Fitch Ratings has affirmed
The Short-Term IDR has been affirmed at 'F1+'.
At the same time, Fitch is withdrawing ExIm's Support Rating and Support Rating Floor, as they are no longer relevant to the agency's coverage following the publication of our updated Bank Rating Criteria on
Key Rating Drivers
Government Support-Driven IDR: The Long-Term IDR is driven by our assessment of a very high probability of the central government supporting ExIm in a timely manner in the event of stress, as expressed by the newly assigned GSR, which is equivalent to
The Short-Term IDR is at the higher of the two options for a Long-Term IDR of 'A+', reflecting our expectations that government support is more certain in the near term.
Policy Role in
We do not assign a Viability Rating to ExIm as it effectively acts as an agent of the state. Its policy role also renders its Standalone Credit Profile, including the assessment of its financial ratios, less meaningful.
Policy Lending Prioritised: ExIm's policy role remains intact, even though in principle policy institutions, including Exlm, are asked to adhere to the same prudential requirements as commercial banks under the
Continued Rapid Loan Growth: We expect ExIm to retain its key role in supporting state policy objectives, including policy-directed lending to parts of the economy or borrowers that may otherwise be perceived as unfavourable on a risk-adjusted basis for commercial lenders. We expect the bank to continue to grow its loans considering its policy role. Loans rose by 10% in 2021, driven by foreign trade finance loans, which were up 17%, and loans to fund overseas infrastructure and construction projects at Chinese companies (up by 8%).
Rating Sensitivities
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The IDRs and GSR are likely to move in tandem with
The Short-Term IDR will be downgraded if the sovereign's Short-Term IDR is downgraded or if ExIm's Long-Term IDR is downgraded to 'A-' or lower.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
An upgrade of
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
Public Ratings with Credit Linkage to other ratings
ExIm's IDRs are directly linked to
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
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