Strong retail franchise. Above-average funding. Moderate systemic importance to China's banking system as the seventh-largest commercial bank. Moderate capital and earnings despite good profitability. Exposure to high economic risk in China. The stable outlook on China Merchants Bank Co. Ltd. (CMB) reflects our view that the bank's asset quality is likely to remain strong and sustain its capitalization over the next two years. While an economic slowdown in China will continue to pressure CMB's credit quality, we expect the bank's credit losses through a cycle to remain lower than the industry average. We continue to see a moderately high likelihood of extraordinary government support for CMB based on the bank's systemic importance. We may downgrade CMB if we lower our
