The ratings on Taipeibank reflect the fact that the bank is able to maintain above-average asset quality relative to other Taiwan banks while the unfavorable Taiwan economy continues to put pressure on the quality of their assets. The ratings also reflect the bank's strong capitalization, solid franchise and its efforts to improve operating efficiency since its privatization in November 1999. While Taipeibank's business is still tied to the Taipei City government, its reliance on loans to and deposits from the Taipei City government has decreased. Over the long term, increasing competition from banks with similar product lines is likely to make it difficult for the bank to differentiate itself from other domestic commercial banks. The bank's business activities are mostly
