The rating on Bank of Communications Co. Ltd. (BoCom) reflects the bank's good business profile, which is underpinned by an entrenched domestic franchise, implicit government support, and improving financial performance. The rating also takes into consideration the strong likelihood that BoCom's increasingly close partnership with Hongkong and Shanghai Banking Corp. Ltd. (AA/Stable/A-1+), the bank's second-largest shareholder, will further improve its competitiveness in retail banking and risk management. Counterbalancing factors include the bank's under-tested risk management system, and pressured capitalization and latent credit risks associated with the bank's aggressive asset and loan growth. Standard&Poor's regards BoCom as a systemically important commercial government-related entity. The bank has a share of about 5% of China's enormous deposit market. Standard&Poor's
