Taiwan financial firms' exposure to Russia & Ukraine tops NT$217 billion

02/25/2022 07:31 PM
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CNA file photo
CNA file photo

Taiwan, Feb. 25 (CNA) Taiwanese banks', insurers', and securities firms' exposure in the Ukrainian and Russian markets totaled more than NT$217 billion (US$7.75 billion) as of the end of January, according to the Financial Supervisory Commission (FSC).

The three industries' exposure in the two eastern European states fell about NT$10 billion from a month earlier to NT$217.91 billion, said the FSC, the top financial regular in the country, following Moscow's commencement of military operations across Ukraine on Thursday.

The FSC said the month-on-month decline in exposure largely came from Taiwanese life insurance companies, attributing the change to firms cutting portfolio holdings after assessing the risks as well as fluctuations in the market value of their investments.

Taiwanese banks, insurers, and securities firms' exposure to stock and debt markets in Russia and Ukraine is just a small fraction of their worldwide total, which stood at almost NT$3 trillion as of the end of January, according to FSC figures.

The FSC said the local banking industry recorded lending to Russia of NT$64 million and that their investments in the country totaled NT$5.04 billion. As for Ukraine, the industry's lending reached only NT$3 million.

Taiwanese life insurers' investments in Russia hit NT$138.2 billion as of the end of January, while they had no investments in Ukraine. Meanwhile, non-life insurers recorded no investments in both Russia and Ukraine, the FSC said.

The FSC said that while the local securities and futures industry had no direct exposure to Russia and Ukraine, individuals held about NT$55.2 billion in Russia-based exposure after investing in local and overseas mutual funds with assets in the county. In addition, individual investments in mutual funds with assets in Ukraine amounted to exposure of around NT$19.4 billion.

Kuo Chia-chun (郭佳君), deputy director of the FSC's Securities and Futures Bureau, said the industry's exposure to the two markets was relatively small.

Kuo said Taiwan had only one mutual fund investing Russia, which accounted for more than 70 percent of the fund's total investments. However, she added that the fund did not directly invest in the Moscow Exchange and instead invested in Russian firms' American depositary receipts (ADRs) traded on the U.S. market, and their global depositary receipts (GDRs) traded on the U.K. market.

Meanwhile, Fubon Financial Holding Co. and Cathay Financial Holding Co., the top two financial holding firms in Taiwan, said their investments in Russia totaled NT$21.2 billion and NT$20 billion, respectively, as of the end of January, with no investments in Ukraine.

The two financial holding firms said their investments in Russia were focused on government bonds.

(By Hsieh Fang-wu, Su Ssu-yun and Frances Huang)


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