Fitch has adjusted the rating outlook of six Chinese state-owned banks from "stable" to "negative". The six state-owned banks are Industrial and Commercial Bank of China , China Construction Bank , Bank of China Agricultural Bank of China Bank of Communications, andPostal Savings Bank of China.
Fitch stated that this outlook revision was carried out after earlier adjusting the outlook of China's sovereign rating from "stable" to "negative", reflecting that China faces a more uncertain economic outlook in the process of economic transformation, and the risks facing the public fiscal outlook are constantly increasing. Although Fitch believes that the tendency of the state to support the banks remains unchanged, the state's ability to provide support for these banks has decreased.
In addition, the Chinese banking system has grown rapidly since 2008, and as of the end of last year, the total assets reached 41.7 trillion yuan, equivalent to about 330% of last year's GDP, and last year, the number of domestic systematically important banks (D-SIB) also increased to 20. Fitch believes that the huge scale of the banking industry and the number of D-SIB have limited the government's ability to support the banking industry.
