Fitch Ratings changed the outlooks of six China-based banks to stable from negative while also affirming their ratings, according to a Tuesday release.
The banks include China Merchants Bank (HKG:3968, SHA:600036) and six state-owned entities, namely Industrial and Commercial Bank of China (HKG:1398, SHA:601398), China Construction Bank (HKG:0939, SHA:601939), Bank of China (HKG:3988, SHA:601988), Agricultural Bank of China (HKG:1288, SHA:601288), and Bank of Communications (HKG:3328, SHA:601328).
The outlook revision reflects Fitch's view of an unchanged likelihood of extraordinary support for the banks even with China's sovereign downgrade.
The government's capital injection into the state banks also boosts the notion of high support likelihood, Fitch said.
The government maintains financial flexibility to anchor the financial sector despite increased deficits and surging debt, Fitch said.
The banks also improved their linkage with the government due to their amplified policy roles, the rating agency said.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.