TEXT-S&P Affirms 'AA-/A-1+' Ratings On HSBC Bank Canada
-- We believe that the Canadian banking sector is encountering incremental pressure from headwinds facing the Canadian economy, which is heightening economic risk in the banking system.
-- We also believe that industry risk for the Canadian banking sector is increasing. We expect that intensifying competition for loans and deposits will lead to pressure on profitability growth, especially in banks' retail businesses.
-- We are affirming our 'AA-/A-1+' long- and short-term issuer credit ratings and our 'AA-' senior unsecured debt rating on HSBC Bank Canada, which reflects those on its parent (HSBC Holdings PLC) as a result of its "core" subsidiary status.
-- The negative outlook reflects that on its parent.
On Dec. 13, 2012, Standard & Poor's Ratings Services affirmed its 'AA-' long- and 'A-1+' short-term issuer credit ratings on HSBC Bank Canada (HSBC Canada). The outlook is negative. The ratings and outlook reflect those on its parent, HSBC Holdings PLC (HSBC: A+/Negative/A-1) and the group as a result of its "core" status. We lowered the stand-alone credit profile (SACP) on HSBC Canada to 'bbb+' from 'a-'.