ANZ Bank (Taiwan) Ltd. 'A+/A-1' Ratings Placed On CreditWatch Positive On Planned Merger With Parent Branch

  • On Oct. 18, 2018, Taipei-based ANZ Taiwan announced its plan to merge into ANZ Taipei Branch, with the branch as the sole surviving entity.
  • Our long-term rating on the branch is generally equivalent to the long-term rating on the group, whereas the rating on ANZ Taiwan is one notch lower than the group rating, given the bank's highly strategic status.
  • We are placing our 'A+/A-1' ratings on ANZ Taiwan on CreditWatch with positive implications.
MELBOURNE (S&P Global Ratings) Nov. 19, 2018--S&P Global Ratings said today it 
had placed its 'A+' long-term and 'A-1' short-term issuer credit ratings on 
ANZ Bank (Taiwan) Ltd. on CreditWatch with positive implications.

"The CreditWatch listing follows ANZ Taiwan's announcement that it plans to 
merge into Australia and New Zealand Banking Group Limited (ANZ) Taipei 
Branch, with the branch surviving as the sole entity after the merger," said 
S&P Global Ratings credit analyst Lisa Barrett.

We generally rate bank branches at the same level as the group credit profile. 
The long-term rating on ANZ Taiwan is one-notch below ANZ's supported group 
credit profile, given ANZ Taiwan's role as a highly strategic subsidiary.

The ratings on ANZ Taiwan continue to reflect our assessment of strong 
implicit support from ANZ in times of need and under most circumstances. The 
ratings also reflect ANZ Taiwan's very strong capitalization, stronger 
liquidity than the industry average, and prudent risk management that follows 
the group standard. ANZ Taiwan's small domestic market share and narrow 
business focus compared with other foreign banks in Taiwan temper these 
strengths. The date of the merger is set for April 8, 2019, subject to local 
regulatory approval.

"The CreditWatch reflects a possible upgrade for ANZ Taiwan by one notch if 
the bank completes the merger as planned," added Ms. Barrett. "We could also 
raise the rating on ANZ Taiwan if the bank attains core group status or 
contributes more than 5% of the group's assets, equities, and profits, while 
maintaining its high integration with the group and operates in line with the 
group's strategy."

We could affirm the ratings on ANZ Taiwan with a negative outlook if the 
merger does not materialize as planned because it fails to attain regulatory 
approval within the necessary timeframe.

Conversely, we could lower the long-term rating on ANZ Taiwan if we lower our 
rating on ANZ group and the merger does not materialize as planned.
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