Pretax earnings by domestic banks in the first eight months of this year were up by 2.7 percent annually to NT$220.15 billion (US$7.23 billion), helped by a nearly four-fold gain in contributions from Chinese branches, the Financial Supervisory Commission said on Tuesday.
Pretax earnings from banks’ Chinese branches surged 394.3 percent in the January-to-August period to NT$2.31 billion as lenders benefitted from lowered general provision charges amid improving asset quality in the country, it said.
The gain was also helped by China’s stabilizing currency strength and economic expansion momentum, it said.
The windfall from banks’ Chinese operations reverses a decline that began in the second half of 2014, when market turmoil led to rising loan delinquencies.
From January to August, offshore banking units of domestic banks saw combined pretax earnings rise 3.6 percent annually to NT$52.44 billion, with other overseas branches seeing pretax earnings gain 38.5 percent annually to NT$20.7 billion.
However, earnings from banks’ branches in Taiwan fell 2.4 percent to NT$144.69 billion, with the loan-to-deposit ratios — a measure loan earnings — dropping to a new low record of 72.7 percent, commission data showed.
As of the end of August, Taiwanese banks saw their combined loan books expanded NT$213.5 billion from July, but the sequential gain was outpaced by a NT$379.5 billion increase in deposits during the same period, the commission said.
August also marked the first time that idle deposits surpassed the NT$10 trillion mark, the data showed.
Meanwhile, new loans to small and medium-sized enterprises (SME) totalled NT$186.4 billion as of the end of August, accounting for 77.67 percent of the commission’s target of NT$240 billion for this year.
State-run lenders First Commercial Bank (第一銀行), Taiwan Cooperative Bank (合作金庫銀行) and Hua Nan Commercial Bank (華南銀行) led their private peers in extending the loans, the commission said.
Banks in Taiwan have also lent much more than expected under the government-initiated “five plus two” innovation program aimed at upgrading nation’s industrial sector, the commission said.
In a written report to the Legislative Yuan, the commission said outstanding loans to companies in the “five plus two” industries totaled NT$4.86 trillion at the end of August, up NT$401.6 billion from the end of September last year.
The “five” industries are the Internet of Things, “smart” machinery, biotechnology, “green” energy and national defense; the “two” are the circular economy and new agriculture.
The NT$401.6 billion far exceeds the commission’s goal of NT$180 billion between October last year and December this year.
About NT$288 billion of the additional loans, or 72 percent, was contributed by nine government-invested banks, the Ministry of Finance said, bringing their total share of the NT$4.86 trillion in loans to about 60 percent.
Additional reporting by CNA
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts