The exposure of Taiwan’s financial sector to Hong Kong declined NT$43 billion (US$1.4 billion) from NT$1.018 trillion a month earlier to NT$975 billion as of the end of October, the Financial Supervisory Commission (FSC) said on Thursday, the largest single-month fall since pro-democracy protests began there in June.
The banking sector’s exposure was NT$705.7 billion in loans and NT$161.6 billion in investments as of the end of October, with both retreating month-on-month, commission data showed.
While lending decreased as clients repaid loans, most banking units in Hong Kong have not increased investments in financial products recently, the data showed.
The insurance industry’s exposure was NT$193.3 billion as of the end of October, down NT$18.8 billion from the end of September, the data showed.
The securities and futures industry was the only sector to report increased exposure to Hong Kong, with investments rising 1.5 percent from NT$74.84 billion a month earlier to NT$76 billion as of the end of October, the data showed.
So far, the operations of Taiwanese institutions have remained normal, the commission said, adding that it would continue to monitor the situation in Hong Kong.
Separately yesterday, the Banking Bureau confirmed a report by the Chinese-language Economic Daily News, which said that 11 local banks have combined exposure of NT$5.1 billion from a syndicated loan to a unit of China Energy Reserve and Chemicals Group Co (中國國儲能源) in Shanghai that might become non-performing.
The 11 banks, some privately owned banks and some state-run, entered into debt negotiation with the company, which was guaranteed by its parent company, the bureau said.
The Shanghai-based company had made no payments on interest or principal since October and if it does not begin payments next month, the loans would be considered non-performing, the report said.
Cathay United Bank (國泰世華銀行), Cathay Financial Holding Co’s (國泰金控) banking unit, and Fubon Financial Holding Co (富邦金控), the nation’s second-largest financial conglomerate by assets, told reporters that they had not participated in the loan.
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