Moody’s rates Hong Kong’s and China’s banking industry

Ratings agency Moody's Investors Service affirms the stability of the banking system in Hong Kong and China.

Moody’s rated Hong Kong's banking system as stable with its banks' credit ratings continuing to be supported by solid financial fundamentals, sound capitalization, good profitability and strong asset quality metrics.

In its China's Banking System Outlook report, Moody's described the outlook for China's banking sector as stable. This reflects Moody’s view that China’s slowing economy will be in for a soft landing this year with growth in the 7.5% to 8.5% range.

This environment will allow China's banks to maintain profitability and manage a likely gradual rise in credit costs, said Yi Zhang, Vice President and Senior Analyst.

The stable rating also reflects solid capital and loss-reverse levels of banks and their strong deposit funding base, and very low vulnerability to external liquidity shocks.