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China Credit Spotlight: The Coming Exit of Struggling Banks

(Editor's Note: This article is part of our "China Credit Spotlight" series, which examines the credit conditions for China's top corporates and banks, key sectors, local and regional governments, and structured finance.)

China's biggest banks remain resilient, while some smaller and weaker institutions are getting weaker. S&P Global Ratings has been regularly writing about this "Matthew Effect," a polarization brought home this year with the Chinese government's takeover of Baoshang Bank in May and a coordinated effort to bolster the troubled Bank of Jinzhou in July. We anticipate more difficulties will likely surface over the next year, and some problem banks will exit the market.

Credit divergence will intensify, in our view, because some small and midsized banks (SMB) are less equipped to deal with a slowing and rebalancing economy and tightening financial regulations. Within the SMB niche, markers for vulnerability include geographic base; high exposure to riskier credit; or governance issues, often indicated by ownership structures and failure to file financial reports in a timely manner.

We estimate that troubled banks make up around 4% of total sector assets. In our view, Chinese authorities are not, at this stage, comfortable with testing the potential reverberations of letting even a small bank abruptly fail. Rather, we expect regulators would arrange an orderly "exit" if needed through a less-jolting medium: such as through restructuring or a merger with a larger institution.

Who's Who Among The Listed Banks

Much of the data sets in this report are derived from 48 listed Chinese commercial banks. By end-2018, the listed banks represented 67% of the sector's total assets (including policy banks) (see chart 1).

These institutions fall into four main categories:

  • Megabanks (Group A). This category covers the "big five" commercial banks plus the Postal Savings Bank of China (PSBC). The six megabanks together account for around 42% of banking sector assets and have extensive branch networks. These banks share a similar geographic reach and business scope.
  • National banks (Group B). The nine listed joint-stock commercial banks (JSCBs) have a nationwide presence and adequate financial disclosure for peer comparison purposes. There are 12 JSCBs in China as of end 2018, accounting for around 18% of total banking sector assets.
  • City commercial banks (Group C). Our group covers only the 23 listed city commercial banks. There are over 100 city commercial banks as of end 2018, accounting for around 13% of total banking sector assets.
  • Rural commercial banks (Group D). We include 10 listed rural commercial banks. There are over 1,000 rural commercial banks as of end 2018, accounting for around 13% of the total banking sector assets.

Group C and Group D are "regional banks." While their deposits and loans are geographically concentrated, in recent years these banks have been gaining greater nationwide exposure via the interbank and bond markets.

The 48 banks in this sample include 17 banks listed only in Hong Kong ("H" shares), 21 banks listed only on China's domestic bourses ("A" shares) and 10 banks with dual listings.

Seven banks are newly listed from 2018: Bank of Changsha, Bank of Xi'an, Luzhou City Commercial Bank, Jiangsu Zijin Bank, Jiangxi Bank, Bank of Jiujiang, Qingdao Rural Commercial Bank.

See table 5 in our appendix for a full list of the 48 banks, and their key statistics.

Chart 1


Big Vs Small: Why The Challenges Are Different

We expect the listed banks in Groups A and B--megabanks and most of the listed JSCBs--can weather slower growth and other headwinds facing the financial sector, given their funding and capital strength and advantages (see "Chinese Banks' Financial Performance Points To A 'Matthew Effect' In The Making," published on RatingsDirect on April 18, 2018). However, the megabanks will also have to shoulder policy mandates that could constrain their profitability, e.g., disseminating affordable credit to higher-risk private sectors and small and micro enterprises. The inherent risks and financial burdens associated with policy-guided banking goes hand in hand with other policies and rules that favor megabanks (see "Credit FAQ: What Drives Chinese Megabanks' Stand-Alone Credit Profiles And Their Likelihood Of Receiving Government Support," March 26, 2019.).

Chart 2


Chart 3


In general, listed banks in Groups C and D--city and rural commercial banks--tend to have weaker underwriting and governance standards as well as riskier exposures. As a result, some SMBs are having a harder time adjusting to regulatory tightening, including a clampdown on shadow-banking and speculative interbank activities, closer surveillance on shareholding structures and governance, and tougher rules on nonperforming loan (NPL) classification (see table 1). To keep the reported NPL ratio generally stable, they will likely continue to enhance charge-offs which will increase the strain on profitability and capitalization (see charts 2-3).

