Banking sector to face new challenges

PREPARED:Despite the obstacles that await Taiwanese lenders, they are considered to have adequate capitalization and liquidity, a credit analyst for Taiwan Ratings said

Taipei Times
Date: Feb 22, 2016
By: Staff writer, with CNA

In an environment where interest rates have been trending lower, Taiwan’s banking sector is expected to face more challenges and see its profitability weaken this year, according to Taiwan Ratings Corp (中華信評), a local partner of US-based Standard & Poor’s Financial Services LLP.

To boost the economy, the central bank cut key interest rates twice late last year, which is expected to exacerbate pressure on the banking sector’s interest spreads this year and hurt its bottom line, the ratings agency said.

Last year, Taiwan’s economy grew only 0.75 percent from a year earlier, compared with a year-on-year increase of 3.92 percent in 2014, after contracting 0.80 percent and 0.52 percent in the third and fourth quarters respectively.     [FULL  STORY]

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