Taiwan banks’ exposure to U.S. hits new high; lending to China falls

Taipei--Lending extended by Taiwanese banks to the United States continued to hit a record high at the end of last year on the back of a recovery in the U.S. economy, the largest in the world, as well as a stronger greenback, according to the local central bank.

However, Taiwanese banks' exposure to China kept falling in reflection of moderating growth in the world's second largest economy and the weakness of the Chinese yuan against the U.S. dollar, the bank's data showed.

At the end of December, outstanding international claims by Taiwanese banks to the U.S. on a direct risk basis rose to US$69.68 billion from US$67.17 billion recorded at the end of September, the data indicated.

On an ultimate risk basis, which calculates a country's consolidated debts after risk transfers, Taiwanese banks' exposure to the U.S. also rose to US$67.36 billion at the end of December from US$63.59 billion seen a quarter earlier, the central bank said.

The U.S. replaced China to become the largest debtor to Taiwan since the end of June 2016, and the debt has kept growing since then.

The central bank said that after the U.S. Federal Reserve kicked off an interest rate hike cycle in December 2016 due to a rebound in the economy, more and more Taiwanese firms have become keen to park their funds in the U.S. In addition, banks in Taiwan have turned more willing to hold U.S. treasury, eyeing higher interest income, the central bank added.

At the end of December, Taiwanese bank's outstanding international claims to China fell to US$38.01 billion from US$40.29 billion on a direct risk basis, while banks' exposure to China on an automate risks basis also fell to US$55.77 billion from US$56.87 billion, the data showed.

China, however, retained the title as the second largest debtor nation to Taiwan, even as Taiwanese enterprises cut back their investments in the mainland. That led to a decline in borrowing from Taiwan's banks from their Chinese counterparts and a drop in deposits placed by Taiwanese banks in their accounts in China.

After the U.S. and China, Luxembourg ranked as the third largest debtor to Taiwan at the end of December on a direct risk basis after Taiwanese banks extended US$35.56 billion to the European country.

Japan came in fourth with US$31.68 billion in debt, ahead of Hong Kong with US$31.27 billion, the United Kingdom with US$16.28 billion, the Cayman Islands with US$14.95 billion, Australia with US$14.75 billion, the British West Indies with US$13.23 billion, and Singapore with US$12.60 billion.

At the end of December, outstanding international claims by the Taiwanese banking sector on an ultimate risk basis fell US$7.1 billion or 1.91 percent from a quarter earlier to US$363.8 billion, the central bank said.

Source: Focus Taiwan News Channel

Taiwan banks’ exposure to U.S. hits new high; lending to China falls

Taipei--Lending extended by Taiwanese banks to the United States continued to hit a record high at the end of last year on the back of a recovery in the U.S. economy, the largest in the world, as well as a stronger greenback, according to the local central bank.

However, Taiwanese banks' exposure to China kept falling in reflection of moderating growth in the world's second largest economy and the weakness of the Chinese yuan against the U.S. dollar, the bank's data showed.

At the end of December, outstanding international claims by Taiwanese banks to the U.S. on a direct risk basis rose to US$69.68 billion from US$67.17 billion recorded at the end of September, the data indicated.

On an ultimate risk basis, which calculates a country's consolidated debts after risk transfers, Taiwanese banks' exposure to the U.S. also rose to US$67.36 billion at the end of December from US$63.59 billion seen a quarter earlier, the central bank said.

The U.S. replaced China to become the largest debtor to Taiwan since the end of June 2016, and the debt has kept growing since then.

The central bank said that after the U.S. Federal Reserve kicked off an interest rate hike cycle in December 2016 due to a rebound in the economy, more and more Taiwanese firms have become keen to park their funds in the U.S. In addition, banks in Taiwan have turned more willing to hold U.S. treasury, eyeing higher interest income, the central bank added.

At the end of December, Taiwanese bank's outstanding international claims to China fell to US$38.01 billion from US$40.29 billion on a direct risk basis, while banks' exposure to China on an automate risks basis also fell to US$55.77 billion from US$56.87 billion, the data showed.

China, however, retained the title as the second largest debtor nation to Taiwan, even as Taiwanese enterprises cut back their investments in the mainland. That led to a decline in borrowing from Taiwan's banks from their Chinese counterparts and a drop in deposits placed by Taiwanese banks in their accounts in China.

After the U.S. and China, Luxembourg ranked as the third largest debtor to Taiwan at the end of December on a direct risk basis after Taiwanese banks extended US$35.56 billion to the European country.

Japan came in fourth with US$31.68 billion in debt, ahead of Hong Kong with US$31.27 billion, the United Kingdom with US$16.28 billion, the Cayman Islands with US$14.95 billion, Australia with US$14.75 billion, the British West Indies with US$13.23 billion, and Singapore with US$12.60 billion.

At the end of December, outstanding international claims by the Taiwanese banking sector on an ultimate risk basis fell US$7.1 billion or 1.91 percent from a quarter earlier to US$363.8 billion, the central bank said.

Source: Focus Taiwan News Channel