Insurance acquisition will not weaken CTBC Financial’s credit profile

May 18 2015 by InsuranceAsia News Staff

CTBC Financial Holding’s decision to acquire Taiwan Life Insurance through a USD2bn stock swap deal is unlikely to weaken its credit profile, Taiwan Ratings said in a report.

In a statement, Taiwan Ratings, a local partner of Standard & Poor’s Ratings, said CTBC Financial’s outlook remained stable after the announcement that it would acquire Taiwan life Insurance Co.

The deal, which is scheduled to be completed by the end of this year, is valued at NT32.35bn (USD1.06bn). Taiwan Ratings affirmed CTBC Financial’s long-term and short-term issuer credit rating of “twAA-” and twA-1+”.

The ratings affirmation was based on expectations that CTBC Financial, a Taiwan-based financial holding company, would maintain most of its key risk characteristics over the next one to two years.

An earlier report said the acquisition would boost the market share of CTBC’s life insurance arm, CTBC Life Insurance, making it Taiwan’s fourth largest life insurer with a 10.1% market share.

MORE FROM: Capital Markets