Interest rates on new loans at the nation’s five major state-run banks last month gained 4.2 basis points to 1.903 percent, the highest in 14 years, as lenders charged higher borrowing costs for corporate and consumer loans, the central bank said yesterday.
However, interest rates on new mortgages bucked the uptrend by shedding 0.3 basis points to 2.098 percent, virtually unchanged after the central bank on June 16 kept its policy rates unchanged, it said.
Borrowing costs for new mortgages would consolidate in the future as lenders price loans based on borrowers’ credit profile and in line with their efforts to stay competitive, the central bank said.
Photo: CNA
The monetary policymaker arrived at the findings based on data from Bank of Taiwan (臺灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行). The increase would amount to 5 basis points, totaling 1.911 percent, after stripping out government loans, which enjoyed lower interest rates due to their strong credit standing, it said.
Interest rates on loans for capital expenditures picked up 7.7 basis points to 2.459 percent, driven by urban renewal and construction projects, the central bank said.
Borrowing costs are higher for property development projects owing partly to the monetary policymaker’s selective credit controls.
Interest rates on loans for working capital rallied 4.3 basis points to 1.845 percent, as corporations traditionally display stronger cash demand at quarter ends and lenders raise charges, it said.
Consumer loans also turned slightly more expensive, with interest rates rising 1.6 basis points to 2.866 percent even though the overall volume declined by NT$21.67 billion (US$693.7 million), it said.
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