Fitch Ratings has upgraded the outlook for Taiwan’s banking sector to “neutral” from “deteriorating,” citing a tariff agreement with the US that has reduced uncertainty in Taiwan’s macroeconomic environment and stabilized financial performance.
The US on Jan. 15 agreed to lower tariffs on Taiwanese goods from 20 percent to 15 percent, without stacking them on existing most-favored-nation rates, placing Taiwan on equal footing with major competitors such as Japan, South Korea and the EU.
The deal also grants Taiwan-made semiconductors and related products most-favorable-nation treatment under Section 232 of the US Trade Expansion Act.
Photo: Reuters
Under the agreement, Taiwanese semiconductor, electronics manufacturing service, artificial intelligence and energy companies would invest US$250 billion in the US based on their own plans, while the Taiwanese government would provide US$250 billion in credit guarantees to facilitate the investments.
“US tariff-related risks to Taiwan’s GDP growth have subsided following the trade agreement, offering relief for Taiwan’s export-oriented economy,” Fitch said in a statement on Wednesday last week.
“We expect more stable economic conditions to reinforce Taiwan’s bank operating environment, with sector asset quality and profitability likely to be stronger than we previously forecast,” it added.
Fitch expects the Taiwanese banking sector to maintain an impaired loan ratio below 1 percent, compared with the 1.2 percent it previously forecast, the statement said.
The ratio is estimated to stand at 0.7-0.8 percent last year.
The rating agency also expects the banking sector’s operating profit-to-risk-weighted-assets ratio to remain stable at about 1.5 percent this year, exceeding its earlier forecast of 1.2 percent, supported by robust lending income and fees, as well as lower credit costs.
The banking sector is forecast to report loan growth in the high single digits this year, an upgrade from Fitch’s previous estimate of about 5 percent, driven by increased overseas investment and corporate credit demand, it said.
Market sentiment is also expected to improve, supporting wealth management fees and the sector’s overall bottom line, Fitch added.
NEW MARKET: The partnership opens up India to the Dutch company, which already has a strong hold in the semiconductor market of South Korea, Taiwan and China ASML Holding NV entered into a partnership agreement with Tata Electronics Pvt Ltd aimed at ramping up India’s goal to develop domestic chip-manufacturing capabilities. The Dutch company’s technology would help power Tata Electronics’ planned 300 millimeter (mm) semiconductor foundry in Gujarat, according to a joint statement from the two companies on Saturday. The signing of a memorandum of understanding coincides with a visit by Indian Prime Minister Narendra Modi to the Netherlands, which is looking to deepen bilateral relations with New Delhi. ASML, whose top customers include Taiwan Semiconductor Manufacturing Co (台積電) and Samsung Electronics Co, makes lithography machines that can print
ROUGH RECORDS: Bonds in Japan, as well is in New Zealand, Australia and the US, are seeing the effects of a nervy market as stock exchanges across Asia edge down A deepening slump in Japanese government bonds added fuel to the selloff in global debt markets as rising oil prices stoked inflation fears and pushed yields to multi-decade highs. Japan’s 30-year yield yesterday surged as much as 20 basis points to the highest level since the tenor’s debut in 1999, before paring some of the move. Shorter-maturity Japanese debt was also under pressure, underscored by weak demand at a sale of five-year notes that offered a record-high coupon of 2 percent. Concerns over inflation and government spending rippling through markets including the US, Australia and New Zealand are being amplified in Japan,
The US has cleared about 10 Chinese firms to buy Nvidia Corp’s second-most powerful artificial intelligence (AI) chip, the H200, but not a single delivery has been made so far, three people familiar with the matter said, leaving a major technology deal in limbo as chief executive officer Jensen Huang (黃仁勳) seeks a breakthrough in China this week. Huang, who was not initially listed in a White House delegation to Beijing, joined the trip after an invitation from US President Donald Trump, a source said. Trump picked him up in Alaska en route to a summit with Chinese President Xi Jinping
Wall Street is licking its chops over an unprecedented slate of massive initial public offerings (IPOs) set to arrive in the coming months, beginning with Elon Musk’s Space Exploration Technologies Corp (SpaceX) next month. That is expected to be followed by artificial intelligence (AI) rivals OpenAI and Anthropic PBC. The trio of mega listings, each eyeing valuations around US$1 trillion or more, constitutes a heady period of elevated risk and reward. SpaceX is targeting an IPO that would raise up to US$80 billion — about double the funds generated from all IPOs last year. OpenAI and Anthropic are eyeing IPOs raising US$60 billion. “We’re
RSS