Local banks’ combined loans to small and medium-sized enterprises (SMEs) rose by NT$113.84 billion (US$4.06 billion) in May, the second-largest monthly increase after a rise of NT$140 billion in July last year, as banks extended more loans to companies affected by a nationwide level 3 COVID-19 alert, the Financial Supervisory Commission (FSC) said on Tuesday.
Aggregated SME loans in May totaled NT$8.11 trillion, accounting for 67 percent of all corporate loans granted by banks, with a 0.33 percent non-performing loan ratio, flat from a month earlier, commission data showed.
In the first five months of this year, banks had boosted SME loans by NT$305.9 billion, exceeding the commission’s goal of NT$300 billion.
Hua Nan Commercial Bank (華南銀行) in the first five months approved NT$38.3 billion for SMEs, the most among all banks, followed by Taiwan Cooperative Bank (合庫銀行) with NT$28.1 billion, Cathay United Bank (國泰世華銀行) with NT$23.9 billion, Bank SinoPac (永豐銀行) with NT$21.83 billion and Taiwan Business Bank (台灣企銀) with NT$21.81 billion, the data showed.
Separately, combined pretax profit at 20 Hong Kong branches of local banks sank 81 percent year-on-year to NT$880 million in the first quarter due to weakening lending momentum and more loan-loss provisions, separate commission data showed last week.
Combined loans at Hong Kong branches decreased 16 percent year-on-year in the first quarter to NT$536.1 billion, while combined deposits fell 3.12 percent to NT$1.99 trillion, the data showed.
The branches turned more conservative in the first quarter, leading to lower syndicated loans, the commission said.
They also generated less interest income and set aside more loan-loss provisions amid worries about lower spread and loan quality, it said.
Taiwan’s 15 financial holding companies reported that their combined exposure in Hong Kong at the end of March decreased 6.7 percent from a year earlier to NT$891 billion, placing the territory fifth in terms of overseas exposure, down one notch from the end of last year, the commission said.
Including local lenders’ subsidiary banks in Hong Kong, combined pretax profits from operations in the territory were NT$4.32 billion at the end of March, down 47 percent from a year earlier, the commission said.
Hong Kong nonetheless remained the most profitable market for banks’ overseas operations, it added.
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