Foreign bank subsidiaries
have been less affected
by COVID-19 because of
their very good capitalization
and asset quality before
the pandemic and conservative
approach during the outbreak.
While domestic banks accelerated
lending in 2020, foreign
bank subsidiaries generally
continued lending at the
same pace, or even reduced
their loan books for risk
management considerations.
This may result in their
overall market share shrinking
further, which was already
very small before the
pandemic. The indicative
issuer credit quality
of foreign bank subsidiaries
is typically closely aligned
with the credit standing
of their parents. Ratings
by S&P Global Ratings
demonstrate how the credit
quality of large international
banks has remained relatively
stable despite the pandemic,
and this further underpins
the generally good credit
quality of foreign bank
subsidiaries in China.