The Financial Supervisory Commission (FSC) on Tuesday said that eight local banks should reduce the number of construction loans issued and enhance risk management, or they would be ordered to set aside higher loan-loss provisions.
The commission’s warning came after it last week announced that it would conduct a special examination of the top 10 mortgage lenders from this month to March, as part of the government’s efforts to rein in the overheated property market.
All local banks’ combined construction loans, indicative of the confidence of the construction sector, hit a record at NT$2.69 trillion (US$94.47 billion) as of the end of October, which accounted for 8.62 percent of their total lending, the highest ratio compared with a range of 7.13 to 9.12 percent from 2015 to last year, the commission said.
Photo: CNA
Among the nations’ 36 banks, construction loans made up more than 10 percent of eight banks’ outstanding lending, signally their concentration on construction loans, Banking Bureau Chief Secretary Phil Tong (童政彰) told a news conference in New Taipei City.
Although the eight lenders’ non-performing loan ratios for construction loans are not much higher than the average, their failure to diversify their lending portfolio would result in higher risks, Tong said, declining to name the banks.
The commission has asked the eight banks to submit improvement plans soon, and would monitor their performance on a monthly basis, Tong said.
It is not easy for banks to slash their construction loans in the short term, as such loans are usually long-term, but the commission expects banks to at least refrain from approving more new loans, he said.
If the eight banks fail to improve, they would need to set aside 2 percent loan-loss provisions on their construction loans, up from the current requirement of 1.5 percent, Tong said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported record revenue of NT$416.975 billion (US$13.17 billion) for last month, putting the world’s largest contract chipmaker on track to set a record for quarterly revenue. Last month’s figure surpassed March’s record NT$415.19 billion and represented increases of 1.5 percent from April and 30.1 percent from a year earlier. For the first five months of the year, TSMC generated NT$1.96 trillion in revenue, up 30 percent year-on-year, it said in a statement. TSMC has forecast second-quarter revenue of between US$39 billion and US$40.2 billion, representing sequential growth of about 10 percent and year-on-year growth of about
PATENT PROBE: US lawmakers called for a ban on imports of chips made by TSMC if they are found to infringe on US patents, with a preliminary ruling expected soon Minister of Economic Affairs Kung Ming-hsin (龔明鑫) yesterday expressed confidence in Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) compliance with patent regulations after reports linked the company to a patent infringement lawsuit in the US. US Representative Ryan Zinke, and US senators Tim Sheehy, Roger Marshall and Bernie Moreno urged the US International Trade Commission in a May 22 letter to ban imports of chips made by TSMC if they are found to infringe on US patents, Axios reported on Wednesday. An administrative law judge is expected to issue a preliminary ruling this month, with the commission potentially making a final decision in
Infineon Technologies AG is preparing to open its largest single investment, a 5 billion euro (US$5.8 billion) semiconductor factory built with the help of EU subsidies, as the bloc seeks to boost chip production. The power chip fab, which is an extension of the German company’s Dresden campus, is scheduled to open on July 2, Infineon chief operating officer Alexander Gorski said this week at the site. The project is a major recipient of EU Chips Act funds, receiving about 1 billion euros in subsidies. The new plant represents a rare success for the bloc’s flagship semiconductor law, which was drawn up during
Taiwanese authorities are considering much stricter export controls on artificial intelligence (AI) chip sales to China to further align with US measures, according to people familiar with the matter, an effort to address semiconductor smuggling that risks drawing a rebuke from Beijing. The idea is to give authorities more legal tools to address diversion of advanced hardware, like AI servers with Nvidia Corp chips, from Taiwan to China. Such sales are already banned under US regulations unless companies get Washington’s permission, per curbs the US first imposed in 2022 to prevent Beijing from using advanced Nvidia processors to gain a military
RSS