On 03 Dec 2021, Fitch Ratings has affirmed
The Export-Import Bank of the Republic of China's (Taiwan EXIM) Long-Term
Issuer Default Rating (IDR) at 'AA', Short-Term IDR at 'F1+', National
Long-Term Rating at 'AAA(twn)' and National Short-Term Rating at 'F1+(twn)'.
The Outlook on the Long-Term IDR and National Long-Term Rating is Stable. Fitch
has also affirmed the National Long-Term Rating on the bank's senior unsecured
bonds at 'AAA(twn)'.
Fitch is withdrawing Taiwan
EXIM's Support Rating and Support Rating Floor as they are no longer relevant
to the agency's coverage following the publication of our updated Bank Rating
Criteria on 12 November 2021. In line with the updated criteria, we have
assigned Taiwan EXIM a Government Support Rating (GSR) of 'aa'.
Taiwan EXIM is a wholly state-owned policy bank that is
supervised by the Ministry of Finance (MoF). It was established in 1979 under
The Export-Import Bank of the Republic of China Act to support government
economic and trade policies, including the provision of financing guarantees
and credit insurance to local enterprises as well as financing to foreign
enterprises. Under the act, the government is obliged to make up for any net
losses that are not covered by the bank's own reserves.
The bank has strong linkages with the government, with 61% of
the bank's funding being either provided by the central bank or other
government agencies at end-1H21. The government has also arranged for the
bank's capital to increase by TWD20 billion since 2016 via injections from the
MoF's annual budgets and waivers of dividend payments by the bank to the
treasury since 2018. The capital arrangement was completed in 2021, but we
expect the bank will benefit from extraordinary capital support, if needed.
Taiwan
EXIM has maintained modest profitability while executing government policies in
external trade, and has continued to do so despite challenges from the Covid-19
pandemic since 2020. The bank plays an important role in government-initiated
debt relief programmes by providing relief loans to exporters. The role is
particularly important during the pandemic, in light of Taiwan's
export-dependent economy.