Loans extended by offshore banks hit record high level

Staff writer, with CNA

Mon, Jan 06, 2014 - Page 14

As of the end of November last year, loans extended by offshore banking units (OBUs) of banks operating in Taiwan hit a fresh high, the central bank said on Saturday. The loans totaled US$81.81 billion, up from US$81.73 billion recorded as of the end of October last year, the bank said, adding that after lending by the OBUs surpassed the US$80 billion mark in September last year to hit US$80.69 billion, their loans continued to grow.

The number of OBUs as of the end of November reached 63. They were operated by 38 locally incorporated banks and 25 foreign banks. The 38 Taiwan-registered banks included Citibank Taiwan, Standard Chartered Bank Taiwan and DBS Bank Taiwan (星展銀行).

The central bank said the OBUs’ loans were almost all extended to overseas clients, who made up 99.9 percent of the total lending.

The overseas lending was comprised of US$45.73 billion in long and medium term loans and US$35.99 billion in short term loans. Lending extended to local clients reached only US$83 million or 0.1 percent of the total loans, the bank said.

As of the end of November, the total assets of the 63 OBUs rose 2.1 percent from a month earlier to a new high of US$163.68 billion, and the 38 local banks’ OBUs accounted for 84.6 percent of the total assets, the central bank said.

These OBUs’ lending made up about 50 percent of their total assets with interbank lending and deposits representing 14.6 percent. Securities investments accounted for an additional 13.9 percent, the central bank said.

Asia was the largest fund destination of the OBUs, accounting for 61 percent of the OBUs’ fund use, followed by the Americas with 26 percent and Europe with 6 percent, the central bank said.

In November, foreign exchange trading of the OBUs totaled 38.29 billion, including US$23.13 billion in spot trading, US$7.83 billion in forwards trading and US$7.34 billion in swaps, the bank said.