Fitch Ratings has affirmed DBS Bank (Taiwan) Ltd.'s Long-Term Issuer Default Rating (IDR) at 'AA-' and its National Long-Term Rating at 'AAA(twn)'.

The Outlook is Negative. The ratings have been removed from Rating Watch Negative.

At the same time, Fitch has affirmed DBS Taiwan's Short-Term IDR at 'F1+', National Short-Term Rating at 'F1+(twn)' and Support Rating at '1'.

The ratings actions follow the rating actions on its parent DBS Bank Ltd. (DBS, AA-/Negative/aa-), on 28 September 2020. See 'Fitch Affirms DBS Group's IDRs at 'AA-; Outlook Negative; Off RWN' at https://www.fitchratings.com/site/pr/10137525.

KEY RATING DRIVERS

IDRS, NATIONAL RATINGS AND SUPPORT RATING

DBS Taiwan's IDRs and Support Rating reflect Fitch's belief of a high probability that DBS will extend extraordinary support to its Taiwanese subsidiary, if needed. We believe the reputational damage in the market would be huge if support were not extended to the Taiwanese subsidiary when needed.

DBS Taiwan is wholly owned by DBS and accounts for about 4% of the group's consolidated total assets. Therefore, any required support would be immaterial to DBS. Ordinary liquidity and capital support from the parent to the Taiwan subsidiary have been evident. We expect capital support from the parent to be forthcoming when needed, so that the subsidiary will maintain a sound capital buffer above the regulatory minimum requirement. DBS Taiwan is well-integrated with the parent in terms of their shared brand name, strategic objectives, product platform, infrastructure monitoring, as well as policies and standards of operations.

DBS Taiwan's Long-Term Foreign-Currency IDR is on a par with Taiwan's Long-Term Local-Currency IDR of 'AA-', and corresponds to a 'AAA(twn)' rating for the bank on the National Rating scale. The 'AAA(twn)' rating is at the highest end of the national rating scale, reflecting extremely low default risks relative to domestic issuers in Taiwan. The Negative Outlook on the national rating is aligned with that on the bank's Long-Term IDR.

Fitch has not assigned a Viability Rating to DBS Taiwan due to its strong business and operational integration with DBS and the absence of a meaningful standalone franchise.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

An IDR upgrade is unlikely given the Negative Outlook on DBS Taiwan and its parent DBS. A revision of the Outlook on the Long-Term IDR on parent DBS to Stable will have a similar impact on the Long-Term IDR and National Long-Term Rating of DBS Taiwan. The bank's national ratings and Support Rating are already at the top end of the scales and there is no upside.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Downgrades on DBS Taiwan's IDRs and National Ratings will arise from any negative rating action on DBS's IDRs and Viability Rating. They could also result from Fitch's belief that the parent's propensity to support DBS Taiwan has diminished because of strategic considerations, and this may affect the Support Rating if the change in propensity is significant.

DBS Taiwan's National Ratings are also sensitive to changes to Taiwan's sovereign ratings, as National Ratings are assessed using the full range of the national scale based on a comparative analysis of issuers rated under the same national scale to establish a relative ranking of credit worthiness. Therefore, DBS Taiwan's credit worthiness relative to local issuers may be affected if there was a change to Taiwan's Long-Term IDRs.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579]

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

DBS Taiwan's IDR is directly linked to DBS's Viability Rating-driven IDR.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg

RATING ACTIONS

ENTITY/DEBT	RATING		PRIOR
DBS Bank (Taiwan) Ltd.	LT IDR	AA- 	Affirmed		AA-
ST IDR	F1+ 	Affirmed		F1+
Natl LT	AAA(twn) 	Affirmed		AAA(twn)
Natl ST	F1+(twn) 	Affirmed		F1+(twn)
Support	1 	Affirmed		1

VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

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