Taiwan Ratings Corp (中華信評) yesterday revised its outlook for the long-term ratings of China Development Financial Holdings Co (中華開發) and its core subsidiaries to stable from negative on their improving earnings and strong capitalization.
The ratings agency, a local arm of Standard & Poor’s, said in a statement that earnings at China Development Industrial Bank (中華開發銀行), the core business of the group, had gradually recouped from the global financial crisis.
The lender reported a 2.88 percent return on assets in the first nine months of this year, widening from 2.4 percent and 0.33 percent last year and in 2008 respectively, as a result of the economic recovery and improving risk control in investment portfolio adjustment, Taiwan Ratings said.
“The improvement in [the parent company’s] core earnings is likely to be sustainable for the next two years and its strong -capitalization will remain as a good buffer to financial volatility,” the agency said.
The ratings also reflected China Development Financial’s strong capitalization and its leading position in Taiwan’s venture capital industry as well as its strong funding and liquidity, Taiwan Ratings added.
The lender’s risk-adjusted capital ratio stood at 11.7 percent as of June 30, based on Standard & Poor’s framework, higher than most local and global peers, the ratings firm said.
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