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CTBC Financial ratings affirmed after acquisition decision

CTBC Financial ratings affirmed after acquisition decision

Taipei, May (CNA) Taiwan Ratings (????), a local partner of Standard & Poor's Ratings, has affirmed the credit ratings of CTBC Financial Holding Co. (???), which recently decided to acquire a life insurance company. In a statement Thursday, Taiwan Ratings said CTBC Financial's outlook remained stable, following the announcement of the decision to acquire Taiwan Life Insurance Co. (???). CTBC Financial has said it will acquire Taiwan Life through a stock swap, issuing 1.44 common shares in exchange for one Taiwan Life common share. The deal, scheduled to be completed by the end of the year, is valued at NT$32.35 billion (US$1.06 billion). Taiwan Ratings said the rating affirmation showed that the acquisition deal is unlikely to weaken CTBC Financial's credit profile as the company will issue new shares to finance the purchase. Therefore, Taiwan Ratings affirmed CTBC Financial's long-term and short-term issuer credit rating at 'twAA-' and 'twA-1+'. Taiwan Ratings said the outlook on CTBC Financial's ratings remained stable on expectations that the company will maintain most of its key risk characteristics, including its adequate risk management and adequate capital and earnings, over the next one to two years. Meanwhile, Taiwan Ratings has also affirmed the long-term and short-term issuer credit ratings of CTBC Bank (???), the flagship banking arm of CTBC Financial, at 'twAA+' and 'twA-1+'. The bank's credit rating outlook remains stable, Taiwan Ratings said. Taiwan Ratings said it expects CTBC Bank to maintain its strong position in the highly competitive banking sector in Taiwan. As of the end of last year, Taiwan Life had total assets of NT$500 billion, 900,000 customers with 1.58 million valid insurance policies, and 5,500 salespeople. After the acquisition, CTBC Life Insurance (????), the insurance arm of CTBC Financial, will see estimated increases in its total assets to NT$900 billion, in its customer numbers to 1.57 million, in its number of valid insurance policies to 2.66 million, and in its sales staff to 7,200. CTBC Life is expected to become Taiwan's fourth largest life insurance company after the acquisition. (By Tien Yu-pin and Frances Huang)


Updated : 2021-09-20 01:03 GMT+08:00