Mexico, June 30, 2016 -- Moody's de México has affirmed Barclays Bank Mexico, S.A.
(Barclays Mexico)'s long-term global local and foreign currency
deposit ratings of Baa3, with a stable outlook. The rating
agency has also affirmed the bank's short-term global local
and foreign currency deposit ratings of Prime-3, as well
as the long and short-term Mexican national scale deposit ratings
of Aa3.mx and MX-1.
Barclays Mexico's baseline credit assessment (BCA) of ba2 and adjusted
BCA of baa3, as well as its long and short-term counterparty
risk assessments of Baa2(cr) and Prime-2(cr) remained unaffected.
Moody's also affirmed with a stable outlook the long-term,
global local currency issuer rating of Baa3 of Barclays Capital Casa de
Bolsa, S.A. de C.V. (Barclays Capital
CB). The brokerage house's short-term local currency
issuer rating of Prime-3 as well as its long and short-term
Mexican National scale issuer ratings of Aa3.mx and MX-1
were also affirmed.
The following ratings were affirmed:
Barclays Bank Mexico, S.A.
- Long term global local and foreign currency deposit ratings of
Baa3, stable outlook
- Short term global local and foreign currency deposit ratings
of Prime-3
- Long and short term Mexican National Scale deposit ratings of
Aa3.mx and MX-1
- Overall rating outlook: Stable
Barclays Capital Casa de Bolsa. S.A. de C.V.
- Long term global local currency issuer rating of Baa3,
stable outlook
- Short term global local currency issuer rating of Prime-3
- Long and short term Mexican National Scale issuer ratings of
Aa3.mx and MX-1
- Overall rating outlook: Stable
RATINGS RATIONALE
The affirmation of Barclays Mexico and Barclays Capital CB follows a similar
action taken on the BCA of Barclays Bank PLC (Barclays Bank), the
parent of both entities, which was affirmed at baa2 on 28 June 2016.
Because Barclays Bank's affirmed BCA is the anchor for Moody's
assumption of a "very high" probability of affiliate support
to Barclays Mexico, the change in the outlook to negative from stable
on Barclays Bank supported ratings does not affect the stable outlook
of the Mexican subsidiary thus far.
This outlook change on the parent's ratings followed a referendum
vote in favor of the UK leaving the European Union and the recent change
in the outlook of the UK's Aa1 government bond rating to negative from
stable. For more details, please refer to Moody's press release
"Moody's changes outlook on 12 UK banks and building societies following
UK vote to leave the EU; ratings of 16 UK banks and building societies
affirmed", dated 28 June 2016.
Barclays Mexico's ba2 BCA captures its niche wholesale and investment
banking operations, with a narrow focus on offering securities and
derivatives trading and bond underwriting mostly to domestic institutional
clients, including local pension funds, insurance companies
and local large corporations. The bank's business is less stable
than traditional retail and commercial banking, and is hence more
prone to volatile profitability. The bank's standalone assessment
on the other hand gauges its good core capitalization and liquidity buffers.
The Baa3 issuer rating of Barclays Capital CB is aligned to the baa3 adjusted
BCA of Barclays Mexico, reflecting Moody's assessment of full support
from the bank to the brokerage house through Grupo Financiero Barclays
Mexico, S.A. de C.V. (unrated),
the parent of both entities. The support assumption incorporates
the integration between the bank and the brokerage house in terms of infrastructure,
risk management practices and customer base.
WHAT COULD MOVE THE RATINGS UP OR DOWN
Barclays Mexico's and Barclays Capital CB's ratings would
face downward pressure in the case of a downgrade in Barclays Bank baa2
BCA by more than one notch. Upward pressure on the ratings of the
Mexican subsidiaries is unlikely at this time given the negative outlook
on the parent ratings. Further, Barclays Mexico's BCA is
already constrained by the mono-line nature of the bank's
operations and its inherently volatile profitability.
The principal methodology used in rating Barclays Bank Mexico, S.A.
was Banks published in January 2016. The principal methodology
used to rate Barclays Capital Casa de Bolsa, S.A.
de C.V. was Global Securities Industry Methodology published
in May 2013. Please see the Ratings Methodologies page on www.moodys.com.mx
for a copy of these methodologies.
The period of time covered in the financial information used to determine
Barclays Bank Mexico, S.A. and Barclays Capital Casa
de Bolsa, S.A. de C.V. ratings is between
1 January 2011 and 31 March 2016 (source: Moody's, annual
audited and quarterly unaudited financial statements of Barclays Bank
Mexico, S.A. and Barclays Capital Casa de Bolsa,
S.A. de C.V., Comision Nacional Bancaria
y de Valores and Banco de Mexico).
