TEXT-S&P rates Goldman Sachs International Bank 'A/A-1'

Mon Nov 12, 2012 11:31am EST

Overview
     -- Goldman Sachs International Bank (GSIB) is the largest European bank 
subsidiary of The Goldman Sachs Group Inc. (GS; A-/Negative/A-2).
     -- We consider GSIB to be "core" to GS under our group ratings 
methodology.
     -- We are assigning our 'A/A-1' counterparty credit ratings to GSIB, in 
line with GS' other core operating entities.
     -- The negative outlook reflects the outlook on GS.


Rating Action
On Nov. 12, 2012, Standard & Poor's Ratings Services assigned its 'A/A-1' 
long- and short-term counterparty credit ratings to Goldman Sachs 
International Bank (GSIB). The outlook is negative.

Rationale
The ratings on GSIB reflect our view of its "core" status to GS. Our 
assessment is based on GSIB's position as the group's largest European banking 
entity, the high level of operational integration with other U.K. entities and 
the group, and our view that offering securities and banking services in 
Europe and Asia remain central to GS' long-term strategy.

As a result of assigning "core" status, we align the ratings on GSIB with 
those on the other "core" operating companies of GS, which includes the other 
rated U.K. entity, Goldman Sachs International (GSI; A/Negative/A-1). As the 
group holding company, GS is rated one notch lower than these operating 
companies due to its structural subordination.

GSIB serves the international clients of GS in Europe, as well as in Asia, 
through GSIB's Korean branch. GSIB's activities include European government 
bond trading, loan origination and secondary loan trading, and securities 
lending. The European government bond trading business was recently 
transferred to GSIB from GSI, a sister company. GSI is the group's primary 
broker-dealer entity outside of the U.S. GS has a history of providing capital 
support to GSIB, and we believe it is committed to maintaining adequate 
capital at the subsidiary for business and regulatory purposes.

GSIB reported pretax profits of $10.6 million in 2011 on revenues of $62.8 
million. While profit will to some extent follow fluctuations in market 
volume, we expect profit at year-end 2012 to better reflect the transfer of 
the government bonds business, which happened only late in 2011.

Outlook
The outlook is negative, reflecting that on GS. We expect the ratings to move 
in line with those on GS. We could also lower the ratings if we no longer 
consider GSIB to be "core" to GS. While an unlikely prospect, this could 
result from a period of sustained very weak operating performance at the 
subsidiary level, or evidence that securities and banking activity in Europe 
is no longer part of the group's global strategy.


Related Criteria And Research

All articles listed below are available on RatingsDirect on the Global Credit 
Portal, unless otherwise stated.

Related criteria
     -- Banks: Rating Methodology And Assumptions, Nov. 9, 2011
     -- Group Rating Methodology And Assumptions, Nov. 9, 2011


Related research
     -- EARNINGS UPDATE: The Goldman Sachs Group Inc. Ratings Unaffected By 
Good Third-Quarter Results, Oct. 16, 2012


Ratings List
New Rating; CreditWatch/Outlook Action

Goldman Sachs International Bank
 Counterparty Credit Rating             A/Negative/A-1     



Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.