Fitch affirms Hua Nan

Fitch Ratings said it affirmed the ratings of Hua Nan Commercial Bank (HNCB), including the long-term foreign currency at BBB+, short-term foreign currency at F2, national long-term AA-(twn), national short-term F1(twn), individual C/D and support 2.

The outlook is stable.

Fitch also said it affirmed the ratings of affiliate Hua Nan Bills Finance Corp., including the long-term foreign currency at BB+, short-term foreign currency at B, national long-term A-(twn), national short-term F2(twn), individual D/E and support 3.

Fitch noted the ratings on HNCB reflect its sound overall asset quality, established market position in corporate banking, its systemic importance to the local banking sector and expected strong government support in event of need.

Fitch noted that the industry-wide deterioration in credit quality of cash-card assets would likely have a limited impact on HNCB's credit quality, as cash-card assets only account for 1.2% of its overall loans. However, the agency said it cautions that HNCB is dependent on interest revenue for most of its operating income and its profitability has been hurt by tightening interest margins.

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