TEXT-Fitch affirms HSBC Bank (RR) at 'BBB+', outlook is stable
Dec 10 - Fitch Ratings has affirmed Russia's HSBC Bank (RR) LLC's (HSBCR) Long-term Issuer Default Rating (IDR) at 'BBB+' and Support Rating at '2'. A full list of ratings actions is at the end of this commentary. RATING ACTION RATIONALE AND DRIVERS: IDRS, NATIONAL RATING, SUPPORT RATING The Long-term IDRs continue to reflect the support HSBCR is likely to receive, if needed, from its ultimate shareholder, HSBC Bank Plc (HSBC). Following the recent downgrade of HSBC's IDR to 'AA-'/Stable (see "Fitch Downgrades HSBC to 'AA-', Outlook Stable" dated 7 December 2012 on www.fitchratings.com), HSBCR's ratings remain four notches below that of its ultimate parent. The significant notching reflects Russia's transfer and convertibility risks, which currently cap HSBCR's IDR at 'BBB+'. RATING SENSITIVITES: IDRS, NATIONAL RATING, SUPPORT RATING Should Russia's Country Ceiling of 'BBB+' be revised, Fitch would probably revise HSBCR's ratings. The sale of HSBCR to a lower-rated owner, or a multi-notch downgrade of HSBC, could each also lead to a downgrade of HSBCR. However, neither of these is expected at present. RATING ACTION RATIONALE, DRIVERS AND SENSITIVITES: VIABILITY RATING Fitch has not assigned HSBCR a Viability Rating (which reflects a bank's standalone strength) due to its high dependence on the parent. This includes, in particular, integrated risk management infrastructure, a limited domestic franchise (with most competences and competitive advantages secured through integration with the parent), and reliance on parent liquidity and risk-sharing capabilities. The ratings actions are as follows: Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Stable Short-term foreign currency IDR: affirmed at 'F2' Long-term local currency IDR: affirmed at 'BBB+'; Outlook Stable National Long-term Rating: affirmed at 'AAA(rus)'; Outlook Stable Support rating: affirmed at '2' Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable criteria, "Global Financial Institutions Rating Criteria", dated 15 August 2012, 'National Ratings Criteria ', dated 19 January 2011, and "Rating FI Subsidiaries and Holding Companies", dated 10 August 2012, are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria Rating FI Subsidiaries and Holding Companies
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