Bulletin: China Huarong Asset Management Co. Ltd. Rating Unaffected By 2015 Financial Performance

HONG KONG (Standard&Poor's) March 21, 2016--Standard&Poor's Ratings Services said today that its ratings on China Huarong Asset Management Co. Ltd. (A-/Stable/A-2; cnAA/cnA-1) are unaffected by the company's financial performance in 2015. China Huarong's performance, with 17.3% return on equity, was in line with our expectation and contributed significantly to its capital base. Together with its IPO earlier in 2015, China Huarong's retained profit in the year supported strong growth in its distressed asset book as well as in the banking and investment business. Nevertheless, we continue to expect that China Huarong's capital position could stay moderate, with its risk-adjusted capital (RAC) ratio, using Standard&Poor's methodology, remaining within 5%-7% over the next 24 months. In

...HONG KONG (Standard & Poor's) March 21, 2016--Standard & Poor's Ratings Services said today that its ratings on China Huarong Asset Management Co. Ltd. (A-/Stable/A-2; cnAA/cnA-1) are unaffected by the company's financial performance in 2015. China Huarong's performance, with 17.3% return on equity, was in line with our expectation and contributed significantly to its capital base. Together with its IPO earlier in 2015, China Huarong's retained profit in the year supported strong growth in its distressed asset book as well as in the banking and investment business. Nevertheless, we continue to expect that China Huarong's capital position could stay moderate, with its risk-adjusted capital (RAC) ratio, using Standard & Poor's methodology, remaining within 5%-7% over the next 24 months. In our view, China Huarong's rapid asset growth in recent years and its concentration in the real estate sector are adding pressure to its asset quality in the context of rising economic risk in China. We...

Bulletin