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Fitch Affirms ING Bank Australia at 'A'; Outlook Negative; Off RWN

Published 25/09/2020, 05:03 pm
Updated 25/09/2020, 05:06 pm
© Reuters.

© Reuters.

(The following statement was released by the rating agency) Fitch Ratings-Sydney-25 September 2020: Fitch has affirmed ING Bank (Australia) Limited's (IBAL) Long-Term Issuer Default Rating (IDR) at 'A'. At the same time, Fitch has removed the Rating Watch Negative (RWN) on the rating and assigned a Negative Outlook. This rating action follows similar action on IBAL's parent, ING Bank N.V. (ING Bank, AA-/Negative/a+), which is detailed in "Fitch Affirms ING Groep (AS:INGA) at 'A+'; Outlook Negative," published on 15 September 2020 and available at https://www.fitchratings.com/site/pr/10136222. Fitch has also affirmed IBAL's Short-Term IDR at 'F1' and Support Rating at '1'. IBAL's Viability Rating (VR) has not been reviewed as part of this action. Key Rating Drivers IDRs AND SUPPORT RATING IBAL's Support Rating of '1' reflects the extremely high probability of support from ING Bank should it be required. The bank's Long-Term IDR is rated one notch below the Viability Rating of ING Bank. Fitch believes IBAL is strategically important to the group, which is underscored by the high level of management integration. IBAL accounted for around 5% of ING Bank's total assets at end-2019, suggesting support would not be an issue for the parent. IBAL's Short-Term IDR of 'F1' is at the lower of the two possible choices at the corresponding Long-Term IDR of 'A' under Fitch's Short-Term Ratings Criteria. This is because IBAL's anchor rating is the Viability Rating of ING Bank whose funding and liquidity score is not sufficient to support the higher of the two options under the criteria. RATING SENSITIVITIES IDRs AND SUPPORT RATING Factors that could, individually or collectively, lead to negative rating action/downgrade: IBAL's IDRs and Support Rating are sensitive to changes in the ability or propensity of ING Bank to provide timely support, if needed. A downgrade may result from a downgrade in ING Bank's Viability Rating or a weakening of the importance of IBAL to ING Bank's strategy. The Outlook on IBAL's IDR is also likely to move in line with that of the parent as the ratings are support driven. A full list of downgrade triggers for ING Bank's VR can be found in the 15 September 2020 on ING Groep mentioned above. Factors that could, individually or collectively, lead to positive rating action/upgrade: An upgrade in ING Bank's Viability Rating would result in similar rating action for IBAL. Fitch may also review IBAL's IDR should it become an integral part of the group or if sufficient junior debt buffers were positioned in advance into the Australian subsidiary. IBAL's anchor rating would change to ING Bank's IDR under the latter scenario. A revision of the Outlook on ING Bank's Long-Term IDR to Stable from Negative would result in a similar change in the Outlook on IBAL's Long-Term IDR. 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 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579] 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. Public Ratings with Credit Linkage to other ratings IBAL's ratings are support-driven and therefore linked directly with those of its parent, ING Bank. 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 the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg. ING Bank (Australia) Limited; Long Term Issuer Default Rating; Affirmed; A ; Short Term Issuer Default Rating; Affirmed; F1 ; Support Rating; Affirmed; 1 Contacts: Primary Rating Analyst Jack Do, Director +61 2 8256 0355 Fitch Australia Pty Ltd Suite 15.01, Level 15 135 King Street Sydney 2000 Secondary Rating Analyst George Hong, Director +61 2 8256 0345 Committee Chairperson Heakyu Chang, Senior Director +822 3278 8363 Media Relations: Peter Hoflich, Singapore, Tel: +65 6796 7229, Email: peter.hoflich@thefitchgroup.com Additional information is available on www.fitchratings.com Applicable Criteria Bank Rating Criteria (pub. 28 Feb 2020) (including rating assumption sensitivity) (https://www.fitchratings.com/site/re/10110041) Additional Disclosures Dodd-Frank Rating Information Disclosure Form (https://www.fitchratings.com/site/dodd-frank-disclosure/10137335) Solicitation Status (https://www.fitchratings.com/site/pr/10137335#solicitation) Endorsement Status (https://www.fitchratings.com/site/pr/10137335#endorsement_status) Endorsement Policy (https://www.fitchratings.com/site/pr/10137335#endorsement-policy) ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS (HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS). IN ADDITION, THE FOLLOWING HTTPS://WWW.FITCHRATINGS.COM/RATING-DEFINITIONS-DOCUMENT (https://www.fitchratings.com/rating-definitions-document) DETAILS FITCH'S RATING DEFINITIONS FOR EACH RATING SCALE AND RATING CATEGORIES, INCLUDING DEFINITIONS RELATING TO DEFAULT. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT HTTPS://WWW.FITCHRATINGS.COM/SITE/REGULATORY (https://www.fitchratings.com/site/regulatory). FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH RATINGS WEBSITE. Copyright © 2020 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. 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Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001 Fitch Ratings, Inc. is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (the "NRSRO"). 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