Moody's Eyes Hongkong, Marine
NEW YORK -- Moody's Investors Service Inc. has placed Marine Midland Banks Inc. and its parent company, Hongkong and Shanghai Banking Corp., under review for possible downgrading.
The rating agency said it was concerned about poor asset quality of Hongkong and Shanghai units in the United States, Australia, and Canada and about long-term prospects for the company in Hong Kong, its home market.
"We felt their situation may have deteriorated," said Deborah Kinzer, senior analyst at Moody's in New York. The agency "decided to take a real good look at the bank as a whole," she said.
Moody's put Marine's Baa1-rated senior debt, Baa2 subordinated debt, and P-2 commercial paper under review, as well as the A3 rating for long-term deposits and the Baa1 for long-term standby letters of credit. Also under review are the top P-1 short-term ratings of the holding company, its Canadian unit, and Concord Leasing Inc.
Profits at Hongkong and Shanghai, a unit of HSBC Holdings, have been hard hit by losses at its Australian, Canadian, and U.S. units.
Marine Midland, based in Buffalo, N.Y., has $17 billion in assets. It lost $295 million in 1990 and $109 million so far this year, mainly as a result of troubled commercial real estate loans. The bank is not expected to break even before next year.
Marine Midland seems "to have gone into a holding pattern," Ms. Kinzer said. "I don't see where they're making much improvement."