Research Update: China Merchants Bank, Subsidiaries Upgraded To 'A-' On Improved Liquidity; Outlook Stable

The liquidity of China Merchants Bank Co. Ltd. (CMB) has strengthened in recent years, underpinned by the bank's renewed focus on wealth management. CMB's liquidity metrics now compare favorably with those of China's "Big Four" state-owned banks. Steady customer deposit growth helped the bank reduce its reliance on short-term wholesale funding. We therefore raised our long-term issuer credit rating on CMB and its subsidiaries to 'A-' from 'BBB+'. We affirmed our short-term issuer credit rating on these entities at 'A-2'. The outlook is stable, reflecting our view that CMB will maintain its solid market position, adequate capitalization, sound risk management, and strong funding and liquidity profile over the next two years. We also believe the government is likely to support

...- The liquidity of China Merchants Bank Co. Ltd. (CMB) has strengthened in recent years, underpinned by the bank's renewed focus on wealth management. - CMB's liquidity metrics now compare favorably with those of China's "Big Four" state-owned banks. Steady customer deposit growth helped the bank reduce its reliance on short-term wholesale funding. - We therefore raised our long-term issuer credit rating on CMB and its subsidiaries to 'A-' from '###+'. We affirmed our short-term issuer credit rating on these entities at 'A-2'. - The outlook is stable, reflecting our view that CMB will maintain its solid market position, adequate capitalization, sound risk management, and strong funding and liquidity profile over the next two years. We also believe the government is likely to support the bank, if needed....

Research Update