(The following was released by the rating agency)
TOKYO, August 06 (Fitch) Fitch Ratings has assigned Japan's
Shizuoka Bank, Ltd (Shizuoka) Long-Term Foreign and Local
Currency Issuer Default Ratings (IDR) of 'A' with Stable
Outlook. Fitch also assigned a Support Floor Rating of 'BBB-' to
Shizuoka. All its other ratings have been affirmed. A full
rating breakdown is provided below.
Shizuoka's IDRs are driven by its Viability Rating (VR),
which in turn reflects the bank's strong capitalisation with a
Fitch Core Capital ratio near 18% end-March 2012, and its strong
regional franchise. The ratings also factor in the bank's
conservative management and its overall resilience to
foreseeable risks underpinned by a track record of
profitability. These factors, combined with Fitch's expectations
that the operating environment will not deteriorate beyond
recent past cycles, contribute to the Stable Outlook.
Liquidity is supported by the bank's large holding of
Japanese government bonds (JGBs - 11% of total assets at
end-March 2012) and substantial retail deposits.
Shizuoka's VR and IDRs may see negative rating action if
aggressive growth, earnings volatility or material deterioration
in asset quality results in thinning capitalisation. Conversely,
significant improvement in profitability on a sustained basis
may result in positive rating action. However, the bank's large
investment in JGBs may constrain any upward rating movement if
the Japanese sovereign 'A+' rating, which is currently on
Negative Outlook, is downgraded.
Shizuoka's Support Rating (SR) '2' reflects a high potential
for support from the Japanese sovereign, if needed, which in
turn underpins the Support Rating Floor of 'BBB-'.
Shizuoka is the largest bank in Shizuoka Prefecture and the
fifth-largest regional bank or regional banking group in Japan,
by assets. It has overseas branches and a subsidiary abroad
mainly to serve its Japanese customers.
The rating actions are as follows:
Long-Term Foreign and Local Currency IDRs assigned at 'A';
Short-Term Foreign and Local Currency IDRs affirmed at 'F1'
Viability Rating affirmed at 'a'
Support Rating affirmed at '2'
Support Rating Floor assigned at 'BBB-'