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Moody's Investors Service Inc.

Moody's Affirms China CITIC Bank International Limited's Credit Ratings

Strategic Insights

— 2 min read

Moody's Investors Service has confirmed China CITIC Bank International Limited's long-term and short-term foreign currency and local currency deposit ratings at A3/P-2, affirming the bank's Baseline Credit Assessment (BCA) and Adjusted BCA at baa2. The ratings agency has also downgraded the bank's Counterparty Risk Ratings (CRRs) to A3/P-2 from A2/P-1. The stable outlook on CITIC Bank International's long-term deposit ratings reflects Moody's expectation that the bank will maintain sound asset quality, good capitalization, and solid liquidity over the next 12-18 months.

Key Takeaways:

  • CITIC Bank International's ratings are based on its Strong-Macro Profile, derived from a weighted average of the banking system Macro Profiles, including Strong for Hong Kong, Moderate + for mainland China, Strong + for the United States, and Very Strong - for Singapore.
  • The bank's asset quality remains sound, with impaired loan ratio declining to 2.1% as of year-end 2024 from 2.3% in 2023.
  • CITIC Bank International will maintain good capitalization in 2025, with risk-weighted assets (RWA) expected to expand at low to mid-single digit percentage terms.
  • The bank's profitability will face challenges due to narrower net interest margins (NIM) in 2025, partially offset by growth in fee and commission income.
  • CITIC Bank International has a moderate reliance on wholesale funding and solid liquidity profile, with ample liquid assets and a liquidity coverage ratio of 200% as of Q1 2025.
  • The bank's long-term and short-term foreign currency and local currency CRRs were downgraded to A3/P-2 from A2/P-1, reflecting a low Loss Given Failure (LGF) for CRR liabilities.
  • Moody's expects a moderate probability of indirect support from the Government of China through the parent for CITIC Bank International's junior depositors, senior unsecured creditors, CRRs, and CR Assessment.
  • The parent's systemic importance in China's financial sector and the bank's strategic importance to the parent contribute to a one-notch uplift to the bank's deposit ratings and senior unsecured ratings.

Statistics:

  • CITIC Bank International's total assets were HKD489.3 billion as of 31 December 2024.
  • The bank's loans to property development and investment for use in Hong Kong accounted for 13% of gross loans as of year-end 2024.
  • CITIC Bank International's impaired loan ratio declined to 2.1% as of year-end 2024 from 2.3% in 2023.
  • The bank's risk-weighted assets (RWA) are expected to expand at low to mid-single digit percentage terms in 2025.
  • CITIC Bank International's liquidity coverage ratio was 200% as of Q1 2025.

Sources:

  • Moody's Ratings, "Rating Action: CITIC Bank International Limited", 2024-11-01
  • https://ratings.moodys.com/rmc-documents/432741
  • https://ratings.moodys.com/EN/Core/Governments/Credit-Rating-Methodology
  • Moody's Investors Service, "Annual Default Study, Global Relative Default Rates: 1920-2022", 2023-05-11

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