Outlooks On Seven Subsidiaries Under Japan-Based MUFG And SMFG Revised Up To Positive After Sovereign Action

Stocks and Financial Services Press Releases Tuesday April 17, 2018 17:39
TOKYO--17 Apr--S&P Global Ratings

TOKYO (S&P Global Ratings) April 17, 2018--S&P Global Ratings today said that it has revised to positive from stable its outlooks on its long-term issuer credit ratings on seven subsidiaries of Japan-based Mitsubishi UFJ Financial Group Inc. (MUFG) and Sumitomo Mitsui Financial Group Inc. (SMFG). The subsidiaries are: Mitsubishi UFJ Securities Holdings Co. Ltd., Mitsubishi UFJ Morgan Stanley Securities Co. Ltd., MUFG Securities EMEA PLC, MUFG Securities Americas Inc., MUFG Alternative Fund Services (Cayman) Ltd., The Master Trust Bank of Japan Ltd., and SMBC Nikko Securities Inc. We have also affirmed our ratings on all the aforementioned companies (see list below).

The outlook revisions follow similar actions on the main operating banks of their respective parent groups on April 16, 2018, as a consequence of our April 13 upward revision of our outlook to positive from stable on the long-term sovereign rating on Japan of 'A+'.

The upward outlook revisions on Mitsubishi UFJ Securities Holdings, Mitsubishi UFJ Morgan Stanley Securities, MUFG Securities EMEA, MUFG Securities Americas, MUFG Alternative Fund Services (Cayman), and The Master Trust Bank of Japan follow a similar action on the main operating bank under MUFG. Our outlook revision to positive from stable on SMBC Nikko Securities also follows our upward outlook revision on the main operating bank under SMFG. We consider the seven entities on which we are revising our outlooks to be core subsidiaries of their respective groups, which we believe would provide support to their subsidiaries when necessary. We equalize our ratings on six of the subsidiaries, excluding Mitsubishi UFJ Securities Holdings, with their respective group credit profiles (GCPs). We rate Mitsubishi UFJ Securities Holdings one notch lower than the other core operating companies because as a holding company it is structurally subordinated to its operating companies.

We may raise our ratings on these seven subsidiaries if we raise our GCPs on their respective parent groups. If we revise downward the outlooks on the main operating banks of their respective parent groups to stable, we may similarly revise the outlooks on the subsidiaries.


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