Bulletin: Bank Of China Resilient Amid Macro Uncertainties

HONG KONG (S&P Global Ratings) Sept. 1, 2020--S&P Global Ratings said today that Bank of China Ltd. (BOC: A/Stable/A-1) has a sufficient capital buffer to absorb the pressures on profitability arising from higher asset-quality impairments. We expect BOC's return on average assets to fall from 0.92% in the first half of 2020, a level that was already 20 basis points lower year on year. This is because we expect a broader range of forbearance loan applications in the sector due to COVID-19. As such, overdue loans may increase when the regulator's forbearance policies end in the first quarter of 2021. The company considers that recovery remains slow in some sectors, such as transport and travel-related businesses. As such, we believe

...August 31, 2020 HONG KONG (S&P Global Ratings) Sept. 1, 2020--S&P Global Ratings said today that Bank of China Ltd. (BOC: A/Stable/A-1) has a sufficient capital buffer to absorb the pressures on profitability arising from higher asset-quality impairments. We expect BOC's return on average assets to fall from 0.92% in the first half of 2020, a level that was already 20 basis points lower year on year. This is because we expect a broader range of forbearance loan applications in the sector due to COVID-19. As such, overdue loans may increase when the regulator's forbearance policies end in the first quarter of 2021. The company considers that recovery remains slow in some sectors, such as transport and travel-related businesses. As such, we believe NPL formation pressure remains high. Provisioning pressure is, therefore, likely to weigh on profitability in the next 12 months, in our view. The bank's net profit contracted 11% year on year in the first half of 2020, largely driven by impairment...

Bulletin