Taiwanese banks, insurers and securities firms reduced their exposures to the Ukrainian and Russian markets by a total of NT$143.4 billion (US$4.9 billion) as of the end of last month, down by NT$74.5 billion from two months earlier, the Financial Supervisory Commission said yesterday.
The reduction in exposures was mainly due to the decline in the valuation of Russian bonds, as market prices dipped amid rising default risks since the outbreak of the war in Ukraine, the commission said.
Taiwanese life insurers had invested NT$104.6 billion in Russia, down 25 percent from NT$138.2 billion two months earlier, while no investment was made in Ukraine, commission data showed.
The local securities and futures industry has no direct exposure to the two countries, but individuals held about NT$26.6 billion in Russia-based exposures through investments in local and overseas mutual funds that have assets in Russia, the data showed.
That was a reduction of 52 percent from two months ago, the data showed.
Individual investments in mutual funds with assets in Ukraine totaled about NT$6.9 billion, plunging 63 percent from two months earlier, the data showed.
Conversely, local banks’ exposure to Russia rose 3 percent to NT$5.28 billion, which includes NT$51 million in lending and NT$5.23 billion in direct investments, compared with two months ago, the commission said.
The increases in Russian investment, denominated in US currency, are mostly due to the appreciation of the US dollar against the New Taiwan dollar, the commission said.
Eight local life insurers registered a combined credit loss of NT$14.23 billion, stemming from holdings of Russian bonds as of the end of last month, the data showed.
Shin Kong Life Insurance Co (新光人壽) had the most significant losses amongst local peers, totaling NT$3.16 billion. Nan Shan Life Insurance Co (南山人壽) followed with a loss of NT$3.02 billion. Cathay Life Insurance Co (國泰人壽) registered a loss of NT$2.6 billion.
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