Fitch Affirms DBS Hong Kong and DBS Taiwan at 'AA-'/Stable
(The following statement was released by the rating agency) HONG KONG/TAIPEI, February 13 (Fitch) Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of DBS Bank (Hong Kong) Limited (DBSHK) and DBS Bank (Taiwan) Ltd (DBS Taiwan) at 'AA-'. At the same time, the agency has affirmed DBS Taiwan's National Long-Term Rating at 'AAA(twn)'. The Outlooks are Stable. A full list of rating action is at the end of this commentary. KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SUPPORT RATINGS The affirmation reflects Fitch's belief that the strong ability and propensity of DBS Bank Ltd. (DBS, AA-/Stable) to support its wholly owned subsidiaries in Hong Kong and Taiwan will continue. The IDRs and Outlooks on DBSHK and DBS Taiwan remain aligned with those of DBS, on the basis that both banks remain DBS's core subsidiaries. This is underpinned by a high level of management, business and operational integration. Fitch expects both entities to continue supporting DBS's expansion strategy in greater China. DBSHK's assets accounted for 135% of DBS's equity at end-June 2016 and the bank is a key and integral part of DBS, with a sound record of profit contribution to the group. DBS Taiwan's assets accounted for 35% of DBS's equity and the bank benefits from support such that DBS maintains its reputation. The Support Rating of '1' for both subsidiaries reflects Fitch's view of an extremely high probability of support from the parent, if needed. DBS Taiwan's National Long-Term Rating is at the highest level on the national rating scale and reflects DBS's strong credit profile relative to other Taiwanese credit. Fitch has not assigned Viability Ratings to either bank due to their strong business and operational integration with DBS. RATING SENSITIVITIES IDRS, NATIONAL RATINGS AND SUPPORT RATINGS DBSHK and DBS Taiwan's IDRs and Support Ratings are sensitive to Fitch's assumptions around the ability or propensity of DBS to extend extraordinary support. Rating action on DBS could trigger similar action on DBSHK's and DBS Taiwan's IDRs. DBS Taiwan's National Long-Term Rating would be downgraded if DBS's Long-Term IDR was downgraded to below Taiwan's sovereign rating (AA-/Stable). There is no rating upside for the National Ratings, as they are already at the highest point of the scale. The rating actions are as follows: DBS Bank (Hong Kong) Limited Long-Term Foreign-Currency IDR affirmed at 'AA-'; Outlook Stable Short-Term Foreign-Currency IDR affirmed at 'F1+' Support Rating affirmed at '1' DBS Bank (Taiwan) Ltd Long-Term IDR affirmed at 'AA-'; Outlook Stable Short-Term IDR affirmed at 'F1+' National Long-Term rating affirmed at 'AAA(twn)'; Outlook Stable National Short-Term Rating affirmed at 'F1+(twn)' Support Rating affirmed at '1' Contact: Primary Analyst Sabine Bauer (DBSHK) Senior Director +852 2263 9966 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central Hong Kong Jenifer Chou, CFA, FRM (DBS Taiwan) Director +886 2 8175 7605 Fitch Australia Pty Ltd, Taiwan Branch Suite 1306, 13F, 205, Tun Hwa N. Rd. Taipei, Taiwan Secondary Analyst Ivan Lin, CFA (DBSHK) Associate Director +852 2263 9984 Sophia Chen, CFA, CPA (DBS Taiwan) Director +886 2 8175 7604 Committee Chairperson Ambreesh Srivastava Senior Director +65 6796 7218 Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(twn)' for National ratings in Taiwan. Specific letter grades are not therefore internationally comparable. Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. 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