Loans by Taiwanese banks in China down to $57.49b in Q1

The ratio of the country’s banking sector to the Mainland also fell.

The number of outstanding loans extended and investments made by Taiwanese banks in China fell from $57.83b (NT1.73t) to $57.49b (NT1.72t) in Q1, pushing down the banking sector’s average exposure to China relative to combined net worth, according to the Financial Supervisory Commission (FSC).

The financial regulator did not go into details about the decline. Due to the diminished exposure over the three month period, the ratio of the bank's average exposure to China relative to combined net worth fell from 0.54 from 0.53.

The level of exposure remained below the ratio ceiling of 1.00 set by local financial regulations, which indicates that the local banking sector does not face any pressing risks caused by exposure to China.

Also read: Hong Kong banks face heightened risks from close Chinese ties: Fitch

The data showed the ratio of exposure to China relative to total net worth for Taipei Fubon Commercial Bank which stood at 0.81 in Q1, representing the highest level among all banks in Taiwan.

The exposure ratio at Bank SinoPac dipped from 0.78 to 0.71 whilst the figure for CTBC Bank hit 0.76, also went down from 0.83 in the previous quarter.