The continued slowdown in loan demand would not constrain the profitability of Taiwanese banks and the situation could improve next quarter when the nation’s economy comes out of the woods, Fitch Ratings said yesterday.
“Taiwanese banks’ profitability is likely to be sustained this year, despite slow growth in loan demand in the first five months of the year,” Fitch Ratings said.
Taiwan’s loan-to-deposit ratio in June dropped to 69.28 percent — its lowest level in two years — after public and private borrowers paid down debts and avoided new lending, the Financial Supervisory Commission (FSC) said on Tuesday.
Fitch said local banks’ continued improvement in profitability, stable operating environment, steady risk profiles and capital buffers supported their stable credit profiles.
Loan demand has slowed across the board, including corporate lending, mortgages and secured retail borrowings, Fitch said, attributing the phenomenon to a drop in property transactions, lackluster exports and an economic slowdown.
That explained why the banking sector’s total loan balance in the first five months edged up only 1 percent from the end of last year, it said.
The government significantly paid down its debts in June after collecting hefty corporate and personal income taxes, the FSC said.
Corporate borrowers also cut debt positions, especially at offshore banking accounts that demanded relatively high interest rates, the FSC said.
Fitch said it expects loan demand to pick up in the fourth quarter and next year, as the economy improves.
The recovery would be particularly evident in corporate and offshore lending, it said, adding that domestic retail borrowing, such as mortgages, might see a modest recovery.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS