Singapore, July 05, 2018 -- Moody's Investors Service has today assigned Counterparty Risk Ratings
(CRRs) to nine Indonesian banks.
The affected banks are: (1) Bank Rakyat Indonesia (P.T.)
(BRI); (2) Bank Mandiri (P.T.) (Mandiri); (3)
Bank Central Asia Tbk (P.T.); (4) Bank Negara Indonesia
TBK (P.T.) (BNI); (5) Bank Tabungan Negara (P.T.)
(BTN); (6) PT Bank CIMB Niaga Tbk (CIMB Niaga); (7) Pan Indonesia
Bank TBK (P.T.) (Panin); (8) Bank Danamon Indonesia
TBK (P.T.) (BDI); and (9) Bank Permata TBK (P.T.)
(Permata). The full list of assigned ratings is provided at the
end of this press release.
Moody's Counterparty Risk Ratings are opinions of the ability of
entities to honor the uncollateralized portion of non-debt counterparty
financial liabilities (CRR liabilities) and also reflect the expected
financial losses in the event that such liabilities are not honored.
CRR liabilities typically relate to transactions with unrelated parties.
Examples of CRR liabilities include the uncollateralized portion of payables
arising from derivatives transactions and the uncollateralized portion
of liabilities under sale and repurchase agreements. CRRs are not
applicable to funding commitments or other obligations associated with
covered bonds, letters of credit, guarantees, servicer
and trustee obligations, and other similar obligations that arise
from a bank performing its essential operating functions.
RATINGS RATIONALE
The CRRs assigned to the nine Indonesian banks are in line with the with
the Counterparty Risk Assessments (CRA) already assigned.
Because Moody's considers Indonesia not to have an operational resolution
regime, in assigning CRRs to the Indonesian banks subject to this
rating action, the rating agency applies its basic Loss Given Failure
(LGF) approach. Moody's basic LGF analysis positions CRRs in line
with the banks' CRAs, one notch above their adjusted BCAs,
prior to government support.
Furthermore, the CRRs also incorporate between zero and one notch
of uplift due to Moody's assessment of government support for the nine
banks in times of need, based on the banks' systemic importance
to Indonesia. The uplifts are in line with that applied to the
CRAs.
OUTLOOK
CRRs do not carry outlooks.
FACTORS THAT COULD LEAD TO AN UPGRADE
For Mandiri and BNI, the deposit ratings are already at the level
of the sovereign rating of Baa2 with a stable outlook. As such,
Moody's could upgrade the banks' ratings, if Moody's upgrades Indonesia's
sovereign rating. And, Moody's could upgrade the banks' BCAs
if the banks demonstrate an improvement in their asset quality,
supported by continued strength in their loss-absorbing buffers,
including loan-loss reserves and core capital.
For BRI and Bank Central Asia, their deposit ratings and BCA are
already at the level of the sovereign rating of Baa2 with a stable outlook.
As such, Moody's could upgrade the banks' ratings and BCAs if Moody's
upgrades the sovereign rating, and their credit fundamentals remain
robust and reflect stabilizing asset quality and strong capitalization.
For BTN, CIMB Niaga and BDI, their deposit ratings are already
at the level of the sovereign rating of Baa2 with a stable outlook.
As such, Moody's could upgrade their ratings if Moody's upgrades
the sovereign rating. And, Moody's could upgrade the bank's
BCAs if they demonstrate an improvement in their asset quality,
loss-absorbing buffers — including loan-loss reserves
and core capital — as well as a sustained improvement in funding,
as reflected by track records of lower deposit funding costs.
For Panin and Permata, Moody's could upgrade the banks' deposit
ratings and BCAs, if they demonstrate improvements in their asset
quality, loss-absorbing buffers — including loan-loss
reserves and core capital — as well as improvements in funding.
FACTORS THAT COULD LEAD TO A DOWNGRADE
For BRI, Mandiri, Bank Central Asia, BNI, BTN,
Moody's could downgrade the banks' Baa2 deposit ratings if Moody's downgrades
the sovereign rating.
