Reuters logo
Fitch Revises Outlook on Indoexim to Positive, Affirms 3 State-Owned Banks
January 9, 2017 / 9:28 AM / 10 months ago

Fitch Revises Outlook on Indoexim to Positive, Affirms 3 State-Owned Banks

(The following statement was released by the rating agency) JAKARTA/SINGAPORE, January 09 (Fitch) Fitch Ratings has revised the Outlook on Indonesian state-owned entity Lembaga Pembiayaan Ekspor Indonesia (Indoexim) to Positive from Stable. Fitch has also affirmed the Issuer Default Ratings (IDRs), National Ratings, Support Ratings, Support Rating Floors, and issue ratings of Indoexim, PT Bank Mandiri (Persero) Tbk (Mandiri), PT Bank Rakyat Indonesia (Persero) Tbk (BRI) and PT Bank Negara Indonesia (Persero) Tbk (BNI). The Outlooks on the IDRs and National Ratings of Mandiri, BRI and BNI are Stable. A full list of rating actions is at the end of this rating action commentary. KEY RATING DRIVERS IDRS, NATIONAL RATINGS, SUPPORT RATINGS AND SUPPORT RATING FLOORS The state-owned banks' IDRs and National Ratings are support-driven and, together with their Support Ratings (SRs) and Support Rating Floors (SRFs), reflect the high probability they would continue to receive state support in times of need. This is based on the banks' relative systemic importance in the Indonesian economy, including the degree of their policy roles - especially in the case of Indoexim - as well as the state's majority ownership in each of them. The National Long-Term Rating on BNI is lower than those of Mandiri and BRI to reflect Fitch's view of its lower systemic importance (at around 8% of total system assets at 9M16). The revision of our Outlook on Indoexim follows our revision of the Outlook on Indonesia's sovereign rating to Positive from Stable on 21 December 2016 (see Fitch Revises Indonesia's Outlook to Positive; Affirms at 'BBB-' (here)). Fitch views state support for the three commercial banks Mandiri, BRI, and BNI as somewhat less than that for Indoexim, given their lighter policy roles and lower state ownership. In addition, Fitch believes that supporting regulations (including potential introduction of bail-in of senior creditors) for the Financial System Crisis Prevention and Mitigation Law, due to be announced during 2017, may hinder the government's ability to support these banks. Indoexim is not subject to this law, being a non-deposit taking organisation. ISSUE RATINGS The banks' rupiah- and foreign currency-denominated senior bonds and bond programmes are rated at the same level as their IDRs and National Ratings, in accordance with Fitch's rating criteria. RATING SENSITIVITIES IDRS, NATIONAL RATINGS, SUPPORT RATINGS AND SUPPORT RATING FLOORS Changes to Indonesia's sovereign rating (BBB-/Positive) may lead to changes to the banks' ratings. However, positive action on the three commercial banks' ratings are less likely in the absence of clarity on bail-in regulation. A change in the government's ability and willingness to provide extraordinary support would affect these banks' IDRs, SRs and SRFs. Fitch will review the potential impact on SRs and SRFs, including the possibility of negative rating action, as further key details and supporting regulations for the Financial System Crisis Prevention and Mitigation Law become available during 2017. Deterioration in the state-owned banks' standalone financial profiles alone is unlikely to have an impact on their IDRs and National Ratings unless the factors underpinning state support also weaken. The National Rating of BNI could be upgraded if we view its systemic importance to have risen. ISSUE RATINGS Any changes in the banks' IDRs and National Ratings would affect the ratings on the banks' rupiah- and foreign currency-denominated senior bonds and bond programmes. The rating actions are as follows: Indoexim - Long-Term Foreign-Currency IDR affirmed at 'BBB-'; Outlook revised to Positive from Stable - Short-Term Foreign-Currency IDR affirmed at 'F3' - Support Rating Floor affirmed at 'BBB-' - Support Rating affirmed at '2' - Senior unsecured and EMTN programme affirmed at 'BBB-' Mandiri: - Long-Term Foreign-Currency IDR affirmed at 'BBB-'; Outlook Stable - Long-Term Local-Currency IDR affirmed at 'BBB-'; Outlook Stable - Short-Term Foreign-Currency IDR affirmed at 'F3' - Support Rating Floor affirmed at 'BBB-' - Support Rating affirmed at '2' - National Long-Term Rating affirmed at 'AAA(idn)'; Outlook Stable - National Short-Term Rating affirmed at 'F1+(idn)' BRI: - Long-Term Foreign-Currency IDR affirmed at 'BBB-'; Outlook Stable - Short-Term Foreign-Currency IDR affirmed at 'F3' - Support Rating Floor affirmed at 'BBB-' - Support Rating affirmed at '2' - National Long-Term Rating affirmed at 'AAA(idn)'; Outlook Stable - National Short-Term Rating affirmed at 'F1+(idn)' - Senior unsecured rating affirmed at 'BBB-' - Medium-term notes affirmed at 'AAA(idn)' BNI: - Long-Term Foreign-Currency affirmed at 'BBB-'; Outlook Stable - Long-Term Local-Currency IDR affirmed at 'BBB-'; Outlook Stable - Short-Term Foreign-Currency IDR affirmed at 'F3' - Support Rating Floor affirmed at 'BBB-' - Support Rating affirmed at '2' - National Long-Term Rating affirmed at 'AA+(idn)'; Outlook Stable - National Short-Term Rating affirmed at 'F1+(idn)' - Senior unsecured rating affirmed at 'BBB-' Other ratings of the banks are not affected by this action. Contact: Primary Analyst Ambreesh Srivastava Senior Director +65 67967218 Fitch Ratings Singapore Pte Ltd One Raffles Quay, South Tower #22-11 Singapore 048583 Secondary Analysts Gary Hanniffy, CFA (Mandiri and BNI) Director +62 29886808 Iwan Wisaksana (BRI and Indoexim) Director +62 29886807 Committee Chairperson Jonathan Cornish Managing Director +852 22639901 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Bank Rating Criteria (pub. 25 Nov 2016) here National Scale Ratings Criteria (pub. 30 Oct 2013) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1017312 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. 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. 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 WEBSITE. Copyright © 2017 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. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. 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

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below