DBS Bank Ltd (星展銀行) yesterday said that the COVID-19 outbreak would have a limited impact on its corporate banking business in Taiwan, if it is brought under control by summer.
The effects on its corporate loans could be 2 to 3 percent, but the bank still aims to pursue a high single-digit percentage growth rate this year, managing director Tony Luo (羅綸有) told a news conference in Taipei.
MILD HIT
DBS Bank’s parent company, Singapore-based DBS Group Holdings Ltd, last week forecast that the virus could knock 1 to 2 percent off its revenue this year.
DBS Bank last year approved syndicated loans of US$764 million, Luo said.
Aggregate loans to small and medium-sized enterprises (SMEs) reached NT$29.5 billion, topping other foreign banks in Taiwan, he said.
The outbreak is expected to have a mild impact on Taiwan’s economy, compared with China’s, Luo said.
UPBEAT
Some industries in Taiwan are suffering due to the outbreak, such as food and dining, tourism, retail and transport sectors as well as those relying on Chinese suppliers, he said, adding that most industries would remain unaffected if the outbreak ends in two to three months.
“We still have an upbeat outlook for this year, as demand for funds in Taiwan should grow steadily with the return of Taiwanese companies, the development of 5G and green energy, and manufacturers’ increasing automation,” Luo said.
A HELPING HAND
Even though some companies might lose orders due to the outbreak in the first half of this year, they are expected to regain those orders in the following quarters, he said.
The bank plans to provide loans to more than 10 green energy projects of this year, he said.
If the outbreak continues more than three months, it would have a more severe impact on the Asian economy, as declining consumption in China would be a drag on economic momentum, Luo said.
DBS would provide assistance to borrowers that have solid business performance, but have seen cash flow drop due to the outbreak, Luo said.
The bank would announce the details after finalizing the measures, he said.
“So far, our Taiwanese corporate clients with operations in China are dealing with the situation well. But the SMEs might struggle more,” he said.
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