Standard & Poor's has upgraded its ratings on four state-owned Chinese banks on their enhanced credit profiles, the rating agency said yesterday.

Standard & Poor's Ratings Services said it has raised its local and foreign currency long-term counterparty credit ratings on Bank of China to A- from BBB+, with a stable outlook.

The China Construction Bank and the Industrial & Commercial Bank of China also got upgraded ratings on the long-term counterparty credit rating of foreign currency to A- from BBB+, the rating firm said. CCB's outlook is stable while ICBC's outlook is positive.

Shanghai-based Bank of Communications, the fifth biggest bank in China, got an outlook rating from stable to positive.

"These ratings actions reflect the Standard & Poor's assessment that the banks' efforts to build up their financial positions, corporate risk cultures, risk management capabilities, and business profiles are starting to pay off, albeit to slightly different degrees," said Liao Qiang, a Standard & Poor's credit analyst.

The four banks, among the country's top five, experienced a reform path of attracting strategic overseas investors, restructuring and going public.

The four banks are now listed both in Hong Kong and Shanghai.

Liao said the banks' financial profiles have benefited from a favorable operating environment, including a protected interest rate spread, good liquidity, a booming retail banking market and China's strong economic growth.

China' retail banking sector grows as Chinese seek more financial products when their pockets go deeper amid a rising economy.

Premier Wen Jiabao said earlier this week that China's economy will grow 11.5 percent this year. Economists had said that the growth next year would still be double-digit.

Standard & Poor's regards the four banks as commercial government-related entities and systemically important.

(Shanghai Daily November 24, 2007)