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Standard & Poor's Places Japan Bankers Trust and Deutsche Morgan Grenfell Trust on CreditWatch Following Possible Bankers Trust Corp. and Deutsche Bank Merger

Strategic Insights

— 1 min read

Standard & Poor's has placed its single-'A' long-term counterparty rating of Japan Bankers Trust Co. Ltd. (JBT) on CreditWatch with positive implications, while its double-'A'-plus long-term counterparty rating on Japan-based Deutsche Morgan Grenfell Trust Bank Ltd. (DMG Trust) was placed on CreditWatch with negative implications. This move is linked to the possible merger between Bankers Trust Corp. and Deutsche Bank AG, announced on November 23.

Key Takeaways:

  • JBT's immediate parent is single-'A' rated Bankers Trust Co., New York, a subsidiary of Bankers Trust Corp.
  • DMG Trust and JBT have been competing in the asset-management business for Japanese institutional investors.
  • Standard & Poor's expects the merged parent to continue targeting the asset-management business in Japan, leveraging the existing franchises of the two Japanese subsidiaries.
  • The merged parent is likely to consolidate the two Japanese subsidiaries, rather than divest one of them to a third party.
  • Deutsche Morgan Grenfell Trust's double-'A'-plus rating was placed on CreditWatch with negative implications, likely due to concerns about the merger's impact on the trust bank's operations.
  • The potential merger between Bankers Trust Corp. and Deutsche Bank AG is expected to have a significant impact on the operations and ratings of their respective subsidiaries, including JBT and DMG Trust.

Statistics:

  • 9 foreign-owned trust banks are operating in Japan, with DMG Trust and JBT being two of them (Source: PRNewswire).
  • The merged parent is likely to consolidate the two Japanese subsidiaries, rather than divest one of them to a third party (Source: CreditWire).
  • Standard & Poor's ratings for JBT and DMG Trust are as follows:

+ JBT's single-'A' long-term counterparty rating was placed on CreditWatch with positive implications.

+ DMG Trust's double-'A'-plus long-term counterparty rating was placed on CreditWatch with negative implications.

  • Bankers Trust Corp.'s single-'A' minus rating and Deutsche Bank AG's double-'A' plus rating were both placed on CreditWatch on November 23 (Source: CreditWire).

Sources:

  • PRNewswire, Standard & Poor's Places Japan Bankers Trust on CreditWatch with Positive Implications.
  • CreditWire, RATINGS ON CREDITWATCH TO FROM

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