A move by Taiwan’s financial regulator to require the nation’s banks to increase their general provisions for non-performing loans is a “credit positive” development to the whole sector, Moody’s Investors Service said yesterday.
The ratings agency said the Financial Supervisory Commission’s recent call for comments on a new policy — asking domestic banks to raise their provisions to at least 1 percent from the current 0.5 percent of performing loans — would improve banks’ ability to absorb losses during a downturn.
“That is particularly important given that Taiwanese banks’ profitability is among the lowest of Asian peers, which makes them susceptible to significant loan defaults,” Moody’s analyst Ginger Kao (高玟君) said in a statement.
The commission last year released guidance for the higher provision to local lenders, along with a one-year grace period for them to comply, while regulators in other Asian economies, such as Hong Kong, Singapore and the Philippines, have required a minimum general provision of 1 percent in order to ensure capital adequacy.
Kao said that Taiwanese banks which have been rated by Moody’s mostly achieved the 1 percent regulatory threshold for provisions by the end of last year, except for the Bank of Taiwan (BOT, 台灣銀行).
The bank would be most pressured to improve its provisions this year and may need additional reserves of between NT$1.5 billion and NT$2 billion, or between 13 percent and 17 percent of its pre-provision income last year, she said.
In late August, Moody's issued an average "A2" long-term deposit rating on the 10 rated banks in Taiwan, which is the eighth-highest of 10 investment-grade ratings, with a stable outlook for the local banking system.
As of the end of November last year, the nation’s 39 lenders reported an average non-performing loan ratio of 0.41 percent, down from 0.43 percent the previous month.
The coverage ratio — which gauges the sufficiency of the lender’s reserves covering bad debt — increased by 11.48 percentage points to 285.72 percent over the same period, according to the commission’s data.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained