Local banks’ exposure to China fell in the first 11 months of last year as the Chinese economy showed signs of slowing, the Financial Supervisory Commission said.
Data compiled by the commission showed that the exposure of local banks to China fell to NT$1.71 trillion (US$56.53 billion) as of the end of November last year, down NT$62 billion from the end of 2018.
The decline consisted of a drop of NT$53.1 billion in bank loans, a decline of NT$5.1 billion in investments and a fall of NT$7.1 billion in interbank loans, government data showed.
Banking Bureau Deputy Director Sherri Chuang (莊琇媛) said that China had faced downside risks, prompting local banks to tighten their lending policies.
China also encountered many international disputes, such as a trade spat with the US, she added.
China’s GDP grew 6.1 percent last year, slowing from 6.6 percent growth in 2018 and the lowest level since 1990.
Chinese Academy of Social Sciences economist Zhang Ming (張明) has forecast that China’s GDP growth for the first quarter of this year could slow to 5 percent or even lower because of the coronavirus outbreak that originated in Wuhan.
Exposure to China accounted for 48 percent of the banking sector’s net worth in the fourth quarter last year, down from 48.7 percent in the third quarter, 49.9 percent in the second quarter and 51.2 percent in the first quarter, Chuang said.
Despite the decline in the banking sector, local securities firms saw their exposure to China rise NT$4.27 billion last year to NT$15.43 billion, the Securities and Futures Bureau said, without offering an explanation for the increase.
Local insurance companies’ exposure totaled NT$264.8 billion as of the end of last year, up NT$32.7 billion from a year earlier as firms increased their investments in China, the Insurance Bureau said.
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