Taiwan's Commercial Banks Likely to Outpace Japanese Counterparts on Reform

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Last updated at: (Beijing Time) Thursday, May 15, 2003

Taiwan's Commercial Banks Likely to Outpace Japanese Counterparts on Reform

Standard & Poor's Ratings Services said here Wednesday that Taiwan's commercial banks are likely to outpace their Japanese counterparts in their ongoing attempts at reform.

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Standard & Poor's Ratings Services said here Wednesday that Taiwan's commercial banks are likely to outpace their Japanese counterparts in their ongoing attempts at reform.

In a new publication titled "Taiwan Banking Outlook 2003", the ratings agency says that Taiwan's banks have an edge over their counterparts in Japan in terms of capitalization.

Taiwan's banks and their regulators appear to be moving more swiftly than their Japanese counterparts in terms of emerging fromdenial and facing their respective challenges, it says.

The report also indicates that Taiwan's newly emerging financial holding companies are already putting substantial pressure on many of Taiwan's smaller, independent banks, insurers and securities companies.

The report points to a substantial increase in overseas debt issuance by Taiwan's financial services sector and says that the financial holding company groups have been to the fore in accessing foreign capital. In 2002 alone, Standard & Poor's rated over 2.1 billion US dollars worth of such issues.

This increased access to foreign capital gives the financial holding companies and their members an edge over smaller, independent financial service providers in terms of financial flexibility, the report argues.

Although the financial holding companies will take some years to achieve the potential benefits of cross-selling and cost savings, the stronger players have already expanded quickly and diversified their business profiles through mergers and acquisitions, the report says.

Standard & Poor's is an influential ratings agency in providingfinancial data, analytical research and credit opinions to the global capital markets.

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