Moody's Investors Service Inc. said Monday it has placed the E-plus financial strength rating of Fukuoka City Bank under review, awaiting a possible downgrade.
The review will focus on the bank's ability to control credit cost pressure arising from its loan portfolio, as well as from that of Nagasaki Bank, which is due to become a fully consolidated subsidiary of Fukuoka City Bank, the U.S. rating agency said.
The two regional banks are both based in Kyushu.
Fukuoka City Bank's Baa3 long-term deposit rating and Prime-3 short-term deposit rating will not be included in the review process, Moody's said.
The review will also examine Fukuoka City Bank's ability to use the merger to improve the amount of revenue it generates, the rating agency added.