Fitch Ratings said on Monday that sector outlooks for most non-bank financial institutions (NBFIs) in Asia-Pacific remain neutral mid-year, highlighting resilience despite slowing global growth and ongoing trade uncertainties.
The neutral stance reflects the region’s mix of domestically focused business models and sub-segments that are stabilizing after past underperformance.
However, Fitch downgraded the outlook for developed market finance and leasing companies (FLCs) in the region to “deteriorating,” citing economic slowdowns and growing market scrutiny in South Korea and Taiwan that could lead to higher asset quality and profitability pressures.
Japanese FLCs are seen as more resilient than their regional peers due to broader geographic exposure and less reliance on SME and retail clients, supporting their continued neutral outlook.
In emerging markets, Fitch expects most FLCs to avoid significant deterioration, supported by alignment with government strategies, healthy domestic liquidity, and relatively strong economic performance in countries like India and Indonesia. FLCs in China, India, Indonesia, and Thailand maintained neutral outlooks.
Vietnam’s consumer finance sector saw its sub-sector outlook downgraded to neutral from improving, due to a delayed recovery in asset quality and profitability amid exposure to workers in export-oriented manufacturing.
Fitch upgraded the outlook for Chinese national asset management companies (AMCs) to neutral from deteriorating, citing clearer policy direction and reduced ownership uncertainty following the transfer of shares to Central Huijin, a state-backed shareholder.
Securities firms across APAC retained a neutral outlook, with trading activity supported by market volatility and adequate capital buffers. Japanese firms are expected to benefit from rising yen interest rates, while Chinese firms are seeing modest recovery from low baselines.
Business News Asia
