Domestic banks and securities firms are strengthening fee-based businesses to support revenue growth and cushion potential market volatility, a report by Taiwan Ratings Corp (中華信評) said.
Taiwanese lenders have steadily expanded fee income in the past few years — particularly from wealth management and credit card services — as they seek to diversify revenue beyond traditional lending, the credit ratings agency said.
“Taiwanese banks reported strong fee income growth in 2024 and 2025, which we expect to continue over the next few quarters,” Taiwan Ratings credit analyst Eunice Fan (范維華) said.
Photo: Wu Hsin-tien, Taipei Times
Banks are increasingly promoting fee-based services, with wealth management momentum and rising credit card spending expected to remain the main drivers of fee growth this year and beyond.
A higher contribution from fee income could help offset the impact of rising credit costs and potential fluctuations in interest rates, Fan said.
Banks operating under financial holding companies tend to generate a larger share of fee-based revenue, benefiting from group resources and cross-selling opportunities across banking, securities and insurance subsidiaries, the local arm of S&P Global Ratings said.
Such integration provides additional support to the traditionally low-margin and highly competitive deposit-taking and lending business.
In the securities sector, brokerage operations remain the primary source of income, although wealth management services are gradually becoming a more significant contributor to revenue, the report said.
The combination of stable brokerage income and growing wealth management fees could help securities firms absorb potential trading losses during periods of heightened market volatility, Fan said.
The agency also compared banks’ annual fee income with credit provisions, as well as fee income and trading gains among rated securities firms.
The analysis suggests that stronger fee income can provide financial institutions with a buffer against economic and market volatility.
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