Morningstar DBRS Upgrades HSBC Bank Canada and Then Discontinues and Withdraws All Credit Ratings

DBRS Limited (Morningstar DBRS) has discontinued and withdrawn the credit ratings of HSBC Bank Canada (HSBC Canada or the Bank). The decision to discontinue and withdraw the credit ratings was a result of HSBC Canada’s acquisition by Royal Bank of Canada (RBC; rated AA (high) with a Stable trend by Morningstar DBRS), which closed on March 28, 2024. Prior to discontinuation, Morningstar DBRS equalized HSBC Canada’s credit ratings with those of RBC, including upgrading the Bank’s Long-Term Issuer Rating to AA (high) from A (high) and Short-Term Issuer Rating to R-1 (high) from R-1 (middle), all with Stable trends. Before the discontinuation of the credit ratings, HSBC Canada’s Support Assessment was SA1. These credit rating actions resolve the Under Review with Positive Implications (UR-Pos) status under which HSBC Canada was placed on November 29, 2022 (UR-Pos status was confirmed on November 27, 2023).

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (January 23, 2024) https://dbrs.morningstar.com/research/427030/morningstar-dbrs-criteria:-approach-to-environmental,-social,-and-governance-risk-factors-in-credit-ratings

Notes:
The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (June 22, 2023) https://dbrs.morningstar.com/research/415978. In addition, Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (January 23, 2024) https://dbrs.morningstar.com/research/427030 in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found on the issuer page at dbrs.morningstar.com.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS’ outlooks and credit ratings are under regular surveillance.

For more information on this credit or on this industry, visit dbrs.morningstar.com.

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577