We expect problems to surface as these stringent requirements come into force. Megabanks and the majority of the listed JSCBs are less affected because they already have more disciplined risk practices--for example, classifying as NPLs loans overdue more than 90 days. Some JSCBs and regional banks were also late to meet the new target (see charts 4-5).

Chart 4


Chart 5


In addition, some of these smaller institutions have been hit by a "flight to quality" after the Baoshang Bank takeover (see chart 6 and timeline in the Appendix). We believe all these trends will accelerate polarization. Some banks at the bottom end of the credit spectrum may need to reach out to the local or central government for support. We do not expect any banks to abruptly collapse, but we see managed exits from the market.

Table 1

"Bitter Medicine" To Strengthen China's Banking Sector
Timeline of rules aimed at increasing market discipline and monitoring financial risks
Date Policy initiative Credit-conditions implication
5-Jan-18 Regulations tightened to limit concentrated ownership in commercial banks, and to clarify shareholder responsibilities. In follow-up notices: unlisted commercial banks will be required to register their stakeholders with qualified custodians by end-June 2020, and all commercial banks will be required to identify their shareholders by the end of 2021. Boosts governance; should reduce financial risks.
5-Jan-18 New rules on entrusted loans to restrict the source of funds, and to increase disclosure on the use of the funds from these loans, in which banks act as agents between outside borrowers and lenders. This effective tightening on entrusted lending foreshadowed further clampdowns on "alternative" funding channels.
27-Apr-18 New asset management rule to (1) end implicit guarantees to investors; (2) prohibit multi-tiered product structuring; (3) reduce permitted leverage levels for many products. This was followed up by more detailed rules on wealth management products (WMPs) issued by commercial banks and their subsidiaries, issued in December 2018. Reduces financial risk by stopping banks from providing implicit guarantees on their wealth management products. Banks also face a deadline of 2020 to move many of these products onto their balance sheets, which will require higher provision and capital charges. The result has been a decline in activity in this market.
1-Jul-18 Rule to manage commercial banks' large exposures came into force. E.g., exposure to a single customer in the same industry cannot exceed 25% of the net value of tier-1 capital. This reduces exposures between banks and subjects cross-holdings to tighter supervision.
27-Nov-18 Guidance on the framework on domestic systemically important financial institutions (DSIFI). The guideline sets out resolution mechanisms, though we expect further formalization on how to manage DSIFIs under stress. We believe the framework will develop in a way that gives the government flexibility to bail out banks at its discretion.
30-Apr-19 New measures for asset classification tighten recognition and also extend the scope of application to include nonloan assets such as bonds and receivables. It specifies all financial assets more than 90 days overdue should be classified as nonperforming. More stringent recognition should reduce longer-term financial risks; in the meantime, the result has been higher provisions and charge-offs.
17-May-19 CBIRC Doc 23 "Consolidating Achievements of Financial Cleanup; Facilitating Proper Compliance" re-emphasizes the focus on risk management, compliance and internal controls. Five key areas are: equity shareholding and corporate governance, macro-policy implementation, credit management, shadow banking and cross-financing risks, and risk resolution. This clarifies the continued regulatory tightening stance, especially on credit misuse in the property market, noncompliant financing for local governments and SOEs, bills with no real trade background, WMPs, interbank lending businesses, and NPL classification.
26-Jul-19 Draft rules set asset-concentration floors and licencing requirements for financial holding companies. Restricts investments in nonfinancial businesses for such companies. Addresses governance and heightens risk controls for large financial holding firms, including fintech companies.
CBIRC--China Banking and Insurance Regulatory Commission. SOE--State-owned enterprise. NPL--Nonperforming loan. Sources: CBIRC, the People's Bank of China.

Chart 6


Identifying The SMBs That Are Most Vulnerable

We anticipate the highest downside risk for banks operating in parts of the country with weaker economies; that have riskier assets; and that have governance issues.

