Fitch Ratings raised Bank of China (Hong Kong)'s long-term issuer default rating to A+ from A, according to a Thursday release.
The rating agency also maintained the bank's viability rating and shareholder support rating at "a."
The upgrade reflects Fitch's view that senior creditors would benefit from resolution funds issued by the bank to parent Bank of China (HKG:3988, SHA:601988), given its status as an important subsidiary.
This follows regulatory implementation of loss-absorbing capacity requirements for Hong Kong's local systemically important banks.
Fitch views Hong Kong's banking system as sound, with steady economic growth, strong capital and liquidity positions, as well as prudent regulations offsetting higher local interest rates and property market slowdowns.
The bank has a strong business and financial profile, being the second-largest banking group in Hong Kong with exposure to Southeast Asia and well-positioned to capture cross-border business opportunities with mainland China, Fitch said.
The bank also retains a lower risk profile than other mainland-affiliated Hong Kong banks due to its focus on local and central government-owned entities, the rating agency said.
The company's impaired loan ratio remains steady at 1.1% in mid-2024, among the lowest for Fitch-rated peers.
The bank is also one of Hong Kong's most profitable and well-capitalized banks, Fitch said.
