Bulletin: Bank of China's Portfolio Diversity To Add Resilience

HONG KONG (S&P Global Ratings) April 2, 2024--Bank of China Ltd.'s (BOC) operating performance is likely to be resilient over the next one to two years. The megabank's diversified portfolio and adequate risk management will help it withstand the effects of China's slowing growth, property market strains, and geopolitical tensions, in our view. We expect BOC's (A/Stable/A-1) asset quality to remain manageable over the next 12-24 months. The bank's nonperforming loans (NPLs) plus special mention loans (SMLs) were 2.73% of the total loan book at end-2023, up slightly from 2.67% at end-2022. Mainland Chinese real estate loan exposure was limited, at less than 4.4% of the loan book at end-2023, despite an increase during the year. The NPL ratio for

...April 2, 2024 HONG KONG (S&P Global Ratings) April 2, 2024--Bank of China Ltd.'s (BOC) operating performance is likely to be resilient over the next one to two years. The megabank's diversified portfolio and adequate risk management will help it withstand the effects of China's slowing growth, property market strains, and geopolitical tensions, in our view. We expect BOC's (A/Stable/A-1) asset quality to remain manageable over the next 12-24 months. The bank's nonperforming loans (NPLs) plus special mention loans (SMLs) were 2.73% of the total loan book at end-2023, up slightly from 2.67% at end-2022. Mainland Chinese real estate loan exposure was limited, at less than 4.4% of the loan book at end-2023, despite an increase during the year. The NPL ratio for BOC's corporate loans to the mainland property sector fell to 5.51%, from 7.23% a year earlier. The bank's 89% provision for NPLs and SMLs should strengthen its cushion against losses from asset-quality strains. We forecast BOC's profitability...

Bulletin