Combined net profit at overseas branches of local banks declined for the third consecutive quarter to NT$10.25 billion (US$355.68 million) last quarter, affected by bad loans amid the COVID-19 pandemic, Financial Supervisory Commission (FSC) data released on Monday showed.
Last quarter’s 50 percent decline was slightly milder than the 52 percent fall to NT$9.39 billion in the second quarter, but steeper than the 15 percent drop to NT$15.84 billion in the first quarter, the data showed.
Overseas branches this year generated less net interest income due to interest rate cuts worldwide and higher loan loss provisions amid the pandemic, the data showed.
Photo: Kelson Wang, Taipei Times
They registered an average non-performing loan (NPL) ratio of 0.45 percent as of the end of September, up from 0.19 percent a year earlier, the FSC said.
In the first three quarters, they set aside NT$10 billion in additional provisions from a year earlier, it said.
Hong Kong remained the most lucrative overseas market, despite political unrest in the territory, the commission said.
However, Hong Kong branches’ combined net profit still fell 49 percent year-on-year to NT$5.2 billion last quarter after dropping 36 percent to NT$6.87 billion in the second quarter and declining 15 percent to NT$8.22 billion in the first quarter, it said.
Mainland China remained the second-most profitable market, it said.
Branches there reported combined net profit rose 7.5 percent to NT$1.72 billion last quarter due to fewer bad loans, the FSC said.
US branches reported a combined net loss of NT$460 million, compared with net profit of NT$1.59 billion in the third quarter last year, but net profit at branches declined 65 percent to NT$820 million, it said.
Branches in the Philippines, France and the UK reported widening losses of NT$580 million, NT$60 million and NT$320 million respectively, the data showed.
Overseas branches of O-Bank Co (王道商業銀行), Chang Hwa Bank (彰化銀行) and CTBC Bank (中國信託銀行) were hardest hit, with their NPL ratios tallying 1.75, 1.71 and 1.46 percent respectively as of the end of September, the data showed.
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