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Moody's takes actions on 19 Chinese banks, 4 foreign lenders' local units

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Moody's takes actions on 19 Chinese banks, 4 foreign lenders' local units

Moody's has taken actions on the ratings and outlooks on 19 Chinese commercial banks and the local subsidiaries of four foreign lenders following the revision on the country's macro profile to Moderate + from Moderate.

The rating agency said May 30 that the change on the macro profile was driven by an improvement to Very Strong -- from Strong + in the country's banking country risk score. The growth forecast for 2018 was also increased to 6.6% from 6.3%.

Moody's upgraded the long-term deposit ratings of Agricultural Bank of China Ltd. and Postal Savings Bank of China Co. Ltd. to A1 from A2. It also upgraded the two lenders' baseline credit assessments to "baa2" from "baa3."

Moody's also raised Bank of Communications Co. Ltd.'s long-term deposits rating to A2 from A3, while upgrading the long-term issuer ratings of Bank of Communications Financial Leasing Co. Ltd. and Bocom Leasing Development Hong Kong Co. Ltd. to A2 and A3, respectively, from A3 and Baa1. Bank of Communications' baseline credit assessment was adjusted to "baa3" from "ba1," the rating agency said, adding that it withdrew its outlook on BoCom Leasing and its units' ratings for business reasons.

The agency also upgraded the long-term rating of China Merchants Bank Co. Ltd. to A3 from Baa1 and baseline credit assessment to "baa3" from "ba1." It upgraded the long-term issuer rating of China Merchants Bank unit CMB Financial Leasing Co. Ltd. to A3 from Baa1, while affirming its short-term issuer rating at P-2. The agency further withdrew its outlook on the ratings of CMB Financial Leasing and its unit for commercial reasons.

Meanwhile, the long-term ratings of Industrial Bank Co. Ltd., Bank of Shanghai Co. Ltd. and Bank of Ningbo Co. Ltd. were raised to Baa2 from Baa3. The baseline credit assessment of Industrial Bank was upgraded to "ba2" from "ba3," while those of Bank of Shanghai and Bank of Ningbo were adjusted to "ba1" from "ba2."

In addition, the agency upgraded Bank of Suzhou Co. Ltd.'s long-term rating to Ba1 from Ba2, and its baseline credit assessment to "ba2" from "ba3."

Moody's also affirmed the long-term ratings of Bank of China Ltd., Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. at A1, while upgrading their baseline credit assessments to "baa1" from "baa2."

Ping An Bank Co. Ltd.'s baseline credit assessment was also adjusted to "ba2" from "ba3," while its long-term rating was affirmed at Baa2.

Moreover, the long-term ratings of Shanghai Pudong Development Bank Co. Ltd. and Guangzhou Rural Commercial Bank Co. Ltd. were affirmed at Baa2, while those of China Guangfa Bank Co. Ltd. and China Zheshang Bank Co. Ltd. were affirmed at Baa3 and Ba1, respectively. Moody's affirmed the baseline credit assessments of Shanghai Pudong Development Bank at "ba2"; Guangzhou Rural Commercial Bank at "ba1"; and China Guangfa Bank and China Zheshang Bank at "ba3."

The agency also upgraded the baseline credit assessment of HSBC Holdings PLC unit HSBC Bank (China) Co. Ltd. to "baa1" from "baa2," with those of Hang Seng Bank (China) Ltd. and Mitsubishi UFJ Financial Group Inc. unit Bank of Tokyo-Mitsubishi UFJ (China) Ltd. being adjusted to "baa3" from "ba1." Their long-term ratings were affirmed at A1, A2 and A3 respectively.

Fubon Financial Holding Co. Ltd. unit Fubon Bank (China) Co. Ltd., on the other hand, has its long-term rating and baseline credit assessment affirmed at Baa1 and "ba2," respectively.

The lenders' ratings outlooks were stable.

Further, Moody's revised its outlooks on China CITIC Bank Corp. Ltd., China Everbright Bank Co. Ltd. and Bank of Nanjing Co. Ltd. to positive from stable, while affirming their baseline credit assessments at "ba2." It also affirmed the Baa2 long-term ratings of China CITIC Bank and China Everbright Bank, and the Baa3 rating of Bank of Nanjing.

Following the revision of outlook on China Everbright Bank, Moody's changed its outlook on Everbright Securities Co. Ltd. to positive from stable and affirmed its Baa3/P-3 issuer ratings. It also affirmed Everbright Sun Hung Kai Co. Ltd.'s and China Everbright Ltd.'s issuer ratings at Baa3/P-3 and Baa2/P-2, respectively, with a stable outlook. The agency further withdrew the outlooks on the two affiliates' long-term issuer ratings for business reasons.

Faizan Farooque contributed to this article.