as at June 2007 (4.1% in 2005; 5% in 2004; 6.9% in 2003). Similarly, the bank’s NPL coverage (specific and general reserves) further improved to 104% (88% at end-2005) and together with its strong capitalisation (Total CAR: 14.6%; Tier-1 ratio: 12.5% at H107), its net NPL to equity ratio declined further and was negative at H107 (2.5% at end-2005). — www.theasianbanker.com (September 27 2007)–