FSC re­veals bank lend­ing down as of end-April

The China Post - - BUSINESS -

Loans ex­tended by banks reg­is­tered in Tai­wan as of the end of April fell as the lo­cal econ­omy showed signs of weak­en­ing, ac­cord­ing to the Fi­nan­cial Su­per­vi­sory Com­mis­sion (FSC).

The data com­piled by the FSC, the top fi­nan­cial reg­u­la­tor in Tai­wan, showed that out­stand­ing loans ex­tended by Tai­wanese banks as of April fell NT$121.7 bil­lion (US$3.93 bil­lion) from a month ear­lier to NT$24.95 tril­lion. The mag­ni­tude of the monthly loan decline was the steep­est in more than seven years.

The FSC at­trib­uted the decline to the fact that the lo­cal econ­omy has been af­fected by fall­ing global de­mand, which dragged down the coun­try’s bi­lat­eral trade, caus­ing fund de­mand in Tai­wan to fall ac­cord­ingly.

On May 22, the Di­rec­torate Gen­eral of Bud­get, Ac­count­ing and Statis­tics low­ered its fore­cast of Tai­wan’s eco­nomic growth for 2015 to 3.28 per­cent from a pre­vi­ous es­ti­mate of a 3.78 per­cent, cit­ing the weak­ness of both global and do­mes­tic de­mand.

The FSC said that a rel­a­tively stronger New Tai­wan dollar in April also de­terred Tai­wanese firms’ over­seas sub­sidiaries from se­cur­ing for­eign cur­rency de­nom­i­nated loans from lo­cal banks’ off­shore bank­ing units (OBUs) in the month.

The com­mis­sion said that the OBUs of th­ese Tai­wanese banks suf­fered a fall of NT$80 bil­lion in lend­ing to the lo­cal pri­vate sec­tor in April from a month ear­lier due to fall­ing fund needs un­der un­fa­vor- able busi­ness con­di­tions. The gov­ern­ment agen­cies said that de­mand from the petro­chem­i­cal sec­tor, in par­tic­u­lar, had been on a more vis­i­ble decline.

Mean­while, the FSC said that the ag­gre­gate amount of non­per­form­ing loans (NPLs) booked by th­ese Tai­wanese banks to­taled NT$65.2 bil­lion as of the end of April, up NT$300 mil­lion from the end of March.

The ac­cu­mu­lated NPLs re­sult­ing from the banks’ lend­ing to China as of the end of April rose NT$283 mil­lion from a month ear­lier as a cou­ple of Tai­wanese firms op­er­at­ing in China failed to re­pay their loans, the FSC said.

But, the com­mis­sion said that the loans have been guar­an­teed by th­ese lenders’ par­ent com­pa­nies in Tai­wan, which have pledged col­lat­eral.

As of the end of April, the av­er­age NPL ra­tio of th­ese Tai­wanese banks stood at 0.26 per­cent, un­changed from a month ear­lier, the FSC said.

The NPL ra­tio re­gard­ing th­ese banks’ lend­ing to China as of the end of April was 0.27 per­cent and the FSC said that the level re­mained low.

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