U.S. remains top debtor of Taiwan's banks for 43rd straight quarter

Taipei, June 29 (CNA) The United States remained the largest debtor of Taiwan's banking sector for the 43rd consecutive quarter as of the end of March, while China remained the third largest debtor, Taiwan's central bank said Monday.

Data released by the central bank showed that the exposure of Taiwan's banks to the U.S. on an immediate counterparty basis hit a new high of US$209.01 billion at the end of the first quarter, up 2.05 percent from a quarter earlier.

According to the Bank for International Settlements (BIS), an immediate counterparty basis is a methodology whereby positions are allocated to the primary party to a contract.

Hsieh Jen-chun (謝人俊), deputy head of the central bank's Department of Financial Inspection, said the growth in exposure to the U.S. largely reflected an increase in securities investments and deposits placed in federal reserve banks and loans.

At the end of March, the Taiwan banking sector's exposure to China fell 1.14 percent from the end of December to US$49.32 billion at the end of March, according to the central bank.

Hsieh said Taiwanese banks' exposure to China peaked at US$59.5 billion at the end of 2021 but insufficient domestic demand, a weakening property market and rising local debts in China amid a restructuring of the global supply chain sent the exposure lower.

The gap between Taiwanese banks' exposure to the U.S. and China continued to widen in the first quarter, Hsieh said, rising to US$159.7 billion at the end of March, after surpassing US$100 billion at the end of June 2023, Hsieh said.

Total international claims by Taiwanese banks on an immediate counterparty basis, consisting of investments, deposits, loans and other holdings, increased 2.50 percent from a quarter earlier to US$702.6 billion as of the end of March due to increasing lending in the global non-bank private sector.

The Taiwan banking sector's second highest area of exposure was Luxembourg, at US$51.71 billion as of the end of March, up 0.14 percent from a quarter earlier, the central bank said.

Australia was the fourth largest debtor nation of Taiwanese banks, with the banks having exposure of US$46.86 billion in Australia as of the end of March, up 6.59 percent from a quarter earlier, central bank data showed.

The next biggest areas of exposure for Taiwanese banks were Japan (US$38.30 billion), Hong Kong (US$34.04 billion), the United Kingdom (US$25.17 billion), Singapore (US$22.44 billion), France (US$20.62 billion), and Vietnam (US$19.18 billion), according to the data.

The central bank said exposure to the top 10 debtor nations totaled US$516.6 billion at the end of March, accounting for 73.54 percent of the total international claims held by Taiwan's banks.