Fitch comments on Shin Kong Financial

Fitch Ratings said that Shin Kong Financial Holding Co. Ltd.'s successful completion of its new share issue of NT$13.1 billion will help strengthen the balance sheet of its wholly owned Shin Kong Life Insurance Co. Ltd. The proceeds are to be used solely to add to the company's capital.

The capital enhancement deed is essential to restore the company's capitalization to an adequate level, Fitch said.

However, the agency said it remains concerned that prevailing low interest rates will continue to pressure Taiwanese life insurers' already significant negative interest carry and earnings performance. This could potentially offset the benefits of the new capital increase, Fitch said.

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