Lending activity slowed in February, while bad loans increased as banks worked fewer days due to the Lunar New Year holiday, the Financial Supervisory Commission said.
Aggregate lending by local banks in Fenruary dropped by NT$32.6 billion (US$1.06 billion) to NT$28.8 trillion from January, when lending expanded for the 23rd consecutive month to NT$28.84 trillion, commission data showed.
The commission attributed the decrease in lending to fewer working days in February due to the Lunar New Year, which was nine days compared with six days a year earlier, Banking Bureau Chief Secretary Phil Tong (童政彰) said.
“We are not concerned about the single-month volatility, but if the trend persists that would be a warning sign,” Tong said.
The commission’s data showed that non-performing loans expanded by NT$2.4 billion from a month earlier to NT$72.8 billion as of the end of February, with the average non-performing loan ratio rising to 0.25 percent.
“Asset quality remained healthy, but we would urge banks to monitor their bad loans,” Tong said.
Two lenders that reported non-performing loans in February were Bank of Taiwan (臺灣銀行) with NT$136 million and CTBC Bank (中信銀行) with NT$220 million, data showed.
Due to problematic loans, local banks saw their pretax profit decline 26.4 percent month-on-month to NT$27.53 billion in February, with the combined pretax profit for the first two months totaling NT$64.94 billion, up 12.3 percent year-on-year, the data showed.
The commission said it had asked lenders to lower their non-performing loans to China as long as they made a profit.
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