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S&P gives Bank of China Macau an optimistic ‘A’ long-term issuer credit rating 

The US credit agency noted that the Bank of China’s local subsidiary provided a foothold for its expansion in the Greater Bay Area.

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UPDATED: 19 Jan 2024, 7:36 am

S&P Global Ratings has given the Bank of China Macau an “A” long-term issuer credit rating and a short term rating of “A-1.”

In a statement, the US-headquartered credit rating agency said these ratings mirrored those it had given to Bank of China, in line with S&P’s view that Bank of China Macau (BOCM) would “benefit from strong support from BOC group.” 

S&P said it believed BOCM would maintain its dominant retail market share in Macao, and had healthy enough capital buffers to absorb any losses.

[See more: Moody’s downgrades Macao’s outlook from stable to negative]

The agency also predicted that BOCM’s relatively low credit costs and higher proportion of fee income – when compared with its peers – would shore up return on average assets to levels close to the Macao industry average. 

“We project the bank to maintain a healthy flow of fee income, mostly from wealth management and insurance sales, over the next two years,” it said.

S&P predicted that the bank’s risk-adjusted capitalisation ratio would stay stable (between 11 and 14 percent) and assumed there would be no dividend payout. BOCM’s net interest margin is meanwhile expected to remain below that of its domestic and global peers over the next two years, due to a focus on collateralised retail lending.

UPDATED: 19 Jan 2024, 7:36 am

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