TAIPEI (Taiwan News) — Taiwan’s financial sector exposure to China rose to NT$792.4 billion (US$24.52 billion) in May, the highest level in nine months, but remained 4.34% lower than a year earlier, according to Financial Supervisory Commission statistics.
The FSC said domestic banks accounted for NT$733.1 billion of the total, up NT$1.3 billion from April but down 4.61% year-on-year, per UDN. The exposure was equal to about 14.1% of banks’ net worth, with the annual decline reflecting lower investment holdings despite increases in lending and interbank placements, per MoneyDJ.
FSC Banking Bureau Deputy Director-General Chang Chia-kuei (張嘉魁) said banks’ China exposure rose slightly between April and May, per CNA. However, he said lenders have remained cautious about extending credit and investing in China amid a slowing economy and property market risks.
The insurance sector’s China exposure totaled NT$52.2 billion, up 4.61% from a year earlier, with all of the exposure held by life insurers. FSC Insurance Bureau Deputy Director-General Chen Ching-yuan (陳清源) said the increase was driven by gains in Chinese stock market indices and the yuan’s appreciation against the Taiwan dollar.
Exposure by the securities, futures, and investment trust sectors totaled NT$7.1 billion, down 28.9% from a year earlier and equal to 0.72% of their combined net worth. FSC Securities and Futures Bureau Deputy Director-General Huang Hou-ming (黃厚銘) said securities firms reduced their China positions amid heightened geopolitical uncertainty, leaving exposure at the second-lowest monthly level on record.
Chang said banks’ China exposure increased only 0.18% month-on-month in May, likely from fund management activities. He said overall exposure remains at historically low levels.
