Taiwan bank exposure to China falls in Q1

2018/05/14 15:29:14 fontsize-small fontsize-default fontsize-big
Taiwan bank exposure to China falls in Q1

Taipei, May 14 (CNA) Outstanding loans extended and investments made in China by Taiwanese banks at the end of the first quarter of this year fell from the previous quarter, pushing down their average exposure to China relative to combined net worth, according to the Financial Supervisory Commission (FSC).

Data compiled by the FSC showed that the exposure of Taiwanese banks to China fell to NT$1.72 trillion (US$57.91 million) at the end of March from NT$1.73 trillion at the end of December 2017.

However, the FSC, the top financial regulator in Taiwan, did not detail the reasons for the fall.

Due to the decline in exposure over the three month period, the ratio of the bank's average exposure to China relative to combined net worth fell from 0.54 from 0.53.

The fall in loans relative to net worth was also caused by an increase in the combined net worth of local banks in Taiwan by about NT$33 billion, market analysts said.

The fall reported at the end of March came after three consecutive months in which the ratio increased, the FSC said.

The FSC said the latest figures remained well below the ratio ceiling of 1.00 set by local financial regulations governing banking activity and investment across the Taiwan Strait, indicating the local banking sector does not face any pressing risks caused by exposure to China.

The data showed the ratio of exposure to China relative to total net worth for Taipei Fubon Commercial Bank, the flagship banking entity of Fubon Financial Holding Co., stood at 0.81 at the end of March, the highest level among all banks in Taiwan.

However, Taipei Fubon Bank's ratio fell from 0.83 at the end of December, the data indicated.

Among other banks, the ratio at Bank SinoPac stood at 0.71 at the end of March, down from 0.78 at the end of December, while the figure for CTBC Bank hit 0.76, also down from 0.83 three months earlier, the FSC's statistics showed.

(By Tsai Yi-chu and Frances Huang)
Enditem/AW


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