Fitch rates Wing Hang Bank notes BBB+

Fitch Ratings said it assigned an expected rating of BBB+ to Wing Hang Bank's proposed step-up perpetual subordinated notes, one notch below the bank's long-term issuer default rating of A-. The notes will be subordinated to the bank's senior and lower-tier-II creditors.

The bank's ratings reflect its long history of adequate profitability and sound financial standing, Fitch said. While the bank's core earnings are a bit below its larger Hong Kong peers, they remain satisfactory as per the 1.65% pre-provision return-on-average-assets achieved in both 2006 and 2005, with margins, non-interest income and costs all remaining generally stable, the agency said.

Fitch said it believes the bank has been adequately prudent in its Greater China expansion, noting that the bulk of its China loans are in support of investments by its existing Hong Kong-based clientele. Meanwhile its Macau exposure has arisen out of its wholly-owned subsidiary there, which is rated BBB+ due to its very prudent approach to the many opportunities for risk in Macau's booming economy, the agency added.

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