Fitch affirms Industrial Commercial Bank of China (Asia)

Fitch Ratings said it affirmed Hong Kong-based Industrial and Commercial Bank of China (Asia) Ltd.'s individual rating at C and support rating at 2.

The agency said the company's credit profile is adequate, with sound asset quality ratios and adequate capitalization. Its franchise was further enhanced with the 2004 acquisition of Belgium Bank in Hong Kong, which expanded its assets by one-third and gave it a more balanced business mix: at the end of June, corporate loans accounted for 33% of total loans (versus 57% in 2003) and retail and commercial loans stood at 30% and 35% respectively, thanks to Belgium Bank's more retail and small-and-medium enterprises-oriented nature.

However, Fitch said the bank's profitability, while satisfactory, has remained below its peer-average due to its relatively modest net interest margins, which reflects its limited deposit-taking franchise and considerable amount of low-yielding syndicated corporate loans.

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