At the same time, we have revised the outlook on the bank's BFSR to positive from stable. The full list of affirmed ratings can be found below.

RATINGS RATIONALE

CBI's rating reflects the bank's good capitalization, sound liquidity profile, revamped risk management framework and processes, and steadily-improving asset quality metrics. These positive factors are offset by its exposures to potentially risky Chinese borrowers, high borrower concentration, and below peer-average profitability.

CBI has improved its financial profile since the onset of the global financial crisis. It disposed of its structured securities investments and maintained sound capitalization, thanks to timely capital injections from its ultimate majority parent, the CITIC group.

The bank also steadily improved its loan quality metrics as it worked off its legacy problem loans. These improvements in the bank's financial profile underpin the revision of its BFSR outlook to positive from stable.

CBI is well-positioned to capture business flows from further integration of the economies of Hong Kong and mainland China.

CBI's BFSR translates into a baseline credit assessment of baa3. The bank's long-term deposit rating of Baa2 incorporates one notch of parental support from its majority parent China CITIC Bank Corporation Limited (Baa2/ba2/D).

An upgrade of the bank's BFSR will depend on the bank's maintaining its current asset quality metrics and capitalization while improving its profitability on a sustained basis, with its net income to average risk-weighted assets ratio rising to 1.8% or above. CBI's deposit and debt ratings will only be upgraded if there is a multi-notch upgrade in the bank's BFSR, or if there is an upgrade in the parent's ratings.

A deterioration in CBI's capitalization and asset quality due to imprudent expansion or a severe and extended regional economic downturn would lead to a revision in the bank's BFSR outlook to stable from positive. Persistently lower profits compared with peers may also lead to a similar revision.

Headquartered in Hong Kong, CITIC Bank International Limited reported total consolidated assets of HKD171 billion (USD21.9 billion) and total shareholders' equity of HKD13 billion (USD1.7 billion) as of the end - 2011.

Ratings affirmed:

Long-term local and foreign currency deposit rating at Baa2;

Short-term local and foreign currency deposit rating at P-2;

Bank financial strength rating at D+;

Long-term local and foreign currency deposit note/CD program at (P)Baa2;

Short-term local and foreign currency deposit note/CD program at (P)P-2;

Foreign currency senior unsecured debt under the MTN program at (P)Baa2;

Foreign currency subordinated debt at Baa3;

Foreign currency subordinated debt under the MTN program at (P)Baa3;

Foreign currency junior subordinated debt under the MTN program at (P)Ba1;

PRINCIPAL METHODOLOGIES

The methodologies used in this rating were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology published in March 2012. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Sonny Hsu,CFA Vice President - Senior Analyst Financial Institutions Group Moody'sInvestors Service Hong Kong Ltd. 24/F One Pacific Place 88 Queensway Hong Kong China (Hong Kong S.A.R.) JOURNALISTS: (852) 3758 -1350 SUBSCRIBERS: (852) 3551-3077 Stephen Long MD - Financial Institutions Financial Institutions Group JOURNALISTS: (852) 3758 -1350 SUBSCRIBERS: (852) 3551-3077 Releasing Office: Moody's Investors Service Hong Kong Ltd. 24/F One Pacific Place 88 Queensway Hong Kong China (Hong Kong S.A.R.) JOURNALISTS: (852) 3758 -1350 SUBSCRIBERS: (852) 3551-3077 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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