OREANDA-NEWS. Fitch Ratings has affirmed Taiwan-based E.Sun Securities Corporation's (ESS) National Long-Term Rating at 'AA-(twn) ' and its National Short-Term Rating at 'F1+(twn)'. The Outlook is Stable. ESS is a wholly owned subsidiary of E.Sun Financial Holding Company (ESFHC), of which the principal and fully owned subsidiary is E.Sun Bank (ESB).

KEY RATING DRIVERS - NATIONAL RATINGS

ESS's ratings and Outlook remain tied to the risk profile of the group, which is mainly driven by that of ESB. Fitch views ESS as a core subsidiary of ESFHC and ESFHC is legally obliged to assist ESS when it falls into financial difficulty. ESS remains highly integrated with the group in brand sharing, liquidity, capital planning and risk management. Its brokerage franchise will continue to grow through cross-selling to ESB's larger customer base.

ESB consolidated its franchise in recent years and significantly enhanced its core earnings, including strong fee income generation from its credit card business and wealth management. The risk associated with its above-average credit growth is counterbalanced by the focus on its niche segment of small and medium enterprises and institutionalised risk control mechanism. Fitch expects the bank to maintain its sound capitalisation, as its satisfactory internal capital generation should support its above-average growth in coming years.

RATING SENSITIVITIES - NATIONAL RATINGS

The ratings of ESS are sensitive to changes in the risk profile of ESFHC and ultimately ESB. Downgrade drivers will most likely come from significant deterioration in risk profile and capitalisation, as a result of above-sector growth and excessive risk-taking in more challenging economic conditions. Rating upside is limited due to slower capital accumulation from growth at ESB or ESFHC.