Strong domestic franchise Potential partnership benefits Government support Under-tested risk management system Patchy internal control track record Latent credit risks The ratings on Bank of Communications (BoCom) reflect its strengthening capitalization and faster-than-expected improvements in its financial performance and risk management capabilities. The ratings also reflect the strong likelihood that BoCom's increasingly close partnership with Hongkong and Shanghai Banking Corp. Ltd. (HSBC Asia-Pacific; AA-/Stable/A-1+), the bank's second largest shareholder, will further improve its performance and generate other benefits. The bank's corporate governance, internal controls, risk management capabilities, and retail banking management skills are likely to benefit most from this developing partnership. Government support for BoCom, however, is likely to decline more rapidly than for the "Big Four" state owned commercial
