Cuscal Ltd.

The outlook on Cuscal is positive. We see upside to the stand-alone credit profiles (SACPs) of all banks operating in Australia, including Cuscal. This reflects a positive trend for the Australian banking industry risk on the back of growing systemwide customer deposits and falling offshore borrowings--both as a proportion of domestic customer loans. We expect Cuscal to maintain a very strong risk-adjusted capital (RAC) ratio of above 15% over the next two years, sufficiently covering the company's operational risk exposure. We could revise the outlook on Cuscal to stable if we form the view that industry risks faced by Australia's banking sector are unlikely to fall over the next two years. We expect to raise our ratings on Cuscal over

...(Editor's Note: In the original version of this article first published on Dec. 13, 2022, we misstated our risk-adjusted capital (RAC) ratios due to a misapplication of our Risk-Adjusted Capital Framework Methodology, July 20, 2017. For the same reason, we also misstated some RAC ratios for Cuscal Ltd. in our full analyses on this company published on Nov. 24, 2021, and Dec. 1, 2020. The correct RAC ratios should be as follows: 30.7% as of June 30, 2021 and 27.4% as of June 30, 2020.)...

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