S&P Global Ratings lowered its outlook on to stable from positive on the back of moderating capitalization.
S&P believes the group's capitalization will deteriorateto satisfactory from strong given the high growth of its life insurance arm inthe first half of 2016. The group's capitalization is also sensitive to cashdividend distribution in the holding company, the rating agency said.
At the same time, S&P affirmed the company's issuercredit ratings at BBB/A-3, but lowered its Greater China regional scale ratingsto cnA/cnA-2 from cnA+/cnA-1.
S&P could still raise the consolidated profile and CTBCFinancial's rating if the company is able to maintain strong capitalization viaa prudent business strategy and good earnings retention.
The agency could lower the group credit profile and thecompany's rating if its subsidiaries pursue overly aggressive expansion withoutadequate capital planning or a risk management mechanism, resulting in a weakercapitalization.
S&P Global Ratingsand S&P Global Market Intelligence are owned by S&P Global Inc.