− The six mega banks have about half of the commercial banking market share in China, playing a critical role in overall financial stability.
− The mega banks’ capital position is generally in line with the industry average, and we expect them to issue more hybrid bonds to improve their capitalization.
− Because of their high exposure to the real economy of China, most mega banks typically have a risk position in line with the industry average.
− Most mega banks have a very solid and sticky deposit base which leads to a funding structure more stable than the industry average.
− State-owned mega banks are typically directly or indirectly owned by the central government which views its ownership of the mega banks as long-term and strategic.
− Because of their extremely strong business franchise and very close tie with the central government, the mega banks typically have the strongest stand-alone credit quality and issuer credit quality among Chinese banks.