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.
UNCERTAINTIES: Exports surged 34.1% and private investment grew 7.03% to outpace expectations in the first half, although US tariffs could stall momentum The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its GDP growth forecast to 3.05 percent this year on a robust first-half performance, but warned that US tariff threats and external uncertainty could stall momentum in the second half of the year. “The first half proved exceptionally strong, allowing room for optimism,” CIER president Lien Hsien-ming (連賢明) said. “But the growth momentum may slow moving forward due to US tariffs.” The tariff threat poses definite downside risks, although the scale of the impact remains unclear given the unpredictability of US President Donald Trump’s policies, Lien said. Despite the headwinds, Taiwan is likely
When Lika Megreladze was a child, life in her native western Georgian region of Guria revolved around tea. Her mother worked for decades as a scientist at the Soviet Union’s Institute of Tea and Subtropical Crops in the village of Anaseuli, Georgia, perfecting cultivation methods for a Georgian tea industry that supplied the bulk of the vast communist state’s brews. “When I was a child, this was only my mum’s workplace. Only later I realized that it was something big,” she said. Now, the institute lies abandoned. Yellowed papers are strewn around its decaying corridors, and a statue of Soviet founder Vladimir Lenin
READY TO BUY: Shortly after Nvidia announced the approval, Chinese firms scrambled to order the H20 GPUs, which the company must send to the US government for approval Nvidia Corp chief executive officer Jensen Huang (黃仁勳) late on Monday said the technology giant has won approval from US President Donald Trump’s administration to sell its advanced H20 graphics processing units (GPUs) used to develop artificial intelligence (AI) to China. The news came in a company blog post late on Monday and Huang also spoke about the coup on China’s state-run China Global Television Network in remarks shown on X. “The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” the post said. “Today, I’m announcing that the US government has approved for us
The National Stabilization Fund (NSF, 國安基金) is to continue supporting local shares, as uncertainties in international politics and the economy could affect Taiwanese industries’ global deployment and corporate profits, as well as affect stock movement and investor confidence, the Ministry of Finance said in a statement yesterday. The NT$500 billion (US$17.1 billion) fund would remain active in the stock market as the US’ tariff measures have not yet been fully finalized, which would drive international capital flows and global supply chain restructuring, the ministry said after the a meeting of the fund’s steering committee. Along with ongoing geopolitical risks and an unfavorable
RSS