Moody’s acts on 23 Chinese banks

Moody's Investors Service said it took actions on 19 Chinese commercial banks and four Chinese subsidiaries of international banks.

The agency upgraded by one notch the ratings of the following banks. Their ratings outlook is stable:

• Agricultural Bank of China Ltd.’s (ABC) long-term deposits and senior unsecured debt, and senior unsecured debt of its Hong Kong and New York branches, to A1 from A2;

• Postal Savings Bank of China Co., Ltd.’s (PSBC) long-term deposits to A1 from A2;

• Bank of Communications Co., Ltd.’s (BoCom) long-term deposits its Hong Kong branch’s senior unsecured debt to A2 from A3;

• China Merchants Bank Co., Ltd.’s (CMB) long-term deposits and its Hong Kong branch’s senior unsecured debt to A3 from Baa1;

• Industrial Bank Co., Ltd.’s (CIB) long-term deposits and its Hong Kong branch’s senior unsecured debt to Baa2 from Baa3;

• Bank of Shanghai Co., Ltd.’s (BOSC) long-term deposits to Baa2 from Baa3;

• Bank of Ningbo Co., Ltd.’s (BONB) long-term deposits to Baa2 from Baa3; and

• Bank of Suzhou Co., Ltd.’s (BOSZ) long-term deposits to Ba1 from Ba2.

The agency also upgraded by one notch the ratings of the capital securities of following banks:

• Bank of China Ltd.’s (BOC) and Industrial and Commercial Bank of China Ltd.’s (ICBC) subordinate debt to Baa2 (hyb) from Baa3 (hyb);

• China Construction Bank Corp.’s (CCB), BOC’s and ICBC’s non-cumulative preferred stock to Ba1 (hyb) from Ba2 (hyb);

• PSBC’s non-cumulative preferred stock to Ba2 (hyb) from Ba3 (hyb); and

• BoCom’s non-cumulative preferred stock to Ba3 (hyb) from B1 (hyb).

At the same time, Moody's affirmed the A1 ratings – with a stable outlook – for the long-term deposits of BOC, CCB, and ICBC, and the A1 ratings for the senior unsecured debt of the three banks' overseas branches.

The agency affirming the ratings of the following banks and changed their outlooks to positive from stable:

• China Citic Bank Corp. Ltd.’s (CITICB) Baa2 long-term deposits and senior unsecured debt ratings;

• China Everbright Bank Co. Ltd.’s (CEB) Baa2 long-term deposits ratings; and

• Bank of Nanjing Co., Ltd.’s (BONJ) Baa3 long-term deposits ratings.

In addition, Moody's affirmed the ratings and stable outlooks of the following banks:

• Ping An Bank Co., Ltd.’s (PAB) Baa2 long-term deposits ratings;

• Shanghai Pudong Development Bank Co., Ltd.’s (SPDB) Baa2 long-term deposits and its Hong Kong branch’s Baa2 senior unsecured debt;

• Guangzhou Rural Commercial Bank Co., Ltd.’s (GZRCB) Baa2 long-term deposits ratings;

• China Guangfa Bank Co., Ltd.’s (CGB) Baa3 long-term deposits ratings; and

• China Zheshang Bank Co., Ltd.’s (CZBANK) Ba1 long-term deposits ratings.

For the following Chinese subsidiaries of four international banks, Moody's affirmed their ratings with a stable outlook:

• HSBC Bank (China) Co. Ltd.’s (HBCN) A1 long-term deposits ratings;

• Hang Seng Bank (China) Ltd.’s (HSCN) A2 long-term deposits ratings;

• Bank of Tokyo-Mitsubishi UFJ (China) Ltd.’s (BTCN) A3 long-term deposits ratings; and

• Fubon Bank (China) Co., Ltd.’s (FBCN) Baa1 long-term deposits ratings.

Moody's said it took these rating actions after changing the macro profile for China to "moderate +" from "moderate," driven by an improvement to "very strong --" from "strong +" in the country's banking country risk score.

During the past year, the agency raised its economic growth forecasts for China, from the original expectation of a drop in the growth rate to below 6% in 2019 to an expectation of 6.4% for the same year.

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