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Research Update: Taipei Fubon Commercial Bank Co. Ltd.
Rationale Taiwan Ratings Corp. today affirmed its 'twAA+' long-term and 'twA-1+' short-term counterparty credit ratings on Taipei Fubon Commercial Bank Co. Ltd. (Taipei Fubon Bank). The outlook on the long-term rating is stable. The ratings reflect the bank's strong liquidity and funding profile, good capitalization, adequate credit risk control, and the implicit support from the Fubon Financial Holding Co. Ltd group (Fubon FHC; twAA/Stable/twA-1+). Moderating factors include the bank's moderate profitability and a less diversified business stream than its international peers'. Outlook The stable outlook reflects our expectation that Taipei Fubon Bank will remain the core entity of the Fubon FHC group and that the group is likely to maintain its credit profile commensurate with its current rating level. We expect Fubon FHC to maintain a satisfactory and diversified business stream due to its good market position in most financial sectors including banking, life insurance, property & casualty insurance, and securities industries. We also expect the group to maintain its strong liquidity profile and adequate capitalization. We may lower ratings on the bank if the group's capitalization deteriorates due to aggressive expansion, or its profitability weakens due to pressure on its core earning capability. We may also lower the ratings on Taipei Fubon Bank if its importance to the group declines. We may raise the ratings on the bank if Fubon FHC can improve its profitability to a strong level while maintaining adequate capitalization. Related Research This article is based in part on the following criteria articles:
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