Fitch: Yuanta on watch

Fitch Ratings said it placed most of the ratings of Yuanta group, including Yuanta Financial Holding Co., Ltd. and its subsidiaries – Yuanta Securities Co., Ltd. and Yuanta Commercial Bank Co., Ltd. – on Rating Watch negative.

The negative watch follows news that Yuanta Financial will acquire all the shares of Ta Chong Bank in a transaction valued at NT$56.6 billion.

Although there is scope to enhance the group’s banking franchise and synergies, Fitch said it expects the group’s financial flexibility to be weakened by the transaction, which is likely to be financed through a mix of capital and debt and share issuance at Yuanta Financial.

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