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First Financial ratings upgraded after rights issue

First Financial ratings upgraded after rights issue

Taipei, Oct. 10 (CNA) Taiwan Ratings Corp. has raised its credit ratings for First Financial Holding Co. (???), saying the financial holding firm's capitalization has improved after a recent rights issue. Taiwan Ratings, a local partner of U.S.-based Standard & Poor's, said that after taking First Financial's stronger capital position into account, it upgraded the financial institution's outlook to "stable" and lifted its long-term credit rating higher to "twAA-" from "twA+." The ratings agency also raised the long-term credit rating for First Commercial Bank (??), the main banking unit of First Financial, to "twAA+" from "twAA" and the bank's outlook to "stable." First Financial "completed a fundraising drive through a rights issue in September and injected NT$20 billion (US$608 million) into First Commercial Bank to strengthen the bank's capitalization and support its overseas growth," Taiwan Ratings said. Last month, First Financial issued 1.6 billion new shares at NT$14.2 each to raise a total of NT$23.52 billion. First Financial said it injected NT$20 billion into First Commercial Bank to raise the bank's capital adequacy ratio (CAR). According to First Financial, the CAR of First Commercial Bank -- the financial holding company's main profit engine -- has risen to 13.77 percent from 12.36 percent, and its tier one CAR has grown to 11.03 percent from 9.46 percent. Taiwan Ratings also raised the long-term credit rating for First Securities Inc. (?????) to "twAA-" from "twA+." The ratings agency said the move to raise the credit ratings for First Financial and its key subsidiaries reflected the improvement of the group's capital structure to "a strong level." In terms of First Commercial Bank, Taiwan Ratings said it had faith the bank "should be able to maintain its strong capitalization even considering its expansion plans over the next two years." Taiwan Ratings said First Commercial Bank's risk-adjusted capital ratio (RAC) is expected to rise to 10.5 percent in 2016-2107, compared with 9.8 percent recorded at the end of 2014, after the capital injection. The higher anticipated RAC will also likely benefit from the bank's planned investments in China and Southeast Asia and mid-single-digit loan growth, Taiwan Ratings added. In response, First Financial said the group will continue its strategy to extend its reach into China and the ASEAN (Association of Southeast Asian Nations) region in the future. The financial holding company said it is still seeking acquisition opportunities to further expand its size and better compete with its counterparts in the region. (By Tien Yu-pin and Frances Huang)


Updated : 2021-09-17 02:22 GMT+08:00