Fitch affirms Standard Chartered Bank

Fitch Ratings said it affirmed Standard Chartered Bank Ltd.'s ratings at issuer default A+, short-term F1, individual B and support 3. The outlook on the issuer default rating is stable.

At the same time, the agency placed the ratings of Taiwan's Hsinchu International Bank on rating watch positive, including issuer default rating BBB-, short-term F3, national long-term A, national short-term F1 and support 4. Hsinchu's individual rating was affirmed at C/D.

The rating action follows an announcement that Standard Chartered Bank has made a tender offer for Hsinchu. As Standard Chartered will be raising about $1.2 billion in fresh equity to finance the acquisition, capitalization will remain satisfactory and comfortably within its target range of 7% to 9%, the agency said.

Hsinchu has suffered from a spike in credit losses on sub-prime consumer lending. This and a one-time charge-off of its legacy problematic corporate lending resulted in Hsinchu reporting an operating loss in the first half of 2006 and a weakening in its capital ratios. There is a risk of further problems in these portfolios, but Fitch said the most at-risk portfolios are a relatively small part of Hsinchu's balance sheet and the bank has focused more on the prime segment in its unsecured consumer lending.

Hsinchu's ratings watch positive reflects the enhanced level of support that Fitch said it considers would become available to Hsinchu were it to be acquired by Standard Chartered Bank.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.