S&P: Bank of China view positive

Standard & Poor's said it revised the outlook on Bank of China (Hong Kong) Ltd. to positive from stable and affirmed its A- long-term and A-2 short-term counterparty credit ratings as well as the BBB+ long-term issue rating on its $2.5 billion subordinated notes.

"We revised the outlook primarily to reflect the resilience of [the bank's] credit and financial performances during the most-recent business cycle. Our uncertainty about the robustness of the bank's risk management, a long-standing constraint on the rating, has reduced," S&P analyst Qiang Liao said in a statement.

"Some slippage from the currently low nonperforming loan level is highly likely, in our view. This expected deterioration could be attributable to the seasoning of loans and rapid growth in exposure to borrowers in China, where embedded credit risks are higher than [the bank's] Hong Kong loan portfolio on average," Liao said.

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