The ratings on Bank of China Ltd. (BOC) reflect the bank's strong franchise in mainland China and Hong Kong, which supports its strong liquidity profile and sound profitability. Government support remains an important rating factor as we consider BOC a systemically important bank, which has led to a three-notch uplift from the bank's stand-alone credit profile of 'bbb-'. Counterbalancing factors include latent credit risks on BOC's rapidly growing domestic loan book, its under-tested risk management, and still-developing credit culture. Like other Chinese mega banks, BOC faces the challenge of building a credit culture, and institutionalizing good corporate governance practices and internal controls. As a state-owned bank, it has to balance commercial decisions with China's broader economic and social objectives. BOC's
