S&P ups Bank of China

Standard & Poor's said it raised its counterparty credit ratings on Bank of China Ltd. to A-/A-2 from BBB+/A-2 and raised its bank fundamental strength rating to B from C+.

The outlook is stable.

The upgrade reflects the bank's improved business and financial profiles, the agency said. The ratings also reflect the bank's strong market position in Hong Kong, one of the lowest risk banking systems globally. The bank has superior liquidity, solid capitalization and good asset quality, S&P said. Its profitability is sound, the agency added, but is below that of other leading banks in Hong Kong.

S&P said the bank plans to increase its exposure to unsecured retail lending and charge higher interest rates, which should boost net profit. The gradual change in risk appetite is not expected to have a very significant impact on its asset quality or impaired loan ratio, the agency said.

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