Jinwu Financial News | Rating agency Fitch adjusted the rating outlook for the six Chinese state-owned banks, Industrial and Commercial Bank (01398), China Construction Bank (00939), Bank of China (03988), Agricultural Bank (01288), Bank of Communications (03328), and Postbank (01658), respectively, from “stable” to “negative.”
According to Fitch, this revision of the bank's rating outlook was carried out after China's sovereign rating outlook was adjusted from “stable” to “negative” earlier. Although it is believed that the country's tendency to support banks remains unchanged, the country's ability to provide support to these banks has declined.
Fitch added that China's banking system has grown rapidly since 2008. As of the end of last year, total assets reached 417 trillion yuan, equivalent to about 330% of China's GDP last year. Last year, the number of domestic systemically important banks (D-SIB) increased to 20, believing that the huge size of the banking industry and the number of D-SIBs limited the government's ability to support the banking industry.