Bulletin: Bank of China?s Added Capital Will Enhance Ability To Support Policy Role

HONG KONG (S&P Global Ratings) April 1, 2025--A proposed capital injection from the Chinese government will strengthen Bank of China's (BOC) ability to implement national strategies. It will also enhance the bank's capital position amid a strain on profitability. BOC (A/Stable/A-1) will likely receive up to Chinese renminbi (RMB) 165 billion via a private placement of 'A' shares to the government. This is part of the government's recently announced plan to recapitalize the megabanks in China. The new capital will allow BOC to expand green financing and lend more to micro and small enterprises (MSEs) and strategic emerging sectors that support China's economic growth. In 2024, BOC's domestic green financing and loans to MSEs increased by 31.03% and 29.63%, respectively,

...April 1, 2025 HONG KONG (S&P Global Ratings) April 1, 2025--A proposed capital injection from the Chinese government will strengthen Bank of China's (BOC) ability to implement national strategies. It will also enhance the bank's capital position amid a strain on profitability. BOC (A/Stable/A-1) will likely receive up to Chinese renminbi (RMB) 165 billion via a private placement of 'A' shares to the government. This is part of the government's recently announced plan to recapitalize the megabanks in China. The new capital will allow BOC to expand green financing and lend more to micro and small enterprises (MSEs) and strategic emerging sectors that support China's economic growth. In 2024, BOC's domestic green financing and loans to MSEs increased by 31.03% and 29.63%, respectively, significantly outpacing the 8.18% rise in total customer loans. The capital injection will also mitigate the impact of BOC's reduced internal capital generation amid a decline in profitability. We expect the...

Bulletin