Deposits at local banks dropped by NT$185.4 billion (US$6.02 billion) to NT$38.36 trillion in September from a month earlier, marking the largest monthly decline since January last year, as people transferred funds to overseas markets for higher interest rates or withdrew them to repay debts, the Financial Supervisory Commission (FSC) said on Wednesday.
Deposits at the 37 banks in Taiwan had been climbing and hit a record of NT$38.54 trillion in August, the commission said.
With the decline in September deposits, the total increase in deposits narrowed from NT$1.12 trillion in August to NT$938.1 billion in September, it added.
Among all local and foreign lenders, Mega International Commercial Bank (兆豐銀行) and Taiwan Cooperative Bank (合庫銀行) saw their deposits decline by more than NT$30 billion in September from the previous month, while Cathay United Bank (國泰世華銀行), Yuanta Commercial Bank (元大銀行) and Bank SinoPac (永豐銀行) saw their deposits drop by more than NT$20 billion over the period, FSC data showed.
CTBC Bank (中信銀行), E.Sun Commercial Bank (玉山銀行) and Shin Kong Commercial Bank (新光銀行) saw their deposits decrease by NT$10 billion over the same period, the data showed.
The largest monthly decline was in January last year, when NT$313.9 billion was withdrawn by consumers for the Lunar New Year holiday, the commission said.
Meanwhile, loans at the 37 banks increased by NT$68.5 billion in September to a record NT$28.1 trillion on the back of the nation’s recovering economy, the commission said.
Bank of Taiwan (台灣銀行) ranked first with NT$2.41 trillion in aggregate loans as of September, followed by Taiwan Cooperative Bank (合庫銀行) with NT$2.07 trillion and Land Bank of Taiwan (土地銀行) with NT$1.96 trillion, the data showed.
The overall loan-to-deposit ratio (LDR) rose to 73.25 percent in September, the highest it has been the past 16 months, the FSC said.
“Deposits decreased as a result of investment fund movements, and because some banks’ corporate clients withdrew money to pay their debts. This should be a short-term phenomenon,” FSC Chairman Wellington Koo (顧立雄) told reporters on Wednesday.
Asked if the decrease in deposits should raise concerns over fund outflows, Koo said: “We do not need to worry.”
“It is good for banks when the LDR increases, as we do not want too many idle funds to stay in the banking system,” Koo said.
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