Bank of Communications Financial Leasing Co. Ltd.

Potential support from Bank of Communications, as a core subsidiary. Good business stability stemming from leveraging the parent's established domestic franchise. Prudent underwriting standards. Moderate capital buffer. Operates in China's highly competitive finance industry. High dependency on wholesale funding. We view Bank of Communications Financial Leasing Co. Ltd. as a core subsidiary of Bank of Communications Co. Ltd. (BOCOM: A-Stable/A-2; cnAA/cnA-1), and therefore, equalize the rating on the company with that on the parent. The rating on BOCOMFL is four notches higher than the company's stand-alone credit profile (SACP) of 'bb+'. We assess BOCOMFL's stand-alone credit profile (SACP) as 'bb+' to reflect our anchor assessment for Chinese finance companies and the prudential regulation of the China Banking Regulatory Commission (CBRC)

...We view Bank of Communications Financial Leasing Co. Ltd. as a core subsidiary of Bank of Communications Co. Ltd. (BOCOM: A-Stable/A-2; cnAA/cnA-1), and therefore, equalize the rating on the company with that on the parent. The rating on BOCOMFL is four notches higher than the company's stand-alone credit profile (SACP) of '##+'. We assess BOCOMFL's stand-alone credit profile (SACP) as '##+' to reflect our anchor assessment for Chinese finance companies and the prudential regulation of the China Banking Regulatory Commission (CBRC) that the company benefits from. The SACP also reflects the company's strong business stability supported by the parent's franchise and sufficient headroom for funding under a diversified pool of short-term bank credit facilities. Pressures on BOCOMFL's capitalization because of its high loan growth, which could outpace capital accumulation over the next few years, constrain the SACP....

Full Report