China Merchants Bank Co. Ltd.

Strong retail franchise among domestic peers'. Funding base supported by above-average level of retail and low-cost deposits. Moderate systemic importance as the seventh-largest commercial bank by assets in China. Moderate capital position despite above-average profitability. Asset quality affected by slower domestic economic growth. The stable outlook on China Merchants Bank Co. Ltd. (CMB) reflects our expectation that the bank can maintain its strong retail franchise, above-average asset quality, and resilient capitalization and earnings over the next 24 months. We may raise the rating if: (1) CMB significantly enhances its capital position such that its risk-adjusted capital (RAC) ratio rises above 10% and remains there; or (2) our assessment of the likelihood of extraordinary government support increases, which could happen if

...Asset quality affected by slower domestic economic growth. Outlook: Stable The stable outlook on China Merchants Bank Co. Ltd. (CMB) reflects our expectation that the bank can maintain its strong retail franchise, above-average asset quality, and resilient capitalization and earnings over the next 24 months. We may raise the rating if: (1) CMB significantly enhances its capital position such that its risk-adjusted capital (RAC) ratio rises above 10% and remains there; or (2) our assessment of the likelihood of extraordinary government support increases, which could happen if we view CMB as highly systemically important. We may downgrade CMB if we lower our assessment of the bank's stand-alone credit profile (SACP) to '###-' from '###'. We may lower the SACP if: (1) CMB's credit growth significantly exceeds our forecasts, leading to a deterioration in its capital and earnings such that its RAC ratio falls below 5% over the next two years; or (2) the bank's credit losses increase significantly...

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