June 23, 2014 / 4:17 AM / 3 years ago

Fitch Affirms Taiwan's E.Sun Securities at 'A+(twn)'

(The following statement was released by the rating agency) TAIPEI/SINGAPORE, June 23 (Fitch) Fitch Ratings has affirmed Taiwan-based E.Sun Securities Corporation's (ESS) National Long-Term Rating at 'A+(twn) and its National Short-Term Rating at 'F1+(twn)'. The Outlook is Stable. ESS is a wholly owned subsidiary of E.Sun Financial Holding Company (ESFHC), of which the principal and fully owned subsidiary is E.Sun Bank (ESB). KEY RATING DRIVERS - NATIONAL RATINGS ESS's ratings and Outlook remain tied to the risk profile of the group, which is mainly driven by that of ESB. Fitch views ESS as a core subsidiary of ESFHC and ESFHC is legally obliged to assist ESS when it falls in financial difficulty. ESS remains highly integrated with the group and its brokerage franchise will continue to grow through cross-selling to ESB's larger customer base. ESB consolidated its franchise in recent years and improved its earnings by cross-selling non-loan products, mainly credit card and wealth management. The bank grew its loan book at 10% compound annual growth rate in 2010-2013 primarily to its niche segment of small and medium enterprises. Fitch expects the bank to maintain adequate capitalisation at around 11% Fitch Core Capital Ratio, after a rights issue of TWD9.56bn in 2Q14 and adjusting greater capital charges for mortgages in Taiwan. The bank's improved core earnings should support its organic growth in coming years. RATING SENSITIVITIES - NATIONAL RATINGS ESS' ratings are sensitive to changes in the risk profile of ESFHC and ultimately ESB. The ratings may benefit from ESB's strengthened franchise and a sustained improvement in earnings and capitalisation. Downward rating pressures may result from a weakened risk profile and capitalisation caused by ESB's growth strategy in high-risk emerging markets. A Credit Update on ESS will be available shortly at www.fitchratings.com. Contact: Primary Analyst Cherry Huang, CFA Director +886 2 8175 7603 Fitch Ratings Limited, Taiwan Branch Suite 1306, 13F, Tun Hwa N. Rd., Taipei Secondary Analyst Jack Chiu Associate Director +886 2 8175 7606 Committee Chairperson Tim Roche Senior Director +61 2 8256 0310 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 1 January 2014, 'National Scale Ratings Criteria', dated 30 October 2013, and "Securities Firms Criteria", dated 31 January 2014 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here National Scale Ratings Criteria here Securities Firms Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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