Following its withdrawal of 14 Japanese banks, as reported in May, Fitch has further reduced its coverage in June and July, with banks from countries including India, Indonesia and the Philippines among those cut.
Some of the banks involved are among their respective countries’ leadings institutions, such as Metrobank, by some measure the largest in the Philippines, but most of the ratings withdrawn so far are those of smaller regional banks.
No longer relevant
In each case, the agency has made the announcement with a standardized phrase, saying it has stopped coverage of a bank because the rating is “no longer considered by Fitch to be relevant to the agency's coverage”. When asked by Euromoney what these rollbacks mean for the agency’s coverage in Asia, and whether investors can expect further cuts in coverage, a Fitch spokesman replied via email that he had no comment.
A former senior manager at Fitch who has recently left the firm tells Euromoney that reasons for the cutbacks will vary by market, but that in many cases the ratings were unpaid. Agencies typically offer issuers ratings for no charge in order to build market share and as a service to investors; when markets are difficult, these unpaid ratings then become a drain on resources.