Fitch Ratings has affirmed China Construction Bank (New Zealand) Limited's (CCB NZ) Long-Term Foreign-Currency and Local-Currency Issuer Default Ratings (IDRs) at 'A'.

The Outlook is Negative, aligned with the Outlook on the parent, China Construction Bank Corporation (CCB, A/Negative/bbb). Fitch has also affirmed CCB NZ's Short-Term IDRs at 'F1+' and Shareholder Support Rating (SSR) at 'a'.

Key Rating Drivers

Shareholder Support Drives Ratings: CCB NZ's ratings reflect a 'Very High' likelihood of support from its parent. CCB provides a guarantee on all of CCB NZ's senior unsecured obligations, including deposits. We equalise the subsidiary's IDRs and SSR with the parent's IDRs as a result. CCB's Long-Term Foreign-Currency IDR is used as the anchor rating, reflecting our view that support would flow from the Chinese government (A+/Negative) and through the parent if required.

Parental Guarantee: Fitch's view on the likelihood of support is underpinned by CCB's provision of a deed of guarantee. This provides an irrevocable and unconditional guarantee of payment to all senior unsecured creditors of CCB NZ. The guarantee has no expiration date and no limit to the amount of obligations guaranteed.

Strong Links, Common Branding: We have not assigned a Viability Rating to CCB NZ, because it maintains strong links with the parent through management, strategy and risk controls, and relies on the parent's brand name to obtain customers and funding. This means a standalone credit strength assessment for the subsidiary is not meaningful.

Strategically Important to Parent: Fitch believes that CCB NZ has strong synergies with - and is strategically important to - the parent, but its small size means it is not an integral part of the group. We have reflected this by scoring CCB NZ's role in the group factor at one notch lower in our shareholder support assessment.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

The SSR and Long-Term IDRs are likely to be downgraded if the Long-Term IDR of the parent isdowngraded.

Fitch would also review the ratings should the parental guarantee be removed or altered. Any downgrade is likely to be limited to one notch, provided the parent's ability or propensity to support and CCB NZ's strategic importance remain unchanged.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

A revision in the Outlook on the parent's Long-Term IDR to Stable would probably be reflected in the Outlook on CCB NZ's Long-Term IDRs. Any upgrade to the parent's Long-Term IDR is likely to be reflected in CCB NZ's SSR and Long-Term IDRs, so long as there is no change in the parent's ability or propensity to support the subsidiary.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

Short-Term IDRs: The Short-Term IDRs are support-driven and at the higher of the two options at the 'A' Long-Term IDRs, as outlined in Fitch's Bank Rating Criteria. This reflects our view that CCB's propensity to provide support is more certain in the short term.

Senior Unsecured Debt: CCB NZ's senior debt ratings are aligned with its IDRs. This is consistent with Fitch's approach to rating senior unsecured debt instruments in markets such as New Zealand that have a developed resolution framework and no full depositor preference, as well as reflecting the benefit from the parent's guarantee.

IDRs(xgs): CCB NZ's IDRs(xgs) are aligned with the IDRs(xgs) of its parent, CCB, which are driven by CCB's Viability Rating.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade:

Short-Term IDRs

The Short-Term IDRs would be downgraded if the Long-Term IDRs are downgraded.

Senior Unsecured Debt

A downgrade of CCB NZ's IDRs would lead to a downgrade of the senior debt instruments.

IDRs(xgs)

The IDRs(xgs) would be downgraded if CCB's IDRs(xgs) are downgraded

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade:

Short-Term IDRs

The Short-Term IDRs cannot be upgraded, as they are at the highest level on Fitch's rating scale.

Senior Unsecured Debt

An upgrade of the Long-Term IDRs would lead to positive rating action on CCB NZ's long-term senior debt instruments.

IDRs(xgs)

The IDRs(xgs) would be upgraded if CCB's IDRs(xgs) are upgraded

Sources of Information

The principal sources of information used in the analysis are described in the applicable criteria.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

CCB NZ's IDRs are equalised with CCB's IDRs, based on our view of the potential for support.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/topics/esg/products#esg-relevance-scores.

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