Taiwan's Shin Kong ratings affirmed with stable outlook - S&P

BANGALORE (Thomson Financial) - Standard & Poor's Ratings Services has affirmed its 'BBB' long-term counterparty credit rating, with a stable outlook, and 'A-3' short-term rating on Shin Kong Financial Holding Co. Ltd. (Shin Kong FHC).

S&P said the ratings reflect the group's strong business franchise in Taiwan's life insurance industry and its satisfactory liquidity.

The ratings agency said counterbalancing factors include the group's small and mediocre banking operations relative to those of its peers. On a standalone basis, S&P said Shin Kong FHC has satisfactory financial flexibility and adequate capitalisation.

S&P also affirmed its 'BBB+' long-term counterparty and insurer financial strength credit ratings on Shin Kong FHC's flagship and core unit, Shin Kong Life Insurance Co. Ltd. The outlook on the long-term rating is stable.

The agency said the ratings on Shin Kong Life reflect the insurer's strong business franchise, good asset quality, satisfactory liquidity, and adequate capitalization profile.

These positive factors are tempered by its volatile investment performance, S&P said, adding that Shin Kong Life's good underwriting profits, proactive asset management, and experienced asset-liability management provide good buffers to its operating performance.

Further, S&P affirmed its 'BBB+' long-term, 'A-2' short-term counterparty credit ratings and 'D+' bank fundamental strength rating on Taiwan Shin Kong Commercial Bank. The outlook on the long-term rating is stable.

S&P said the ratings reflect Shin Kong Bank's importance to the Shin Kong FHC group, and the bank's adequate capitalisation.

Counterbalancing factors include the bank's mediocre core earnings generating capability and small market position, S&P added.

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