No impact expected on existing ratings.

Besides editorial changes, with this update Scope:

• Expanded on the approach to rating bank capital instruments, incorporating key methodological elements from the Bank Capital Instruments Rating Methodology, which has been withdrawn at the same time
   
• Introduced a refined five-grade scale under the long-term sustainability assessment (previously a four-grade scale), with a wider notching approach to reflect additional downside risks
   
• Revised the number of notches under the financial viability management assessment to avoid any cliff-effect in case of a deteriorating credit profile
   
• Specified in more detail how Scope may assign deposit ratings as well as local and foreign currency ratings
   
• Specified how credit ratings are assigned to branches
   
• Clarified the sources of information used to derive credit ratings
   
• Clarified the typical description of the operating environment, business model and earnings capacity and risk exposure qualifiers
   
• Clarified how external support is factored in
   
• Clarified how short-term ratings are derived for financial institutions from the short-term/long-term credit rating correspondence presented in Scope’s credit rating definitions
   
• Relabeled ‘additional risk factors’ as ‘additional credit factors’ to remove the reference to support and avoid confusion with external support

Scope did not receive comments from market participants during the request-for-comments period, which expired on 20 January 2023.

Download the updated methodology here or on www.scoperatings.com.