HONG KONG, 27 March 2026. CSPI Ratings has affirmed Bank of China Limited’s (BOC) global-scale foreign-currency long-term issuer credit rating (LTICR) at ‘AA-’ and short-term issuer credit rating (STICR) at ‘A-1+’. The rating is concurrently withdrawn for business reasons.
BOC’s LTICR incorporates a standalone credit profile (SACP) rating of ‘bbb+’. This reflects the bank’s stronger overseas franchise, enhanced capital buffer, resilient profitability supported by business diversification, and strong funding and liquidity. It also considers BOC’s susceptibility to market volatilities. In addition, we believe that the Chinese government (‘AA’/Stable) has an extremely strong willingness to support BOC in times of need, given the state ownership, the Bank’s irreplaceable importance to the financial system, and its key role in government initiatives.
KEY RATING RATIONALES
Credit Strengths
Extremely Strong Government Support: We expect the Chinese government to demonstrate an extraordinarily strong willingness to support BOC in times of need. As one of China's six major state-owned banks, BOC's long-term strategy is largely aligned with public policy objectives. BOC's management has articulated a strategy focused on supporting the Chinese government's aims to buttress strategically significant industries, maintain financial and social stability, and advance key initiatives in economic recovery. Given the long history of Chinese government support and its quasi-policy role, we believe Bank’s important position will continue over the medium to long term.
Stronger Overseas Franchise: BOC’s market franchise is supported by its global network, with more extensive overseas branches, and greater capabilities to capture more cross-border businesses than state-owned peers. As of the end of 2024, BOC had 543 overseas institutions spanning across 64 countries and regions globally, with the number of overseas institutions and personnel and regional coverage consistently ranking first among the state-owned peers. We believe that BOC will maintain its status as a global systemically important bank (G-SIB) and a domestic systemically important bank (D-SIB) in China, considering it ranks as the fourth largest bank in the world and China in terms of its total assets.
Enhanced Loss-absorption Buffer: We forecast BOC to enhance its capital profile over the next 12-18 months, given its long track record of keeping a healthy loss-absorption buffer and the government's plan to issue special bonds to replenish the capital of large state-owned banks. During 2024, BOC successfully issued RMB 50 billion of perpetual capital bonds and RMB 120 billion of Tier 2 capital bonds. Meanwhile, in June 2025, BOC privately placed and issued 27.83 billion A-shares to the Ministry of Finance of the People's Republic of China at a price of RMB5.93 per share, with a total fund amounting to RMB 165 billion. After deducting relevant issuance expenses, the entire proceeds were used to replenish BOC's CET1 Capital, of which RMB 27.83 billion was included in share capital and the remainder was included in capital reserves. The Bank registered abundant capitalization with a common equity tier 1 (CET1) capital ratio of 12.58%, a tier 1 capital ratio of 14.66%, and a total capital adequacy ratio (CAR) of 18.66% as of 30 September 2025.
Chinese regulators require systemic banks, such as BOC, to hold additional capital surcharges and leverage ratios to maintain stability and control systemic risks. China's Total Loss-Absorbing Capacity (TLAC) rules, aligned with international standards, impose additional capital surcharges and minimum TLAC requirements of risk-weighted assets (RWA) and leverage ratio exposure (LRE) for enlisted D-SIBs to further boost their capital strength against unexpected crises. In 2024 and 2025, BOC issued TLAC non-capital bonds totaling RMB50 billion and RMB100 billion respectively, to further enhance its Total Loss Absorption Capacity.
Resilient Profitability Benefits from Diversification: BOC’s profitability will continue to be resilient as the bank’s actively initiative to optimize asset and liability structure and the bank’s diversification benefits offset the pressures of margin compression in the onshore market. In 2024, BOC's average interest rate of the interest-earning assets decreased by 24 basis points, primarily due to a reduction in RMB asset yields, driven in part by a decline in the RMB Loan Prime Rate (LPR) and adjustments to mortgage loan rates. However, the bank maintained steady progress in enhancing the active management of liabilities, resulting in a 6 basis points reduction in the average cost of interest-bearing liabilities for the year. The combined effect dragged the bank's Net Interest Margin (NIM) down to 1.40%. Meanwhile, Bank of China's other non-interest income grew by 15.87% year-on-year in 2024, mainly driven by the strong growth in investment income. In addition, driven by the management’s stringent cost control and optimization of expense structure, BOC’s cost-income ratio was 28.77% in 2024, which was at the lower end among state-owned banks. In terms of geographical distribution, BOC’s overseas business generated around 22.33% of the group’s total profit, providing the bank a competitive advantage in earning mix.
Strong funding and liquidity: We believe that BOC will maintain its good funding structure, given its vast retail deposit base. Customer deposits are the bank’s primary source of funding. Its customer deposits increased by 5.66% in 2024 to RMB24.20 trillion, and its proportion to total liabilities decreased to 75.38%. The bank also has abundant liquidity, with a liquidity coverage ratio of 138.29% and a net stable funding ratio of 127.89% as the end of September 2025, both of which were much higher than the minimum regulatory requirement of 100%.
We anticipate that BOC and other large state-owned banks will benefit from the risk aversion of market funds when overall confidence in the financial sector deteriorates. Hence, we believe they will have a stronger and more stable liquidity profile in stressed markets than other small and medium-sized banks, whose funding is more vulnerable to market shocks.
Credit Weaknesses
Vulnerability to Economic Volatilities: As a major state-owned bank, BOC will continue to be subject to a high degree of market volatility, as the bank is tasked with policy mandates to support economic growth and industry developments. BOC’s loan portfolio tracks closely with that of the broader market, with large exposure to commercial services, manufacturing and transportation, representing 14.78%, 12.68% and 10.34% of total loans at end-2024, respectively.
The complex and challenging international and domestic situation is likely to continue to put pressure on BOC’s asset quality and earnings. The intensified international geopolitical conflicts, insufficient momentum of global economic growth, and divergence in the monetary policies of major developed economies may increase the volatility of global financial markets. Domestically, the slow recovery of the domestic macroeconomy, the mounting pressure in the property and LGFV sectors, and the tightening of financial regulation have led to the credit risk exposure in certain regions and industries.
Note: The ratings mentioned above are unsolicited.
ANALYSTS CONTACT
Primary Analyst
Tingting Qiao
+852 3615 8339
tingting.qiao@cspi-ratings.com
Secondary Analyst
Sherlock Liang
+86 755 2348 3690
sherlock.liang@cspi-ratings.com
Committee Chair
Winnie Guo
+852 3615 8317
MEDIA CONTACT
RATING SERVICE CONTACT
Date of Relevant Rating Committee: 25 March 2026
Additional information is available on www.cspi-ratings.com
Related Criteria
Global Banking Rating Criteria (16 August 2019)
Government-Related Entities Rating Criteria (31 August 2018)
Rating Symbols and Definitions (7 May 2018)
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