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Non-Bank Financial Institutions

Global Home > Non-Bank Financial Institutions

Higher BDC Leverage Increases Focus on Senior Loans, Funding

Leverage has slowly increased for business development companies (BDCs) following passage of The Small Business Credit Availability Act (SBCAA) in March 2018, which directionally Fitch views as a credit negative. However, ratings have been largely stable for the sector as BDCs utilizing higher debt capacity have opted to alter portfolio risk composition by moving the capital structure into more first-lien positions. 

Tighter Regulation Challenges Chinese Peer-to-Peer Business Models

Fitch Ratings expects China’s peer-to-peer (P2P) lending industry continues to shrink and suggests watching out the impacts on business models, asset quality, liquidity and funding.

China's Peer-to-Peer Lending Shrinks as Regulation Tightens

China's peer-to-peer lending industry will continue to shrink and consolidate as tighter regulation and weak investor sentiment drive out operators conducting the riskiest activities.

 

Related Materials:
Dashboard
Tighter Regulation Challenges Chinese Peer-to-Peer Business Models (English video)
监管趋严使中国的P2P业务模式面临挑战 (中文视频)

 U.S. Auto Loan Credit Improves; Prime and Subprime Trends Diverge

The credit performance of U.S. auto loans strengthened in 2018 with net charge-offs for the largest auto lenders declining on a year-over-year basis in 4Q18, according to the latest U.S. Auto Asset Quality Review report.

Global Non-Bank Financial ESG Risk Mostly Governance

Governance tends to have a higher relevance for emerging market NBFIs versus developed market NBFIs, where it is often associated with the implementation and/or execution of corporate strategies and structures. Developed market considerations related to governance include complex group structures, key person risk and transparency.

Webinar on Demand

ESG Relevance Scores for Financial Institutions

In this webinar, Fitch analysts from Insurance, Banks and NBFI, provided a detailed overview of our approach to ESG, our analytical framework, and the deliverables that are available to market participants. Listen Now

Potential Non-Bank Move to Bank Status Could Be Credit Positive

Bank status brings several credit benefits, including the ability to diversify funding by offering deposit accounts, access to central bank funding in a severe liquidity shortage and a stronger governance framework associated with extra regulatory oversight. However, it also brings extra compliance costs and constraints on operational flexibility that necessitate greater scale.

Boeing 737 MAX Issues Could Have Broad Aviation Effects

The Boeing 737 MAX could be a concern throughout the aviation credit sector for much of 2019, according to Fitch Ratings.
ReportGlobal Airlines, Lessors Face Mixed 737 MAX Grounding Risk

UK Rating Watch Negative Is No Immediate Threat to NBFI Ratings

The Brexit-driven Rating Watch Negative (RWN) on the UK does not imply an immediate threat to the ratings of UK Non-Bank Financial Institutions (NBFIs).  A one-notch sovereign downgrade would not, in itself, trigger issuer downgrades, and there is no automatic sovereign cap under Fitch's NBFI rating criteria. 

ESG Risk

Introducing ESG Relevance Scores for Financial Institutions

Nearly 20% of global financial institution ratings are currently influenced by governance risk according to an analysis of new Environmental, Social & Governance (ESG) Relevance Scores. ESG risks overall have a low level of direct impact on financial institution credit ratings. The scores cover over 900 banks, non-bank financial institutions and insurance companies around the globe. Download our ESG Financial Institutions special report to learn more

New Zealand Non-Bank Deposit Takers Face Scale Challenges

New Zealand's non-bank deposit takers (NBDTs) face a number of challenges as a result of their small franchises, ownership and capital structures, high macroeconomic risks and increasing investment needs.

Webinar: China Shadow Banking 2019 Outlook

NOW Available On-Demand

Fitch Ratings hosted a webcast to discuss how regulatory developments will impact the 2019 outlook for China’s shadow banking activities, and how banks will cope with growth priorities and capital preservation against more challenging economic conditions.

 

Click here to access the webinar in English

Click here to access the webinar in Chinese

 

Related Press Release:
China's Shadow Banking Sector to Shrink Further in 2019

Open-Ended Bond Funds a Potential Risk to Financial Stability

Open-ended bond funds are a potential risk to global financial stability given their rapid growth and increasing liquidity mismatches and credit risk.
Financial Times: Fitch Flags Risks of Forced Sales for Bond Mutual Funds

Private Equity Appetite for Aircraft Lessors Takes Off

Alternative investment managers (Alt-IMs) have become increasingly active investors in the aircraft leasing industry as they seek to deploy capital into a growing sector that could provide attractive investment returns. However, Fitch Ratings notes that the typically fixed-life nature of private equity ownership can increase long-term strategic and financial uncertainty.

Download ESG Relevance Scores for NBFI

For Non-Bank Financial Institutions, Fitch has assigned ESG Relevance Scores across its internationally-rated portfolio. Review all of the scores here:

ESG Relevance Scores for NBFI

CECL Ratings Neutral for U.S. Financial Institutions

The pending implementation of the U.S. accounting standard for current expected credit loss (CECL) reserves by the Financial Accounting Standards Board is not expected to result in ratings actions upon adoption, Fitch Ratings says. 

Contacts

Nathan Flanders

Global

Nathan Flanders

Analytical Global Head

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Jose Santos

Global

Jose Santos

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Javier Serrano

GLOBAL

Javier Serrano

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Mark Young

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APAC

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Sing Chan Ng

APAC

Sing Chan Ng

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Christian Kuendig

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Christian Kuendig

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Erwin van Lümich

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Claire Dopson

UK & Northern Europe

Claire Dopson

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Alejandro Garcia

LATAM

Alejandro Garcia

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Diego Alcazar

LATAM

Diego Alcazar

Business

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Meghan Neenan

North America

Meghan Neenan

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John Bareiss

North America

John Bareiss

Business

+1 312 368 3162

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