Standard Chartered Bank (Hong Kong) Ltd.

High likelihood of potential government support due to high systemic importance in Hong Kong. Status as a core member of the Standard Chartered group. Rich customer deposit base. Strong record of containing credit losses. Strong business stability benefiting from long established franchise. Capitalization likely to remain moderate. Credit risk exposure to entities from systems with higher economic risk. The stable outlook reflects our belief that SCBHK will remain a core subsidiary of Standard Chartered group and a bank with high systemic importance in Hong Kong. We also expect SCBHK to maintain its SACP at 'a-' in the next one to two years. The potential increase in the bank's credit risk exposure to entities from China or other Asian countries may

...Credit risk exposure to entities from systems with higher economic risk. Outlook: Stable The stable outlook reflects our belief that SCBHK will remain a core subsidiary of Standard Chartered group and a bank with high systemic importance in Hong Kong. We also expect SCBHK to maintain its SACP at 'a-' in the next one to two years. The potential increase in the bank's credit risk exposure to entities from China or other Asian countries may put pressure on our assessment of its anchor and SACP. However, SCBHK's risk management capacity in maintaining lower credit losses compared with that of peers facing a similar level of economic risk should mitigate the effects of such exposure. An upgrade could be triggered by an upgrade of the group credit profile of Standard Chartered PLC. A downgrade could occur if: (1) We downgrade the group credit profile of Standard Chartered PLC or we no longer consider SCBHK as a core subsidiary of the group; and (2) we lower the SACP of SCBHK to '###+', we downgrade...

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