Aggregate pre-tax earnings at domestic banks in the first five months of the year fell by 0.9 percent year-on-year to NT$138.7 billion (US$4.3 billion) because of the nation’s slowing economic growth, the Financial Supervisory Commission said yesterday.
“In light of the current macroeconomic challenges, the fact that domestic banks maintained profitability is a testament to their management acumen,” Banking Bureau Deputy Director-General Jean Chiu (邱淑貞) told a news conference in Taipei.
However, the annual dip would have been worse except for a NT$13.2 billion one-time real-estate asset revaluation gain booked by state-run Bank of Taiwan (臺灣銀行) in March.
The gain came after the completion of the dissolving and liquidation process at Kaohsiung Ammonium Sulfate Co (高雄硫酸錏), in which Bank of Taiwan holds a 91.86 percent stake.
With the exception of a 5.1 percent year-on-year gain at domestic operations, earnings by Taiwanese banks’ offshore banking units, Chinese branches and other overseas branches saw an across-the-board decline in the first five months of the year, dipping, 13.1 percent, 52.9 percent and 0.6 percent respectively, Chiu said.
Regarding the precipitous fall in China, Chiu said that banks in the first five months allocated an additional NT$900 million to provisions against exposures related to the nation, compared with the NT$270 million allocated last year.
“The increased provisions come with increased lending in China, indicating that revenues derived from the nation are rising,” Chiu said.
BAD LOANS
Meanwhile, aggregate delinquent loans as of the end of May increased by NT$900 million sequentially to NT$71 billion, while the non-performing loan ratio was gauged at 0.28 percent, unchanged from the previous month, the commission said.
The nation’s 39 banks, including the domestic operations of foreign banks, saw their bad loan courage ratio dip 5.18 percent sequentially to 472.79 percent in May.
The commission also said that it has approved three out of five applications for new bank branches this year as of yesterday, compared with the four out of 11 applications it approved last year.
“Overbanking remains a concern in Taiwan,” Banking Bureau Director-General Austin Chan (詹庭禎) told reporters.
CTBC Bank Co Ltd (中國信託銀行), Taishin International Bank (台新銀行) and KGI Bank (凱基銀行) have each received approval to establish an additional branch in Taiwan, the commission said.
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