S&P shifts Cathay view to stable

S&P said it revised the outlook to stable from negative on its long-term ratings on various units of Cathay FHC group. At the same time, we affirmed the long-term ratings on the entities.

The affected ratings are Cathay Life Insurance Co. Ltd. (A-/stable/--), Cathay Financial Holding Co. Ltd. (Cathay FHC; BBB+/stable/A-2), Cathay Century Insurance Co. Ltd. (A-/stable/--) and Cathay United Bank (China) Ltd. (BBB+/stable/A-2).

At the same time, we affirmed our ratings on Cathay United Bank Co. Ltd. (CUB; A-/stable/A-2) with a stable outlook.

“The outlook revision on most of the Cathay FHC group entities reflects our view that the group's flagship unit, Cathay Life, could sustain its restored capital and earnings over the next two years. We believe Cathay Life's proactive asset-liability management risk and moderating asset growth will provide the insurer with a buffer against market volatility over the same horizon. The group credit profile reflects the stand-alone credit profile of Cathay Life, given the insurer's dominant contribution to the group's proforma assets and net income,” S&P said in a press release.

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