Strategically important status within the Haitong group. Strengthened capital position owing to parental capital injections. Lack of scale in highly competitive and global market. Predominantly investment banking related revenue, which is inherently more volatile. High single name concentration. High reliance on wholesale funding. The negative outlook reflects the probability of a downgrade in the next 12-18 months if we anticipate an increasing deterioration of the bank's business or risk profile amid the current global economic downturn caused by COVID-19. We could lower our ratings if the bank's operating performance suffered significantly and more than anticipated, from loss of business or heightened market volatility, or if its exposure to riskier asset classes increased substantially, resulting in much higher impairment losses. It
