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April 3, 2008 |
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ST. GEORGE BANK: Fitch Affirms 'BB' Support Rating Floor Fitch Ratings affirmed St. George Bank Limited's Long-term Issuer Default Rating at 'A+' with a Stable Outlook, Short-term IDR at 'F1', Individual at 'B', Support at '3' and Support Rating Floor at 'BB+'. St. George's Long-term IDR, Short-term IDR and Individual ratings reflect the group's solid financial profile, robust risk management framework, excellent asset quality and satisfactory capitalization, while also recognizing a level of geographic and product concentration. Meanwhile, the Support rating is in line with Fitch's view that there is a moderate probability of support from authorities if ever required. St. George has no direct exposure to US subprime mortgages and the group's asset quality remains excellent - gross impaired assets as a percentage of gross loans fell to 0.09% at 30 September 2007 from 0.11% at FYE06. However, as with most Australian banks, St. George has been impacted on the liability side of its balance sheet. St. George has maintained access to wholesale funding markets, but it has been at a significantly higher cost, and is more heavily focused on shorter term domestic issuance, while securitization markets, which have previously been an important part of St. George's funding framework, remain subdued. These factors not withstanding, St. George has benefited somewhat from the current market conditions. The group's market share of housing loans has increased as a number of smaller players have been more severely affected by the disruption in wholesale funding markets and have either withdrawn or vastly reduced their lending activities. On the liability side, St. George's retail deposit growth has increased since FYE07 as a result of rising interest rates and volatility in equity markets. The group's capitalization has also improved since FYE07 -- the group's Tier 1 capital ratio was 6.7%, but as a result of a number of capital initiatives aimed at improving business flexibility this ratio has increased to above 7%. The group's Fitch eligible capital ratio was 7.2% at FYE07, which is above average for the larger Australian banks. About St. George Bank Headquartered in Kogarah, New South Wales, Australia -- http://www.stgeorge.com.au -- St. George Bank Limited is a banking company. The Company operates in four business segments: Retail Bank (RB), Institutional and Business Banking (IBB), BankSA (BSA) and Wealth Management (WM). RB is responsible for residential and consumer lending, provision of personal financial services including transaction services, call and term deposits, small business banking and financial planners. This division manages retail branches, call centers, agency networks and electronic channels, such as electronic funds transfer at point of sale (EFTPOS) terminals, automated teller machines (ATMs) and Internet banking. On September 28, 2007, it disposed of its 100% interest in Scottish Pacific Business Finance Holdings Pty. Limited. |
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