...August 30, 2021 SINGAPORE (S&P Global Ratings) Aug. 30, 2021--S&P Global Ratings today said diversified exposures will help Bank of China Ltd. (BOC; A/Stable/A-1) navigate rising defaults amid China's economic rebalancing and an uneven recovery overseas. This was evident in BOC's profit growth in the first half of 2021, which rose about 10% year-on-year, helped by lower impairment losses. The bank's nonperforming loan (NPL) and special mention loan (SML) ratios were 1.30% and 1.53%, respectively, down from end-2020 levels. This allowed its credit cost to fall to 0.65% annualized during this period, while maintaining a broadly stable NPL coverage ratio of 184% as at end-June 2021. The bank will see less asset quality pressure than last year as COVID impacts subside. BOC's nonperforming asset (NPA) ratio has peaked and will steadily decline in the next 24 months, in our view. This is notwithstanding rising NPLs overseas and in certain sectors, such as manufacturing and real estate, in the...
