Fitch boosts five Chinese banks

Fitch Ratings said it upgraded the support ratings of five commercial banks in China by one notch, reflecting the improved ability of the government to support domestic financial institutions and the close relationship between these banks and the central and local governments. The agency also affirmed the banks' other ratings.

The Bank of Communications' individual rating was affirmed at D and support rating was upgraded to 1 from 2.

The Bank of Beijing's individual rating was affirmed at D/E and its support rating was upgraded to 3 from 4.

The Bank of Shanghai's long-term issuer default rating was affirmed at BB- with stable outlook, short-term rating at B, individual rating at D and its support rating was upgraded to 3 from 4.

Industrial Bank's individual rating was affirmed at D/E and its support rating was upgraded to 3 from 4.

Shanghai Pudong Development Bank's individual rating was affirmed at D and its support rating was upgraded to 3 from 4.

The rating upgrade for Bank of Communications reflects the bank's close historical relationship with the government, as well as significant 5% market share in loans and deposits, Fitch said.

The upgrades on the rest of the banks reflects the improved financial standings of the central and local governments, the agency said, together with their ongoing close relationships with the banks. The agency also noted that all four banks have large foreign financial institutions as significant shareholders - all of whom could serve as a potential source of support.

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