Fri, May 27, 2011 - Page 11 News List

Offshore banks and overseas branches may trade in yuan

By Crystal Hsu  /  Staff Reporter

The Financial Supervisory Commission (FSC) yesterday said it had agreed to allow offshore banking units and overseas branches of domestic lenders to operate Chinese yuan business.

The deregulation came in response to pleas by Taiwanese financial institutions amid growing demand for Chinese yuan by their customers involved in cross-strait business operations.

The financial regulator said it would soon unveil related guidelines after gaining approval from the Cabinet.

The FSC yesterday also approved an E.Sun Financial Holding Co (玉山金控) plan to acquire Chu Nan Credit-Cooperative Association (竹南信用合作社).

The acquisition will take effect on July 9, boosting the -medium-sized financial group’s number of banking branches to 132, from the current 122.

In addition, the FSC published the nation’s latest non--performing loan data, which showed improving asset quality among domestic lenders as evidenced by a lower bad loan ratio of 0.54 percent at the end of last month, from 0.55 percent in March.

Total bad loans for the 37 banks amounted to NT$110.3 billion (US$3.81 billion) last month, down NT$2.8 billion from a month earlier, FSC data showed.

The coverage ratio rose to 176.4 percent at the end of last month, from 172.35 percent one month earlier, the FSC said, adding that none of the lenders had a bad loan ratio above the 2 percent mark.

Outstanding loans reached NT$20.47 trillion at the end of last month, an increase of NT$18.8 billion from a month earlier, FSC said.

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