(1) Operating in region with a sharper deceleration in GDP growth

Credit costs have sharply risen for city and rural commercial banks in general. In our view, banks are more vulnerable to asset quality problems if they operate in regions with economic growth that is slower than the national average, or experienced relatively sharp slowdown in the past few years. We applied a growth filter and found the following mainland Chinese regions are more vulnerable based on growth pattern metrics: Gansu, Guizhou, Hainan, Heilongjiang, Inner Mongolia, Jilin, Liaoning, Ningxia, Qinghai, Shaanxi, Shandong, Tianjin, Tibet, and Xinjiang.

We consider the combined ratio of special-mention loans (SML) plus NPLs (known as "problematic loans") as a more useful metric in assessing Chinese banks' asset quality. Some 12 listed banks have ratios above the national average (see table 2). Most Chinese banks have relatively high provision coverage on NPLs; however, when including SMLs, the provision ratio on problematic loans falls to as low as 40% for some small banks. We note that the asset quality of some small banks can be volatile, requiring a more cautious reading of their provision coverage ratios.

Table 2

Asset Quality Metrics For Listed Banks By Geographic Breakdown
Region Province Number of listed regional banks Name* Group Gross loans yoy (%) NPL + SML ratio (%) Problematic loan formation ratio (%) Problematic loan provision coverage ratio (%)
Total City commerical bank Rural commercial bank 2017 2018 2017 2018 2017 2018 2017 2018
National 33 23 10 5.23 4.96
Beijing Beijing 1 1 0 BoBJ C 19.69 17.15 2.80 2.34 1.15 0.97 126.32 146.06
Beijing Total 1 1 0
Northern China Tianjin 1 1 0 BoTJ C 16.30 16.04 5.78 6.24 0.87 1.42 50.35 65.68
Northern China Total 1 1 0
Northeastern China Heilongjiang 1 1 0 Harbin Bank C 17.74 17.28 4.26 4.08 1.31 0.73 65.23 71.07
Jilin 1 0 1 JJRCB D 26.93 -1.65 3.95 3.23 0.16 -0.75 74.94 86.69
Liaoning 2 2 0 SJB C 18.73 35.39 3.18 6.31 -0.31 5.43 86.91 43.38
BoJZ C 69.65 N/A 3.25 N/A 1.20 N/A 86.16 N/A
Northeastern China Total 4 3 1
Eastern China Shanghai 1 1 0 BoSH C 19.86 28.11 3.23 3.00 0.85 1.17 97.11 126.59
Jiangsu 8 2 6 BoJS C 15.08 24.19 3.80 3.49 0.89 0.80 68.41 81.69
CSRCB D 17.15 19.26 3.81 3.06 0.17 0.31 97.69 143.20
WXRCB D 9.65 14.03 2.87 1.92 0.68 -0.12 93.14 151.93
JYRCB D 6.33 12.77 4.11 3.82 -0.70 1.31 111.79 131.68
BoNJ C 17.23 23.50 2.50 2.31 0.57 0.98 158.81 178.12
ZJGRCB D 10.80 22.50 8.20 6.71 1.48 0.85 40.23 49.04
WJRCB D 8.01 21.00 7.85 5.98 -7.48 0.92 42.10 54.52
ZJRCB D 15.80 19.80 3.80 3.46 0.51 0.71 119.09 112.35
Zhejiang 2 2 0 BoNB C 14.44 23.94 1.50 1.33 -0.08 0.27 269.82 306.38
BoHZ C 15.10 23.48 4.44 2.71 -0.39 -0.31 75.63 136.97
Anhui 1 1 0 HSB C 13.46 21.31 2.48 2.57 0.77 1.17 128.69 130.08
Jiangxi 2 2 0 JXB C 19.78 32.27 7.07 6.83 2.69 2.85 50.00 47.57
BoJJ C 29.21 38.07 3.11 3.36 -0.34 3.20 100.19 98.09
Shandong 2 1 1 BoQD C 12.50 29.42 7.14 7.31 3.85 4.04 36.36 38.35
QDRCB D 11.27 21.81 11.47 8.71 0.03 0.22 44.09 52.09
Eastern China Total 16 9 7
Central and Southern China Henan 2 2 0 ZYB C 20.63 28.83 6.40 6.31 1.26 3.79 56.50 59.92
BoZZ C 15.63 35.55 4.45 4.96 2.27 2.97 67.19 74.22
Hunan 1 1 0 BoCS C 30.16 32.31 2.04 4.19 0.84 3.88 157.36 84.96
Guangdong 1 0 1 GZRCB D 19.57 28.56 3.93 3.85 -0.84 1.66 71.98 89.43
Central and Southern China Total 4 3 1
Southwestern China Chongqing 2 1 1 CQRCB D 12.62 12.65 3.47 3.23 0.68 1.04 121.11 139.18
BoCQ C 17.34 19.88 5.27 4.67 2.21 2.50 54.03 65.61
Sichuan 2 2 0 BoCD C 8.91 25.00 4.43 3.42 0.47 0.48 77.00 106.57
LZCCB C 33.49 61.22 3.71 2.47 -0.35 0.37 78.76 102.49
Guizhou 1 1 0 BoGY C 22.46 51.18 4.10 3.54 1.21 2.22 85.56 99.95
Southwestern China Total 5 4 1
Northwestern China Shaanxi 1 1 0 BoXA C 15.12 18.19 3.40 3.47 -0.28 0.33 73.80 75.05
Gansu 1 1 0 BoGS C 20.80 23.49 7.25 8.14 6.17 3.43 53.23 47.74
Northwestern China Total 2 2 0
Mega and national banks ICBC A 9.01 8.61 5.50 4.44 0.44 0.07 43.49 60.23
CCB A 9.75 6.82 4.32 4.27 0.87 1.38 58.97 70.99
ABC A 10.30 11.38 5.08 4.32 0.25 0.36 74.20 92.78
BOC A 9.26 8.47 4.36 4.31 0.86 1.10 53.05 59.59
BOCOM A 8.63 8.91 4.38 3.95 0.73 0.96 51.84 58.37
PSBC A 20.58 17.82 1.43 1.49 0.17 0.52 170.78 200.14
INDB B 16.87 25.19 3.74 3.49 1.13 1.35 89.87 94.35
CMB B 9.30 10.57 3.21 2.87 0.13 0.48 131.27 169.92
SPDB B 15.63 13.01 5.36 4.79 2.29 1.76 53.01 61.52
CMBC B 13.92 13.89 5.56 4.92 1.92 1.78 48.16 47.61
CITIC B 11.08 13.13 3.82 4.12 1.08 2.24 74.49 67.82
CEB B 13.19 22.71 4.43 3.88 0.39 0.90 56.76 71.13
PAB B 15.48 17.58 5.40 4.46 2.80 1.99 47.63 60.40
HXB B 14.58 15.74 6.36 6.28 2.18 1.68 43.39 46.62
CZB B 46.44 31.00 2.70 2.78 0.85 1.27 125.22 115.08
*Please see table 6 in Appendix for full names of banks. N/A--Not available. Source: S&P Global Market Intelligence, Arrow Global.
(2) High exposures to riskier asset classes or recent aggressive entry into new businesses.

