Entrenched domestic franchise Potential partnership benefits Government support Improving profitability Under-tested risk management system Patchy internal-control track record Latent credit risk associated with aggressive loan growth The rating on Bank of Communications Co., Ltd. (BoCom) reflects the bank's good business profile, which is underpinned by its entrenched domestic franchise, implicit government support, and improving financial performance. The rating also takes into consideration 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. Counterbalancing factors include Bocom's patchy track record of internal control and latent credit risks associated with aggressive loan growth. Its substantial balance of special mention loans remains
