Fitch Ratings has assigned an expected rating of 'BBB(EXP)' to China Everbright Bank Co., Ltd., Hong Kong Branch's (CEB Hong Kong Branch) proposed long-term senior unsecured notes to be issued under its medium-term note (MTN) programme.

The proposed notes will be listed on the Hong Kong Stock Exchange and the proceeds will be used primarily to support the CEB Hong Kong Branch's general funding needs. The issue amount and maturity structure will be finalised upon settlement. The final rating is contingent upon the receipt of final documents conforming to the information already received. Fitch's last rating action on the senior debt instruments issued by CEB Hong Kong Branch was the affirmation on 29 April 2020.

KEY RATING DRIVERS

CEB Hong Kong Branch is part of the legal entity, China Everbright Bank Company Limited (CEB). Therefore, the notes to be issued under the MTN programme ultimately represent direct, unconditional, unsecured and unsubordinated obligations of CEB, and are rated in line with CEB's Long-Term Issuer Default Rating (IDR) of 'BBB' with Stable Outlook. CEB's IDR is underpinned by the agency's expectations of a high probability of support from the Chinese sovereign (A+/Stable) in the event of stress.

CEB Hong Kong Branch was established in 2013 and is a fully licensed bank in Hong Kong. It is the first and largest overseas branch of CEB, and its operations and business are highly integrated with CEB. CEB also provides credit facilities to CEB Hong Kong Branch to support the branch's liquidity needs.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

An upgrade of CEB's IDR would lead to positive rating action on the senior debt instruments issued by CEB Hong Kong Branch.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

A downgrade of CEB's IDR would lead to negative rating action on the senior debt instruments issued by CEB Hong Kong Branch.

ESG CONSIDERATIONS

CEB has an ESG Relevance Score of 4 for financial transparency risk due to under-reporting of non-performing loans and risk-weighted assets stemming from the use of off-balance-sheet transactions. This negatively affects the bank's credit profile and is relevant to the rating in conjunction with other factors.

Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579]

DATE OF RELEVANT COMMITTEE

27 April 2020

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

The ratings on the senior debt instruments issued by CEB Hong Kong Branch are correlated directly with CEB's IDR, which will reflect any shift in the perceived willingness or ability of the Chinese government to support CEB in a full and timely manner.

RATING ACTIONS

ENTITY/DEBT	RATING

China Everbright Bank Co., Ltd., Hong Kong Branch

senior unsecured

LT	BBB(EXP) 	Expected Rating

VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

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