Moody's assigned first-time ratings and assessments to China Zheshang Bank Co. Ltd.
The rating agency assigned the bank a long-term local- and foreign-currency deposit rating of Ba1, a short-term local- and foreign-currency deposit rating of Not Prime, a baseline credit assessment and adjusted BCA at "ba3," as well as a counterparty risk assessment of Ba1(cr)/NP(cr).
The ratings outlook is stable.
The long-term deposit rating reflect the bank's baseline credit assessment and a two-notch uplift based on assumptions of a high level of support from the Chinese government amid slow economic growth.
The rating agency believes that the bank's asset quality will remain pressured by China's economic rebalancing and the lender's rapid asset growth. The bank's liquidity is also weak due to a high dependence on market funds to support longer-term investments in loans and receivables.
Moody's could upgrade the lender's baseline credit assessment and deposit ratings if the bank's asset quality and profitability remain strong amid China's slower economic growth, and if its asset growth slows to around 15%.
Conversely, the ratings could be downgraded if China Zheshang Bank's operating environment, asset quality, profitability, capital and liquidity position weaken significantly.