Banks are making better use of Taiwan’s immense pool of idle funds, the Financial Supervisory Commission’s latest loan-to-deposit ratio (LDR) statistics showed.
The overall LDR of local and foreign lenders increased to 74.87 percent last month — the highest in the past 28 months — as loan books expanded on the back of the nation’s recovering economy, a report released by the commission said on Thursday last week.
Total loans increased NT$224.1 billion (US$7.33 billion) in May to NT$29.78 trillion, driven primarily by foreign banks operating in Taiwan, who saw their loan books expand NT$170.1 billion, while their domestic counterparts saw an increase of NT$58.9 billion, it said.
“Foreign banks posted faster loan growth thanks to rising demand for short-term loans by local companies,” the commission added.
In comparison, total deposits at banks totaled NT$39.78 trillion last month, marking a month-on-month increase of NT$122.3 billion and an annual expansion of NT$1.68 trillion, commission data showed.
The commission said it continues to pay close attention to mortgage figures, as statistics showed that the non-performing mortgage ratios of three lenders exceeded 1 percent in May, compared with an average bad loan ratio of 0.26 percent for all banks.
The three lenders, which had been upgraded from credit cooperatives, are required to present concrete measures for improving their bad loan ratios, it said.
Commission tallies showed that life insurance companies reported foreign-exchange losses of NT$98.4 billion in the first six months of the year, after last month’s losses expanded to NT$18.1 billion from May.
The commission said that life insurance companies have reported foreign-exchange losses for six consecutive months, but that the losses in the first half of the year were lower than the NT$103 billion in the same period last year.
The New Taiwan dollar appreciated 2.5 percent against the US dollar in the first quarter, but weakened in the second quarter, the commission said.
The NT dollar depreciated by 2.18 percent against the greenback in the first six months of the year, it added.
Despite their foreign-exchange losses, life insurance companies reported a combined profit of NT$63.7 billion in the first half of the year, up 116.7 percent year-on-year, with a total net value of NT$1.37 trillion, an increase of NT$122.5 billion from last year.
Over the same period, property insurers made a combined profit of NT$9.3 billion, an increase of NT$2 billion from last year, the commission said.
Additional reporting by staff writer
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