Taiwanese banks slightly increased their overseas lending in the first quarter of this year, with most of the expansion directed toward large, familiar markets and private-sector borrowers, keeping their external risk exposure geographically concentrated, the central bank said yesterday.
Total foreign claims based on a direct risk basis rose to US$702.55 billion by the end of March, up 2.5 percent from three months earlier, mainly driven by higher exposure to the US, while exposure to China edged lower.
The US remained the largest destination for Taiwanese banks’ overseas claims for the 43rd consecutive quarter, with exposure climbing to US$209.01 billion, supported by higher holdings of securities, increased deposits with US Federal Reserve banks and additional lending activity, the central bank said.
Photo: Tyrone Siu / Reuters
By contrast, exposure to China declined to US$49.32 billion, reflecting reduced interbank placements and lower lending amid weaker economic conditions and ongoing structural pressures — including a soft property market and shifting global supply chains, the bank said.
Despite the decline, exposure to China has remained broadly stable at about US$50 billion over the past year, it added.
The ranking of the top 10 exposure destinations was unchanged. After the US and China, the largest exposures were Luxembourg, Australia, Japan, Hong Kong, the UK, Singapore, France and Vietnam, the central bank said.
Combined exposure to the top 10 markets reached US$516.64 billion at the end of March, accounting for 73.54 percent of total foreign claims, up 2.11 percent from three months earlier, it said.
Exposure to Luxembourg rose to US$51.71 billion, supported by higher loans and increased securities holdings. The country remained the second-largest destination, reflecting its role as a key hub for fund registration and asset management activities.
Exposure to Australia increased to US$46.86 billion, driven by purchases of government bonds and higher lending.
Exposure to Japan fell to US$38.3 billion, reflecting reduced interbank placements and lower deposits with the Bank of Japan, alongside the impact of a weaker yen against the US dollar.
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