Shadow-banking reforms have raised funding costs and refinancing risks for certain corporate borrowers, especially some highly leveraged property developers. If residential sales slow, this could add further liquidity stress on some smaller developers. Regional banks are more exposed to smaller developers.

Table 3

Exposure Matters
Top 10 banks with highest proportional exposure to property-development related loans
Rank Bank Loan book exposure (%) Group
1 Qingdao Rural Commercial Bank 21.1 D
2 Bank of Jiujiang 20.5 C
3 Luzhou City Commercial Bank 18.4 C
4 Bank of Guiyang 17.9 C
5 Guangzhou Rural Commercial Bank 17.8 D
6 China Zheshang Bank 17.2 B
7 Bank of Tianjin 17.0 C
8 Bank of Shanghai 17.0 C
9 Bank of Zhengzhou 15.6 C
10 Bank of Xi'an 15.3 C
Source: S&P Global Market Intelligence, WIND.

We also see a risk of rising consumer loan defaults, from a very low base. The cooperation with so-called fintech companies have boosted consumer loan growth for some regional banks. However, banks or many fintechs that have self-proclaimed superior consumer lending tools have yet to be tested by a full consumer credit cycle. It would not surprise us if some overly aggressive banks experienced a sharp increase in consumer credit charge-offs (see "Will China's Credit Card Boom Follow The Well-Worn Path To Bust?," July 3, 2019).

