Top 25 Safest Banks In China 2018

For China’s banks, growth is easier than reducing debt and bad loans.

China’s banking sector is dominated by state-owned banks and three “policy banks”—entities established in 1994 to develop policy and finance economic and trade development—that have financed China’s expansion. The government must sustain growth while addressing risks associated with the enormous increase in debt, potential asset bubbles and the shadow-banking market.

The goal of financial reforms outlined by the central bank is to reduce credit without damaging economic growth. However, there has been no meaningful deleveraging of the financial system yet. In fact, the central bank increased lending to banks by 300%, to $1.5 trillion, since 2015. Economic growth waned only slightly, with Q2 2018 growth of 6.7% versus 6.9% in Q2 last year.

The trade war with the US adds additional pressure and may cause more credit expansion. The government has eased collateral and banking reserve requirements, extended loan duration, and provided credit support to local governments and to projects and companies impacted by the trade war. Chinese regulators are also trying to shift shadow banking to the legitimate sector, but the effort conflicts with the mandate to reduce banking-system credit.

The policy banks are aligned with the government and thus were downgraded when S&P trimmed China’s sovereign rating in September 2017. The Agricultural Bank of China was upgraded by Moody’s in May 2018 to A1, giving it a score of 16—par with the other three large state-owned banks that also conduct broad commercial business.

Methodology

The scoring methodology for the Safest Chinese Banks follows that used in our other Safest Banks rankings. A rating of AAA is assigned a score of 10 points, AA+ receives nine points, down to BBB— worth one point and BB+ worth —1 point, and so on. When a bank has only two ratings, an implied score for the third rating is calculated by taking the average of the other two and deducting one point. When a bank has only one rating, an implied score for the second rating is calculated by deducting one point from the actual rating, and an implied score for the third rating is calculated by deducting two points from the actual rating.

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China’s Top 25 Safest Banks

Rank	Company Name	Fitch	Moody’s	S&P	Total Score	Assets ($ Mil.)	Statement Date
1	China Development Bank	A+	A1	A+	18	2,450,812	31-Dec-2017
2	Agricultural Development Bank of China	A+	A1	A+	18	808,118	31-Dec-2016
3	The Export-Import Bank of China	A+	A1	A+	18	479,776	31-Dec-2016
4	Industrial and Commercial Bank of China	A	A1	A	16	4,006,242	31-Dec-2017
5	China Construction Bank	A	A1	A	16	3,397,688	31-Dec-2017
6	Agricultural Bank of China	A	A1	A	16	3,233,212	31-Dec-2017
7	Bank of China	A	A1	A	16	2,989,653	31-Dec-2017
8	Bank of Communications	A	A2	A—	14	1,388,024	31-Dec-2017
9	China Merchants Bank	BBB	Baa1	BBB+	8	967,141	31-Dec-2017
10	China CITIC Bank Corporation	BBB	Baa2	BBB+	7	871,935	31-Dec-2017
11	Shanghai Pudong Development Bank	BBB	Baa2	BBB	6	942,509	31-Dec-2017
12	China Everbright Bank Company	BBB	Baa2	NR	5	627,840	31-Dec-2017
13	Guangzhou Rural Commercial Bank	NR	Baa2	BBB	5	112,978	31-Dec-2017
14	Shanghai Rural Commercial Bank	NR	NR	BBB	3	108,707	31-Dec-2016
15	Ping An Bank	BB+	Baa2	NR	0.5	498,875	31-Dec-2017
16	Bank of Chongqing	NR	NR	BBB—	0	64,649	31-Dec-2017
17	Industrial Bank	BB+	Baa3	NR	—1	985,448	31-Dec-2017
18	China Minsheng Banking Corp.	BB+	NR	BBB—	—1	906,396	31-Dec-2017
19	China Guangfa Bank	BB+	Baa3	NR	-1	318,342	31-Dec-2017
20	Bank of Nanjing	NR	Baa3	NR	-2	167,099	30-June-2017
21	Bank of Ningbo	NR	Baa3	NR	-2	158,483	31-Dec-2017
22	Xua Xia Bank	BB+	NR	NR	-6	385,301	31-Dec-2017
23	Bank of Beijing	BB+	NR	NR	-6	357,793	31-Dec-2017
24	China Zhesang Bank	NR	Ba1	NR	-6	235,988	31-Dec-2017
25	Bank of Suzhou	NR	Ba2	NR	-9	37,473	31-Dec-2016
Asset figures from Fitch, Moody’s, and company reports. Ratings valid as of Aug. 17, 2018.