U.S. stays largest debtor nation of Taiwan's banks for 37th straight quarter

Taipei, Dec. 30 (CNA) The United States remained the largest debtor nation of banks in Taiwan for the 37th consecutive quarter at the end of the third quarter of 2024.

Data released by Taiwan's central bank over the weekend showed Taiwanese banks' exposure to the U.S. stood at US$181.99 billion at the end of September, up US$6.67 billion or 3.80 percent from a quarter earlier.

Speaking with reporters, Hsieh Jen-chun (謝人俊), deputy head of the central bank's Department of Financial Inspection, said that as the U.S. economy remains stable, banks in Taiwan continued to raise investments in trusted assets and increased interbank loans and financial bond purchases in the U.S. market.

According to Hsieh, the U.S. accounted for 29.81 percent of Taiwanese banks' total international claims at the end of September, compared with a new high of 29.89 percent at the end of June.

China remained the second largest debtor nation of Taiwan's banking sector with exposure at US$48.27 billion as of the end of September, up 4.34 percent from the end of June, which Hsieh attributed to the Chinese yen's appreciation against the U.S. dollar and an increase of loans and bond purchases.

Still, the gap in exposure to the U.S. and China widened to US$133.7 billion at the end of September from US$129.0 billion at the end of June, and also from US$111.0 billion at the end of June 2023 as the Chinese economy was hit by escalating trade tensions between Washington and Beijing, growing geopolitical unease and rising protectionism, the central bank said.

At the end of the third quarter, international claims by Taiwanese banks stood at US$610.4 billion, up 4.08 percent from a quarter earlier as the local banking sector increased lending to the nonbanking segment in the private sectors of debtor nations, the central bank said.

After the U.S. and China, Luxembourg took the third spot with exposure from Taiwanese banks at US$44.62 billion at the end of September, up 9.68 percent from a quarter earlier due to an increase in investments in currency mutual funds ahead of Australia (US$40.19 billion, up 7.39 percent) and Japan (US$35.51 billion, down 17.04 percent.)

The central bank attributed the growth in exposure to Japan to the Japanese yen's appreciation against the greenback and a rise in interbank loans.

Rounding out the top 10 debtor areas were Hong Kong with exposure of about US$32.20 billion at the end of September, down 3.54 percent on a weaker economy, followed by the United Kingdom (US$20.56 billion, up 1.52 percent), Singapore (US$17.78 billion, down 2.28 percent), South Korea (US$17.26 billion, up 7.17 percent) and France (US$15.98 billion, down 0.34 percent).

Exposure to the top 10 debtors totaled US$454.30 billion, accounting for 74.43 percent of the total international claims of Taiwan's banks at the end of September, the central bank said.