FINANCIAL INSTITUTIONSISSUER COMMENT 10 JUNE 2015INDUSTRIAL&COMMERCIAL BANK OF CHINA (ICBC )Moodys Senior Unsecured Rating A1Moodys Outlook STABond-Implied Rating NACDS-Implied Rating Baa3EDF-Implied Rating Ba1As of 6/9/2015ANALYST CONTACTSAllerton G. Smith 212-553-4058 Sr Dir-Sr Research Analyst allerton.smith@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service andoperates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page.Market Signals ReviewIndustrial&Commercial Bank of China Ltd.: Implied Ratings Improve The market signals for ICBC advanced over the last year, reflecting the companys good financial standing, with strong measures for liquidity, capital, and profitability. However, softer asset quality trends merit continued monitoring. According to Moodys Bank Financial Metrics, ICBC is the largest bank in the world ranked by assets, which are $3.3 trillion (please see Appendix 1).FIGURE 1. ICBC: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)Twelve months ago ICBCs CDS-implied rating was Ba1 and climbed by one notch to its current Baa3 (Figure 1). The EDF'-implied rating rose three notches over the last year from B2 to Ba1, reflecting an improvement in the companys EDF metric from 1.28% a year ago toMOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 10 JUNE 2015 MARKET SIGNALS REVIEW : INDUSTRIAL&COMMERCIAL BANK OF CHINA LTD.: IMPLIED RATINGS IMPROVE0.49. We do not publish a bond-implied rating on ICBC because none of its outstanding debt securities fit our model.According to our ratings gap-conditioned transition matrices, companies rated A1 with a CDS-implied rating of Baa3 outperformed the broad market 62% of the time over the following 12 months, matched the markets performance 13% of the time, and underperformed the broad market 23% of the time.ICBCs CDS-implied ratings gap is now -5 notches, better by a notch from 12 months ago. The EDF-implied ra...
