By

Shruti Tolanur
1PB12MBA28
S&P Credit Rating Agency
With offices in 23 countries and a history that dates back more
than 150 years.

Standard & Poors is known to investors worldwide as a leader
of financial- market intelligence.

What is Credit Rating?

How well a company is performing in absolute terms
in a particular market or industry.



Why the need for credit rating??
Financial transactions have become a major economic
activity
A safe and sound banking industry can bring about
stability within the financial markets,
Risks and uncertainties,
Overall assessment

S&P Criteria for rating
BSFR represent an S&P opinion of a banks fundamental
strength, or more specifically, what has been formally referred
to as status quo rating on the bank.

Different rating agencies use different methodology.

BSFR assessment of what a single legal entity within a group
would be rated, which incorporate the benefits or burden of
being part of the group.

A BSFR would not include any potential capital assistance
from the group, regulator or Government

Ratings Definitions Used by Standard & Poors

The rating services use a 9-point rating scale based on the
following symbols:

1. A has a Very Strong fundamental strength compared
with that of its global peers.

2. B+ - show the higher relative standing with its rating category.

3. B - has a Strong fundamental strength.
It is more susceptible to the adverse effects of changes in circumstance
economic conditions than those entities rated as A

4. C+ - show the higher relative standing with its rating category.

Ratings Definitions Used by Standard & Poors

5. C has adequate fundamental strength.

6.D+ - show the higher relative standing with its rating category.

7. D - is vulnerable to a greater degree than those banks rated higher,
to adverse circumstances in its operating environment.

8.E+ - show the higher relative standing with its rating category.

9.E - is likely to be facing significant weaknesses in its fundamental
credit profile and may be in default on some or all of its financial
obligations.


Banks Credit Rating
The factors considered in the rating of banks or financial
Institutions are as follows:

Industry Risk Financial Risk
Structure Funding & Liquidity
Ownership profile Capitalization
Customer base Earnings
Regulation
Market position
Degree of diversification
Management style & strategies
Standards of accounting used

Perceived Economic Risk Risk Management
Credit Risk Strategy Market Risk
Market/Structural Risk
Credit Risk
Trading Risk Financial Flexibility


Thank you