Standard & Poor's is changing its view of China's banking sector.
The credit rating agency's overall outlook is 'positive' while it has altered its assessment of the economic risks from 'high' to 'moderately high' and of the industry risks from 'very high' to 'high'.
Ryan Tsang, the Greater China director of financial services ratings, said yesterday the improvement in the sector's profile was not just down to injections of government money and foreign investment, but also because of reform efforts, such as the implementation of risk management from headquarters down to branch level.
'But there's still a lot of hard work for the sector to do in coming years,' Mr Tsang said, adding that the reforms were very much a work in progress and setbacks along the road were only to be expected.
He pointed to cases of irregularities in the past couple of years that indicated internal controls or risk management systems were not working as well as they should.
Other setbacks could arise at individual banks running into resistance from members of staff who are not keen on change.