Interest rates on new loans at Taiwan’s five major state-run banks last month rose 23 basis points to an average of 2.051 percent as loan demand picked up, the central bank said yesterday.
The monetary policymaker analyzed data from Bank of Taiwan (臺灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行).
The uptick was most evident for mortgage lending, which rose 8 basis points to 2.079 percent, driven by real demand and completion of new residential properties, although the central bank has kept interest rates unchanged since June, central bank research official Tsao Ti-jen (曹體仁) said.
Photo: Wang Chieh, Taipei Times
The mortgage balance increased by NT$9.39 billion (US$299.73 million) to a record NT$98.96 billion, Tsao said, adding that loans backed by a government interest subsidy program accounted for 36.48 percent, or NT$36.1 billion.
The rise in mortgage volume was linked to seasonality, as it is common for developers in Taiwan to complete construction on presale residential projects and book profits ahead of the Lunar New Year holiday, he said.
Prospective home buyers also prefer to close deals toward the end of the year in keeping with tradition, he added.
Last year, mortgage operations at the five state-run banks expanded 8.4 percent from 2022, milder than the advances of 12.6 and 20 percent in the previous two years, Tsao said.
“I would not describe the pace of increases as a sign of overheating, but the central bank will continue to pay close attention to the housing market,” Tsao said, adding that interest subsidies are for purchases of first homes, suggesting that healthy real demand is upholding the house transaction data.
Interest rates on new working capital climbed to 2.015 percent, as companies sought cash to support the distribution of bonuses, he said.
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