Taiwanese banks and life insurers have reduced their exposure to China to a record low due to the COVID-19 pandemic, economic uncertainty and a declining property market, data released by the Financial Supervisory Commission (FSC) yesterday showed.
Local banks’ aggregate exposure through loans, investments and deposits contracted about 1 percent sequentially to NT$1.18 trillion (US$37.9 billion) at the end of September, the lowest in nine years, the commission said.
On an annual basis, it fell by 17 percent, or NT$234 billion, it said.
Photo: AFP
Local banks’ exposure to China accounted for 29 percent of their combined net value of NT$4.11 trillion, down from 36 percent a year earlier, the data showed.
CTBC Bank (中國信託商銀) led its peers, with an exposure of NT$173 billion, down 3.8 percent or NT$7 billion from a year earlier, the data showed.
Taipei Fubon Commercial Bank (台北富邦銀行) was second, with its China exposure declining 14 percent to NT$104 billion, while E.Sun Commercial Bank (玉山銀行) ranked third at NT$88 billion, down 3 percent from a year earlier.
Cathay United Bank (國泰世華銀行) slipped from second to fourth place this year, as its exposure to China plunged 35 percent to NT$84 billion.
Life insurance firms last quarter cut their investment in China for the sixth consecutive quarter, with their combined investment sliding to NT$148.5 billion at the end of September, the lowest in the past 25 quarters, the commission said.
China’s tensions with the US, its strict COVID-19 controls and troubled property market have made local insurers more conservative about investing in China, the commission said.
Cathay Life Insurance Co (國泰人壽) led its peers, although its investment in China had declined for six quarters in a row to about NT$32 billion at the end of last quarter, the data showed.
Taiwan Life Insurance Co (台灣人壽), Fubon Life Insurance Co (富邦人壽), China Life Insurance Co (中國人壽) and Nan Shan Life Insurance Co (南山人壽) round up the top five list.
However, Taiwanese financial holding companies still increased their investment in Chinese tech giants Tencent Holdings Ltd (騰訊) and Alibaba Group Holding Ltd (阿里巴巴) last quarter, the commission said.
Their investment in Tencent rose 4.3 percent quarterly to NT$79.7 billion at the end of September, while that in Alibaba climbed 3.5 percent to NT$46.3 billion, it said.
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