S&P affirms Dah Sing's profitability rating

Standard & Poor's affirmed its 'BBB+' long-term and 'A-2' short-term counterparty credit ratings on Dah Sing Bank. The outlook on the long-term rating is negative. S&P also affirmed the issue ratings on the issues under DSB's medium-term note program.
All the ratings were removed from CreditWatch, where they had been placed with negative implications on 24 July 2009. At the same time, it affirmed the 'C+' bank fundamental strength rating on DSB.

"We affirmed the ratings to reflect DSB's sound capitalisation and the fair likelihood, in our view, that the bank's profitability could be higher than our projection when we originally placed the ratings on CreditWatch. Our revised assumption is based on DSB's stronger-than-expected credit performance so far this year," said Standard & Poor's credit analyst Qiang Liao.

DSB's sound capitalisation remains a key supportive rating factor. The bank's ratio of adjusted total equity to adjusted assets improved to 8.32 percent at the end of June 2009 from 7.1 percent at the end of 2008, due mainly to its US$167.7 million capital placement in the first half of 2009. DSB's balance sheet is expanding at a much moderated pace, driven mainly by liability growth. S&P expects the bank's capital ratios to stay largely stable over the next 12 months.