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Bank of China vs China Construction Bank

Side-by-side credit pricing comparison from Pillar 3 disclosures.

Last updated: March 2026 · Data source: public Pillar 3 disclosures
Verdict:

On a representative BBB+ EUR 25M 5-year term loan, China Construction Bank is the cheaper lender by 0bp in minimum spread. For a EUR 25M facility, that's EUR 0 per year.

Bank profiles compared

Metric Bank of China
China		 China Construction Bank
China
IRB approachF-IRBF-IRB
Cost-to-income34.0%33.0%
Effective tax rate22.0%22.0%
Avg corporate PD2.78%2.73%
Avg LGD unsecured38.2%38.3%
Avg LGD secured25.0%25.0%
Funding spread (bp)10bp10bp
Corporate EADEUR 13570bnEUR 14408bn

Sample RAROC: BBB+ EUR 25M 5Y term loan

Both banks priced on the exact same deal — 150bp spread, 20bp commitment fee, 60-month maturity. Higher RAROC means the bank earns more from this deal. Lower min-spread means the borrower gets a better rate.

Component Bank of China China Construction Bank
Annual revenueEUR 385,000EUR 385,000
Operating costEUR 154,000EUR 154,000
Expected lossEUR 28,750EUR 28,750
Capital required (FPE)EUR 2,451,320EUR 2,451,320
RAROC (after tax)8.06%8.06%
Min spread for 12% RAROC233bp233bp
This is just one sample deal.

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Bank of China full profile China Construction Bank full profile All banks RAROC methodology

FAQ: Bank of China vs China Construction Bank

Which bank is cheaper on corporate credit: Bank of China or China Construction Bank?
On a BBB+ EUR 25M 5-year term loan, China Construction Bank requires a minimum spread of 233bp to reach a 12% RAROC hurdle, versus 233bp at the other bank — a difference of 0bp on the same deal.
How do Bank of China and China Construction Bank compare on corporate PD?
Bank of China reports an EAD-weighted corporate PD of 2.78%, while China Construction Bank reports 2.73%. The gap reflects differences in obligor mix and geography rather than underwriting quality.
How do the two banks differ on IRB approach?
Bank of China uses F-IRB and China Construction Bank uses F-IRB. The IRB approach determines whether internal LGD models or supervisory LGDs apply, which materially affects capital required on every corporate facility.
What deal is used in this comparison?
A single standardised facility: BBB+ rated, EUR 25M drawn on a EUR 30M commitment, 5-year tenor, 150bp spread, 20bp commitment fee. Both banks are priced on this exact deal using their own disclosed Pillar 3 parameters.