US largest bank debtor for 40th consecutive quarter

The US remained the largest debtor nation to Taiwan’s banking sector for the 40th consecutive quarter at the end of June, after local banks’ exposure to the US market rose more than 8 percent from three months earlier, the central bank said on Friday.

Exposure to the US climbed to US$194.87 billion, up US$14.80 billion, or 8.22 percent, from the previous quarter, central bank data showed.

Department of Financial Inspection Deputy Director-General Hsieh Jen-chun (謝人俊) attributed the increase to banks raising their deposits and interbank loans in the US, while also placing more funds into stock and bond mutual funds.

Photo: AP

China rose one spot to become the second-largest debtor nation, with Taiwanese banks’ exposure up US$2.38 billion, or 5.16 percent, to US$48.50 billion, Hsieh said.

The rise in exposure to China came as banks capitalized on a stronger yuan to invest in Chinese bonds while extending more interbank loans, he said.

However, the gap between Taiwanese banks’ exposure to the US and China widened further, reaching a record US$146.4 billion at the end of June, the central bank said.

After the US and China, Luxembourg ranked third at the end of June, slipping one spot from a quarter earlier, with Taiwanese banks’ exposure rising 4.20 percent to US$48.06 billion, the central bank said.

Australia followed with US$40.22 billion and Japan with US$37.26 billion, it said.

Rounding out the top 11 debtor areas were Hong Kong with exposure of US$32.29 billion, the UK with US$22.11 billion, Singapore with US$19.02 billion, France with US$18.86 billion, Vietnam with US$16.84 billion and South Korea with US$16.29 billion, it added.

Exposure to the top 10 debtors totaled US$478 billion, or 73.75 percent of Taiwan’s total international claims of US$648.2 billion at the end of June, it said.

Overall claims rose 5.57 percent from the previous quarter, mainly due to an increase in lending to nonbank firms, the bank said.