(3) Banks that have not filed financial reports in a timely manner, or have related governance issues.

At least 19 banks--that are either listed or have outstanding financial bonds--were late or have not yet published their 2018 annual reports. They accounted for about 1.8% of total sector assets as of 2017. Of these, 12 are rural commercial banks, six are city commercial banks, and one is a national joint stock bank. Late audits or changed business models were cited for the delays. By Aug. 6, 2019, more than half of the late-filers had reported (see table 4 for a list of those who haven't). The asset scales of the remaining seven banks range from RMB15 billion to more than RMB1 trillion. This in turn compares with about RMB570 billion in total assets for Baoshang Bank and roughly RMB720 billion for Jinzhou.

Table 4

Banks That Have Not Published Their 2018 Annual Reports
Name Type Province 2017 total assets (bil. RMB) Reason cited for delay
Hengfeng Bank National bank Shandong (headquarters) N.A. Auditor's report is still in progress
Bank of Jinzhou City commercial bank Liaoning 723.4 Auditor's report is still in progress
Panzhihua City Commercial Bank City commercial bank Sichuan 82.5 "Internal procedures" have not been completed
Chengdu Rural Commercial Bank Rural commercial bank Sichuan 705.6 Auditor's report is still in progress
Shandong Guangrao Rural Commercial Bank Rural commercial bank Shandong 24.3 Annual report delayed due to change of business model
Shandong Boxing Rural Commercial Bank Rural commercial bank Shandong 15.6 Auditor's report is still in progress
Shandong Zouping Rural Commercial Bank Rural commercial bank Shandong 20.4 Auditor's report is still in progress
bil.--billion. RMB--Chinese reminbi. N.A.--Not available.

In its 2018 financial stability report on 4,327 financial institutions, the People's Bank of China graded 420 institutions in the lowest categories of 8-10. This included 235 rural cooperative banks, 109 rural county banks, and 67 rural commercial banks. By our estimates, these low-graded banks together with those that have not disclosed annual reports account for around 4% of total assets in the banking sector. We expect the sector's NPL+SML ratio will to be around 6%-7% over the next two years.

"Exits" Rather Than Failures

We expect some banks will exit the market, a process that could range from takeovers, mergers, cancellations of banking licenses, or restructuring of unhealthy banks. Given that deposit insurance is still at a nascent stage, we believe an abrupt failure is not an option in the short term, but rather negotiated and supported exit.


Chinese authorities have a difficult road ahead as they develop strategies to fix the country's problem institutions without spooking markets. In our view, this will involve balancing market discipline against financial stability. Whereas small-bank failures are fairly common on a global front--the U.S. Federal Deposit Insurance Corp. closed 465 banks from 2008 to 2012--we don't see China going this route. We expect troubled institutions would be offered support to repair balance sheet, combined with sharp curtailment of asset growth until their problems are addressed. In some cases, licenses will be lost, and assets merged or taken over, but we do not expect "failure" in the sense of an abrupt closure.

In many cases, problems surfaced as a result of tightening regulations aimed at reducing risk over the long term. Over the short term, we believe regulators will show some tolerance toward banks struggling to adjust to the new standards.

In our view, the government takeover of Baoshang Bank was meant to break expectations of implicit government support. Nonetheless, the action was mostly supportive, with limited losses to claimholders. We believe the action will strengthen a market-oriented risk assessment process in the interbank lending market. It should also lead to further declines in interbank businesses at city and rural banks, particularly for the weaker ones. In the Bank of Jinzhou case, authorities adopted a relatively safer approach.

Regulators are likely to provide liquidity to faltering banks, rather than allow distress to build and potentially spread. Local governments are often major shareholders of small banks, and would likely help bridge the capital gap. Megabanks and distressed asset management companies have also been involved in providing support, as in the case of Bank of Jinzhou.

Related Research

  • Will China's Credit Card Boom Follow The Well-Worn Path To Bust?, July 3, 2019
  • Credit FAQ: What Drives Chinese Megabanks' Stand-Alone Credit Profiles And Their Likelihood Of Receiving Government Support," March 26, 2019
  • Deleveraging While Disseminating: The Task Facing China's Banks, Nov. 8, 2018
  • Chinese Banks' Financial Performance Points To A 'Matthew Effect' In The Making," April 18, 2018


Timeline: Baoshang Bank and Bank of Jinzhou

China's policymakers have taken a measured approach to facilitate the risk resolution of two troubled banks this year.

