TEXT-S&P summary: Migros Bank
(The following statement was released by the rating agency)
Dec 04 -
Summary analysis -- Migros Bank ----------------------------------- 04-Dec-2012
CREDIT RATING: A/Negative/A-1 Country: Switzerland
Primary SIC: Commercial banks,
Credit Rating History:
Local currency Foreign currency
14-Sep-2001 A/A-1 A/A-1
Ratings Score Snapshot
Issuer Credit Rating A/Negative/A-1
Business Position Moderate (-1)
Capital and Earnings Very Strong (+2)
Risk Position Moderate (-1)
Funding and Liquidity Average
and Strong (0)
GRE Support 0
Group Support 0
Sovereign Support 0
Additional Factors 0
Major Rating Factors
-- Very good asset quality.
-- Very strong capitalization.
-- Stable and predictable profitability through the cycle.
-- Strong domestic brand name.
-- Relatively low domestic market shares and limited price-setting power.
-- High exposure to the Swiss residential housing market.
-- Low cross-selling capacity due to status as a second bank for some clientele.
Standard & Poor's Rating Services' outlook on Migros Bank (MIB) is negative, reflecting growing economic imbalances in Switzerland stemming from residential real estate price increases over the past three years and associated risks for the high asset quality of the bank's mortgage loan book.
If we were to lower our Banking Industry Country Risk Assessment (BICRA) on Switzerland to reflect these imbalances, we would subsequently review the ratings on domestically-oriented Swiss banks. A lower BICRA could directly impact the "anchor" we ascribe to all such banks, including MIB. The anchor is our starting point in assigning an issuer credit rating (ICR). A lower BICRA might in turn result in a one-notch downward revision of MIB's stand-alone credit profile (SACP) and the ICR on the bank.
We could revise the outlook to stable if we were to conclude that the current developments in Swiss housing prices have little or no effect on the asset quality of MIB's residential mortgage loan book.
Ratings upside would depend primarily on a more positive assessment of MIB's risk position. Therefore, we would need to take the view that MIB's risk management capacities and the overall risk profile of MIB is commensurate with peers with an adequate risk position assessment.
Related Criteria And Research
-- Outlook On Nine Swiss Banks To Negative On Exposure To Rising Property Prices; Ratings On All Swiss Banks Affirmed, July 3, 2012
-- Outlook on Switzerland-Based Migros Bank To Negative On Risk From Rising Property prices; 'A/A-1' Affirmed, July 3, 2012
-- Banking Industry Country Risk Assessment: Switzerland, April 11, 2012
-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011
-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011
-- Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010
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