The ratings on Taipeibank reflect its above average asset quality, satisfactory market position, good capitalization, and membership in the Fubon Financial Holding Co. Ltd. (Fubon FHC, BBB/Stable/A-3) group. These factors are partly offset by the competitive nature of Taiwan's banking sector and the bank's profitability, which is only moderate by international standards. Taipeibank's asset quality has been helped by a concentration of credit exposure in Taipei City, where the economy has fared better than those of other Taiwan cities in recent years. The quality of Taipeibank's credit portfolio is above average, its ratio of nonperforming assets to gross loans improved to 2.4% as of September 2004 from 3.1% as of December 2003. Taipeibank's market position is satisfactory, given its relatively
