Singapore, February 09, 2017 -- Moody's Investors Service has affirmed the Baa3 deposit and, where
applicable, issuer and senior unsecured debt ratings of 10 banks
in Indonesia (Baa3 positive).
At the same time, Moody's has revised the outlooks for the ratings
of eight banks to positive from stable. The affected banks are:
(1) Bank Mandiri (P.T.); (2) Bank Rakyat Indonesia
(P.T.) (BRI); (3) Bank Central Asia Tbk (P.T.);
(4) Bank Negara Indonesia TBK (P.T.) (BNI); (5) PT
Bank CIMB Niaga Tbk; (6) Bank Tabugan Negara (P.T.)
(BTN); (7) Bank Danamon Indonesia TBK (P.T.);
and (8) Lembaga Pembiayaan Ekspor Indonesia (Indonesia Eximbank).
The rating outlooks for two other banks are maintained: Pan Indonesia
Bank TBK (P.T.)'s (Panin) rating outlook remains stable
and Bank Permata TBK (P.T.)'s rating outlook remains
negative.
The rating actions follow the affirmation of Indonesia's Baa3 sovereign
rating, and the change in the outlook for Indonesia's rating to
positive from stable on 8 February 2017.
In addition, the P-3 short-term deposit ratings,
baseline credit assessments (BCAs), Adjusted BCAs and counterparty
risk (CR) assessments assigned to the banks were affirmed.
The full list of banks affected by today's rating actions is presented
at the end of this press-release.
RATINGS RATIONALE
Today's rating actions on the 10 Indonesian banks are driven by Moody's
revision of the outlook on Indonesia's Baa3 sovereign rating to positive
from stable.
The key drivers of the revision to Indonesia's sovereign outlook are emerging
signs of a reduction in structural constraints on Indonesia's rating,
including its level of external vulnerability and the strength of its
institutions:
1) Indonesia's vulnerability to external shocks is declining somewhat
and is expected to continue to do so, as a result of measures fostering
narrower current account deficits, higher foreign exchange reserves,
and a slower rise in private sector external debt; and
2) Indonesia's lengthening track record of macroeconomic stability and
fiscal discipline, together with its measured but ongoing progress
on structural economic, fiscal and regulatory reforms, suggest
that policy effectiveness is improving.
Indonesia's credit strength is a key input in Moody's deposit and debt
ratings for financial institutions in the country, because it affects
Moody's assessment of the government's capacity to provide support in
times of stress.
Moody's revision of the outlook on the Indonesian government's Baa3 rating
to positive from stable increases the potential for a higher sovereign
rating to raise the supported ratings for most Moody's-rated financial
institutions in the country.
For more information on the sovereign credit rating action, please
refer to the Government of Indonesia issuer page on www.moodys.com.
The Macro Profile for Indonesia remains at Moderate and unaffected by
the sovereign rating action.
EIGHT BANKS WITH POSITIVE OUTLOOK
The Baa3 deposit ratings of the eight banks - Mandiri, BRI,
Bank Central Asia, BNI, CIMB Niaga, BTN, Danamon,
Indonesia Eximbank -- incorporate Moody's assumptions of High
to Very High probability of government support for the banks in times
of need.
As such, these ratings -- currently positioned at the same
level as Indonesia's sovereign rating -- are likely to benefit
from a widening of support uplift of up to 1 notch when the sovereign
rating is upgraded.
TWO BANKS WITH STABLE OR NEGATIVE OUTLOOK
Panin's Baa3 rating was affirmed, with a stable outlook,
to reflect Moody's stable view of the bank's standalone credit
profile (ba2 BCA) and the two notches of government support uplift already
incorporated in the rating.
Taking into account Moody's view of the bank's lower systemic
importance compared to its larger peer banks, Moody's does
not expect to increase the rating uplift for this bank beyond two notches,
even if the sovereign's rating eventually rises to Baa2.
Permata's Baa3 rating was affirmed with a negative outlook.
Despite the positive rating action on the sovereign, the pressure
on Permata's rating remains to the downside, taking into account
the bank's deteriorating asset quality and profitability, as well
as uncertainties over the likelihood of receiving extraordinary support
from its existing key shareholders in the future.
WHAT COULD MOVE THE RATING UP/DOWN
Given the revision of the sovereign rating outlook to positive from stable,
the ratings of the eight banks with positive outlooks are likely to be
upgraded if the sovereign rating is upgraded, provided that these
banks maintain strong standalone financial metrics.
Conversely, the outlook on the banks' ratings could be revised to
stable if the sovereign rating outlook is revised to stable.
Permata's ratings would be downgraded if its BCA and/or Adjusted BCA are
downgraded as a result of any of the following: a sharp increase
in its NPLs and restructured loans and/or a continued decline in its core
capital buffer because of high credit costs and/or rapid credit growth;
an erosion of its liquidity profile; a change in its major shareholders
that creates uncertainty over affiliate support.
Permata's Baa3 deposit ratings are unlikely to be upgraded, given
the negative outlook. However, the outlook could return to
stable if the downside risks to its BCA moderate.
Panin's Baa3 rating could face negative pressure if its BCA is downgraded
as a result of a deterioration in its financial fundamentals, especially
in its asset quality, against a backdrop of rapid loan growth;
and/or a weakened capital position, without a clear recapitalization
plan.
