By Sherry Qin

Fitch Ratings has downgraded the outlook for six Chinese state-owned banks amid concerns about the government's ability to support the sector in the event of stress. The move comes after the rating agency cut its outlook for China's sovereign credit rating last week.

Fitch on Tuesday downgraded the outlook for the credit rating of six Chinese banks to negative from stable, including Industrial & Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, Bank of Communications and Postal Savings Bank of China.

Last week, the rating agency cut its outlook for China's long-term foreign debt to negative from stable, citing risks to China's public finances as the country faces more uncertainties "amid a transition away from property-reliant growth to what the government views as a more sustainable growth model."

Fitch said China's lower sovereign rating outlook indicates its reduced ability to "provide the same level of extraordinary support to these banks," although it reckons the government's propensity to support the state-owned banks remains intact.

Write to Sherry Qin at

(END) Dow Jones Newswires

04-16-24 0500ET