Taipei Fubon Commercial Bank Co. Ltd.

The stable rating outlook reflects our view of a moderately high likelihood that the Taiwan government would provide financial support to Taipei Fubon Bank in times of financial distress, given the bank's moderate systemic importance in Taiwan's banking sector. In addition, we forecast Taipei Fubon Bank to maintain strong capitalization and satisfactory asset quality over the next one to two years. We continue to view the bank as the core member of the Fubon FHC group, given its material representation and contribution to the group. We may lower the ratings on Taipei Fubon Commercial Bank if the bank fails to sustain its capitalization at a strong level, as indicated by a risk-adjusted capital (RAC) ratio consistently below 10%, or if

...Proactive capital management support strong capitalization. In our view, Taipei Fubon Commercial Bank Co. Ltd. (Taipei Fubon Bank) will likely remain proactive in its capital management to support its various business growth strategies. The Taiwan government has identified Taipei Fubon Bank as one of the six local banks it considers to be domestic systemically important banks (D-SIBs). Therefore, the bank is likely to remain cautious in the management of its capital consumption and maintain stable earnings to support capital stability over the next one to two years. Adequate credit risk control mechanism underpins good asset quality despite above-average overseas exposure. We forecast Taipei Fubon Bank will pursue slightly higher growth than the domestic average over the next few years, with a shift toward overseas lending and small and mid-size enterprise loans. At the same time, we believe the bank will uphold its adequate credit risk controls to maintain good asset quality without incurring...

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