U.S. remains top debtor of Taiwan banks for 41st straight quarter

Taipei, Dec. 29 (CNA) The United States remained the largest debtor nation of Taiwan's banking sector for the 41st consecutive quarter, while China fell one spot to third, according to the central bank.

Data released over the weekend showed Taiwanese banks' exposure to the U.S. rose US$4.03 billion, or 2.07 percent, from the end of June to US$198.896 billion at the end of September.

The growth largely reflected an increase in investments in the U.S. securities and lending, according to Hsieh Jen-chun (謝人俊), deputy head of the central bank's Department of Financial Inspection.

Luxembourg replaced China as the second-largest debtor nation of Taiwan's banks, as of the end of the third quarter, with exposure to the European country rising US$2.72 billion, or 5.63 percent, from the end of June to US$50.77 billion at the end of September.

Hsieh said the increase was due to Taiwanese banks placing more funds in trust assets in the European country, marking the third straight quarter of quarter-on-quarter growth.

China dropped to third place, although Taiwan banks' exposure rose about US$1.07 billion, or 2.20 percent, from a quarter earlier to US$49.56 billion.

The local banking sector's exposure to China has ranged between US$40 billion and US$50 billion recently, amid concerns about that country's economic outlook and caution over Taiwan's Financial Supervisory Commission restrictions on lending and investments in China, Hsieh said.

As of the end of September, international claims by Taiwanese banks on a direct risk basis -- comprising loans, investments, deposits and other holdings -- had increased 3.48 percent from a quarter earlier to US$670.8 billion on the back of an increase in lending in the global nonbank private sector.

Australia was Taiwan's fourth largest debtor nation, with exposure of US$42.14 billion as of the end of September, up 4.76 percent from a quarter earlier. The other major debtors were Japan (US$41.17 billion), Hong Kong (US$32.68 billion), the United Kingdom (US$23.20 billion), Singapore (US$20.62 billion), France (US$19.42 billion), and Vietnam (US$17.58 billion), in that order.

Exposure to the top 10 debtor nations totaled US$496.0 billion at the end of September, accounting for 73.95 percent of the total international claims held by Taiwan's banks, according to the central bank.