Fitch cites asset quality in China Minsheng upgrade

PUBLISHED : Saturday, 14 July, 2007, 12:00am
UPDATED : Saturday, 14 July, 2007, 12:00am

Fitch Ratings raised its rating on China Minsheng Banking Corp, the mainland's first privately owned lender, citing the bank's improved capitalisation and continued above-average asset quality.

The bank's assets quintupled from 2001 to 2006, Fitch said yesterday in raising the rating to D - the third-lowest of nine grades - from D/E.

'Its relatively more advanced risk management is a key reason behind its historical asset quality strength and it has been operating a centralised loan approval system since 2000, well ahead of most peers.'

China Minsheng Banking Corp raised 18.2 billion yuan in an A-share private placement in March, almost doubling the equity base it had at the end of last year.

Fitch estimated the bank's total capital adequacy ratio increased to 12 per cent after the placement from 8 per cent with a rise in the equity to asset ratio to 5 per cent from 3 per cent.