MOODY'S REVIEWS FOR DOWNGRADE CRÉDIT AGRICOLE INDOSUEZ C FINANCIAL RATING; CONFIRMS Aa2/P-1 DEPOSIT AND DEBT RATINGS
Paris, 09-02-98 -- Moody's announced today that its was reviewing for possible downgrade the C financial strength rating of Cr‚dit Agricole Indosuez (CA Indosuez), the corporate and investment banking subsidiary of Cr‚dit Agricole Group. At the same time, the Aa2/P-1 deposit ratings of CA Indosuez as well as the Aa1/P-1 ratings of Caisse Nationale de Cr‚dit Agricole and its regional banks were confirmed.
Moody's said that its decision to review for possible downgrade of CA Indosuez's financial strength rating reflected the potentially negative implications of CA Indosuez presence and commitments in Russia and other emerging markets, which could further impair the bank's earnings and franchise. The agency added that the increasing turbulence in emerging markets may also undermine CA Indosuez's international strategy, while the bank may find it increasingly difficult to compete successfully in developed countries' markets against international bulge bracket competitors. At the same time, CA Indosuez's Aa2/P-1 debt and deposit ratings were confirmed owing to the support to the bank's creditworthiness coming from its shareholder, the Cr‚dit Agricole group, rated Aa1/P-1/B+ by Moody's, reflecting its superior domestic retail franchise and financial strength.
Moody's added that the review will consider the magnitude of the counterparty and market risk which the bank has in its capital markets and lending activities, especially in Russia, its related protections, as well as the strength and the upside potential of its recurring profitability and economic capital base. The agency will also contemplate the position of CA Indosuez relative to its peers and the potential to strengthen its investment banking franchise under the umbrella of the Cr‚dit Agricole group, in an increasingly volatile and competitive business environment.
The following rating was put on review for downgrade:
Cr‚dit Agricole Indosuez -- the bank financial strength rating at C.
The following ratings of Cr‚dit Agricole Indosuez were not under review and are confirmed:
Cr‚dit Agricole Indosuez -- senior debt at Aa2, subordinated debt at Aa3, long-term deposits at Aa2, short-term deposits at Prime-1;
Indosuez Holdings S.C.A. -- the rating for noncumulative preferred stock guaranteed by Banque Indosuez at "a1";
Banque Indosuez, Hong Kong Branch -- long-term deposits at A1;
Banque Indosuez North America, Inc. -- the Prime-1 rating for commercial paper.
Cr‚dit Agricole Indosuez, headquartered in Paris, had total assets of FF 832 billion (approximately US$ 139 billion) at year end 1997.
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