On April 8, 2005, Standard&Poor's Ratings Services raised its long-term foreign currency counterparty credit rating on Bank of Communications (BoComm) to 'BB+' from 'BB'. The outlook is positive. The rating actions reflect the strengthening of BoComm's financial profile as a result of government support in the form of capital injections and problem loan sales, new capital injected by Hongkong and Shanghai Banking Corp. (HSBC Asia-Pacific, foreign currency: AA-/Stable/A-1+; local currency: A+/Stable/A-1) as well as reform initiatives by the bank itself. The shareholders' funds of the bank now exceed Standard&Poor's estimate of the additional loan loss reserving required to better provide for existing impaired loans. While BoComm's capitalization has strengthened substantially, additional capital is required to prudently