May 6 Liquidity injection:   The People's Bank of China (PBOC) announces a targeted cut to the required reserve ratio for small and midsized banks.

May 24 Baoshang takeover:   The PBOC and China Banking and Insurance Regulatory Commission (CBIRC) jointly announce a takeover of Baoshang Bank, and entrusted China Construction Bank Corp. to handle the bank's daily business operations.

May 26 Coverage scheme:   All corporate deposits and interbank liabilities with amounts not greater than RMB50 million will be protected; for corporate deposits or bank claims above RMB50 million, settlement will be negotiated by creditors and the entrusted team. No impact on retail business and full retail deposit coverage.

May 27 No vulturing:   CBIRC Beijing Bureau notice emphasizes a prohibition on vicious competition for Baoshang's clients and requires other banks to support the takeover work.

May 29 Some haircuts on interbank funding:   Coverage scheme is rolled out for Baoshang's interbank liabilities: full coverage for up to RMB50 million; principal but no interest guaranteed for claims of RMB50 million-RMB100 million; at least 90% of principal for RMB100 million-RMB2 billion; at least 80% of principal for RMB2 billion-RMB 5 billion; and at least 70% principal coverage for above RMB5 billion.

May 31 Guidelines on bill repayment:   The arrangement guarantees the payment of bills claims of up to RMB50 million. Holdings beyond RMB50 million will be 80% guaranteed by the deposit insurance fund, and the rest can be sought through legal claims. Based on this, 94% of the bill holders get full coverage. Among the bill holders that are corporates, 99% get full coverage.

May 31: Auditors of Bank of Jinzhou (BoJZ) resign:   The bank discloses that its auditor had resigned. Ernst & Young noted indications that some loans to institutional customers were not used in ways consistent with the purpose stated in documents. The lender's shares had been suspended from trading since April 1, 2019. BoJZ disclosed in August 2019, that it expected to record a net loss of about RMB4 billion-RMB5 billion in 2018 and RMB500 million-RMB1 billion in first-half 2019, due in part to increased provisions amid a decline in asset quality.

June 2 "An isolated case":   PBOC statement says the takeover of Baoshang Bank was an isolated case, while revealing the seizure was triggered by misappropriation of funds by its largest shareholder. The central bank said it does not plan to take over other institutions; that the market impact was manageable; and that corporate and interbank creditors with claims of more than RMB50 million are expected to initially receive 90% of the debt payable on average.

June 9 PBOC liquidity promise:   The central bank announces it will use various policy tools to safeguard against financial stress, and provide targeted liquidity support to small and mid-sized banks.

June 10 BoJZ gets enhancement:   PBOC provides a credit enhancement to RMB2 billion of six-month interbank certificates of deposits issued by BoJZ.

June 18 Managing the cascade:  In an effort coordinated by regulators, megabanks will step up to back top brokers, in order to support lending to small and midsized nonbank institutions.

July 28 BoJZ gets new investors:   Several major state-owned financial institutions purchase an aggregate 17.3% of shares from existing shareholders. The Industrial and Commercial Bank of China Ltd. (ICBC) took the biggest take (10.8%) through its unit ICBC Financial Asset Investment Co. The rest purchased by distressed asset managers China Cinda Asset Management Co. Ltd. and Great Wall Asset Management Co. Ltd.

