Taiwanese financial institutions will be facing an uphill battle to raise additional capital this year, following their disappointing operations last year amid the global financial crisis, Taiwan Ratings Corp (中華信評), a local arm of Standard & Poor’s, said yesterday.
“Taiwan’s financial institutions will likely face continuing and sizeable challenges to restore their key financial metrics in 2009,” Taiwan Ratings’ credit analyst Susan Chu (朱素徵) said in a statement.
Chu’s remark came as the ratings agency published a report titled Taiwan Financial Services 2009 Ratings Outlook: Nowhere To Shelter.
The report said the ratings outlook for the Taiwanese banking and life insurance sectors was negative, Chu said, citing concerns about local financial institutions’ capabilities to cope with the rising credit and market risks.
“All financial institutions must respond proactively to the new economic and operating conditions under which the need to restore capitalization to satisfactory levels and enhance their risk management takes on renewed importance,” Chu said.
Taiwan Ratings said the government would likely maintain its strong commitment to stabilizing the financial system, but weaker players would still face “flight to quality” pressures as investors look for better and safer investments for their money.
“We expect economic recession to continue throughout 2009, accompanied by rising credit costs, softening investment markets and depressed revenue sources,” Chu said.
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NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
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