Banks approved mortgages and construction loans at a slower pace last month, but it is unclear if the trend would continue or if it was due to fewer working days in the month, the Financial Supervisory Commission (FSC) said yesterday.
New mortgages expanded NT$26 billion (US$909.03 million) from January, compared with a monthly rise of NT$64.9 billion in January, while new construction loans grew NT$20.6 billion last month, compared with a monthly growth of NT$24 billion in the previous month, the commission told a news conference in New Taipei City.
Overall, mortgages and construction loans grew NT$46.5 billion month-on-month, a smaller increase than the more than NT$100 billion for some months last year, data showed.
Photo: Cheng I-hwa, Bloomberg
On a yearly basis, new housing loans grew 9.22 percent last month, the lowest increase in four months, while new construction loans rose 12.55 percent, flat from a month earlier, data showed.
The ratio of non-performing loans for mortgages last month was 0.08 percent, while it was 0.05 percent for construction loans, data showed.
In addition to fewer working days last month because of the Lunar New Year and 228 Peace Memorial Day holidays, the central bank’s selective credit control measures and the commission’s financial examinations on banks’ mortgage practices also helped slow lending, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) said.
It is uncertain if the central bank last week raising its policy rates by 25 basis points would further cap the growth of mortgage and construction loans this month.
The commission last month raised the risk weighting for five types of mortgages and loans issued by local banks to as high as 200 percent, a measure aiming to rein in rising housing prices.
Current regulations cap a bank’s mortgages and construction loans at 30 percent of its deposits and bank debentures, meaning that a bank whose ratio is higher than 29 percent and another five banks with ratios between 28 and 29 percent are being monitored by the commission, Lin said.
Local banks’ average property loan-to-deposit ratio fell 0.1 percentage points month-on-month to 26.89 percent last month because of an increase in deposits, he added.
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