State-run banks yesterday said that they would raise interest rates on savings deposits and loans after the central bank last week raised its policy rates by 25 basis points, but would approach the matter guided by business needs and other considerations.
Top officials from state-run lenders made known their intentions during a meeting of the legislature’s Finance Committee in Taipei, where lawmakers raised questions about the impact of the rate hikes.
State-owned Bank of Taiwan (臺灣銀行) has increased the interest rates on its savings deposits by 0.25 percentage points, but would not impose similar charges on all lending operations to retain customers, chairman Joseph Lyu (呂桔誠) said.
Photo: CNA
Starting yesterday, the nation’s largest lender by assets raised the interest rate on time savings deposits of different tenures by 25 basis points, benefits that failed to be extended to large deposits and demand deposit accounts.
Bank of Taiwan did not comment on how the rate hike would affect syndicated loans, land financing, corporate lending and mortgage operations.
Similarly, state-run Mega International Commercial Bank (兆豐銀行) is to raise interest rates on time savings deposits by 25 basis points, but the adjustment for demand deposits would be smaller, chairman Michael Chang (張兆順) said.
Taiwan Cooperative Bank (合庫銀行) chairman Lei Chung-dar (雷仲達) said that he would stand by the central bank’s policy in dealing with savings and loans except for demand deposits. Lenders generally offer very small interest rates for demand deposits.
State-run and private banks are to discuss lending rates this week and implement the changes next month.
Interest rates for mortgages are likely to rise from 1.31 percent to upward of 1.56 percent to reflect the central bank’s monetary normalization, adding an extra NT$1,200 (US$42.12) a month for homeowners with a NT$10 million mortgage.
Interest rates for land financing are likely to climb to at least 2.05 percent from 1.8 percent to help discourage land hoarding.
While ample liquidity and record-low borrowing costs aimed at mitigating the pain of the COVID-19 pandemic had helped drive up property prices, the increase in funding costs would reduce developers’ and builders’ financing needs, and the property market would reflect real demand by home buyers, Capital Investment Management Corp (群益投顧) said in a note yesterday, adding that demand would remain strong as the nation’s economic fundamentals continue to improve.
State-owned Land Bank of Taiwan (土地銀行) announced earlier that it would not take on new land financing after related lending approached the regulatory limit.
The Financial Supervisory Commission has tightened capital requirements for real-estate lending, obligating banks intent on growing their real-estate lending to demonstrate higher capitalization, but it remains to be seen if developers and builders would pass higher interest expenses to home buyers, analysts said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the