Latest Rating：Fitch Assigns Taiwan EXIM Bank at AA- Rating and Stable Outlook

On 16 Dec 2020, Fitch Ratings has assigned Taiwan's Export-Import Bank of the Republic of China (Taiwan EXIM) the following ratings:

Long-Term Issuer Default Rating of 'AA-'; Outlook Stable

Short-Term Issuer Default Rating of 'F1+'

National Long-Term Rating of 'AAA(twn)'; Outlook Stable

National Short-Term Rating of 'F1+(twn)'

Support Rating of '1'

Support Rating Floor of 'AA-'

National Long-Term Rating on senior unsecured bonds of 'AAA(twn)'

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 a strong linkage to the government, which is evident in 62% of the bank's funding being either provided by the central bank or other government agencies at end-3Q20. In addition, the government arranged for the bank's capital to increase byTWD20 billion since 2016 via injections from the MoF's annual budgets and waivers of dividend payments by the bank to the treasury from 2018 to 2020.

Taiwan EXIM has been able to maintain modest profitability while executing government policies in external trade, and has continued to do so during the global economic downturn in 2020 due to coronavirus pandemic. This role is particularly important during the pandemic in light of Taiwan's export-dependent economy. The bank plays an important role in government-initiated debt relief program by providing relief loans and insurance discounts to exporters. The bank prudently manages its balance sheet to maintain sound capital strength and a satisfactory asset-quality profile. The bank has not encountered significant financial distress that has required extraordinary capital or liquidity support from the government in the past.