Fitch affirms HSBC India's CoD programme rating

Credit rating agency Fitch today affirmed rating on HSBC India's Rs 5,000 crore certificates of deposit (CoD) programme with a stable outlook on the back of its strong linkages with the parent company.

"Fitch Ratings has affirmed The Hongkong and Shanghai Banking Corporation Limited India branch's Rs 5,000 crore certificates of deposit programme at 'A1+(ind)'," the ratings agency said in a statement.

It further added: "HSBC India's rating reflects the financial strength of and Fitch's expectation of continued strong support from Hong Kong-based, The Hongkong and Shanghai Banking Corporation Limited, of which the former is a branch."

An 'A' rating denotes expectations of low default risk relative to other issuers or obligations in the same country.

Fitch said that HSBC (headquartered in London), has supported HSBC India by way of equity injections in the past including providing Rs 1,440 crore in March 2009.

"The high probability of support is underpinned by HSBC India's explicit linkages to its head office, HSBC, as well as the importance of the India operations for the group. HSBC's presence in India runs over many decades with a bouquet of financial services [viz. Wealth management, brokerage etc.] on offering," it said.

Naina Lal Kidwai, Chairman of HSBC India has been a representative on HSBC's Board since 2010.

Fitch also cited HSBC India's strong capitalisation levels including a capital adequacy ratio (CAR) of 18%.