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Macoto
Bank Ratings Placed on CreditWatch Positive Following Proposed Merger With Shin Kong FHC
Taiwan Ratings Corp. said today that it had placed its 'twBBB+' long-term and 'twA-2' short-term counterparty credit ratings on Macoto Bank on CreditWatch with positive implications following the bank's announcement of a share swap merger with Shin Kong Financial Holding Co. Ltd. (Shin Kong FHC). At the same time, Taiwan Ratings said that the merger has no immediate impact on the credit ratings and rating outlook on Taiwan Shin Kong Bank (twA-/Stable/twA-2), which is the existing wholly owned banking subsidiary of Shin Kong FHC. The merger is likely to be beneficial to Macoto Bank if it proceeds as planned. Shin Kong FHC's core operating subsidiary is Shin Kong Life Insurance, which is Taiwan's third-largest life insurance company with a good market position and an established franchise. Operational benefits, such as increased economies of scale, are likely to result if Macoto can smoothly leverage the resources of the Shin Kong group over the medium term. The resolution of
the CreditWatch placement of the ratings on Macoto Bank will depend
on the progress of the merger, including the requisite shareholder and
regulatory approvals.
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