HSBC Bank Taiwan aims to increase its loans to large corporations this year as current low interest rates allow them to obtain cheap long-term capital that may be used for refinancing or expansions later, commercial banking head Stanley Hsiao (蕭仲程) said on Wednesday.
“I don’t think borrowing costs will drop further or stay unchanged for long,” Hsiao said.
Companies may want to replace existing debts with new loans that charge lower interest rates, or lock up long-term funds for business expansions when the macro-environment turns more favorable, said Hsiao, who assumed his present position in September last year.
By large corporation, Hsiao said he meant companies with annual revenues of NT$15 billion (US$501.42 million) or more.
While other lenders are seeking to strengthen lending to small and medium-sized enterprises to boost their overall interest margin, HSBC prefers a balanced approach, Hsiao said, adding that higher interest premiums usually carry higher credit risks that may not prove profitable in the end.
Hsiao is upbeat about the bank’s yuan business, saying many customers have plans to turn parts of their assets into the Chinese currency and related investment products.
“The trend will become more evident when more yuan-linked products hit the market,” he said.
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