The rating on Taipeibank reflects its ability to maintain good asset quality amid the stresses facing the local banking industry, solid capitalization, and conservative liquidity management. The bank is taking advantage of its new flexibility, which was brought about by its privatization in November 1999, to strengthen its competitiveness and overall performance. Concerns over the bank's geographical concentration in Taipei are partially alleviated by Taipei city's stronger and more balanced economic performance compared with other areas in Taiwan. Profitability, however, remains subdued because of a less-than-efficient expense structure and low rates on city government-related loans. The bank's asset quality is among the best of all domestic banks, reflected by an impaired assets ratio less than half the market average. This
