Lo­cal banks’ ex­po­sure to main­land China falls fur­ther as of end-March

The China Post - - LOCAL -

Lend­ing ex­tended by Tai­wan’s banks to China as of the end of March fell fur­ther from the end of De­cem­ber with mar­ket an­a­lysts at­tribut­ing the fall to Tai­wanese fi­nan­cial author­i­ties’ move to tighten mon­i­tor­ing of banks’ ex­po­sure to the main­land.

Ac­cord­ing to sta­tis­tics re­leased by the Cen­tral Bank of the Re­pub­lic of China (Tai­wan), out­stand­ing in­ter­na­tional claims by Tai­wanese banks to China on a di­rect risk ba­sis as of the end of the first quar­ter fell 3.63 per­cent from a quar­ter ear­lier to US$47.35 bil­lion.

The de­cline fol­lowed a pre­vi­ous 4.3 per­cent sequential drop recorded as of the end of De­cem­ber, mark­ing the sec­ond con­sec­u­tive de­crease in ex­po­sure of lo­cal banks to China-based com­pa­nies or in­di­vid­u­als.

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

Many mar­ket observers have voiced con­cerns that large ex­po­sure to China from Tai­wan’s banks has raised risks faced by the Tai­wanese bank­ing sys­tem, prompt­ing lo­cal fi­nan­cial author­i­ties to in­ten­sify their ef­forts to su­per­vise the banks’ oper­a­tions.

On an ul­ti­mate risk ba­sis, which cal­cu­lates a coun­try’s con­sol­i­dated debts af­ter risk trans­fers, Tai­wanese banks’ lend­ing to China also fell to US$79.78 bil­lion as of the end of March, from US$84.16 bil­lion recorded at the end of De­cem­ber, the data in­di­cated.

In terms of to­tal out­stand­ing in­ter­na­tional claims by Tai­wanese banks, as of the end of March, the amount on a di­rect risk ba­sis reached US$280.28 bil­lion, up 3.24 per­cent from the end of De­cem­ber.

On an ul­ti­mate risk ba­sis, the to­tal out­stand­ing ex­po­sure to over­seas bor­row­ers as of the end of March also rose 3.15 per­cent from the end of De­cem­ber to US$333.1 bil­lion, the bank said.

Fol­low­ing China, Lux­em­bourg ranked as the sec­ond largest debtor to Tai­wan on a di­rect risk ba­sis as Tai­wanese banks’ ex­po­sure to the Euro­pean coun­try stood at US$39.73 bil­lion as of the end of March.

Hong Kong came in third with Tai­wanese banks’ ex­po­sure to­tal­ing US$33.92 bil­lion, ahead of the United States with US$33.01 bil­lion, and the Bri­tish West Indies with US$14.33 bil­lion.

The United King­dom was the sixth largest debtor to Tai­wan with Tai­wanese banks’ ex­po­sure at US$ 13.93 bil­lion, fol­lowed by the Cay­man Is­lands with US$12.24 bil­lion, Sin­ga­pore with US$7.63 bil­lion, Aus­tralia with US$5.82 bil­lion, and Ja­pan with US$5.51 bil­lion.

The cen­tral bank said that ex­po­sure to the top 10 debtors to­taled US$213.47 bil­lion, ac­count­ing for 76.16 per­cent of Tai­wan’s to­tal in­ter­na­tional claims.

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