China Bohai Bank (HKG:9668) will likely see its asset quality improving as it sells its risky loans, S&P Global Ratings said in a Tuesday release.

On Friday, the bank sold 28.97 billion yuan in loans at a discounted price to state-owned Tianjin Jinrong Asset Management.

This follows the sale of the bank's assets worth 5.67 billion yuan last March.

The bank is also taking other steps to reduce risk, such as narrowing its asset growth, tightening its internal control, and cleaning up high-risk assets like internet loans, S&P said.

The rating agency estimates a drop in the bank's nonperforming asset ratio to 6.3% in 2026, closer to the 5.8% forecast for the overall sector.

S&P believes the Tianjin City government had a key part in coordinating with the local asset management company to reach the sale deal.