Taiwanese banks’ loan books grew to a record NT$29.2 trillion (US$940.4 billion) as of the end of May, up NT$230.5 billion from the end of April, statistics released this month by the Financial Supervisory Commission showed.
That was the third straight month of growth and was faster than increases of NT$52.7 billion and NT$106.9 billion in the previous two months, the data showed.
Compared with the beginning of this year, combined loans by the nation’s 37 local banks expanded NT$357.6 billion, driven mainly by corporate demand for working capital, the commission said.
Despite the increase, local banks’ asset quality remained “benign,” reporting a combined NT$70.2 billion in nonperforming loans as of the end of May, a monthly decrease of NT$1.7 billion. The nonperforming loans ratio was 0.24 percent, down 0.01 percentage points from a month earlier and down 0.03 percentage points from a year earlier, the data showed.
The overall coverage ratio — the loans covered by banks’ provisions, which indicates the sufficiency of bad-loan reserves — was 572.99 percent in May, up from 556.6 percent in April, which the commission said reflected banks’ intention to maintain high bad-debt provisions.
As the government pushes Taiwanese businesses with overseas operations to return home, funds for corporate customers is expected to increase, the commission said.
As of Friday, the Ministry of Economic Affairs’ three-year plan to encourage Taiwanese businesses to return had 93 approved applications this year, with about NT$452 billion in pledged investments.
To encourage returning Taiwanese businesses to build plants and purchase manufacturing equipment, the National Development Fund has promised to subsidize 0.5 percent of bank commissions if the firms borrow less than NT$2 billion, 0.3 percent for businesses borrowing NT$2 billion to NT$10 billion and 0.1 percent for those borrowing more than NT$10 billion.
Even though the central bank has kept benchmark interest rates unchanged since September 2016, local banks’ lending momentum is likely to remain steady for an extended period as they vie for business from returning Taiwanese firms, which bodes well for profitability, the commission said.
In April, Moody’s Investors Service said it expected stable loan growth of about 5 percent for Taiwanese banks this year, compared with loan growth of 5.1 percent last year and 4.7 percent in 2017.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
RSS