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Moody's raises outlook on China CITIC Bank International ratings

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Moody's raises outlook on China CITIC Bank International ratings

Moody's raised the outlook on Hong Kong-based China CITIC Bank International Ltd. to stable from negative.

The rating agency said in an Oct. 9 report that it affirmed the lender's long-term and short-term deposit ratings at Baa1 and Prime-2, respectively. The bank's baseline credit assessment and adjusted BCA were also affirmed at "baa2."

The rating action comes after the lender agreed to sell new shares to five investors to raise HK$9.05 billion, a transaction that is expected to close end-2017 once approvals are in.

The outlook revision reflects the outlook of the Chinese government and the lender's parent, China CITIC Bank Corp. Ltd. Moody's added there is easing pressure on the bank's credit worthiness, given its performance in recent years despite subdued economic growth in Hong Kong.

The rating affirmation reflects China CITIC Bank International's overall credit profile along with its improved capital position after the capital injection. Moody's noted the lender has maintained a sound solvency and liquidity profile amid challenging operating conditions.

A change in the parent's ratings could lead to similar action on the lender's ratings. Rapid growth in the bank's mainland or overseas operations that weakens its solvency and liquidity profiles could also lead to a downgrade of its stand-alone credit assessment.