Moody's upgrades Hang Seng China's ratings to A2; stable

    Moody's Investors Service has upgraded the
long-term deposit and issuer ratings of Hang Seng Bank (China) Limited (Hang Seng China) to A2 from A3.
  The upgrade was prompted by the change in Hang Seng China's bank financial strength rating (BFSR) to D+ from D-, and standalone baseline credit assessment (BCA) to ba1 from ba3.
  At the same time, Moody's has upgraded the bank's short-term deposit ratings to Prime-1 from Prime-2. The rating outlook is stable.
  "The upward revision of Hang Seng China's BCA to ba1 from ba3 reflects the bank's improved capitalization as well as its track record of above industry-average asset quality," said Simon Chen, a Moody's Assistant Vice President and Analyst.
  "Its ba1 BCA also takes into account its weak risk-adjusted profitability and modest deposit franchise -- relative to Moody's-rated banks in China -- as well as the high concentration in large borrowers that could expose it to one-off credit costs." Chen added.
  Hang Seng China reported a Tier 1 ratio of 14.6% at end-2013, higher than 14.5% at end-2012 and 13.7% at end-2011. The increases in its core capital base were supported mainly by several capital injections from its parent, Hang Seng Bank Limited (HSB, Aa2 stable)(00011), the credit rating agency noted.