Moody’s upgrades China Citic Bank

Moody's Investors Service said it upgraded the foreign currency long-term deposit rating of China Citic Bank to Baa1 from Baa2.

The upgrade was prompted by the raise in China Citic Bank's standalone bank financial strength rating/baseline credit assessment to D+/ba1 from D/ba2.

The bank’s foreign currency P-2 short-term deposit rating was affirmed and the outlook is stable.

The review for upgrade was initiated on Sept. 2 after the senior unsecured bond ratings of both Citic Group Corp. and Citic Ltd. (formerly Citic Pacific Ltd.) were upgraded to A3 from Baa2 on Aug. 28.

Citic Group – wholly owned by China's Ministry of Finance – is China Citic Bank's ultimate parent. Citic Group owns a 78% stake in Citic Ltd., which in turns owns 67.1% of China Citic Bank's shares.

The upgrade of China Citic Bank's ratings reflects Moody's expectation of strengthened capitalization at the bank, the agency said.

Moody's also upgraded the long-term deposit ratings of China Citic Bank International Ltd. to Baa1 from Baa2 and affirmed the bank's P-2 short-term deposit ratings. The bank's senior unsecured medium-term note program rating and deposit note/CD program ratings are also upgraded to provisional Baa1/Baa1 from provisional Baa2/Baa2, while the short-term deposit note/CD program ratings are affirmed at provisional P-2. The bank's baseline credit assessment is unchanged at baa3.

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