Fitch cuts Bank SinoPac view to negative

Fitch Ratings said it revised the outlook of Bank SinoPac's ratings to negative from stable and affirmed its long-term foreign-currency issuer default rating at BBB+, short-term foreign-currency issuer default rating at F2, national long-term rating at AA-(twn) and national short-term rating at F1+(twn).

The agency also said it revised the outlook of its parent, SinoPac Financial Holdings, to negative from stable and affirmed its long-term foreign-currency issuer default rating at BBB, short-term foreign-currency issuer default rating at F3, national long-term rating at A+(twn) and national short-term rating at F1(twn).

The agency also said it affirmed SinoPac Securities' long-term foreign-currency issuer default rating at BBB, short-term foreign-currency issuer default rating at F3, national long-term rating at A+(twn) and national short-term rating at F1(twn).

The downgraded outlook reflects the bank' notably weakened internal capital generation due to sharply compressed interest margins on its mortgage-concentrated loan portfolio, Fitch said. Also, the consecutive losses in 2007 through 2008 points to weaknesses in the bank's internal control and risk management, the agency said.

The group's ratings could be lowered if the bank's core profitability, capitalization or asset quality deteriorates, the agency said.

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