TAIPEI (Taiwan News) — The Financial Supervisory Commission said Tuesday that Taiwan's domestic banks issued NT$42.59 trillion (US$1.35 trillion) in loans in January.
The figure rose NT$388.5 billion from the previous month, the highest increase in six months. The commission attributed the rise to increased loans to private enterprises and funding demands due to pre-Lunar New Year inventory preparations, per CNA.
Working capital loans saw the largest increase in January, rising around NT$320 billion, the highest in six months. Real estate loans increased NT$57.8 billion, followed by corporate investment loans, up NT$7.7 billion, and movable asset loans, up NT$2.9 billion.
Taiwan's banks reported a non-performing loan ratio of 0.16% in January, indicating a low level of bad loans. However, the loan loss provision coverage ratio, which shows the funds set aside to cover potential bad loans, dropped to 845.58%.
The commission also announced that deposits in domestic banks reached NT$59.49 trillion in January, up NT$56.9 billion from December. However, the growth rate was the lowest since September 2023.
The commission’s Banking Bureau Deputy Director-General Hou Li-yang (侯立洋) attributed the slow growth in bank deposits to three factors: large business payments for goods, the US dollar's depreciation against the New Taiwan dollar reducing the value of overseas income, and increased overseas investments by bank clients.
Taiwan's banks reported pre-tax profits of NT$53.63 billion in January, second to the NT$54.61 billion recorded in the same month last year. Domestic headquarters and branches accounted for the majority of the profits, with pre-tax earnings of NT$39.3 billion, down 5.1% from 2024.
Hou said the profit decrease for domestic headquarters and branches was due to higher employee welfare expenses and reduced fee income and investment returns. However, profits increased NT$21.26 billion from December.
Pre-tax profits for overseas branches of Taiwan's banks totaled NT$6.08 billion in January, down 6.5% from 2024, Hou added. The decline stemmed primarily from higher provisions for bad debts and reduced interest income.
