Moody's assigned Bank of Communications (Hong Kong) Ltd. a local currency and foreign currency long-term deposit ratings of A2, and short-term deposit ratings of P-1, with a stable outlook.
The rating agency said in an Aug. 26 report that it also assigned the lender a baseline credit assessment and adjusted BCA of "baa2."
The long-term deposit ratings factor in the bank's BCA and adjusted BCA, as well as three notches of uplift due to support from the Chinese government through the bank's parent, Bank of Communications Co. Ltd. The parent bank is of systemic importance in China, while the Hong Kong lender is strategically core to the group, Moody's said.
Further, the Hong Kong lender's BCA takes into account its strong capitalization level, steady asset quality, sufficient liquid resources, good funding profile, as well as moderate profitability.
The assessment also considered the fact that the bank is separate from its parent Bank of Communications's Hong Kong branch, which holds mainly retail and private banking business. Bank of Communications (Hong Kong) held a nonperforming loan ratio of 0.09% at end-2018.
