S&P lifts Bank SinoPac view to positive

S&P said it revised the outlook on the long-term issuer credit ratings on Bank SinoPac, SinoPac Holdings and SinoPac Securities Corp. to positive from stable.

The agency also said it affirmed the long-term and short-term issuer credit ratings on the three entities, as well as the issue ratings on the companies’ various unsecured subordinated debts.

S&P also said it affirmed the Greater China regional scale ratings on SinoPac Holdings and raised the ratings on Bank SinoPac and SinoPac Securities to cnA+/cnA-1 from cnA/cnA-2.

The outlook revision reflects an expectation that the bank is likely to enhance its capitalization to a stronger level if it continues to pursue a prudent capital policy and growth strategy over the next two years, the agency said.

Bank SinoPac is the core banking subsidiary of the SinoPac group, S&P said.

The bank has undertaken several measures to strengthen its capitalization over the past few years, the agency said.

This includes the retention of its earnings with no cash dividend payout for the past three years and several hybrid tier 1 issuances qualified under the intermediate equity content, S&P said.

Bank SinoPac also received a NT$5 billion capital injection in early 2016 and is scheduled to divest its U.S. subsidiary, the agency said.

The bank has adopted a more prudent growth strategy to scale down the credit risks in its loan portfolio over the next two years based on the bank's conservative view of the operating environment, S&P said.

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