Fitch Ratings said on Saturday that it has upgraded the credit rating of Citibank Taiwan, a local subsidiary of the US financial giant Citibank, based on its strong bottom line and high potential for growth.
In a statement, the ratings company said it upgraded the bank’s long-term foreign currency issuer default rating (IDR) to “A+” from “A” and its short-term foreign currency IDR to “F1+” from “F1.”
Fitch also raised Citibank Taiwan’s national long-term rating to “AAA (twn)” from “AA+(twn)” and maintained its national short-term rating at “F1+(twn).”
All of Citibank Taiwan’s ratings remained on “rating watch negative” in line with its parent, Fitch said, adding that any rating action on the parent company would likely trigger a similar action on the Taiwan unit.
Citibank Taiwan “continued to be seen by its parent as one of the group’s core universal banking franchises based on (its) strong execution and earnings power,” Fitch said.
“Taiwan is also identified as one of the few key markets with high growth potential,” it added.
Describing Citibank Taiwan as a top performer in the local banking industry for years, Fitch said the bank’s strong track record helped it weather a global financial crisis and make an acquisition of financially troubled Bank of Overseas Chinese during the 2008-2009 period.
Fitch said it expects Citibank Taiwan “to maintain robust earnings with diversified franchise in both corporate finance and retail banking and to preserve its prudent risk management against a favorable economic backdrop.”
According to Fitch, Citibank Taiwan, which runs 65 branches nationwide, accounted for 2.3 percent of the total deposits in the local banking system at the end of 2010.
The bank’s non-performing loan ratio fell to 0.44 percent at the end of 2010 from 1.44 percent a year earlier, Fitch said.