Fitch cuts Bank of Beijing viability

Fitch Ratings said it affirmed the long-term foreign currency issuer default ratings of six Chinese mid-tier commercial banks at BB+.

The banks include Bank of Beijing, Industrial Bank Co., Ltd., China Minsheng Banking Corp., Ltd., Ping An Bank Co., Ltd., Hua Xia Bank Co., Ltd. and China Guangfa Bank Co., Ltd.

The outlooks are stable.

At the same time, Fitch downgraded the viability rating on Bank of Beijing to b+ from bb-. Fitch affirmed the viability ratings of the other banks.

The agency said the banks' issuer default ratings are based on state support and are at the banks' support rating floors of BB+.

This reflects a continued expectation that there is a moderate probability of extraordinary support from the central government in the event of stress, Fitch said.

Bank of Beijing’s viability rating downgrade takes into consideration the bank's continued growth in entrusted investments (around 17% of assets) and wealth management products (around 21% of assets) over 2017, despite an improvement in core capitalization following a private placement of shares in December 2017, Fitch said.

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