Domestic banks’ overall loan-to-deposit ratio (LDR) hit a new low of 69.93 percent at the end of October, from 70.07 percent in September, as deposits at the banks exceeded their lending, the Financial Supervisory Commission (FSC) reported yesterday.
Combined deposits increased by NT$355 billion (US$12.77 billion) from September to NT$47.65 trillion, while total loans increased by NT$179 billion to NT$33.32 trillion, commission data showed.
In October, the gap between deposits and loans increased to NT$14.33 trillion, the data showed.
The increase in October deposits could partially be attributed to Taiwan Semiconductor Manufacturing Co (台積電), which deposited more than NT$20 billion before its issuance of corporate bonds, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) said.
The increase also reflected a rise in fund transfers for equity trading, he added.
Out of all loan types in October, housing loans, which reached NT$102.8 billion, had the highest total, the data showed.
Over the past three years, the average LDR of domestic banks has been between 72 percent and 73 percent, but this year, the average has fallen, mainly due to banks not increasing their lending as quickly as they receive new deposits, Lin said.
In the first 10 months of the year, the banks’ lending increased by NT$1.86 trillion, lower than the increase of NT$2.86 trillion in deposits, he said, adding that banks should design innovative products to bolster their lending momentum.
Separately, local banks reported a combined pretax profit of NT$295 billion for the first 10 months, up 8.5 percent year-on-year, the commission said.
Profit from banks’ domestic operations increased 17 percent annually to NT$191 billion, while profit from their overseas branches increased 48 percent to NT$26 billion, the data showed.
However, profit from their Chinese operations declined 33 percent to NT$3.1 billion, due to lower investment returns and higher loan-loss provisions, the commission data showed.
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