The Kleinwort Benson Group has received its first credit rating as a stand alone entity.
Moody's Investors Service assigned Baa2/Prime-2 long and short term deposit ratings and a bank financial strength rating (BFSR) of C- to the two banking entities in the Kleinwort Benson Group: the UK-based Kleinwort Benson Private Bank Limited and the CI-based Kleinwort Benson (Channel Islands) Limited. The outlook for all ratings is stable.
The short term rating applies to all deposits with maturity of up to one year and the long term rating is applicable to deposits with a maturity exceeding one year. Client custodial and investment assets will continue to be segregated and are not affected by this announcement.
The independent credit rating is another positive milestone as Kleinwort Benson moves towards the completion of its sale to RHJ International S.A. (RHJI).
Moody's judged the Kleinwort Benson Group to have a number of financial and organisational strengths, those primarily being strong capitalisation, excellent asset quality on a small loan book, a conservative risk management culture and a well entrenched and respected financial services franchise in the UK and Channel Islands.
Robert Taylor, Chief Executive of the Kleinwort Benson Group, believes that the positive Moody's rating will provide clients with considerable reassurance regarding the security of their deposits.
"We are pleased with the Moody's rating. It acknowledges our strong financial position and recognises that our new shareholder RHJI offers considerable equity capital to underpin our development. On completion of the sale, the Kleinwort Benson Group will be one of the most well capitalised businesses of our size in the financial services industry," he said.
Kleinwort Benson's tier one capital ratio, which at over 20% is significantly in excess of typical banking regulatory requirements, places the wealth manager and financial services provider well above many organisations in the sector.
The Kleinwort Benson Group employs a conservative treasury management policy whereby its loan book is funded solely from the receipt of client deposits and is not reliant upon the wholesale credit markets. New shareholder RHJI will further strengthen the Kleinwort Benson Group's position by providing additional financial resources to underpin plans for future expansion and ensure continued stability.
RHJ International S.A. which is listed on the Belgian EURONEXT is acquiring the Kleinwort Benson Group and its historic financial services brand from Commerzbank AG, following the German bank's decision in May 2009 to divest itself of its non-domestic wealth management businesses.
The Moody's rating is subject to the completion of the sale, which is subject to regulatory approval and is scheduled to take place before the end of July. Until that time the Kleinwort Benson Group maintains the full financial backing and support of its current shareholder Commerzbank AG.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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