Haitong Banco de Investimento do Brasil S.A. Global Scale Outlook Revised To Developing From Negative; Ratings Affirmed
- On Sept. 17, 2024, S&P Global Ratings revised its rating outlook on Haitong Bank S.A. (HB) to developing from negative following a similar action on the bank's parent company, Haitong Securities Co. Ltd. (HTS), given the announcement of the Chinese company's plan to merge with Guotai Junan Securities Co. Ltd. (GTJA).
- We continue to view Haitong Banco de Investimento do Brasil S.A. (Haitong Brasil) as a core subsidiary of HB.
- As a result, we revised the outlook on our global scale rating on Haitong Brazil to developing from negative. The outlook on the national scale rating remains negative. At the same time, we affirmed our long- and short-term 'BB/B' global and 'brAAA/brA-1+' national scale ratings on Haitong Brasil.
- The developing outlook on the long-term global scale rating reflects that we could affirm, lower, or raise our ratings on Haitong Brasil in the next 12 months, depending on the execution of the merger and its outcome. The negative outlook on the national scale rating reflects that we still believe there is at least a one-in-three likelihood of a downgrade.
SAO PAULO (S&P Global Ratings) Sept. 17, 2024--S&P Global Ratings revised the outlook on its long-term global scale rating on Haitong Brasil to developing from negative. The outlook on the national scale rating remains negative. At the same time, we affirmed our 'BB/B' long- and short-term foreign and local currency global scale ratings and the 'brAAA/brA-1+' long- and short-term national scale ratings on the bank.
For more details, see "Haitong Securities And Subsidiary Outlook Revised To Developing On Merger Announcement; Ratings Affirmed," published Sept. 11, 2024. We think the impacts of a potential HTS merger with GTJA are still uncertain, with various potential implications to its subsidiaries, including HB and Haitong Brasil.
We view Haitong Brasil as a core subsidiary of its parent, HB, given its significant revenue contribution, its strategic importance as the hub for the group's Latin American operations, and the parent's long-term commitment to the Brazilian operations. We think HB would support the bank under any foreseeable circumstances, except in a sovereign stress scenario.
Historically, Haitong Brasil has represented about one-third of HB's balance sheet. The Brazilian entity is one of the largest contributors to the group's operating revenues. Therefore, we currently equalize our ratings on the bank with those on HB. That said, Haitong Brazil and HB operate in different markets than HTS (and GTJA), and their contribution to the current group remains limited. Any change in their strategic positioning to the new group may prompt us to change our view of group support, potentially affecting the issuer credit ratings.
Related Criteria
- Criteria | Financial Institutions | General: Risk-Adjusted Capital Framework Methodology, April 30, 2024
- General Criteria: National And Regional Scale Credit Ratings Methodology, June 8, 2023
- Criteria | Financial Institutions | Banks: Banking Industry Country Risk Assessment Methodology And Assumptions, Dec. 9, 2021
- Criteria | Financial Institutions | General: Financial Institutions Rating Methodology, Dec. 9, 2021
- General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021
- General Criteria: Group Rating Methodology, July 1, 2019
- General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017
- General Criteria: Ratings Above The Sovereign--Corporate And Government Ratings: Methodology And Assumptions, Nov. 19, 2013
- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
Related Research
- Haitong Bank Outlook Revised To Developing From Negative After Similar Action on Parent, ‘BB/B’ Ratings Affirmed, Sept. 17, 2024
- Haitong Securities And Subsidiary Outlook Revised To Developing On Merger Announcement; Ratings Affirmed, Sept. 11, 2024
Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.spglobal.com/ratings for further information. Complete ratings information is available to RatingsDirect subscribers at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.spglobal.com/ratings.
European Endorsement Status
Global-scale credit rating(s) issued by S&P Global Ratings' affiliates based in the following jurisdictions [To read more, visit Endorsement of Credit Ratings] have been endorsed into the EU and/or the UK in accordance with the relevant CRA regulations. Note: Endorsements for U.S. Public Finance global-scale credit ratings are done per request. To review the endorsement status by credit rating, visit the spglobal.com/ratings website and search for the rated entity.
| Primary Credit Analyst: | Felipe Ojima, Sao Paulo + 55-11-3039-4844; felipe.ojima@spglobal.com |
| Secondary Contacts: | Guilherme Machado, Sao Paulo +55-11-3039-9700; guilherme.machado@spglobal.com |
| Sergio A Garibian, Sao Paulo +55-11-3039-9749; sergio.garibian@spglobal.com |
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