The banking sector’s asset quality improved slightly last month, with the non-performing loan (NPL) ratio dropping 0.11 percentage points from May to 1.5 percent, Financial Supervisory Commission data showed yesterday.
Bad loans by the nation’s 37 banks totaled NT$271.3 billion (US$8.26 billion) at the end of last month — a decrease of NT$18.2 billion from May, the data showed.
Twenty-nine of the banks had an NPL ratio of less than 2.5 percent, while seven had NPL ratios of between 2.5 percent and 5 percent.
Chinfon Commercial Bank (慶豐銀行) continued to top the list with an NPL ratio of 13.53 percent, but that was a big drop from its 30 percent level in May, although all of its bad loans under the government’s custody had been sold off to private asset management firms in March.
Amid the recent export slump, the demand for loans among local businesses picked up last month, reversing a previous decline that began last November.
Outstanding loans granted by the 37 banks increased by NT$48.6 billion to NT$18.54 trillion last month, the data showed. Of the total, 71.34 percent of the loans were covered by banks’ provisions, 2.69 percentage points up from May, the data showed.
Loans to private businesses and individuals increased by NT$111.7 billion last month, while lending to the government decreased by more than NT$50 billion, Banking Bureau Deputy Director Lin Tung-liang (林棟樑) told a media briefing yesterday.
Lin refused to say if the increased lending was a sign of “green shoots” in the economy.