Reuters logo
Fitch Assigns 'bbb+' Viability Rating to Citibank Taiwan; Affirms IDR
October 7, 2016 / 9:32 AM / a year ago

Fitch Assigns 'bbb+' Viability Rating to Citibank Taiwan; Affirms IDR

(The following statement was released by the rating agency) TAIPEI, October 07 (Fitch) Fitch Ratings has assigned Citibank Taiwan Limited (CTL) a Viability Rating (VR) of 'bbb+' and affirmed CTL's Long-Term Issuer Default Rating (IDR) at 'A' and National Long-Term Rating at 'AA+(twn)'. The Outlook is Stable. A full list of rating actions is at the end of this rating action commentary. The affirmation follows Fitch's rating action on Citigroup Inc. (Citi, A/Stable/a), CTL's ultimate parent, on 15 June 2016 (see <a href="">"Correction: Fitch Affirms Citigroup's Long-Term IDR at 'A'; Outlook Stable" ). KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SUPPORT RATING The IDR and Support Rating of '1' on CTL reflects the extremely high probability of support from its parent, Citibank N.A. (A+/Stable/a, Citi's major operating subsidiary), if needed. CTL's IDR is aligned with Citibank N.A.'s Viability Rating and their rating Outlooks are also aligned, given CTL is a core part of the group's global banking franchise, they have highly integrated operations in risk management, a shared brand name and are part of a global network. Among Citi's Asian subsidiaries, CTL is one of the important contributors to the group's liquidity and earnings. Like many of Citi's international subsidiaries, CTL is not specifically named as a material legal entity (MLE). The recovery and resolution plan of Citi, along with those of other global banks, continues to evolve, including the designation of MLEs and the positioning of internal total loss-absorbing capacity (TLAC). As a consequence Fitch may reassess the parent and subsidiary linkages of CTL as these issues become more permanent. VR CTL's VR reflects a niche, sustainable and profitable franchise with a sound risk buffer relative to its risk profile. This is underpinned by the local management's ability to use Citibank's global platform and brand recognition in Taiwan to consistently deliver above-sector-average earnings. CTL has developed its niches in cross-border financing, cash management, trade finance, financial advisory in M&A and introducing innovative wealth management and credit card products in Taiwan. CTL reported a stable return on assets of 1% in 1H16 because non-interest income generation from wealth management, credit cards and derivatives has continued to be robust. The sector's average ROA was 0.65%. Its impaired loan ratio rose to 1.6% at end-1H16 from 1.3% at end-2014). Fitch expects CTL's strong loan-loss provisioning to help absorb rising credit costs in a slowing economy. The bank's strong internal capital generation will help sustain its above sector-average capitalisation. Its Fitch Core Capital ratio fell to 11.3% at end-1H16 from 12.4% at end-2015 due to a dividend payout. The median ratio for Fitch-rated peers was 10.1% at end-1H16. RATING SENSITIVITIES IDRS, NATIONAL RATINGS AND SUPPORT RATING CTL's IDR and Support Rating are sensitive to any change in the ability and propensity of Citibank N.A. to provide timely support to CTL. The ratings would also be affected by the evolution of the group's recovery and resolution plan, which may lead to the introduction of a notching of the IDR relative to the parent's VR. VR The bank's VRs could be upgraded if its franchise strengthens or is more diversified and becomes comparable to that of better-rated large local rivals. A VR downgrade could result from unexpected deterioration in capitalisation or its risk profile, or excessive growth or risk-taking, particularly in high-risk high-return unsecured personal loans. The rating actions are as follows: CTL Long-Term IDR affirmed at 'A'; Outlook Stable Short-Term IDR affirmed at 'F1' National Long-Term Rating affirmed at 'AA+(twn)'; Outlook Stable National Short-Term Rating affirmed at 'F1+(twn)' Viability Rating assigned at 'bbb+' Support Rating affirmed at '1' Contact: Primary Analyst Cherry Huang, CFA Director +886 2 8175 7603 Fitch Australia Pty Ltd, Taiwan Branch Suite 1306, 13F, Tun Hwa N. Rd., Taipei Secondary Analyst Jenifer Chou Director +886 2 8175 7605 Committee Chairperson Mark Young Managing Director +65 6796 7229 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(twn)' for National ratings in Taiwan. Specific letter grades are not therefore internationally comparable. Additional information is available on Applicable Criteria Global Bank Rating Criteria (pub. 15 Jul 2016) here National Scale Ratings Criteria (pub. 30 Oct 2013) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1012795 Solicitation Status here Endorsement Policy here ail=31 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below