Overseas financial exposure rises more than 16 percent

The overseas exposure of Taiwan’s financial holding companies rose 16.35 percent year-on-year in the third quarter, with the US remaining the largest market of exposure, data released by the Financial Supervisory Commission (FSC) on Sunday showed.

As of the end of September, overseas exposure of Taiwanese financial holding companies reached NT$33.04 trillion (US$1 trillion), a record high, the data showed.

The exposure included interbank loans, other lending and investments by local financial holding companies, with investments accounting for 71.7 percent, the FSC said.

A street sign for Wall Street is seen outside the New York Stock Exchange in New York City in 2021.

Photo: Reuters

The US remained the largest market of exposure for the 46th consecutive quarter, with exposure reaching a record NT$11.7 trillion, up 18.11 percent from a year earlier, the data showed.

The FSC attributed the increase largely to financial holding companies’ substantial investments in marketable securities and bonds in the US.

The US accounted for 35.59 percent of the companies’ overseas exposure in the third quarter, the highest proportion since the FSC began compiling the statistics in the second quarter of 2015.

China remained the second-largest market of exposure as of the end of September, with exposure falling NT$1.99 trillion. The figure was up 2.48 percent year-on-year but down 0.87 percent from the previous quarter, with the annual growth rate below the overall average.

China accounted for 6.05 percent of Taiwan’s overseas exposure, the lowest proportion on record, the FSC said.

Meanwhile, exposure to Japan surged 44.89 percent from a year earlier to NT$1.85 trillion, driven by increases in lending and investments, closing the gap with China, it said.

Singapore re-entered the top 10 markets of exposure for the first time since the second quarter of 2015, ranking 10th at the end of September, with exposure to the city-state soaring 41.35 percent year-on-year to NT$693 billion as of the end of September, the data showed.

The increase in exposure to Singapore was driven mainly by a 154 percent annual rise in interbank placements, while net loans and net investments grew by 40 percent and 20 percent respectively, the FSC said.

The top 10 markets of exposure for Taiwan’s financial holding companies at the end of the third quarter were the US, China, Japan, Australia, France, the UK, South Korea, Hong Kong, Canada and Singapore, the data showed.