The ratings on The Bank of East Asia, Limited (BEA) reflect the Hong Kong-based bank's strong capitalization, good liquidity profile, and solid domestic franchise in Hong Kong. The bank's pressured core earnings and high concentration risk from property-related lending moderate these strengths. BEA's expansion in China provides opportunities for growth, but also exposes the bank to higher banking industry risk in a country with a developing economy. BEA continues to focus on its core markets of Hong Kong and China. Hong Kong accounted for 50.9% of the bank's total loan book at the end of 2010, whereas China accounted for 38.1%. BEA has a solid and established franchise in Hong Kong, where it is the fifth-largest domestically incorporated bank. Nevertheless,
