BEIJING, December 2, 2021 - S&P Global (China) Ratings has assigned its “AAA_spc” issuer credit rating (“ICR”) to Australia and New Zealand Bank (China) Company Limited (“ANZ (China)”). The Outlook is “stable”.

We assess ANZ (China)’s stand-alone credit profile (“SACP”) as “a_spc”, two notches higher than the bank anchor of “bbb+”. This SACP reflects its very strong capital base and very good asset quality, and it also considers its very small business size and unstable revenue.

ANZ (China) positions itself as a specialist bank with niche strengths in the APAC region. Its priority industries include resources, energy and infrastructure industries, and agricultural business. As of the end of 2020, it had a market share of less than 0.01% for both loans and deposits in China. Its business is concentrated in Shanghai and Beijing.

ANZ (China)’s capitalization is much stronger than the industry average. Its reported regulatory tier 1 capital adequacy ratio was 23.5% as of the end of 2020, much higher than the industry average of 12% and the minimum regulatory requirement of 8.5%. Its shrinking loan book size has pushed its capital ratios higher in recent years. We expect its tier 1 capital adequacy ratio to remain above 20% in the next 24 months.

ANZ (China) has very prudent underwriting standards, resulting in very good asset quality metrics that remained resilient even during COVID pressure. As of the end of 2020, it had no non-performing loans (“NPL”) and no overdue loans, and its special mention loans (“SML”) only accounted for 0.53% of its gross loans. Given its very strict loan classification rules, we expect low credit loss for its SMLs.

S&P Global Ratings has assigned an SACP of “a” and an ICR of “AA-” to Australia and New Zealand Banking Group Ltd.(“ANZ”), the outlook is “stable”. Based on the broad relationship observed between the credit opinions of S&P Global Ratings and S&P Global (China) Ratings, we view the issuer credit quality of ANZ as extremely strong, equivalent to the ICR of “AAA_spc” on our national scale. Among the 41 foreign banks with Chinese subsidiaries, ANZ is among the banks with the highest credit ratings assigned by S&P Global Ratings.

Therefore, ANZ (China)’s rating reflects its high importance to its parent, which has been assigned a very strong rating by S&P Global Ratings. Because of the extremely strong issuer credit quality of its parent, we assign an Issuer Credit Rating of “AAA_spc” to ANZ (China), five notches higher than its stand-alone credit profile of “a_spc”.

Rating Score Snapshot 

Anchor: bbb+ 

Business Position: -2

Capital and Earnings: +2

Risk Position: +2

Funding and Liquidity: 0

Stand-alone Credit Profile: a_spc

Group Support: +5

Issuer Credit Rating: AAA_spc

Outlook: Stable 

Related Methodologies and Research: 

Rating report: Australia and New Zealand Bank (China) Company Limited, November 30, 2021;

S&P Global (China) Ratings Financial Institutions Methodology, January 31, 2019.

Media Contacts:

Sharon Tang, Beijing, (86) 10-6569-2988; Sharon.Tang@spglobal.com

Analyst Contacts:

Yifu Wang, CFA, CPA, Beijing; Yifu.Wang@spgchinaratings.cn

Xiaochen Luan, CFA, FRM, Beijing; Collins.Luan@spgchinaratings.cn

Xuefei Zou, CPA, Beijing; Eric.Zou@spgchinaratings.cn