ICBC rating affirmed by Fitch as viability profile is upgraded

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ICBC rating affirmed by Fitch

Highlights

Fitch affirms ICBC's Long-Term Foreign-Currency IDR at 'A'/Stable and upgrades its Viability Rating to 'bbb+' from 'bbb' due to a stronger business profile.
Fitch raises China's banking operating environment score to 'bbb' from 'bbb-', citing lower shadow-banking risks, increased transparency, and regulatory improvements boosting sector stability.
ICBC's profitability outlook improves with expected operating profit relative to risk-weighted assets rising to 1.6% in 2026, up from 1.5% in 2025.

Rating action and core drivers

As reported by Fitch Ratings, Industrial and Commercial Bank of China Limited's Long-Term Foreign-Currency Issuer Default Rating remains at 'A', its Short-Term IDR at 'F1+' and its Government Support Rating at 'a', while the outlook on the long-term rating stays stable.

Fitch also upgrades ICBC's Viability Rating to 'bbb+' from 'bbb'. The agency says the move reflects the bank's strong business profile, continued through-the-cycle credit resilience and an improved operating environment for Chinese banks.

Fitch says ICBC's long-term issuer rating is driven by a 'Very High' likelihood of government support, with the support rating equalised with China's sovereign rating of A/Stable. It links that assessment to majority state ownership, the bank's long record of receiving support, its systemic importance and its expanding policy role.

The agency also revises China's operating environment score to 'bbb' from 'bbb-', citing structural improvements in the banking system over the past five years. Fitch points to lower shadow-banking risks, greater transparency, stronger credit discipline and further regulatory improvement as factors supporting financial stability in the sector.

Stronger franchise, risk controls and funding support outlook

ICBC's domestic franchise remains a central factor in the rating decision, supported by its retail banking scale and ties with major state-owned enterprises. Fitch says the bank holds loan and deposit market shares of about 11% at the end of the first half of 2026, although it still factors in the authorities' influence on management and governance.

Fitch revises ICBC's risk profile score to 'bbb+'/stable from 'bbb'/stable and its asset quality score to 'bbb+'/stable from 'bbb'/stable. The agency attributes that to improved risk management, more selective lending, reduced shadow-banking exposure, stronger impaired-loan recognition and continued resolution of non-performing loans.

On profitability, Fitch expects operating profit relative to risk-weighted assets to improve modestly to around 1.6% in 2026 from 1.5% in 2025. It says earlier-than-expected net interest margin stabilisation, recovering fee income growth and easing provisioning pressure should support earnings resilience.

Fitch maintains ICBC's capitalisation and leverage score at 'bbb'/stable, saying resilient earnings and timely state-led capital injections continue to underpin capital strength. It also revises the funding and liquidity score to 'bbb+'/stable from 'bbb'/stable, helped by a rising share of retail deposits, moderated growth appetite and depositor confidence linked to the bank's G-SIB and D-SIB status.

In our earlier coverage of China’s late-September policy support aimed at stabilising growth, we noted expectations for a modest pickup in third-quarter GDP even as weak consumption, private investment and property-sector stress persisted. The piece highlighted measures such as targeted rate cuts, mortgage support and the use of unused local-government debt quotas, with exports helping offset softer domestic demand—context that frames the improving operating environment now cited for major Chinese banks.

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