The ratings and rating outlooks for the affected banks are listed below
in alphabetic order:
Bank Central Asia Tbk (P.T.)
- Long-term foreign currency issuer rating affirmed at Baa3;
outlook changed to positive from stable
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook changed to positive from stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- BCA and adjusted BCA affirmed at baa3;
- CR Assessment affirmed at Baa2(cr)/P-2(cr);
- Outlook for the bank revised to positive from stable.
Bank Danamon Indonesia TBK (P.T.)
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook changed to positive from stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- Adjusted BCA affirmed at baa3;
- BCA affirmed at ba1;
- CR Assessment affirmed at Baa2(cr)/P-2(cr);
- Outlook for the bank revised to positive from stable.
Bank Mandiri (P.T.)
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook changed to positive from stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- BCA and adjusted BCA affirmed at baa3;
- CR Assessment affirmed at Baa2(cr)/P-2(cr);
- Outlook for the bank revised to positive from stable.
Bank Negara Indonesia TBK (P.T.)
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook changed to positive from stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- Foreign currency senior unsecured debt rating affirmed at Baa3;
outlook changed to positive from stable
- BCA and adjusted BCA affirmed at ba1;
- CR Assessment affirmed at Baa3(cr)/P-3(cr);
- Outlook for the bank revised to positive from stable.
Bank Permata TBK (P.T.)
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook maintained at negative
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- Adjusted BCA affirmed at ba1;
- BCA affirmed at ba2;
- CR Assessment affirmed at Baa3(cr)/P-3(cr);
- Outlook for the bank maintained at negative.
Bank Rakyat Indonesia (P.T.)
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook changed to positive from stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- Foreign currency senior unsecured debt rating affirmed at Baa3;
outlook changed to positive from stable
- BCA and adjusted BCA affirmed at baa3;
- CR Assessment affirmed at Baa2(cr)/P-2(cr);
- Outlook for the bank revised to positive from stable.
Bank Tabungan Negara (P.T.)
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook changed to positive from stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- BCA and adjusted BCA affirmed at ba2;
- CR Assessment affirmed at Baa3(cr)/P-3(cr);
- Outlook for the bank revised to positive from stable.
Lembaga Pembiayaan Ekspor Indonesia
- Long-term local and foreign currency issuer rating affirmed
at Baa3; outlook changed to positive from stable
- Foreign currency senior unsecured debt rating affirmed at Baa3;
outlook changed to positive from stable
- Long-term foreign senior unsecured MTN program rating
affirmed at (P)Baa3;
- Short-term foreign senior unsecured MTN program rating
affirmed at (P)P-3;
- Outlook for the bank revised to positive from stable.
Pan Indonesia Bank TBK (P.T.)
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook maintained at stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- BCA and adjusted BCA affirmed at ba2;
- CR Assessment affirmed at Baa3(cr)/P-3(cr);
- Outlook for the bank maintained at stable.
PT Bank CIMB Niaga Tbk
- Long-term foreign currency issuer rating affirmed at Baa3;
outlook changed to positive from stable
- Long-term local and foreign currency bank deposit ratings
affirmed at Baa3; outlook changed to positive from stable
- Short-term local and foreign currency bank deposit ratings
affirmed at P-3;
- Adjusted BCA affirmed at baa3;
- BCA affirmed at ba2;
- CR Assessment affirmed at Baa2(cr)/P-2(cr);
- Outlook for the bank revised to positive from stable.
The banks are headquartered in Jakarta, and reported total assets
at end-September 2016 of :
Bank Central Asia Tbk (P.T.) : IDR660 trillion ($51
billion)
Bank Danamon Indonesia TBK (P.T.) : IDR175 trillion
($13 billion)
Bank Mandiri (P.T.) : IDR975 trillion ($75
billion)
Bank Negara Indonesia TBK (P.T.) : IDR572 trillion
($44 billion)
Bank Permata TBK (P.T.) : IDR171 trillion ($13
billion)
Bank Rakyat Indonesia (P.T.) : IDR932 trillion ($72
billion)
Bank Tabungan Negara (P.T.) : IDR197 trillion ($15
billion)
Lembaga Pembiayaan Ekspor Indonesia : IDR94 trillion ($7
billion)
Pan Indonesia Bank TBK (P.T.) : IDR195 trillion ($15
billion)
PT Bank CIMB Niaga Tbk : IDR237 trillion ($18 billion)
The principal methodology used in rating Bank Mandiri (P.T.),
Bank Rakyat Indonesia (P.T.), Bank Central Asia Tbk
(P.T.), Bank Negara Indonesia TBK (P.T.),
PT Bank CIMB Niaga Tbk, Bank Tabugan Negara (P.T.)
(BTN), Pan Indonesia Bank TBK (P.T.), Bank Danamon
Indonesia TBK (P.T.) and Bank Permata TBK (P.T.)
was Banks published in January 2016. The principal methodologies
used in rating Lembaga Pembiayaan Ekspor Indonesia (Indonesia Eximbank)
were Finance Companies published in December 2016, and Government-Related
Issuers published in October 2014. Please see the Rating Methodologies
page on www.moodys.com for a copy of these methodologies.
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.
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 analyst and the Moody's legal entity that has issued the ratings.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
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
SUBSCRIBERS: (852) 3551-3077
Gene Fang
Associate Managing Director
Financial Institutions Group
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077
