State-run banks yesterday said that they would raise interest rates on savings deposits and loans after the central bank last week raised its policy rates by 25 basis points, but would approach the matter guided by business needs and other considerations.
Top officials from state-run lenders made known their intentions during a meeting of the legislature’s Finance Committee in Taipei, where lawmakers raised questions about the impact of the rate hikes.
State-owned Bank of Taiwan (臺灣銀行) has increased the interest rates on its savings deposits by 0.25 percentage points, but would not impose similar charges on all lending operations to retain customers, chairman Joseph Lyu (呂桔誠) said.
Photo: CNA
Starting yesterday, the nation’s largest lender by assets raised the interest rate on time savings deposits of different tenures by 25 basis points, benefits that failed to be extended to large deposits and demand deposit accounts.
Bank of Taiwan did not comment on how the rate hike would affect syndicated loans, land financing, corporate lending and mortgage operations.
Similarly, state-run Mega International Commercial Bank (兆豐銀行) is to raise interest rates on time savings deposits by 25 basis points, but the adjustment for demand deposits would be smaller, chairman Michael Chang (張兆順) said.
Taiwan Cooperative Bank (合庫銀行) chairman Lei Chung-dar (雷仲達) said that he would stand by the central bank’s policy in dealing with savings and loans except for demand deposits. Lenders generally offer very small interest rates for demand deposits.
State-run and private banks are to discuss lending rates this week and implement the changes next month.
Interest rates for mortgages are likely to rise from 1.31 percent to upward of 1.56 percent to reflect the central bank’s monetary normalization, adding an extra NT$1,200 (US$42.12) a month for homeowners with a NT$10 million mortgage.
Interest rates for land financing are likely to climb to at least 2.05 percent from 1.8 percent to help discourage land hoarding.
While ample liquidity and record-low borrowing costs aimed at mitigating the pain of the COVID-19 pandemic had helped drive up property prices, the increase in funding costs would reduce developers’ and builders’ financing needs, and the property market would reflect real demand by home buyers, Capital Investment Management Corp (群益投顧) said in a note yesterday, adding that demand would remain strong as the nation’s economic fundamentals continue to improve.
State-owned Land Bank of Taiwan (土地銀行) announced earlier that it would not take on new land financing after related lending approached the regulatory limit.
The Financial Supervisory Commission has tightened capital requirements for real-estate lending, obligating banks intent on growing their real-estate lending to demonstrate higher capitalization, but it remains to be seen if developers and builders would pass higher interest expenses to home buyers, analysts said.
US PROBE: The Information reported that the US Department of Commerce is investigating whether the firm made advanced chips for China’s Huawei Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, yesterday said it is a law-abiding company, and is committed to complying with all applicable laws and regulations including export controls. The Hsinchu-based chip giant issued the statement after US news Web site The Information ran a story saying that the US Department of Commerce has launched a probe into TSMC over whether it breached export rules by making smartphone or artificial intelligence (AI) chips for China’s Huawei Technologies Co (華為). “We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” the statement said. “If we
REGIONAL COMPETITION: Over the past few years the Philippines has lost ground to neighbors such as Vietnam, Indonesia and Malaysia, a Philippine official said The Philippines is trying to enlist Taiwanese chip giants to expand in semiconductors, a bid to catch up with its neighbors who are emerging as significant suppliers in the industry. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) are among companies the Philippines is reaching out to as it seeks equipment and expertise to build out chip fabrication operations, said Dan Lachica, head of the Southeast Asian country’s main electronics industry group, the Semiconductor and Electronics Industries in the Philippines Foundation Inc (SEIPI). The association is working with Philippine officials in Taiwan to talk with potential
DEMAND FOR AI CHIPS: Net income in the third quarter surged 31.2% quarter-on-quarter to NT$325.26 billion, the strongest quarterly return in the company’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its revenue forecast to annual growth of 30 percent this year, thanks to strong and sustainable demand for artificial intelligence (AI) processors for servers. It was the second upward adjustment from 25 percent year-on-year growth estimated three months ago, despite recent concerns about whether the AI boom could be another technology bubble. “The demand is real. It’s real. And I believe it is just the beginning of this demand. Alright, so one of my key customers said the demand right now is ‘insane,’” TSMC chairman and chief executive C.C.
Starbucks Corp might have the more recognizable name, but 7-Eleven’s City Cafe remains the king of Taiwan’s fresh coffee market, helped by the convenience store chain’s extensive market presence and product diversification. President Chain Store Corp (PCSC, 統一超商), which runs both the 7-Eleven and Starbucks store chains in Taiwan, established the City Cafe brand in 2004. The brand took off when actress Gwei Lun-mei (桂綸鎂) became its spokesperson in 2007. City Cafe’s sales exceeded NT$10 billion (US$311.69 million) for the first time in 2015, surpassing the revenue of Starbucks Taiwan, and rose to more than NT$17 billion last year, exceeding the NT$14.98