The ratings on Bank of Communications (BoCom) reflect improvements in the bank's capital and asset quality. BoCom's capital has been strengthened by Chinese renminbi (RMB) 18 billion in capital injections from the Chinese Ministry of Finance, its major shareholder, and other government linked agencies, and further augmented by an acquisition of a 19.9% interest in BoCom by Hongkong and Shanghai Banking Corp. Ltd. (HSBC Asia-Pacific; foreign currency A+/Stable/A-1, local currency AA-/Stable/A-1+). The transaction makes HSBC Asia-Pacific BoCom's second-largest shareholder, after the ministry. Prior to the transaction, BoCom had sold a significant amount of nonperforming loans to an asset management company, which helped the bank to lower its reported nonperforming loans to RMB19.8 billion as at June 30, 2004. Standard&
