Standard & Poor's (S&P) Ratings Services has revised the outlook on its 'BB' long-term foreign currency counter-party credit rating on Bank of Communications (BoC) to "positive" from "stable" after taking into consideration recent improvements in the bank's capital and asset quality.
BoC's capital has been strengthened by a18 bn yuan (US$2.2bn) capital injection from the Chinese Ministry of Finance, its major shareholder and other government linked agencies and further augmented by an acquisition of a 19.9% interest in BoC by Hongkong and Shanghai Banking Corp Ltd, a unit of HSBC Holdings Plc (5.HK), it said.
Prior to the transaction, BoC had sold a significant amount of non-performing loans to an asset management company, which helped the bank to lower its reported non-performing loans to 19.8 bn as at 30 June 2004, S&P said.
