The rating on the Bank of Communications (BOComm) reflects a degree of implicit support from the Chinese government. This support is counterbalanced by the bank's weak profitability, its high level of nonperforming loans (NPLs), and its inadequate loan loss provisions. As the commercialization of state-owned banks progresses, regulatory policies evolve, and tighter restrictions are imposed on Chinese financial institutions, BOComm's rating will increasingly reflect the bank's own financial strength and its ability to manage changes and improve its financial performance. BOComm's operations are generally regarded as more focused, flexible, and efficient than those of its domestic peers. However, such competitive advantages are counterbalanced by the bank's smaller market position. BOComm's profits, asset quality measures, and ratio of adjusted common equity
