Taiwan bank loan growth to hit high single digits on US pact

Increased overseas investments and corporate credit demand will lift loas.

The recent US-Taiwan trade agreement has eased the Taiwanese banking sector’s tariff related risks and macroeconomic uncertainties, said Fitch Ratings.

Loan growth is expected to be in the “high single digits” in 2026, it added, compared to the previous forecast of about 5%. Increased overseas investments and corporate credit demand will lift loan growth.

“We expect more stable economic conditions to reinforce Taiwan’s bank operating environment, with sector asset quality and profitability likely to be stronger than we previously forecast,” the ratings agency said in a report published on 30 January 2026.

On 15 January, the US and Taiwan announced a new trade agreement, with tariffs reduced to 15%. In exchange Taiwan tech firms are expected to sink $250m to expand production capacity in the US.

Fitch revised the Taiwanese banking sector’s outlook from deteriorating to neutral on 28 January, noting that loan pressures from export sectors have reduced thanks to the agreement.

“We expect the sector’s impaired loan ratio will remain under 1%, against 1.2% in our previous forecast,” the ratings agency said.

Fitch earlier set expectations for lower loan growth and moderating wealth management sales in 2026.

“We expect net fee income to decline as loan growth slows and wealth-management sales moderate amidst market uncertainties,” Fitch Ratings had said in late 2025, in its 2026 outlook report

With the trade agreement likely to improve market sentiment, Fitch now has a more positive outlook for wealth-management fees and overall sector profitability.