Taiwanese banks and life insurers have reduced their exposure to China to a record low due to the COVID-19 pandemic, economic uncertainty and a declining property market, data released by the Financial Supervisory Commission (FSC) yesterday showed.
Local banks’ aggregate exposure through loans, investments and deposits contracted about 1 percent sequentially to NT$1.18 trillion (US$37.9 billion) at the end of September, the lowest in nine years, the commission said.
On an annual basis, it fell by 17 percent, or NT$234 billion, it said.
Photo: AFP
Local banks’ exposure to China accounted for 29 percent of their combined net value of NT$4.11 trillion, down from 36 percent a year earlier, the data showed.
CTBC Bank (中國信託商銀) led its peers, with an exposure of NT$173 billion, down 3.8 percent or NT$7 billion from a year earlier, the data showed.
Taipei Fubon Commercial Bank (台北富邦銀行) was second, with its China exposure declining 14 percent to NT$104 billion, while E.Sun Commercial Bank (玉山銀行) ranked third at NT$88 billion, down 3 percent from a year earlier.
Cathay United Bank (國泰世華銀行) slipped from second to fourth place this year, as its exposure to China plunged 35 percent to NT$84 billion.
Life insurance firms last quarter cut their investment in China for the sixth consecutive quarter, with their combined investment sliding to NT$148.5 billion at the end of September, the lowest in the past 25 quarters, the commission said.
China’s tensions with the US, its strict COVID-19 controls and troubled property market have made local insurers more conservative about investing in China, the commission said.
Cathay Life Insurance Co (國泰人壽) led its peers, although its investment in China had declined for six quarters in a row to about NT$32 billion at the end of last quarter, the data showed.
Taiwan Life Insurance Co (台灣人壽), Fubon Life Insurance Co (富邦人壽), China Life Insurance Co (中國人壽) and Nan Shan Life Insurance Co (南山人壽) round up the top five list.
However, Taiwanese financial holding companies still increased their investment in Chinese tech giants Tencent Holdings Ltd (騰訊) and Alibaba Group Holding Ltd (阿里巴巴) last quarter, the commission said.
Their investment in Tencent rose 4.3 percent quarterly to NT$79.7 billion at the end of September, while that in Alibaba climbed 3.5 percent to NT$46.3 billion, it said.
SPEED OF LIGHT: US lawmakers urged the commerce department to examine the national security threats from China’s development of silicon photonics technology US President Joe Biden’s administration on Monday said it is finalizing rules that would limit US investments in artificial intelligence (AI) and other technology sectors in China that could threaten US national security. The rules, which were proposed in June by the US Department of the Treasury, were directed by an executive order signed by Biden in August last year covering three key sectors: semiconductors and microelectronics, quantum information technologies and certain AI systems. The rules are to take effect on Jan. 2 next year and would be overseen by the Treasury’s newly created Office of Global Transactions. The Treasury said the “narrow
SPECULATION: The central bank cut the loan-to-value ratio for mortgages on second homes by 10 percent and denied grace periods to prevent a real-estate bubble The central bank’s board members in September agreed to tighten lending terms to induce a soft landing in the housing market, although some raised doubts that they would achieve the intended effect, the meeting’s minutes released yesterday showed. The central bank on Sept. 18 introduced harsher loan restrictions for mortgages across Taiwan in the hope of curbing housing speculation and hoarding that could create a bubble and threaten the financial system’s stability. Toward the aim, it cut the loan-to-value ratio by 10 percent for second and subsequent home mortgages and denied grace periods for first mortgages if applicants already owned other residential
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
TECHNOLOGY EXIT: The selling of Apple stock might be related to the death of Berkshire vice chairman Charlie Munger last year, an analyst said Billionaire Warren Buffett is now sitting on more than US$325 billion in cash after continuing to unload billions of US dollars worth of Apple Inc and Bank of America Corp shares this year and continuing to collect a steady stream of profits from all of Berkshire Hathaway Inc’s assorted businesses without finding any major acquisitions. Berkshire on Saturday said it sold off about 100 million more Apple shares in the third quarter after halving its massive investment in the iPhone maker the previous quarter. The remaining stake of about 300 million shares was valued at US$69.9 billion at the end of