Fitch Ratings on Dec. 20 assigned its AAA(mex) long-term rating to Industrial and Commercial Bank of China Mexico SA with a stable outlook. It also assigned the bank an F1+(mex) short-term rating.
The ratings consider the support the bank would likely receive, if needed, from parent company Industrial and Commercial Bank of China (ICBC), which is the largest bank in China. State-owned ICBC has a long-term issuer default rating of A on Fitch's international scale.
The capacity and willingness of ICBC to provide support is based on the strategic importance of the Mexican unit given the potential for growth in trade between the two countries and the low level of financial intermediation in Mexico, Fitch said.
Considering ICBC's global expansion strategy, which includes Latin America, the bank is also more likely to provide support to the Mexican unit given the risk to its reputation of allowing a subsidiary to fall into default, according to the rating agency. The commercial synergies between the parent and ICBC México are also likely to strengthen as the Mexican operation grows, Fitch added.
ICBC launched operations in Mexico in June 2016 and is focused on providing commercial credit services mainly to corporations and government entities. It also has an aggressive portfolio expansion plan, which aims to grow its market share in the next three years, Fitch noted.
The Mexican unit is ICBC's fourth subsidiary in Latin America after Peru, Argentina and Brazil.