S&P views Guangzhou Finance negatively

S&P said it revised its outlook for Guangzhou Finance Holdings Group Co. Ltd. to negative from stable but affirmed its BBB+ ratings.

“In our view, GZFH is exposed to China's prolonged property sector downturn amid weakening macroeconomic conditions. This exposure is primarily from BoGZ's real estate lending in Guangzhou. We believe the group's loan book is likely to turn more vulnerable if China's property sector downturn persists longer or if there is a deeper correction.

“Credit stress in the property sector could pressure the group's credit strength, in our view. It could also weigh on the group's other loan and investment portfolios. We continue to expect an 'L-shaped' recovery for the Chinese property sector,” S&P said in a press release.

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