Rate cuts put pressure on banks

摘要

Taiwan's central bank has cut its benchmark interest rate for the fourth consecutive quarter, prompting local lenders to look elsewhere for better returns as opportunities in the island's over-banked market dwindle. The benchmark rate was reduced to 1.375% from 1.5% on June 30, bringing the total cut since last September to 50bp in response to deteriorating exports and mounting global economic uncertainty. The move does not bode well for a banking industry already facing a dearth of deals and shrinking margins. In response, lenders are ramping up overseas lending and structuring more cross-border deals.