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Loans extended by OBUs hit record high

TAIPEI--As of the end of November, loans extended by offshore banking units (OBUs) of banks operating in Taiwan hit a fresh high, the central bank said yesterday.

As of the end of November, the loans totaled US$81.81 billion, up from US$81.73 billion recorded as of the end of October, the central bank said, adding that after lending by the OBUs surpassed the US$80 billion mark in September to hit US$80.69 billion, their loans continued to grow.

The number of OBUs as of the end of November reached 63. They were operated by 38 locally incorporated banks and 25 foreign banks. The 38 Taiwan registered banks included Citibank Taiwan, Standard Chartered Bank Taiwan and DBS Bank Taiwan.

The central bank said the OBUs' loans were almost all extended to overseas clients, who made up 99.9 percent of the total lending. The overseas lending was comprised of US$45.73 billion in long and medium term loans and US$35.99 billion in short term loans.

Lending extended to local clients only reached US$83 million or 0.1 percent of the total loans, the central bank said.

As of the end of November, the total assets of the 63 OBUs rose 2.1 percent from a month earlier to a new high of US$163.68 billion, and the 38 local banks' OBUs accounted for 84.6 percent of the total assets, the central bank said.

These OBUs' lending made up about 50 percent of their total assets with interbank lending and deposits representing 14.6 percent. Securities investments accounted for an additional 13.9 percent, the central bank said.

Asia was the largest fund destination of the OBUs, accounting for 61 percent of the OBUs' fund use, followed by the Americas with 26 percent and Europe with 6 percent, the central bank said.

The central bank added that funds owned by the OBUs largely came from vostro accounts, which refer to the deposit accounts maintained by their correspondent banks. Funds from these accounts totaled US$71.29 billion, making up 43.6 percent of the OBUs' total funds.

Asia was the largest fund source of the OBUs, accounting for 65 percent of the funds, ahead of the Americas with 21 percent and Europe with 9 percent, the central bank said.

In November alone, foreign exchange trading of the OBUs totaled 38.29 billion, including US$23.13 billion in spot trading, US$7.83 billion in forwards trading and US$7.34 billion in swaps, the central bank said.

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