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Bank Standalone Ratings
Bank Standalone Ratings (BSRs) provide a forward-looking view of the intrinsic, standalone credit strength of rated banks, that is, the ability of banks to meet financial obligations on an ongoing basis without requiring extraordinary support from owners or the government and in the absence of extraordinary interference, including government-imposed transfer, convertibility, and deposit withdrawal restrictions (i.e. sovereign interference risk).
BSRs take into account key credit fundamentals including the relative strength of a bank’s business model, management, risk profile, earnings capacity, and capital and liquidity buffers. They also reflect the operating environment and sovereign credit risk. Hence the BSR represents CI Ratings’ opinion of the likelihood of a bank becoming untenable or unsound owing to inherent business and financial weaknesses, operating environment risks, and the direct and indirect impact of sovereign distress. BSRs generally take a long-term view, including of a bank’s resilience to adversity and stress.
The following definitions and rating scale apply to BSRs and should be read in conjunction with the relevant criteria.
Bank Standalone Ratings
| aaa |
Exceptional standalone strength. Exceptionally strong and sustainable financial and non-financial credit fundamentals. Operating environment is very strong. The bank is highly resilient to adverse changes in business, economic and financial conditions. It is extremely unlikely that the bank will require extraordinary support to meet its financial obligations. |
| aa |
Very strong standalone strength. Very strong and sustainable financial and non-financial credit fundamentals. Operating environment is likely to be strong. The bank is resilient to adverse changes in business, economic and financial conditions. It is unlikely that the bank will require extraordinary support to meet its financial obligations. |
| a |
Strong standalone strength. Strong and sustainable financial and non-financial credit fundamentals. Operating environment may be less strong and resilient than in higher rating categories. The bank may be slightly more vulnerable to adverse changes in business, economic and financial conditions than banks in higher categories. In the event of adversity, the likelihood of the bank requiring extraordinary support to meet financial obligations is very low. |
| bbb |
Sound standalone strength. Adequate financial and non-financial credit fundamentals. Operating environment may be sound overall but with some important vulnerabilities or weaknesses. The bank may be somewhat vulnerable to adverse changes in business, economic and financial conditions. In the event of adversity, the likelihood of the bank requiring extraordinary support to meet financial obligations is reasonably low. |
| bb |
Moderate standalone strength. Moderate financial and non-financial credit fundamentals. Operating environment may have significant vulnerabilities or weaknesses. The bank may be vulnerable to adverse changes in business, economic and financial conditions. In the event of adversity, the likelihood of the bank requiring extraordinary support to meet financial obligations is moderate. |
| b |
Weak standalone strength. Weak financial and non-financial credit fundamentals. Operating environment may be weak and highly susceptible to shocks. The bank is very vulnerable to adverse changes in business, economic and financial conditions. In the event of adversity, the likelihood of the bank requiring extraordinary support to meet financial obligations is relatively high. |
| c | Very weak standalone financial position, either with immediate problems or with insufficient capacity to withstand adversities. The bank may be at, or very close to, the point of non-viability. It may be in default or at very high risk of defaulting in the absence of extraordinary support. Operating environment may be very weak and volatile. |
CI appends "+" and "-" signs to Bank Standalone Ratings ratings in the categories from "aa" to "b" to indicate that the strength of a particular institution is, respectively, slightly greater or less than that of similarly rated peers.
Outlook - expectations of improvement, no change or deterioration in the rating over the 12 months following its publication are denoted Positive, Stable or Negative.
