INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED

(1398)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Fitch Rates ICBCIL Finance's Proposed USD Notes 'A(EXP)'

01/21/2022 | 04:25am EDT

Fitch Ratings has assigned ICBCIL Finance Co. Limited's (A/Stable) proposed US dollar senior unsecured notes an expected 'A(EXP)' rating.

The proposed notes, which will be issued under ICBCIL Finance's medium-term note (MTN) programme, benefit from a keepwell and liquidity support deed and deed of asset purchase undertaking provided by ICBC Financial Leasing Co., Ltd. (ICBC Leasing, A/Stable).

The proposed notes will be listed on the Hong Kong stock exchange. The proceeds of the notes will be used to fund ordinary asset purchase activities, refinancing and other general corporate purposes.

The maturity structure will be finalised upon settlement. The final rating is contingent upon the receipt of final documents conforming to information already received. The MTN programme was first rated on 7 October 2015 and most recently affirmed on 27 May 2021. The programme was increased to USD20 billion in September 2019 from USD10 billion to support asset expansion.

Key Rating Drivers

The rating on the proposed notes reflects our assessment of an extremely high probability of support from ICBC Leasing to ICBCIL Finance, which is the primary treasury platform for ICBC Leasing's offshore leasing operations. ICBC Leasing is the wholly owned leasing arm of Industrial and Commercial Bank of China Limited (ICBC, A/Stable), which provides aviation, shipping, and equipment leasing services.

Fitch factors in an extremely high level of support from ICBC Leasing to ICBCIL Finance, as the two are highly integrated. ICBCIL Finance is owned by ICBC and not by ICBC Leasing, but it is highly integrated into ICBC Leasing's operations. In addition, ICBC has authorised and mandated ICBC Leasing to exercise full managerial and operational control over ICBCIL Finance. A default on the notes or by ICBCIL Finance would create significant reputational risk for ICBC Leasing and ICBC, in Fitch's view, as counterparties generally see ICBCIL Finance as an integral part of ICBC Leasing.

The keepwell and liquidity support deed commits ICBC Leasing to ensure that the issuer maintains sufficient levels of equity and liquidity to service its obligations to offshore bondholders at all times. The deed of asset purchase undertaking serves as an important mechanism to allow ICBC Leasing to provide foreign-currency liquidity to ICBCIL Finance in a timely manner.

ICBC Leasing's rating reflects our view of an extremely high level of support from ICBC, given its role as the bank's core subsidiary. The China Banking and Insurance Regulatory Commission's regulations, as well as ICBC Leasing's articles of association, require ICBC to provide liquidity and capital support to ICBC Leasing, if needed.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Positive rating action on ICBC Leasing appears unlikely unless there is a positive change in Fitch's view of the ratings for ICBC and ultimately the sovereign.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

The expected rating on ICBCIL Finance's proposed notes will move in tandem with any changes to ICBC Leasing's rating, which is linked to the ratings of ICBC and the Chinese sovereign (A+/Stable).

The expected rating would also be downgraded if there is any sign of weakening in the linkage between ICBCIL Finance and ICBC Leasing, and in turn, between ICBC Leasing and ICBC. This would include a meaningful reduction in the parent's shareholdings or the parent losing its status and strong control as majority shareholder; changes in the regulatory obligation in ICBC Leasing's articles of association for ICBC to provide capital and liquidity support; or a significant change in ICBC Leasing's role in the group or evolution of strategies that makes it deviate significantly from ICBC's overall strategy or policy role.

Any change that severely weakens the recovery prospects of the bonds issued by the overseas platform, or any change in regulation that causes ICBC Leasing to encounter practical difficulties in exercising the keepwell and asset-purchase deeds or providing support to its overseas platform will also likely trigger a downgrade of the proposed notes.

Best/Worst Case Rating Scenario

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579

(C) 2022 Electronic News Publishing, source ENP Newswire

All news about INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
05/19Shanghai Allows Banks, Exchanges to Resume Work as COVID-19 Curbs Ease
MT
05/18Dongguan Leader Precision Industry Co., Ltd. acquired unknown minority stake in Industr..
CI
05/17Chinese Commercial Banks’ Forex Settlement Surplus Shrinks in April
MT
05/01ICBC’s Q1 Profit Rises 5.7%; Revenue Misses Estimate
MT
04/29China allows 'Big Four' banks to issue loss-absorbing bonds
RE
04/29China's ICBC posts 5.7% rise in quarterly profit
RE
04/29Industrial and Commercial Bank of China Limited Reports Earnings Results for the First ..
CI
04/26Dongguan Leader Precision Industry Co., Ltd. acquired unknown minority stake in Industr..
CI
04/24China's Commercial Banks Log $26 Billion Forex Settlement Surplus in March
MT
04/24Some Chinese state banks will cut deposit rates on Monday - sources
RE
More news
Analyst Recommendations on INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
More recommendations
Financials
Sales 2022 910 B 136 B 136 B
Net income 2022 361 B 53 977 M 53 977 M
Net Debt 2022 - - -
P/E ratio 2022 3,93x
Yield 2022 7,81%
Capitalization 1 592 B 238 B 238 B
Capi. / Sales 2022 1,75x
Capi. / Sales 2023 1,63x
Nbr of Employees 434 089
Free-Float 67,5%
Chart INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
Duration : Period :
Industrial and Commercial Bank of China Limited Technical Analysis Chart | 1398 | CNE1000003G1 | MarketScreener
Technical analysis trends INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 23
Last Close Price 3,97 CNY
Average target price 5,14 CNY
Spread / Average Target 29,6%
EPS Revisions
Managers and Directors
Lin Liao Vice Chairman & President
Wen Wu Zhang Senior Executive VP, GM-Finance & Accounting
Si Qing Chen Chairman
Liang Bo Huang Chairman-Supervisory Board
Xiang Jiang Wu GM-Internal Control & Compliance Department
Sector and Competitors