Bank of China
Bank of China is one of the big four state-owned commercial banks of the People's Republic of China – the other three are Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Bank of China was founded in 1912 to replace the Government Bank of Imperial China, and is the oldest bank in China. From its establishment until 1942, it issued banknotes on behalf of the Government of the Republic of China along with the "Big Four" banks of the period: the Central Bank of China, Farmers Bank of China and Bank of Communications. Although it initially functioned as the Chinese central bank, in 1928 the Central Bank of China replaced it in that role. Subsequently, BOC became a purely commercial bank.
S&P upgrades ratings of big China banks
Bei Hu in Beijing
Change reflects improvements and government's support
Standard & Poor's yesterday raised the credit ratings of seven mainland financial institutions, including the country's five largest commercial banks.
The upgrades reflected financial improvements, government support, enhanced risk management and foreign strategic investments and came on a day when the international ratings agency raised its assessments for 18 other Asian banks on expectations of government support.
S&P upgraded the long-term foreign currency ratings of the Industrial and Commercial Bank of China, Bank of China and China Construction Bank to BBB-plus from BBB-minus with a stable outlook.
Short-term ratings on the three largest commercial lenders in China were lifted to A-2 from A-3.
The three have won a combined US$60 billion state capital injection since 2003 which kick-started massive financial restructurings that raised their capital adequacy, slashed problem loans and lifted reserve ratios. S&P's ratings also factored in expected continued government support for the banks over the medium term.
Shanghai-based Bank of Communications (Bocom), the mainland's fifth-largest commercial lender and the first major bank to go public, saw its long-term foreign currency rating upgraded to BBB-minus from BB-plus with stable outlook.
S&P expects closer partnership between Bocom and its 19.9 per cent shareholder HSBC Holdings will improve the former's performance, governance, internal control, risk management and retail banking skills.
S&P further raised the four banks' fundamental strength ratings from D-plus to C, citing expected near-term material improvement in their performance.
'The rating actions reflect the banks' solid progress in improving their financial profiles,' S&P credit analyst Ryan Tsang said in a statement.
Meanwhile, S&P raised the public information rating on the Agricultural Bank of China, the weakest of the Big Four state lenders, from BBpi to BBBpi, reflecting its role in supporting China's weak agricultural sector and rural economy as well as 'expectations that the Chinese government will provide adequate support to the bank to rebuild its fragile financial profile in the near term'.
Also affected by the latest round of upgrades were Citic Group and Guangdong Development Bank.