Moody's Affirms Bank Vontobel's Deposit Ratings and Affirms Vontobel Holding's Issuer Ratings with Stable Outlook

Strategic Insights -

Bank Vontobel AG, a major Swiss bank, has had its deposit ratings affirmed at Aa3/P-1 with a stable outlook by Moody's Investors Service. The rating agency also affirmed the bank's a2 Baseline Credit Assessment (BCA) and a2 Adjusted BCA, as well as its long- and short-term Counterparty Risk Ratings at A2/P-1 and its long- and short-term Counterparty Risk Assessment at A1(cr)/P-1(cr). Vontobel Holding AG, the parent company of Bank Vontobel, has also had its issuer ratings affirmed at A2 with a stable outlook.

Moody's experts conducted a thorough analysis of Bank Vontobel's and Vontobel Holding's credit metrics, including their diversified product suite, sizeable assets under management, and sound liquidity and funding profiles. The rating agency also considered the bank's and the group's moderate earnings levels, as well as their high dependence on capital market developments and client-driven trading income, which increases earnings volatility.

Key Takeaways:

  • Bank Vontobel's deposit ratings have been affirmed at Aa3/P-1 with a stable outlook, reflecting its stable credit metrics and strong capitalisation.
  • Vontobel Holding's issuer ratings have been affirmed at A2 with a stable outlook, reflecting its moderate loss-given-failure for the group's senior unsecured debt instruments.
  • Moody's has affirmed Bank Vontobel's a2 BCA and a2 Adjusted BCA, reflecting its stable financial profiles and sound liquidity and funding profiles.
  • The rating agency has also affirmed Vontobel Holding's preferred stock ratings on its high-trigger AT1 instruments at Baa2(hyb), reflecting the high loss-given-failure for the AT1 securities and the write-down features.
  • Factors that could lead to an upgrade of the ratings include an upgrade of the bank's BCA or Adjusted BCA, or higher rating uplift resulting from Moody's Advanced LGF analysis.
  • Factors that could lead to a downgrade of the ratings include a downgrade of the bank's BCA or Adjusted BCA, or a reduction in the rating uplift resulting from Moody's Advanced LGF analysis.

Statistics:

  • Bank Vontobel's deposit ratings: Aa3/P-1 (stable outlook)
  • Vontobel Holding's issuer ratings: A2 (stable outlook)
  • Bank Vontobel's BCA: a2
  • Bank Vontobel's Adjusted BCA: a2
  • Vontobel Holding's preferred stock ratings on its high-trigger AT1 instruments: Baa2(hyb)
  • Moody's Advanced LGF analysis rating uplift: two notches for Bank Vontobel's deposit ratings and one notch for Vontobel Holding's issuer ratings

Sources:

  • Moody's Investors Service, "Moody's Investors Service ("Moody's") has today affirmed Bank Vontobel AG's (Bank Vontobel, or "the bank") deposit ratings at Aa3/P-1 with a stable outlook" (Source: Moody's)
  • Bank Vontobel AG, "Bank Vontobel AG: Moody's confirms long-term rating Aa3" (Source: Bank Vontobel AG)
  • Vontobel Holding AG, "Vontobel Holding AG: Moody's confirms long-term rating A2" (Source: Vontobel Holding AG)