Table 5

China's 48 Listed Banks Ranking by Assets
Rank in 2018 Rank in 2017 Bank Total assets in 2018 (bil.RMB) Total assets in 2017 (bil.RMB) Total adjusted assets in 2018 (bil.RMB) Group
1 1 Industrial and Commercial Bank of China Ltd. 27,700 26,087 30,275 A
2 2 China Construction Bank Corp. 23,223 22,124 25,064 A
3 3 Agricultural Bank of China Ltd. 22,609 21,053 24,316 A
4 4 Bank of China Ltd. 21,267 19,467 22,424 A
5 5 Bank of Communications Co. Ltd. 9,531 9,038 10,491 A
6 6 Postal Savings Bank of China Co. Ltd. 9,516 9,013 10,304 A
7 8 China Merchants Bank Co. Ltd. 6,746 6,298 8,798 B
8 7 Industrial Bank Co. Ltd. 6,712 6,417 7,927 B
9 9 Shanghai Pudong Development Bank Co. Ltd. 6,290 6,135 7,665 B
10 11 China CITIC Bank Corporation Ltd. 6,067 5,678 7,126 B
11 10 China Minsheng Banking Corp. Ltd. 5,995 5,902 6,846 B
12 12 China Everbright Bank Co. Ltd. 4,357 4,088 5,046 B
13 13 Ping An Bank Co. Ltd. 3,419 3,248 3,956 B
14 14 Hua Xia Bank Co. Ltd. 2,681 2,509 3,150 B
15 15 Bank of Beijing Co. Ltd. 2,573 2,330 2,898 C
16 16 Bank of Shanghai Co. Ltd. 2,028 1,808 2,280 C
17 17 Bank of Jiangsu Co. Ltd. 1,926 1,771 2,220 C
18 18 China Zheshang Bank Co. Ltd. 1,647 1,537 1,987 B
19 19 Bank of Nanjing Co., Ltd. 1,243 1,141 1,547 C
20 21 Bank of Ningbo Co. Ltd. 1,116 1,027 1,351 C
21 22 Huishang Bank Corp. Ltd. 1,051 908 1,152 C
22 20 Shengjing Bank Co. Ltd. 985 1,031 1,038 C
23 23 Chongqing Rural Commercial Bank Co. Ltd. 951 906 1,061 D
24 24 Bank of Hangzhou Co. Ltd. 921 833 1,109 C
25 25 Guangzhou Rural Commercial Bank Co.Ltd. 763 736 841 D
26 27 Bank of Tianjin Co. Ltd. 659 702 764 C
27 29 Zhongyuan Bank Co., Ltd. 620 522 663 C
28 28 Harbin Bank Co. Ltd. 616 564 683 C
29 30 Bank of Changsha Co. Ltd. 527 471 572 C
30 31 Bank of Guiyang Co. Ltd. 503 464 579 C
31 33 Bank of Chengdu Co. Ltd. 492 435 514 C
32 32 Bank of Zhengzhou Co. Ltd. 466 436 503 C
33 34 Bank of Chongqing Co. Ltd. 450 423 502 C
34 35 Jiangxi Bank Co. Ltd. 419 370 452 C
35 40 Bank of Gansu Co. Ltd. 329 217 349 C
36 36 Bank of Qingdao Co. Ltd. 318 306 389 C
37 37 Bank of Jiujiang Co. Ltd. 312 271 347 C
38 38 Qingdao Rural Commercial Bank Corp. 294 251 316 D
39 39 The Bank of Xi'An Co. Ltd. 243 234 258 C
40 42 Jiangsu Zijin Rural Commercial Bank Co. Ltd. 193 171 200 D
41 43 Jiangsu Suzhou Rural Commercial Bank Co., Ltd. 167 146 196 D
42 41 Jilin Jiutai Rural Commercial Bank Corp. Ltd. 164 187 168 D
43 44 Wuxi Rural Commercial Bank Co. Ltd. 154 137 165 D
44 47 Jiangsu Wujiang Rural Commercial Bank Co. Ltd 117 94 128 D
45 45 Jiangsu Jiangyin Rural Commercial Bank Co. Ltd. 115 109 121 D
46 46 Jiangsu Zhangjiagang Rural Commercial Bank Co. Ltd. 113 103 126 D
47 48 Luzhou Bank Co. Ltd. 83 71 84 C
Unranked 26 Bank of Jinzhou Co. Ltd.* N/A 723 N/A C
*Bank of Jinzhou's 2018 financial report has not yet been published. bil.--billion. RMB--Chinese renminbi. N/A--Not available. Source: Banks' annual reports.

