(May 12): Two of Taiwan’s biggest securities firms are seeking nearly US$1 billion ($1.27 billion) of loans to expand their businesses, according to people familiar with the matter, as investors pile into a booming stock market that has become the sixth largest in the world.
Yuanta Securities Co, Taiwan’s top brokerage by trading volume, is in talks with banks over a potential syndicated loan of around NT$10 billion (US$318 million or $400 million), while Fubon Securities Co is seeking up to about NT$20 billion, said the people, who asked not to be identified discussing private matters.
Both loans are likely to have a tenor of three years, and proceeds would be used for working capital, they said. The talks are ongoing and details could change, they added.
Taiwan’s stock market has been on a tear in recent months, as demand for artificial intelligence-linked shares and the rise of chip giant Taiwan Semiconductor Manufacturing Co have pushed up the tech sector. That’s created greater investor appetite for financial services.
Yuanta and Fubon aren’t frequent borrowers in the syndicated loan market, but the equities boom has increased the need to raise funds to extend loans to investors, the people said.
A Yuanta Securities representative said the loan was under evaluation and terms have yet to be determined. Fubon Securities said all of its actions are in accordance with applicable laws and regulations.
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Individual and institutional investors in Taiwan can use qualified securities as collateral to borrow from brokerage firms, which have lending caps based on net worth.
In the first four months of this year, Yuanta Securities’ revenue rose 95.7% to about US$1.5 billion, while Fubon Securities’ revenue more than doubled to US$481 million, Taiwan Stock Exchange data showed. Yuanta had a 15.8% share of the market based on trading volume, while Fubon held 7.1% as of April, making them the first and third largest securities firms in Taiwan, respectively, according to TWSE data.
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Other Taiwanese securities firms have raised syndicated loans in the past two years, including President Securities Corp’s NT$8 billion facility last August and Capital Securities Corp’s NT$10 billion borrowing in November 2024.
Fubon Securities raised a NT$5 billion three-year loan from 10 banks in October 2018, Bloomberg-compiled data showed.
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