U.S. remains top debtor to Taiwan's financial holding firms in Q2

Taipei, Aug. 4 (CNA) The United States remained the largest debtor to Taiwan's financial holding firms in the second quarter, despite a significant drop in exposure, according to the Financial Supervisory Commission (FSC).

FSC data released Sunday showed that exposure to the U.S. fell to NT$9.56 trillion (US$333.89 billion) at the end of the second quarter, dropping below the NT$10 trillion mark -- a decline of NT$792.3 billion from the previous quarter.

It was the steepest quarterly decline since records began in 2015, with market analysts attributing the drop to U.S. tariff policies and a stronger Taiwan dollar against the U.S. dollar.

The FSC defines international exposure as including interbank loans, lending and investment activities by Taiwan's financial holding firms.

By the end of June, total international exposure by Taiwan's financial holding firms had fallen to NT$27.02 trillion -- a drop of NT$2.09 trillion, or 7.2 percent, from the end of March -- marking the sharpest quarterly decline since records began.

China remained the second-largest debtor to Taiwan's financial holding firms, with exposure falling to NT$1.896 trillion at the end of June -- down NT$149.9 billion from the previous quarter. The FSC said the decline was driven by simultaneous drops in interbank loans, lending and investments.

After the U.S. and China, France ranked third in exposure at NT$1.28 trillion as of the end of June, followed by the United Kingdom (NT$1.27 trillion), Australia (NT$1.19 trillion), Japan (NT$1.13 trillion), South Korea (NT$1.07 trillion), Hong Kong (NT$925.6 billion), Canada (NT$867.4 billion) and the United Arab Emirates (NT$561.9 billion), according to the data.

Among the top 10 debtors, Japan was the only country to see a quarter-on-quarter increase in exposure from Taiwanese financial holding firms, rising by NT$12.31 billion at the end of June due to increased investment, the FSC said.

As a result, Japan overtook South Korea to become the sixth-largest debtor to Taiwan's financial holding firms, after South Korea's exposure fell by NT$52.54 billion from the previous quarter, dropping it one spot in the rankings, the FSC said.

While overseas exposure declined, Taiwan's financial holding firms increased their domestic exposure by NT$1.12 trillion, reaching NT$47.56 trillion at the end of June, the FSC said.