CHINA'S two major state banks have defended their ability to service foreign loans, following the markdown of their debt ratings by Moody's Investors Service.
An official from the Ministry of Finance (MOF) also called on the credit rating agency to do a more in-depth analysis of the situation: 'China should be given a fair level with regard to borrowing status. The commercialisation of the banks is a process that takes time. We certainly didn't expect this.' The Bank of China (BOC) was one of four state banks, including the Bank of Communications, People's Construction Bank and Industrial and Commercial Bank of China, which suffered a long-term debt ratings downgrading from A3 to Baa1.
Guangdong International Trust and Investment Corp (GITIC) received a similar downgrade and the giant Chinese investment conglomerate China International Trust and Investment Corp (CITIC) was put on review for a downgrade.
In Beijing, the BOC expressed deep regret over the markdown. 'The BOC has maintained a good reputation among international financial associates with its steady management style, excellent management achievements, its powerful capital strength and staunch support from the state,' the bank said in a statement.
The BOC is likely to suffer the most among the four banks. The most active in the market, it will be pay more for its money.
To counter the assessment by Moody's and to calm foreign counterparts, the BOC said it would not change its position as a state-owned bank and major channel for raising foreign loans, whatever assessment was given by the outside world.
