Fitch may up ICBC Asia

Fitch Ratings said it placed on Rating Watch positive Industrial and Commercial Bank of China (Asia) Ltd.'s (ICBC Asia) long-term issuer default rating of A- and short-term issuer default rating of F2.

The watch placement follows ICBC Asia's board approval and offer made by parent Industrial and Commercial Bank of China Ltd. (ICBC) to buy the remaining 28% of ICBC Asia it does not already own, Fitch said.

This transaction will turn ICBC Asia into a 100%-owned subsidiary of ICBC, and Fitch said it expects this to lead to further strategic and operational integration between the parent and the subsidiary, which further increases the likelihood of support.

The ratings reflect the bank's continued reliance on corporate lending and wholesale funding, the agency said, although it currently has sound asset quality and reasonable capitalization.

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