Fitch Publishes Rating on PT Bank Commonwealth's Senior Bonds of 'AAA(idn)'

(The following statement was released by the rating agency) Fitch Ratings-Jakarta-20 July 2020: Fitch Ratings Indonesia has published the National Long-Term Rating on PT Bank Commonwealth's (PTBC, AAA(idn)/Stable) proposed rupiah bond issuance and the bank's senior debt rating of 'AAA(idn)'. The bonds will be up to IDR1 trillion in size with a maturity of three years. The proceeds will be used to support the bank's growth. 'AAA' National Long-Term Ratings denote the highest rating assigned by the agency in its National Rating scale for that country. This rating is assigned to issuers or obligations with the lowest expectation of default risk relative to all other issuers or obligations in the same country or monetary union. Key Rating Drivers The senior debt rating and the rating on the bonds are at the same level as PTBC's National Long-Term Rating, in accordance with Fitch's criteria. This is because they represent the bank's direct and senior unsecured obligations and rank equally with all its other senior unsecured obligations. PTBC's ratings are support-driven and reflect Fitch's expectation that the bank's higher-rated parent has high ability and propensity to provide timely extraordinary support to the Indonesian subsidiary, should it be needed. PTBC is 99%-owned by Commonwealth Bank of Australia (CBA, A+/Negative/a+). RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: A downgrade of PTBC's National Long-Term Rating would lead to a corresponding downgrade of the issue ratings. Downward rating pressure may arise from a perceived weakening of support from the parent, including from major ownership changes. A considerable weakening in the parent's credit profile relative to the universe of rated issuers in Indonesia could also negatively affect the ratings. Fitch believes this to be a remote prospect in the near to medium term, because the parent is rated multiple notches above the majority of Indonesian issuers, including the sovereign, which is rated 'BBB'/Stable. Factors that could, individually or collectively, lead to positive rating action/upgrade: There is no rating upside, as the ratings are already at the highest point on the National Ratings scale. Best/Worst Case Rating Scenario International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579] REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. Public Ratings with Credit Linkage to other ratings PTBC's support-driven ratings are credit-linked to CBA's ratings based on our expectation of extraordinary support. PT Bank Commonwealth ----senior unsecured; National Long Term Rating; Publish; AAA(idn) Contacts: Primary Rating Analyst Dimas Nugroho, Analyst +62 21 2988 6810 PT Fitch Ratings Indonesia DBS Bank Tower 24th Floor, Suite 2403 Jl. Prof.Dr. Satrio Kav 3-5 Jakarta 12940 Committee Chairperson David Wong, Senior Director +852 2263 9927 Media Relations: Leslie Tan, Singapore, Tel: +65 6796 7234, Email: leslie.tan@thefitchgroup.com Peter Hoflich, Singapore, Tel: +65 6796 7229, Email: peter.hoflich@thefitchgroup.com Additional information is available on www.fitchratings.com Applicable Criteria Bank Rating Criteria (pub. 28 Feb 2020) (including rating assumption sensitivity) (https://www.fitchratings.com/site/re/10110041) National Scale Rating Criteria (pub. 08 Jun 2020) (https://www.fitchratings.com/site/re/10121358) Additional Disclosures Solicitation Status (https://www.fitchratings.com/site/pr/10130282#solicitation) Endorsement Status (https://www.fitchratings.com/site/pr/10130282#endorsement_status) Endorsement Policy (https://www.fitchratings.com/site/pr/10130282#endorsement-policy) ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 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