Mon, Jun 04, 2012 - Page 11 News List

Loans to SMEs rise by NT$67 billion

ON TARGET:Lending lagged behind the government’s aim to increase loans to the SME segment by NT$220 billion this year, but the banks have vowed to do better

Staff writer, with CNA

The Financial Supervisory Commission (FSC) said on Saturday that outstanding loans extended from banks registered in Taiwan to small and medium-sized enterprises (SME) at the end of April had risen by NT$67 billion (US$2.24 billion) since the end of last year.

The FSC said the amount accounted for about 30.47 percent of the government’s goal to increase outstanding loans to this business segment by NT$220 billion this year.

The commission said the expanded lending in the four-month period lagged behind the government’s expectations, but banks are gearing up to attract new customers in a bid to boost outstanding loans to reach the government’s lending target by the end of this year.

As of the end of April, total outstanding loans to small and medium-sized companies stood at NT$4.14 trillion, which made up 47.56 percent of the total lending of the local banking sector to corporate clients, the FSC said.

The NT$4.14 trillion also represented 51.62 percent of the bank loans to companies in the private sector, the commission said.

According to the Small and Medium Enterprises Administration of the Ministry of Economic Affairs, SMEs are incorporated entities that generate below NT$100 million in sales a year.

For the manufacturing, construction and mining sectors they are firms that post less than NT$80 million in sales each year.

As of the end of April, the average non-performing loan (NPL) ratio of the local banking sector based on their lending to small and medium-sized corporations rose to 0.61 percent, from 0.59 percent recorded at the end of last year, the commission said.

Last week, the commission released statistics that showed the average NPL ratio of the local banking sector in terms of the total lending at the end of April rose 0.18 percentage points from the end of March, to 0.62 percent.

The commission said bad loans in the local banking sector at the end of April rose NT$40 billion from a month earlier to NT$136.4 billion.

It said the bad loan figures reflected the loans extended to financially troubled memory chip maker ProMOS Technologies Inc (茂德科技), which has been mired in a downcycle of the global dynamic random access memory (DRAM) industry.

The FSC said among the 38 banks registered in Taiwan, including HSBC Bank Taiwan, Citibank Taiwan, Standard Chartered Bank Taiwan and DBS Bank Taiwan, 37 registered an NPL ratio below 2 percent at the end of April.

Cosmos Bank (萬泰銀行) reported a bad loan ratio of 7.63 percent at the end of April, but the commission said the bank’s NPL ratio was expected to fall to 2.9 percent last month because it has disposed of a property pledged by debtor car vendor Auto21 as a loan payment.

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