Fitch cuts CTBC Financial, Taiwan Life

Fitch Ratings said it affirmed the issuer default ratings and national ratings on CTBC Bank Co., Ltd. and revised the outlook to stable from negative.

The agency simultaneously downgraded the ratings on its parent CTBC Financial Holding Co., Ltd. and its sister companies Taiwan Life Insurance Co., Ltd. and CTBC Securities Co., Ltd. by one-notch to reflect the growing life insurance operation and the holding company's high common-equity double leverage ratio.

Fitch said CTBC Bank's affirmation and outlook revision is primarily based on the bank's enhanced capital profile and its focus on organic growth in domestic and offshore markets in the near- to medium-term.

The downgrade of the ratings on the bank's parent mainly reflects the continued growth of Taiwan Life, which forms a significant part of CTBC group but has weaker standalone strength than CTBC Bank, the agency explained. Taiwan Life amounted to 28% of CTBC group's consolidated assets as of end-1H17.

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