Taiwanese bills finance companies to be unaffected by recent COVID surge: Fitch | Asian Banking & Finance - The Latest News, Headlines, Insight, Commentary & Analysis

Taiwanese bills finance companies to be unaffected by recent COVID surge: Fitch

The country’s economic resilience has eased BFCs’ operational pressures.

Taiwanese bills finance companies (BFCs) are expected to be relatively unaffected by the recent surge in local COVID-19 cases, unless the surge starts to hurt domestic consumption and other economic activities, reports Fitch Ratings.

A BFC is a company involved in the business of certifying, underwriting, brokering, and trading short-term bills, or a debt instrument maturing within one year, according to Taiwan’s Financial Supervisory Commission.

Fitch expects the impact on Taiwan’s economic growth of the recent COVID surge to be contained.

“Strong exports in the first four months of 2021 have created upside risks to our full-year growth forecast, but the recent outbreak could offset the upside risk to our forecast if it starts to hurt domestic consumption, business activities and manufacturing and ultimately exports and domestic investment,” the ratings agency said in a media note.

Fitch believes that the operating environment for BFCs has stabilised due to Taiwan's economic resilience throughout the pandemic. This has reportedly helped to ease operational pressures on their financial profiles.

“We expect BFCs' asset quality in commercial paper guarantees and fixed-income investments to remain healthy. This, together with our expectation of no major rate hike and abundant system liquidity in Taiwan, should support stable profitability in 2021-2022,” the ratings agency said.

BFCs’ are also expected to retain capitalisation based on steady profitability and growth appetite.

Funding and liquidity profiles will also reportedly remain stable despite their heavy reliance on repo funding for fixed-income investments. This will be mitigated by the high credit quality of their fixed-income holdings and sound system liquidity.

Get Asian Banking & Finance - The Latest News, Headlines, Insight, Commentary & Analysis in your inbox
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Shares were priced at the top end, at KRW39,000 ($34).
In January, 1.2 million transactions were carried out via the SGQR.
Its launch will require legal changes to the nation’s foreign exchange and IT rules.
But less than half of consumers are impressed with the digital financial services currently offered.
Treasury teams can mobilize liquidity and fund intraday payments in real-time.
Customers have the option to pay their tax balances in full or partially.
About 750 new accounts have been opened in four APAC markets through the new portal.
UnionDigital will be a wholly-owned subsidiary of the Philippine lender.
SmartStream’s Peter Hainz and Amazon Web Services’ Anna Green shared their insights on the advantages of on-demand and highly scalable cloud environments for banks and other financial institutions, as well as the factors hindering its adoption in the region.
This August, the Asian Banking & Finance and SAP will provide insights on the evolving landscape for ESG in financial services.
Thirteen lenders noted that demand was moderately weaker than the preceding 3-month period.
Investors will likely seek signs that private lenders will be able to step up lending once COVID subsides.
It opens up new revenue models and lowers the cost-to-serve.
Bypassing credit cards, the payment instalment options prove to be attractive.
More banks and institutions are exploring its use for payments and cross-border transfers.