Bank of Communications Co. Ltd. And Subsidiaries

That said, concessions to policy-favored sectors and ongoing NIM contraction may limit profit growth. S&P Global Ratings' NPA forecasts include reported NPLs and special mention loans (SMLs), as well as our estimates of forborne loans and other problem assets that are classified as normal but are either 90 days overdue or, in our assessment, could be subject to a long restructuring process. The stable outlook on BoCom reflects our expectation that the bank will maintain its asset quality in line with peers' over the next two years. The bank is also likely to maintain adequate capitalization and liquidity during the period. We may downgrade BoCom if we lower our assessment of the bank's stand-alone credit profile (SACP) by two notches,

...Bank of Communications Co. Ltd.'s (BoCom) megabank status and diversified business lines will continue to underpin its strong market position. BoCom's strategy of leveraging its home ground advantage to become the self-described "leading bank in the Yangtze River Delta" will solidify its customer base in the prosperous region, supporting its long-term growth. That said, concessions to policy-favored sectors and ongoing NIM contraction may limit profit growth. Despite a lackluster economic rebound and prolonged housing weakness in China, BoCom's asset quality should be stable. We see the bank's nonperforming asset (NPA) ratio in the 3.2%-3.5% range at the end of 2025, broadly unchanged from our end-2022 estimate of 3.4%. The real estate nonperforming loan (NPL) ratio remained low at 2.8% last year, while the direct impact of mortgage boycotts was limited for BoCom. Meanwhile, China's economic rebound,...

Full Report