Fitch: Public Sector Control of Bills Finance Corp. Has No Immediate Rating Impact

Central News Agency, Taipei, June 1. Bills Finance Corp. (BFC) held its shareholders' meeting last week to complete the election of its 9th board of directors. Fitch Ratings stated today that the public sector's increased stake and acquisition of effective control over BFC have no immediate impact on the company's ratings.

BFC held its 2026 annual general meeting on May 29 and elected its 9th board. It announced on the same day that the new board elected former Mega Financial Holding Chairman Chang Chao-shun as the new Chairman, and former Mega Financial independent director Wu Ying as the new General Manager and Chief Information Security Officer. The market interprets this as the public sector taking control of BFC.

Fitch explained in a press release today that the public sector's stake in BFC has increased from less than 10% to approximately 20%, representing 8 out of 15 board seats. Fitch believes there is no clear indication that the government's willingness to support BFC and its main operating subsidiary, International Bills Finance Corp., has significantly increased. BFC's long-term Issuer Default Rating (IDR) is driven by its standalone credit profile, and the IDR of the holding company is consistent with that of the subsidiary.

Fitch explained that for Taiwanese financial holding companies, government support ratings are usually granted only when they are under long-term government control and have a clear policy role in supporting government strategic goals. Fitch assigns a 'b+' government support rating to BFC, reflecting its low systemic importance as a bills finance company. A change in control alone does not indicate an increased willingness of the government to support BFC, as neither its actual operations nor systemic importance has changed.

Fitch noted that if there is clearer evidence of increased government support after the change in control, such as stronger and clearer links between BFC and the government, or a more prominent policy role, the government support rating could be upgraded in the medium term. If the government provides support to both the holding company and the subsidiary when necessary, a government support rating might be granted to the holding company, which would likely be consistent with that of the subsidiary.

Fitch added that the IDRs of BFC and its subsidiary are still likely to be driven by their intrinsic credit profiles rather than Fitch's expectations of government support. The IDR of BFC also considers its moderate double leverage ratio, which remained stable at 117% as of the end of 2025.

Fitch explained that if BFC's double leverage ratio deteriorates and remains above 120% without a clear plan to improve it, the rating gap between the holding company and the subsidiary could widen by one notch. For example, if BFC executes large-scale acquisitions or further invests in its joint venture, Rakuten International Commercial Bank, without a corresponding increase in its risk buffers, this could occur.