Research Update: Australian Unity Bank 'BBB/A-2' Ratings Affirmed; Outlook Stable

We forecast our risk-adjusted capital (RAC) ratio for AUB to decline to between 13.7% and 14.7% through to June 2021, from 15.3% as of December 2018. We are revising AUB's stand-alone credit profile (SACP) to 'bb+' from 'bbb-'. At the same time, we are affirming our long-term and short-term issuer credit ratings on AUB at 'BBB' and 'A-2', respectively, as we believe AUB remains an important part of the Australian Unity Ltd. (AUL) group and its strategy. Our stable outlook on AUB reflects our expectation that AUL, AUB's ultimate parent, would provide financial support to the mutual bank, if needed, offsetting a weakening in the bank's risk-adjusted capital. On June 5, 2019, S&P Global Ratings affirmed its 'BBB' long-term and

...- We forecast our risk-adjusted capital (RAC) ratio for AUB to decline to between 13.7% and 14.7% through to June 2021, from 15.3% as of December 2018. - We are revising AUB's stand-alone credit profile (SACP) to '##+' from '###-'. - At the same time, we are affirming our long-term and short-term issuer credit ratings on AUB at '###' and 'A-2', respectively, as we believe AUB remains an important part of the Australian Unity Ltd. (AUL) group and its strategy. - Our stable outlook on AUB reflects our expectation that AUL, AUB's ultimate parent, would provide financial support to the mutual bank, if needed, offsetting a weakening in the bank's risk-adjusted capital....

Research Update