Taiwan’s banks face challenging environment

Taiwan’s banks have been affected by the country’s weak economic growth, which has seen the largest banks slip down the rankings. Kimberley Long reports.

by Kimberley Long

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A slowing economy and the decline in electronics exports have hit the Taiwanese economy hard, and this is reflected in the banks’ Top 1000 World Banks performance. After a strong year in 2021, gross domestic product growth stalled at 2.43% in 2022, below the forecasted 3.06%. The economy contracted by 0.86% in the fourth quarter of the year as exports fell.

CTBC Bank remains Taiwan’s biggest bank by Tier 1 capital. However, it has fallen two places to 160th, due to a 2.78% contraction in core capital. It also only manages third place in the overall best-performing bank table, despite taking first place for growth and return on risk. The bank saw a 22.34% increase in pre-tax profits in 2022 and recorded the second-highest return on capital (ROC) ratio, of 11.13%, bested only by O-Bank (formerly Industrial Bank of Taiwan), which recorded an ROC of 20.23%.

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Kimberley Long

Kimberley Long is the Asia editor at The Banker. She joined from Euromoney, where she spent four years as transaction services editor. She has a BA in English Language and Literature from the University of Liverpool, and an MA in Print Journalism from the University of Sheffield. Between degrees she spent a year teaching English in Japan as part of the JET Programme.