Hangzhou Finance and Investment ratings affirmed at BBB+ as leverage outlook stabilizes

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Hangzhou Finance rating stable

Highlights

Fitch Ratings affirmed Hangzhou Finance and Investment Group's 'BBB+' Long-Term Issuer Default Ratings with a Stable Outlook, citing a Very Likely level of government support.
The Hangzhou municipal government controls 94.54% of HFI, retains operational oversight, and directed strategic shifts toward policy-driven and priority sector investments.
In 2024 and 2025, HFI received an 11.86% stake in Bank of Hangzhou, a 31.95% stake in Hangzhou Caikai Investment Group, and over CNY1.5 billion in cash injections.

Rating action and support assessment

As reported by Fitch Ratings, Hangzhou Finance and Investment Group Co., Ltd.'s Long-Term Foreign- and Local-Currency Issuer Default Ratings are affirmed at 'BBB+', with a Stable Outlook.

Fitch says the rating continues to reflect HFI's policy role as a major financial investment company under the Hangzhou municipal government. The agency assesses extraordinary government support as "Very Likely," keeping the company's support score at 30 out of 60 under its Government-Related Entities Rating Criteria.

That view is based on what Fitch describes as strong government responsibility and incentive to support HFI if needed. The municipal government owns 94.54% of the company through the Hangzhou Finance Bureau, while the Zhejiang provincial government indirectly holds the remaining 5.46% through Zhejiang Financial Development Co. Ltd.

Ownership structure and strategic shift

Fitch says the municipal government oversees HFI's board and retains decision-making power over strategic planning, major investments, and operational and financial activities. HFI also reports key operating and financial indicators to the government on a regular basis.

While the company still has commercial discretion within approved policies and mandates, Fitch says the government is increasingly directing HFI toward investments in strategically important sectors and projects tied to local and national priorities. The agency links that shift to stronger oversight of the company's long-term development path.

Fitch also points to a record of support through asset transfers and capital injections. In 2024, the municipal government transferred an 11.86% stake in Bank of Hangzhou to HFI, creating a dividend income source, and in 2025 it transferred its remaining 31.95% stake in Hangzhou Caikai Investment Group, lifting attributable equity by 48%.

From 2025 through the first half of 2026, HFI received more than CNY1.5 billion in cash injections for strategic investments. Fitch says the company's move away from trading and debt investments toward financial licenses and policy-linked sectors should help stabilize leverage over the rating horizon, while its role in managing financial assets and policy-driven funds remains important to Hangzhou's local development goals.

Our earlier coverage of Fitch’s rating action on Hainan Rubber’s proposed subordinated perpetual securities explained how the BBB- instrument rating reflected structural subordination and the issuer’s ability to defer coupons. We also outlined Fitch’s view of the company’s government-related support linkages, alongside leverage and liquidity factors shaping its refinancing plans.

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