Mon, Dec 19, 2011 - Page 12 News List

Taiwanese banks’ exposure to PIIGS countries reduced

Staff Writer, with CNA

The exposure of Taiwanese banks to debt shouldered by Portugal, Ireland, Italy, Greece and Spain (PIIGS) fell by US$800 million at the end of the third quarter this year from a quarter earlier, to US$4.28 billion, the central bank said on Friday.

The central bank cited statistics as showing that the decrease in exposure was the result of investors redeeming mutual fund bonds that had been invested in the five European countries through Taiwanese banks.

Taiwanese banks’ exposure to debt issued by Portugal reached US$40 million, while it was US$220 million for Italy, US$60 million for Greece, US$240 million for Spain and US$3.72 billion for Ireland, the bank said.

According to the Financial Supervisory Commission, a total of 37 banks have been registered and are operating in Taiwan.

The bank said out of the US$4.28 billion in exposure, more than US$3 billion was in the form of mutual fund bonds and the risks were shouldered by the investors, not the banks.

After excluding the mutual funds, Taiwanese banks were actually exposed to about US$1 billion of debt from PIIGS countries at the end of September, the bank said.

The exposure to Irish debt was largest among the five European countries, the bank added.

Meanwhile, the bank said total international claims by the 37 Taiwanese banks fell by US$7.29 billion, or 3.83 percent, to US$182.9 billion at the end of September from the end of June because of a decline in assets in the form of trusts.

Loans with a maturity of one year or less extended by the Taiwanese banks accounted for 69.73 percent of total international claims, while lending with a maturity of one to two years made up 7.68 percent and loans with maturity of more than two years accounted for the remaining 22.59 percent, the bank said.

The US was the biggest borrower from the Taiwanese banks, with a total of US$35.02 billion in loans. This was followed by Luxembourg with US$31.08 billion, China with US$15.37 billion, Hong Kong with US$14.1 billion and the West Indies with US$9.77 billion.

The UK was in sixth place with US$8.18 billion, before the Cayman Islands’ US$6.06 billion.

The bank said it was the first time China had become one of the country’s top three borrowers.

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