Moody's may cut Cathay Financial

Moody's Investors Service said it placed on review for possible downgrade the A3 long-term issuer rating of Cathay Financial Holding Co Ltd., the A1 insurance financial strength rating of Cathay Life Insurance Co. Ltd. and the A1 long-term deposit rating and A2 subordinated debt rating of Cathay United Bank.

Moody's also said it affirmed the A2 insurer financial strength rating of Cathay Century Insurance Co. Ltd. and the C- bank financial strength rating and prime-1 short-term deposit rating of Cathay United Bank.

The outlook remains stable.

This action follows news of the third quarter results of Cathay Financial and its subsidiaries. The action is driven by the significant deterioration in Cathay Life's capital adequacy and profitability due to exposures to domestic and overseas equity markets and the possible continued deterioration in market conditions, Moody's said.

The agency said it believes that Cathay Life's weakened profitability and lower level of capital adequacy may no longer support the current A1 rating.

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