Global ratings agency Fitch Ratings yesterday assigned a long-term foreign currency issuer default rating (IDR) of AA- and national long-term rating of AAA to Citibank Taiwan Limited (花旗台灣商銀), a fully owned subsidiary of Citibank NA.
The ratings reflect Citibank Taiwan’s successful integration, as well as the parent company’s strong capacity to provide strong management and financial support, a Fitch Ratings statement said.
The ratings are the highest corporate ratings Fitch has assigned in Taiwan and in line with those assigned to its parent Citibank, the statement said.
“We recognize that Citibank Taiwan will soon become an integral part of the parent group with a complete balance sheet,” Fitch Ratings analyst Renee Tsai (蔡女鈺) said by telephone yesterday.
No Taiwanese bank has received more than a single A rating since they are also capped by Fitch’s A+ sovereign rating for the country, Tsai said.
After acquiring the Bank of Overseas Chinese (華僑銀行) late last year, Citibank Taiwan is now in the midst of a major organizational restructuring, which is expected to be completed by the middle of next year, Fitch said.
Citigroup Inc will remodel Citibank Taiwan to focus on consumer banking and small and medium-sized enterprises, while spinning off Citibank Taiwan’s large corporate portfolio to Citibank.
Supported by Citigroup’s in-depth product experience and management input, Fitch also expects Citibank Taiwan to effectively revitalize its previously underdeveloped local franchise by the middle of next year, Tsai said.
At the end of last year, Citibank quickly rebuilt Citibank Taiwan’s once tarnished capital base by pouring in US$1.5 billion, which Fitch said provided a solid level of capital to support the subsidiary’s aggressive write-downs last year.
Fitch Ratings, however, assigned a negative outlook rating to Citibank Taiwan — in line with that of its parent company.
Although Fitch has a positive view on Citibank Taiwan, “whose finances outperform its US-based parent group, its outlook rating is inevitably capped by the same negative outlook rating for its parent Citigroup,” Tsai said.