Taipei: The United States remained the largest debtor nation of Taiwan’s banking sector for the 41st consecutive quarter, with China falling one spot to third, according to the central bank. Data released over the weekend showed Taiwanese banks’ exposure to the U.S. rose by US$4.03 billion, or 2.07 percent, from the end of June to US$198.896 billion at the end of September.
According to Focus Taiwan, the growth largely reflected an increase in investments in U.S. securities and lending, as noted by Hsieh Jen-chun, deputy head of the central bank’s Department of Financial Inspection. Luxembourg replaced China as the second-largest debtor nation of Taiwan’s banks as of the end of the third quarter. Exposure to the European country rose by US$2.72 billion, or 5.63 percent, from the end of June to US$50.77 billion at the end of September.
Hsieh mentioned that the increase was due to Taiwanese banks placing more funds in trust assets in Luxembourg, marking the third straight quarter of quarter-on-quarter growth.
China dropped to third place, although Taiwan banks’ exposure rose by about US$1.07 billion, or 2.20 percent, from a quarter earlier to US$49.56 billion.
The local banking sector’s exposure to China has recently ranged between US$40 billion and US$50 billion, amid concerns about the country’s economic outlook and caution over Taiwan’s Financial Supervisory Commission restrictions on lending and investments in China, Hsieh stated. As of the end of September, international claims by Taiwanese banks on a direct risk basis-which includes loans, investments, deposits, and other holdings-had increased by 3.48 percent from a quarter earlier to US$670.8 billion, driven by an increase in lending in the global nonbank private sector.
Australia was Taiwan’s fourth-largest debtor nation, with exposure of US$42.14 billion as of the end of September, up 4.76 percent from a quarter earlier. The other major debtors were Japan (US$41.17 billion), Hong Kong (US$32.68 billion), the United Kingdom (US$23.20 billion), Singapore
(US$20.62 billion), France (US$19.42 billion), and Vietnam (US$17.58 billion), in that order. The exposure to the top 10 debtor nations totaled US$496.0 billion at the end of September, accounting for 73.95 percent of the total international claims held by Taiwan’s banks, according to the central bank.
