Moody's affirms Cathay United Bank

Moody's Investors Service said it affirmed Taiwan-based Cathay United Bank's C- bank financial strength rating and A3/P-1 foreign-currency deposit rating.

The outlook is stable.

The affirmation follows the announcement of the bank's plan to complete its merger with Lucky Bank on Jan.1. The overall impact on the bank's financials is not expected to be significant given Lucky Bank's relatively small size - its outstanding loans and deposits only account for 8% and 10% of the bank's loans and deposits respectively, Moody's said.

Given the bank's experience in integrating the old Cathay United Bank with United World Chinese Commercial Bank in 2003, Moody's said it expects the bank's management team to integrate Lucky Bank's operations smoothly.

The ratings also incorporate the impact of the credit card crisis because the bank is a sizable player in the credit card market and has suffered losses, the agency said, adding that these are considered manageable because the bank has strong earnings and ample capital to help offset the losses.

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