Moody's Counterparty Risk Ratings for HDFC Bank and its branches

HDFC Bank announced that Moody's Investors Service on 12 June 2018 assigned Counterparty Risk Ratings to the bank and its branches as under -

HDFC Bank
Assigned local currency long-term Counterparty Risk Rating of Baa1.
Assigned local currency short-term Counterparty Risk Rating of P-2.

HDFC Bank, Bahrain Branch:
Assigned local currency long-term Counterparty Risk Rating of Ba1.
Assigned local currency short-term Counterparty Risk Rating of NP.

HDFC Bank, Hong Kong Branch:
Assigned local currency long-term Counterparty Risk Rating of Baa1.
Assigned local currency short-term Counterparty Risk Rating of P-2.

Moody's Counterparty Risk Ratings are opinions of the ability of entities to honor the uncollateralized portion of non-debt counterparty financial liabilities (CRR liabilities) and also reflect the expected financial losses in the event that such liabilities are not honored. CRR liabilities typically relate to transactions with unrelated parties. Examples of CRR liabilities include the uncollateralized portion of payables arising from derivatives transactions and the uncollateralized portion of liabilities under sale and repurchase agreements. CRRs are not applicable to funding commitments or other obligations associated with covered bonds, letters of credit, guarantees, servicer and trustee obligations, and other similar obligations that arise from a bank performing its essential operating functions.

Moody's could upgrade HDFC Bank's senior unsecured debt and deposit ratings if Moody's upgrades India's sovereign rating.

Downward pressure on HDFC Bank's BCA could arise from: (1) a sustained deterioration in impaired loans or loan-loss reserves; (2) a significantly higher new NPL formation rate than previously experienced; (3) a decline in earnings, leading to a significant decrease in internal capital generation; or (4) a downgrade in the sovereign foreign-currency debt rating.

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