Fitch Raises Viability Ratings for Four Major Chinese Banks to “bbb+”
Key Facts
Fitch Ratings raised the viability ratings of China’s four largest banks to “bbb+” in a review covering six major lenders, while two others received ratings two notches lower. The October 27 decision covered Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank. The agency raised China Postal Savings Bank’s rating to “bbb” and Bank of Communications’ to “bbb-”, according to details reported by Yicai Global. At the same time, Fitch affirmed the six banks’ long-term foreign-currency issuer ratings at “A”, with a stable outlook. It raised its assessment of China’s banking operating environment from “bbb-” to “bbb”, signaling an improvement in common factors affecting the sector’s performance.
Fitch attributed the higher operating-environment assessment to tighter supervision, improved credit discipline and reduced shadow-banking risks. It said these improvements support banks’ resilience through economic cycles. The agency also linked the improved assessment to slower bank loan growth, which eased the pace of credit expansion in the sector. Lending grew 5% in the first half of 2026, after 7% in 2024-2025 and double-digit rates before 2023. Fitch expects loan growth in 2026-2028 to broadly align with nominal GDP growth.
For banking metrics, Fitch raised the asset-risk, asset-quality, funding and liquidity scores for Bank of China and the other three major banks from “bbb” to “bbb+”. It also raised the capitalization and leverage scores for Bank of China and Agricultural Bank of China from “bbb-” to “bbb”. The adjustments reflect differences among the assessment components, even as all four banks benefited from the higher viability rating. China Postal Savings Bank was rated “bbb”, while Bank of Communications remained at “bbb-”. The six banks’ long-term foreign-currency issuer ratings remain at “A” under Fitch’s decision.
Fitch’s review comes as China’s economy grew 4.5% year over year in the third quarter of 2026, compared with 4.3% in the second quarter. Growth reached 4.6% in the first three quarters of the year, according to National Bureau of Statistics data reported by the Chinese government. The manufacturing purchasing managers’ index returned to expansion in September at 50.1%, up 0.3 percentage points from the previous month. Meanwhile, a vice commerce minister cited difficulties China faces in attracting foreign capital, including rising geopolitical tensions, weak growth momentum and increased protectionist and unilateral measures. Foreign investment in high-tech industries rose 33.8% in January-September, driven by research and development and design services.
Bank of China shares, trading under the ticker BACHY, closed at $19.32 on October 27, according to EL7 data. The share performance came on a day preceding publication of details of the ratings decision in press coverage, while no other session-trading data are available here. Investors are watching for the official October purchasing managers’ index, scheduled for release on October 31 at 9:30 a.m. China time. The private “RatingDog” manufacturing index was also scheduled for release on November 2 at 9:45 a.m. China time. The two readings will provide an update on industrial activity after the official index returned to expansion in September.