HSBC BANK OMAN S.A.O.G.
Fitch Ratings has downgraded
The ratings have been removed from Rating Watch Negative (RWN). The Outlook on the Long-Term IDR is Positive. Concurrently, Fitch has withdrawn all the ratings. A full list of rating actions is below.
The rating actions followed the completion of the merger between HBON and Sohar International Bank SAOG (SIB; BB-/Positive) on
Key Rating Drivers
Prior to the downgrade, HBON's Long-Term IDR was driven by potential support from the bank's then ultimate parent, HSBC Holdings plc (HSBC; A+/Stable), as was reflected in the bank's SSR. Following the completion of the merger with SIB on
HBON's VR was heavily influenced by being part of the HSBC group. Without the benefits from HSBC and as part of the merger with SIB, HBON's standalone credit profile converged towards SIB's, which was reflected by the downgrade of HBON's VR to 'b+' from 'bb-' prior to its withdrawal.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Not applicable as the ratings have been withdrawn.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Not applicable as the ratings have been withdrawn.
VR ADJUSTMENTS
The operating environment score of 'bb' was assigned below the 'bbb' category implied score for
The asset quality score of 'b+' was assigned below the 'bb' category implied score due to the following reason: historical & future metrics (negative).
The earnings and profitability score of 'b+' was assigned below the 'bb' category implied score due to the following reason: earnings stability (negative).
The capitalisation and leverage score of 'b+' was assigned below the 'bbb' category implied score due to the following reason: risk profile and business model (negative).
The funding and liquidity score of 'b+' was assigned below the 'bb' category implied score due to the following reason: deposit structure (negative).
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance, if present, is a score of '3'. This means ESG issues are credit neutral or have only a minimal credit impact on HBON, either due to their nature or to the way in which they are being managed by HBON. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.
(C) 2023 Electronic News Publishing, source
