The ratings on Bank of China Ltd. (BOC) reflect the bank's strong franchise in mainland China and Hong Kong, which underpins its strong liquidity profile, and good capitalization. Government support remains an important rating factor. Counterbalancing factors include latent credit risks on the bank's aggressively expanding domestic loan book, against a backdrop of its still-developing credit culture, and its reduced but still sizable exposure to distressed structured finance products. BOC's operations are more diverse than its domestic peers' in terms of business lines and geographic presence because it has the most extensive overseas operations. The bank has a particularly strong franchise in Hong Kong, where it is the second-largest lender. This gives it a competitive edge over other major domestic