For CIMB Niaga and BDI, Moody's could downgrade the banks' Baa2
deposit ratings if Moody's downgrades the sovereign rating and the banks'
adjusted BCAs.
And, Moody's could downgrade these banks' BCAs, if their financial
fundamentals deteriorate significantly. If all other rating factors
are constant, their BCAs would come under adverse pressure if they
report a continued increase in problem loans — including nonperforming
and restructured loans — or a material decline in core capital ratios
and/or profitability.
For Panin and Permata, Moody's could downgrade the banks' deposit
ratings and BCAs if their financial fundamentals deteriorate significantly.
If all other rating factors are constant, their BCAs would come
under adverse pressure, if they report a continued increase in problem
loans — including nonperforming and restructured loans — or
a material decline in core capital ratios and/or profitability.
The principal methodology used in these ratings was Banks published in
June 2018. Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
The following ratings were assigned:
Bank Rakyat Indonesia (P.T.)
Local and foreign currency long-term Counterparty Risk ratings
of Baa1
Local and foreign currency short-term Counterparty Risk ratings
of P-2
Bank Mandiri (P.T.)
Local and foreign currency long-term Counterparty Risk ratings
of Baa2
Local and foreign currency short-term Counterparty Risk ratings
of P-2
Bank Central Asia Tbk (P.T.)
Local and foreign currency long-term Counterparty Risk ratings
of Baa1
Local and foreign currency short-term Counterparty Risk ratings
of P-2
Bank Negara Indonesia TBK (P.T.)
Local and foreign currency long-term Counterparty Risk ratings
of Baa2
Local and foreign currency short-term Counterparty Risk ratings
of P-2
Bank Tabungan Negara (P.T.)
Local and foreign currency long-term Counterparty Risk ratings
of Baa2
Local and foreign currency short-term Counterparty Risk ratings
of P-2
PT Bank CIMB Niaga Tbk
Local and foreign currency long-term Counterparty Risk ratings
of Baa1
Local and foreign currency short-term Counterparty Risk ratings
of P-2
Pan Indonesia Bank TBK (P.T.)
Local and foreign currency long-term Counterparty Risk ratings
of Baa2
Local and foreign currency short-term Counterparty Risk ratings
of P-2
Bank Danamon Indonesia TBK (P.T.)
Local and foreign currency long-term Counterparty Risk ratings
of Baa1
Local and foreign currency short-term Counterparty Risk ratings
of P-2
Bank Permata TBK (P.T.).
Local and foreign currency long-term Counterparty Risk ratings
of Baa2
Local and foreign currency short-term Counterparty Risk ratings
of P-2
The financial institutions are headquartered in Jakarta, and reported
total assets at the end of March 2018 of:
Bank Rakyat Indonesia (P.T.): IDR1.12 quadrillion
($81 billion)
Bank Mandiri (P.T.): IDR1.10 quadrillion ($80
billion)
Bank Central Asia Tbk (P.T.): IDR760 trillion ($55
billion)
Bank Negara Indonesia TBK (P.T.): IDR700 trillion
($51 billion)
Bank Tabungan Negara (P.T.): IDR259 trillion ($19
billion)
PT Bank CIMB Niaga Tbk : IDR258 trillion ($19 billion)
Pan Indonesia Bank TBK (P.T.): IDR214 trillion ($15
billion)
Bank Danamon Indonesia TBK (P.T.): IDR180 trillion
($13 billion)
Bank Permata TBK (P.T.): IDR152 trillion ($11
billion)
REGULATORY DISCLOSURES
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 credit rating action on the support provider and in relation to
each particular credit 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.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit 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.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Simon Chen
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Graeme Knowd
MD - Banking
Financial Institutions Group
JOURNALISTS: 81 3 5408 4110
Client Service: 81 3 5408 4100
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
