China Tells

On Feb 2, Fitch has downgraded two Chinese banks – China Merchants Bank and Citic Bank to D, which means ‘weakness of internal or external origin’. Before the downgrade the two banks were ranked C/D, which means ‘adequate but with one or more trouble aspects’. Such a downgrade has invited strong reaction from a senior bank official of People’s Bank of China (See Article from WSJ). According to the official, Chinese banks have weathered financial storm well and came up in better shape than any other western banks (See Graph from Chinatells). Therefore Fitch’s rating is not objective. In addition the capital adequacy ratio of the two banks is good enough and their NPL ratio keeps going down. However the record amount of increase in loans in ’09 did post potential risks to the banks, albeit not that clear for the moment.

美国评级机构Fitch近日调低招商银行和中信银行的评级，从C/D降到D。此举引发央行高管的不满。从08年金融危机以来，中国银行受到的冲击最小，在走出危机的过程中一马当先，远远胜过美国同行，因此最近的降级难以让人信服。