Loans to nations targeted by the government’s New Southbound Policy totaled NT$1.18 trillion (US$42.23 billion) as of the end of last month, down NT$9.76 billion from the end of last year, as banks reduced lending due to economic uncertainty amid the COVID-19 pandemic, the Financial Supervisory Commission (FSC) said yesterday.
Combined loans to the 18 nations at the end of last year were NT$1.19 trillion, the commission said.
“That came in contrary to our expectations of a 5 percent increase in banks’ combined loans to Southeast Asia this year,” Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) told a videoconference in New Taipei City.
The decline in lending also came after a string of overseas loans turned sour last year, but Lin said that the commission had not yet concluded that was a contributing factor.
In the first half of this year, loans to India dipped the steepest by 21.4 percent from the end of last year to NT$111.5 billion, while loans to Indonesia decreased 17.4 percent to NT$115.1 billion and those to Singapore fell 12 percent to NT$177.9 billion, FSC data showed.
Australia continued to be the largest market for overseas lending, but loans to the country also fell 1.6 percent to NT$259.8 billion, data showed.
Vietnam was the only market that saw loan growth, with combined lending expanding 20.9 percent to NT$257.6 billion over the period, as more Taiwanese companies increased investments or production in the country and thus needed more funding from banks, Lin said.
Taiwanese banks also have the most units — branches, offices or subsidiaries — in Vietnam, at 58, among the New Southbound Policy countries, he said, adding that the more units a bank has, the more business opportunities it attracts.
Banks have 54 units in Cambodia, 17 in the Philippines and 15 in Myanmar, he said.
The FSC has approved seven banks to set up new branches in Vietnam, while most of them intended to open units in the capital, Hanoi, but have not yet received permission from Vietnamese regulators, Lin said.
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