Rating Definitions

Bank Deposit Ratings

Moody’s Bank Deposit Ratings are opinions of a bank’s ability to repay punctually its foreign and/or domestic currency deposit obligations. Foreign currency deposit ratings are subject to Moody’s country ceilings for foreign currency deposits. This may result in the assignment of a different (and typically lower) rating for the foreign currency deposits relative to the bank’s rating for domestic currency obligations.

Unless otherwise indicated, Moody’s Bank Deposit Ratings apply to a bank’s foreign and domestic currency deposit obligations. A bank may also be assigned different (typically higher) domestic currency deposit ratings that are unconstrained by the respective country ceilings for foreign currency deposits.

Foreign currency deposit ratings are applicable only to banks and branches located in countries that have been assigned a country ceiling for foreign currency for bank deposits. Such obligations are rated at the lower of the bank’s deposit rating or Moody’s country ceiling for bank deposits for the country in which the branch is located.

Moody’s Bank Deposit Ratings are intended to incorporate those aspects of credit risk that are relevant to the prospective payment performance of the rated bank with respect to its foreign and/or domestic currency deposit obligations. Included are factors such as intrinsic financial strength, sovereign transfer risk (for foreign currency deposits), and both implicit and explicit external support elements.

Moody’s Bank Deposit Ratings do not take into account the benefit of deposit insurance schemes that make payments to depositors, but they do recognize the potential support from schemes that may provide direct assistance to banks. In addition to its Bank Deposit Ratings, Moody’s also publishes Bank Financial Strength Ratings, which exclude certain of these external risk and support elements (i.e., sovereign risk and external support). Such ratings are intended to elaborate and explain Moody’s Bank Deposit Ratings, which incorporate and reflect such elements of credit risk.

Long-Term Bank Deposit Ratings

Moody’s long-term bank deposit ratings employ the same alphanumeric rating system as that for long-term issuer ratings.

Aaa

Banks rated Aaa for deposits offer exceptional credit quality and have the smallest degree of risk. While the credit quality of these banks may change, such changes as can be visualized are most unlikely to materially impair the banks’ strong positions.

Banks rated Aa for deposits offer excellent credit quality, but are rated lower than Aaa banks because their susceptibility to long-term risks appears somewhat greater. The margins of protection may not be as great as with Aaa-rated banks, or fluctuations of protective elements may be of greater amplitude.

Banks rated A for deposits offer good credit quality. However, elements may be present that suggest a susceptibility to impairment over the long term.

Baa

Banks rated Baa for deposits offer adequate credit quality. However, certain protective elements may be lacking or may be characteristically unreliable over any great length of time.

Banks rated Ba for deposits offer questionable credit quality. Often the ability of these banks to meet punctually deposit obligations may be uncertain and therefore not well safeguarded in the future.

Banks rated B for deposits offer generally poor credit quality. Assurance of punctual payment of deposit obligations over any long period of time is small.

Caa

Banks rated Caa for deposits offer extremely poor credit quality. Such banks may be in default, or there may be present elements of danger with regard to financial capacity.

Banks rated Ca for deposits are usually in default on their deposit obligations.

Banks rated C for deposits are usually in default on their deposit obligations, and potential recovery values are low.

Note: Moody’s appends the numerical modifiers 1, 2, and 3 to each generic rating category from Aa to Caa. The modifier 1 indicates that the bank is in the higher end of its letter-rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the bank is in the lower end of its letter-rating category.

Short-Term Bank Deposit Ratings

Moody’s employs the following designations to indicate the relative repayment ability for bank deposits:

P-1

Banks rated Prime-1 for deposits offer superior credit quality and a very strong capacity for timely payment of short-term deposit obligations.

P-2

Banks rated Prime-2 for deposits offer strong credit quality and a strong capacity for timely payment of short-term deposit obligations.

P-3

Banks rated Prime-3 for deposits offer acceptable credit quality and an adequate capacity for timely payment of short-term deposit obligations.

Banks rated Not Prime for deposits offer questionable to poor credit quality and an uncertain capacity for timely payment of short-term deposit obligations.