Standard Chartered Bank (Singapore) Ltd.

Our stable outlook reflects our view that SCBS will receive timely support from its financially stronger group or the Singapore government, if needed over the next 24 months. We expect the group and government to be willing and able to support SCBS to a level commensurate with the 'A/A-1' ratings. We would raise our ratings on SCBS if the bank's stand-alone creditworthiness, or the additional loss-absorbing capacity (ALAC)-supported group's creditworthiness, improve. The most likely scenario is the group's credit profile improving to 'a+' from 'a'. SCBS' stand-alone creditworthiness could improve if we observe a sustainable improvement in its business franchise, such as return on assets sustainably increasing to levels more commensurate with the industry. In our view, the impact of

...The parent's Association of Southeast Asian Nations (ASEAN) hub plan could raise SCBS' franchise in Singapore. The hub will consolidate the group's Malaysia, Vietnam, and Thailand subsidiaries under SCBS, subject to regulatory approval. We believe this could optimize SCBS' funding and liquidity, and provide it a bigger capital base to serve large clients in Southeast Asia. In our opinion, the reorganization will solidify SCBS' core group status within the Standard Chartered group. This status underpins our 'A' rating on the bank. SCBS' capitalization is likely to stay solid. In our base case, the bank's risk-adjusted capital (RAC) ratio will stay well above 10% level for our strong capital and earnings assessment over the next 12-24 months. We also see limited downside risks to asset quality as the Singapore economy recovers, leading to lower credit costs. This, together with lower margins, should support profitability....

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