ROC banks’ ex­po­sure to main­land China de­clines

The China Post - - BUSINESS -

Lend­ing ex­tended by banks op­er­at­ing in Tai­wan to China as of the end of De­cem­ber 2014 fell from the end of Septem­ber, re­flect­ing a decline in de­posits placed by lo­cal banks in Bank of China’s Taipei branch, ac­cord­ing to the Cen­tral Bank of the Repub­lic of China.

Still, China re­mained the largest debtor to Tai­wan’s banks, the cen­tral bank’s statis­tics showed.

The bank said that out­stand­ing in­ter­na­tional claims by Tai­wanese banks to China on a di­rect risk ba­sis as of the end of De­cem­ber to­taled US$49.14 bil­lion (NT$1.53 tril­lion), down 4.3 per­cent from a quar­ter ear­lier.

On an ul­ti­mate risk ba­sis, which cal­cu­lates a coun­try’s con­sol­i­dated debts af­ter risk trans­fers, Tai­wanese banks’ ex­po­sure to China as of the end of De­cem­ber also fell 7.7 per­cent from the end of Septem­ber to US$84.16 bil­lion, the data in­di­cated. The cen­tral bank said Tai­wanese banks as­signed more funds to buy Chi­nese yuan­de­nom­i­nated bonds is­sued in the lo­cal mar­ket, which have been dubbed “For­mosa bonds,” and other fi­nan­cial in­stru­ments.

As a re­sult, lo­cal banks’ de­posits placed in the Bank of China’s Taipei branch were on the decline, drag­ging down the ex­po­sure to China at the end of last year, the cen­tral bank said.

Fol­low­ing China, Lux­em­bourg ranked as the sec­ond largest debtor to Tai­wan as Tai­wanese banks’ ex­po­sure to the coun­try to­taled US$40.25 bil­lion as of the end of De­cem­ber on a di­rect risk ba­sis, ahead of Hong Kong with US$33.59 bil­lion, the United States with US$30.30 bil­lion, and the Bri­tish West Indies with US$14.31 bil­lion, the statis­tics showed.

The Cay­man Is­lands came in sixth af­ter Tai­wanese banks ex­tended US$11.72 bil­lion in loans on a di­rect risk ba­sis. It was fol­lowed af­ter the United King­dom with US$11.71 bil­lion, Sin­ga­pore with US$7.24 bil­lion, Australia with US$5.47 bil­lion, and Ja­pan with US$4.22 bil­lion, ac­cord­ing to the data.

The cen­tral bank said that ex­po­sure to the top 10 debtors of Tai­wan’s banks reached US$207.9 bil­lion, ac­count­ing for 76.59 per­cent of Tai­wan’s to­tal in­ter­na­tional claims worth US$271.5 bil­lion as of the end of De­cem­ber.

As of the end of De­cem­ber, Tai­wan’s in­ter­na­tional claims on a di­rect risk ba­sis fell 3.58 per­cent from the end of Septem­ber as lend­ing ex­tended to the non-bank pri­vate sec­tor reg­is­tered a decline dur­ing the three-month pe­riod, the cen­tral bank said.

The data showed that Tai­wan’s ex­po­sure to the non-bank pri­vate sec­tor to­taled US$183.20 bil­lion as of the De­cem­ber, mak­ing up 67.48 per­cent of the coun­try’s to­tal in­ter­na­tional claims, down 3.81 per­cent from the end of Septem­ber.

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