In July, total lending by domestic banks had gained 5.4 percent year-on-year, or NT$425.3 billion (US$13.29 billion), allowing the sector to rake in a record profit of NT$45.29 billion thanks to financing needs for working capital and dividend issuance, the Financial Supervisory Commission said.
The advance reflected a seasonal pickup in loan demand for July, the high season for Taiwanese companies to distribute cash and stock dividends. Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) told a media briefing on Thursday.
It signified an improvement in business, as firms needed money to buy materials for export use, Lin said.
Photo on courtesy of Mega International Commercial Bank
Lin cited local lenders as saying that the increased lending went mainly to corporate customers, who wished to bolster working capital, which is a good sign that an economic recovery is approaching.
Specifically, local makers of flat panels, personal computers, and LEDs indicated that their inventory has returned to healthy levels following several quarters of adjustments, Lin said.
Global trade is in the process of bottom building and might come out of the woods toward the year-end, the financial official said.
Lin quoted other local banks as saying that strong demand for components for artificial intelligence applications helped make local tech firms less conservative.
CTBC Bank (中信銀行) reported the biggest loan increase valued at NT$167.2 billion, followed by Cathay United Bank’s (國泰世華銀行) NT$36.2 billion and E.Sun Commercial Bank’s (玉山銀行) NT$34.2 billion, Lin said.
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