Chang Hwa's rating cut to junk

Chang Hwa Commercial Bank (彰化銀行), Taiwan's sixth-largest lender by assets, had its long-term local currency credit rating cut one level to speculative grade from investment grade by Standard & Poor's. The rating was cut to Bbpi from BBBpi because of "a persistently high level of non-performing loans and a low level of loan loss provisions, which have continued to weaken the bank's capitalization," S&P said in its statement. The bank in the first half turned to a net loss of NT$18.8 billion (US$561 million) from a net income of NT$989.3 million a year ago after writing off bad loans. Ratings with a "pi" subscript are based on published financial information. They don't reflect in-depth meetings with management.