Fitch: Taiwan Bank Mergers Unlikely to Change Market Landscape

April 8, 2015 6:57 AM

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(The following statement was released by the rating agency) TAIPEI/SINGAPORE, April 08 (Fitch) The Taiwanese government's efforts to promote consolidation between several state banks, while enabling them to compete better in Asia, will not necessarily resolve the sector's structural weaknesses - including thin margins and moderate capitalisation, says Fitch Ratings.

State banks, with an aggregate 50% market share by assets, tend to be less commercially oriented, which leads to depressed loan pricing and weaker margins than their private-sector counterparts. Surplus liquidity alongside weak domestic credit demand has contributed further to the sector's thin marg...

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