Fitch says banks may face weak 2016 profitability

INVESTMENT DESERT?The ratings agency said the economic landscape is unfavorable for credit risks, which should begin to return to normal this year

Taipei Times
Date: Jan 21, 2016
By: Crystal Hsu  /  Staff reporter

The profitability of Taiwanese banks might weaken this year from last year due to lower loan demand and interest spreads, with higher credit costs amid wild financial market volatility, Fitch Ratings said yesterday.

On average, the sector could achieve a return-on-asset ratio of 0.5 percent to 0.6 percent this year, compared with a range of 0.6 percent to 0.7 percent last year, Fitch Taiwan’s financial analyst Jenifer Chou (周筱娟) said.

“We believe [the sector’s] profitability peaked in 2014… Credit costs are likely to climb higher this year, while lending operations moderate from rapid growth as recorded by their branches in China,” Chou said.     [FULL  STORY]

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