The sources and items of information used to determine Barclays Bank Mexico,
S.A. and Barclays Capital Casa de Bolsa, S.A.
de C.V. ratings include 2016 and 2015 interim financial
statements (sources: Moody's and quarterly unaudited financial statements
of Barclays Bank Mexico, S.A. and Barclays Capital
Casa de Bolsa, S.A. de C.V.); year-end
2015 and 2014 audited financial statements (sources: Moody's and
annual audited financial statements of Barclays Bank Mexico, S.A.
and Barclays Capital Casa de Bolsa, S.A. de C.V.);
information on market position (source: Comision Nacional Bancaria
y de Valores); regulatory capital information (source: Banco
de Mexico).
Moody's National Scale Credit Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative risks.
NSRs differ from Moody's global scale credit ratings in that they are
not globally comparable with the full universe of Moody's rated entities,
but only with NSRs for other rated debt issues and issuers within the
same country. NSRs are designated by a ".nn" country modifier
signifying the relevant country, as in ".za" for South Africa.
For further information on Moody's approach to national scale credit ratings,
please refer to Moody's Credit rating Methodology published in May 2016
entitled "Mapping National Scale Ratings from Global Scale Ratings".
While NSRs have no inherent absolute meaning in terms of default risk
or expected loss, a historical probability of default consistent
with a given NSR can be inferred from the GSR to which it maps back at
that particular point in time. For information on the historical
default rates associated with different global scale rating categories
over different investment horizons, please see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_189530.
The long term Mexican National Scale rating of Aa3.mx indicates
issuers or issues with very strong creditworthiness relative to other
domestic issuers.
Barclays Bank Mexico and Barclays Capital CB are headquartered in Mexico
City, Mexico. As of March 2016, the bank had total
assets of MXN81.5 billion and MXN4.8 billion in shareholder's
equity.
REGULATORY DISCLOSURES
Information sources used to prepare the rating are the following:
parties involved in the ratings, public information, and confidential
and proprietary Moody's information.
The ratings have been disclosed to the rated entities prior to public
dissemination.
A general listing of the sources of information used in the rating process,
and the structure and voting process for the rating committees responsible
for the assignment and monitoring of ratings can be found in the Disclosure
tab in www.moodys.com.mx.
The date of the last Credit Rating Action for both enities was 13 June
2016.
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.mx.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.Exceptions
to this approach exist for the following disclosures, if applicable
to jurisdiction: Ancillary Services, Disclosure to rated entity,
Disclosure from rated entity.
This Rating is subject to upgrade or downgrade based on future changes
in the financial condition of the Issuer/Security, and said modifications
will be made without Moody's de México S.A. de C.V
accepting any liability as a result.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's considers the quality of information available on the rated entity,
obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a rating is of sufficient quality and from sources Moody's
considers to be reliable including, when appropriate, independent
third-party sources. However, Moody's is not an auditor
and cannot in every instance independently verify or validate information
received in the rating process.
Please see Moody's Rating Symbols and Definitions on www.moodys.com.mx
for further information on the meaning of each rating category and the
definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com.mx
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is the most
reliable and accurate based on the information that is available to it.
Please see our website www.moodys.com.mx for further
information.
Please see www.moodys.com.mx for any updates on changes
to the lead rating analyst and to the Moody's legal entity that has issued
the rating.
The ratings issued by Moody's de Mexico are opinions regarding the credit
quality of securities and/or their issuers and not a recommendation to
invest in any such security and/or issuer.
Please see the ratings tab on the issuer/entity page on www.moodys.com.mx
for additional regulatory disclosures for each credit rating.
Georges Hatcherian
Analyst
Financial Institutions Group
Moody's de Mexico S.A. de C.V
Ave. Paseo de las Palmas
No. 405 - 502
Col. Lomas de Chapultepec
Mexico, DF 11000
Mexico
JOURNALISTS: 001-888-779-5833
SUBSCRIBERS:52-55-1253-5700
M. Celina Vansetti
MD - Banking
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's de Mexico S.A. de C.V
Ave. Paseo de las Palmas
No. 405 - 502
Col. Lomas de Chapultepec
Mexico, DF 11000
Mexico
JOURNALISTS: 001-888-779-5833
SUBSCRIBERS:52-55-1253-5700
Moody's affirms Barclays Bank Mexico's ratings, outlook stable
