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.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS