Government support Entrenched domestic franchise Adequate financial profile Latent credit risk Under-tested risk management Modest, though strengthened capitalization The rating on Bank of Communications Co. Ltd. (BoCom) reflects the bank's good business profile, which is underpinned by an entrenched domestic franchise and implicit government support. In addition, the bank also has an adequate financial profile, in our view. The rating also takes into consideration potential benefits to BoCom's operations, risk management, and credit card business, from the partnership with its second-largest shareholder Hongkong and Shanghai Banking Corp. Ltd. (AA/Stable/A-1+). The latent credit risks from BoCom's aggressive loan expansion over the past two years and under-tested risk management, and its strengthened but still modest capitalization temper the rating. Standard&Poor's
