Moody's: Negative view for three Taiwan banks

Moody's Investors Service said it taken multiple rating actions on two banks and one financial holding company in Taiwan to reflect the stresses arising from the financial crisis.

SinoPac Financial Holding Co.'s foreign-currency issuer rating was confirmed at Baa2 with negative outlook, concluding a review for possible downgrade that began in December.

Hua Nan Commercial Bank's outlook was changed to negative from stable on its D-rated bank financial strength rating, A3 local- and foreign-currency deposit ratings, Aa2.tw national scale deposit rating and prime-1 short-term local- and foreign-currency deposit ratings.

Taiwan Cooperative Bank's outlook was changed to negative from stable on its D-rated bank financial strength rating, A2 local- and foreign-currency deposit ratings and Aa1.tw national scale deposit rating.

The outlook changes for both banks reflect a concern that their core capital levels could be further weakened by the expected deterioration in asset quality, Moody's said.

In general, for Taiwanese banks, weakening earnings and rising credit costs will pressure their already moderate-to-weak capital adequacy levels, while capital raisings have proved challenging in a less favorable market environment, the agency said.

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