Table 6

Acronyms For The 48 Listed Banks
Megabanks Acronym
Industrial and Commercial Bank of China Ltd. ICBC
China Construction Bank Corp. CCB
Agricultural Bank of China Ltd. ABC
Bank of China Ltd. BOC
Bank of Communications Co. Ltd. BoCom
Postal Savings Bank of China Co. Ltd. PSBC
National banks
Industrial Bank Co. Ltd. INDB
China Merchants Bank Co. Ltd. CMB
Shanghai Pudong Development Bank Co. Ltd. SPDB
China Minsheng Banking Corp. Ltd. CMBC
China CITIC Bank Corporation Ltd. CITIC
China Everbright Bank Company Ltd. CEB
Ping An Bank Co. Ltd. PAB
Hua Xia Bank Co. Ltd. HXB
China Zheshang Bank Co. Ltd. CZB
City commercial banks
Bank of Beijing Co. Ltd. BoBJ
Bank of Shanghai Co. Ltd. BOSH
Bank of Jiangsu Co. Ltd. BoJS
Bank of Nanjing Co. Ltd. BoNJ
Shengjing Bank Co. Ltd. SJB
Bank of Ningbo Co. Ltd. BoNB
Huishang Bank Corporation Ltd. HSB
Bank of Hangzhou Co. Ltd. BoHZ
Bank of Jinzhou Co. Ltd. BoJZ
Bank of Tianjin Co. Ltd. BoTJ
Harbin Bank Co. Ltd. HarbinBank
Zhongyuan Bank Co. Ltd. ZYB
Bank of Guiyang Co. Ltd. BoGY
Bank of Zhengzhou Co. Ltd. BoZZ
Bank of Chengdu Co. Ltd. BoCD
Bank of Chongqing Co. Ltd. BoCQ
Bank of Qingdao Co. Ltd. BoQD
Bank of Gansu Co. Ltd. BoGS
Bank of Changsha BoCS
Bank of Xi'An BoXA
Jiangxi Bank JXB
Bank of Jiujiang BoJJ
Luzhou City Commercial Bank LZCCB
Rural commercial Banks
Chongqing Rural Commercial Bank Co. Ltd. CQRCB
Guangzhou Rural Commercial Bank Co. Ltd. GZRCB
Jilin Jiutai Rural Commercial Bank Corporation Ltd. JJRCB
Jiangsu Changshu Rural Commercial Bank Co. Ltd. CSRCB
Wuxi Rural Commercial Bank Co. Ltd. WXRCB
Jiangsu Jiangyin Rural Commercial Bank Co. Ltd. JYRCB
Jiangsu Zhangjiagang Rural Commercial Bank Co. Ltd. ZJGRCB
Jiangsu Wujiang Rural Commercial Bank Co. Ltd WJRCB
Jiangsu Zijin Rural Commercial Bank ZJRCB
Qingdao Rural Commercial Bank QDRCB

Table 7

Rated China Banks
Legal Name Long-term issuer rating Outlook

Agricultural Bank of China Ltd.

A Stable

Agricultural Development Bank of China

A+ Stable

Bank of China Ltd.

A Stable

Bank of Chongqing Co. Ltd.

BBB- Stable

Bank of Communications Co. Ltd.

A- Stable

China CITIC Bank Co. Ltd.

BBB+ Stable

China Construction Bank Corp.

A Stable

China Development Bank

A+ Stable

China Merchants Bank Co. Ltd.

BBB+ Stable

China Minsheng Banking Corp. Ltd.

BBB- Stable

Export-Import Bank of China (The)

A+ Stable

Guangzhou Rural Commercial Bank Co. Ltd.

BBB- Stable

Hua Xia Bank Co. Ltd.

BBB- Stable

Industrial and Commercial Bank of China Ltd.

A Stable

Postal Savings Bank of China Co. Ltd.

A Stable

Shanghai Pudong Development Bank Co. Ltd.

BBB Stable

Shanghai Rural Commercial Bank Co. Ltd.

BBB Stable
Source: S&P Global Ratings.

This report does not constitute a rating action.

Primary Credit Analyst:Liang Yu, PhD, Hong Kong (852) 2533-3541;
Secondary Contacts:Ryan Tsang, CFA, Hong Kong (852) 2533-3532;
Harry Hu, CFA, Hong Kong (852) 2533-3571;
Research Assistant:Tingwei Hsiung, Hong Kong

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