The United States ranked as the largest debtor country to banks registered in Taiwan as of the end of September for the 21st consecutive quarter, according to the central bank.
China retained second place in terms of exposure of banks in Taiwan as of the end of September, the central bank said, adding that Taiwanese banks' exposure to Washington and Beijing grew from a quarter earlier on a direct risk basis.
Data compiled by the central bank showed that outstanding international claims by Taiwanese banks on the U.S. as of the end of September totaled US$94.29 billion, up about US$2.38 billion from a quarter earlier on a direct risk basis, marking the second consecutive quarter of growth.
On an ultimate risk basis, which calculates a country's consolidated debt after risk transfers, Taiwanese banks' exposure to the U.S. also rose to US$89.90 billion as of the end of September, up from US$89.32 million a quarter earlier, the data showed.
In terms of China, outstanding international claims by the local banking sector rose US$2.05 billion from a quarter earlier to US$49.81 billion as of the end of September, also marking the second straight quarter of growth, the central bank said.
It said the increase in exposure to China came after appreciation of the Chinese yuan led to an increase in Taiwanese bank loans. In addition, these banks' investments in the China bond market also boosted the exposure.
After the U.S. and China, Luxembourg remained in third spot, as Taiwanese banks' exposure on a direct risk basis stood at US$39.22 billion as of the end of September, up from US$37.51 billion a quarter earlier, ahead of Hong Kong (US$33.91 billion) and Japan (US$32.86 billion).
Australia took sixth place, as the Taiwan banking sector's exposure hit US$25.07 billion as of the end of September, up from US$24.98 billion a quarter earlier, followed by the Cayman Islands (US$19.16 billion), the United Kingdom (US$15.17 billion), Singapore (US$14.74 billion) and the British West Indies (US$12.20 billion).
The local banking system's aggregate international claims on a direct risk basis as of the end of September rose 1.3 percent from a quarter earlier to US$461.7 billion and the exposure to the top 10 debtor countries stood at US$336.4 billion, or 72.87 percent of the total, the data showed.
Despite the COVID-19 pandemic, Taiwanese banks' exposure worldwide was on the rise at the end of September. The central bank said it remains to be seen whether an escalation of the pandemic worldwide will reverse the trend.
As of the end of September, the non-banking private sector worldwide accounted for 62.27 percent of Taiwan's total international claims on a direct risk basis, with the banking industry making up 28.34 percent and the public sector representing 9.38 percent, the central bank said. (By Su Szu-yun and Frances Huang)