The ratio of the Bank of Taiwan’s exposure to China over its net worth has fallen sharply to 3.42 percent as the bank seeks to reduce its reliance on the Chinese market, it said.
Bank of Taiwan chairman Joseph Lyu (呂桔誠), who has led Taiwan’s largest lender since 2016, said in a recent media interview that the ratio had plunged from a peak of about 45 percent eight years earlier.
That drop occurred as many Taiwanese investors diversified away from China to lower risks amid escalating trade tensions and technology competition between Washington and Beijing, Lyu said.
Photo: CNA.
Bank of Taiwan’s figure echoed data released by the Financial Supervisory Commission (FSC) earlier this month, which showed that Taiwanese banks’ exposure to China regarding their net worth as a whole for the first quarter of this year fell NT$8.14 billion (US$252.75 million), or 0.85 percent, from a quarter earlier to NT$952.86 billion.
However, the local banking sector as a whole still had a relatively high ratio of exposure to China, even though it fell 0.6 percentage points from a quarter earlier to 22.1 percent in the first quarter of this year, the FSC data showed.
The sector’s total exposure to China and the ratio have fallen to new lows since the commission started the tallies in the third quarter of 2013, the commission said, citing concerns over China’s economy and risks in the Chinese property market as a cause.
As for the fall in the Bank of Taiwan’s exposure to China, which has pushed down its profits generated from China, including Hong Kong, Lyu said the bank has been keen to seek a balance in corporate banking, consumer banking and services to the public sector to make up for a possible fall in profit.
Once profits from its corporate banking operations drops, the bank would be able to turn its attention to consumer banking services, he said.
Lyu said he is upbeat about Taiwan’s economic growth for this year, although uncertainty over when the US Federal Reserve would cut interest rates, sticky inflation and geopolitical unease are expected to affect the pace of the recovery.
Taiwan would fare better economically this year as artificial intelligence development has created tremendous business opportunities for the local sector, but old economy industries still face challenges, he said.
At the same time, the Bank of Taiwan is seeking to extend its global reach by setting up outlets overseas, he said, adding that it opened a representative office in Arizona in 2022.
That office would help contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), which is building advanced wafer fabs in the US state, as well as the chipmaker’s suppliers, Lyu said.
‘LAGGING BEHIND’: The NATO secretary-general called on democratic allies to be ‘clear-eyed’ about Beijing’s military buildup, urging them to boost military spending NATO Secretary-General Mark Rutte mentioning China’s bullying of Taiwan and its ambition to reshape the global order has significance during a time when authoritarian states are continuously increasing their aggression, the Ministry of Foreign Affairs (MOFA) said yesterday. In a speech at the Carnegie Europe think tank in Brussels on Thursday, Rutte said Beijing is bullying Taiwan and would start to “nibble” at Taiwan if Russia benefits from a post-invasion peace deal with Ukraine. He called on democratic allies to boost defense investments and also urged NATO members to increase defense spending in the face of growing military threats from Russia
PEACEFUL RESOLUTION: A statement issued following a meeting between Australia and Britain reiterated support for Taiwan and opposition to change in the Taiwan Strait Canada should support the peaceful resolution of Taiwan’s destiny according to the will of Taiwanese, Canadian lawmakers said in a resolution marking the second anniversary of that nation’s Indo-Pacific strategy on Monday. The Canadian House of Commons committee on Canada-Chinese relations made the comment as part of 34 recommendations for the new edition of the strategy, adding that Ottawa should back Taiwan’s meaningful participation in international organizations. Canada’s Indo-Pacific Strategy, first published in October 2022, emphasized that the region’s security, trade, human rights, democracy and environmental protection would play a crucial role in shaping Canada’s future. The strategy called for Canada to deepen
LEAP FORWARD: The new tanks are ‘decades more advanced than’ the army’s current fleet and would enable it to compete with China’s tanks, a source said A shipment of 38 US-made M1A2T Abrams tanks — part of a military procurement package from the US — arrived at the Port of Taipei early yesterday. The vehicles are the first batch of 108 tanks and other items that then-US president Donald Trump announced for Taiwan in 2019. The Ministry of National Defense at the time allocated NT$40.5 billion (US$1.25 billion) for the purchase. To accommodate the arrival of the tanks, the port suspended the use of all terminals and storage area machinery from 6pm last night until 7am this morning. The tanks are expected to be deployed at the army’s training
TECH CONFERENCE: Input from industry and academic experts can contribute to future policymaking across government agencies, President William Lai said Multifunctional service robots could be the next new area in which Taiwan could play a significant role, given its strengths in chip manufacturing and software design, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman and chief executive C.C. Wei (魏哲家) said yesterday. “In the past two months, our customers shared a lot of their future plans with me. Artificial intelligence [AI] and AI applications were the most talked about subjects in our conversation,” Wei said in a speech at the National Science and Technology Conference in Taipei. TSMC, the world’s biggest contract chipmaker, counts Nvidia Corp, Advanced Micro Devices Inc, Apple Inc and
RSS