On February 24, 2020, S&P Global (China) Ratings assigned its “AAAspc” issuer credit rating to JPMorgan Chase Bank (China) Company Limited. The Outlook is stable.
JPMorgan Chase Bank (China), a fully owned subsidiary of JPMorgan Chase Bank N.A., is an integral part of the global banking network of JPMorgan which is one of the world’s largest and most diversified global banks.
JPMorgan Chase Bank (China) has a very strong capital base, with capital adequacy ratios much higher than the industry average in China. The very strong capitalization is attributed to its relatively small lending book, very high credit quality investment portfolio and low leverage level.
JPMorgan Chase Bank (China) takes a very prudent approach to risk management. Its asset quality metrics are one of the best in China. JPMorgan has a sophisticated risk management framework at the global level and the risk management of its China subsidiary is fully integrated into this global risk management framework.
The clientele base of JPMorgan Chase Bank (China) is mostly composed of leading multinational corporations, foreign companies which JPMorgan already serves at the global level, leading state-owned enterprises in China, and other national sector leaders. Due to the very selective nature of its clientele, its business size is very small in China.
S&P Global (China) Ratings views the issuer credit quality of JPMorgan Chase Bank N.A. as extremely strong, and we believe JPMorgan Chase Bank (China) has critical importance to its parent.
We assess JPMorgan Chase Bank (China)’s stand-alone credit profile (“SACP”) as “aspc+”, three notches higher than the “bbb+” anchor we typically apply to a commercial bank in China. This SACP reflects its very strong capital base and very good asset quality, and it also takes into account its weakness as a very small operation in China.
The “AAAspc” issuer credit rating incorporates a four-notch uplift from our assessment of JPMorgan Chase Bank (China)’s SACP of “aspc+”, reflecting the extremely high likelihood of group support and the extremely high issuer credit quality of its parent.
The stable outlook reflects our expectation that JPMorgan Chase Bank (China)’s business operations and financial strength will remain stable over the next two years or beyond. We also anticipate that its critical importance to its parent will remain stable.
Rating Score Snapshot
Anchor: bbb+
Business Position: -1
Capital and Earnings: +2
Risk Position: +2
Funding and Liquidity: 0
Stand-alone Credit Profile: aspc+
Government Support: +4
Issuer Credit Rating: AAAspc
Outlook: Stable
Related Methodologies and Research:
S&P Global (China) Ratings Financial Institutions Methodology;
S&P Global (China) Ratings General Considerations On Rating Modifiers And Relative Ranking.
Media Contacts:
Shaoying Tang, Beijing, (86) 10-6569-2988; sharon.tang@spglobal.com
Michelle Lei, Beijing, (86) 10-6569-2961; michelle.lei@spgchinaratings.cn
Analyst Contacts:
Xiaohong Chen, CFA, Beijing; xiaohong.chen@spgchinaratings.cn
Xiaochen Luan, CFA, FRM, Beijing; collins.luan@spgchinaratings.cn
Cong Cui, Beijing; cong.cui@spgchinaratings.cn
Longtai Chen, Beijing; longtai.chen@spgchinaratings.cn
