By Crystal Hsu /
Lending costs at Taiwan’s five major state-run banks rose last month, pointing to a gradual tightening in credit conditions as stronger corporate earnings and investment activity lifted demand for loans, the central bank said on Thursday.The central bank based its assessment on data from Bank of Taiwan Co (臺灣銀行), Land Bank of Taiwan (臺灣土地銀行), Taiwan Cooperative Bank Co (合作金庫銀行), First Commercial Bank Ltd (第一銀行) and Hua Nan Commercial Bank Ltd (華南銀行). The lenders are closely watched, as their pricing trends serve as a key benchmark for private banks when setting borrowing rates.
A person takes a photograph of the central bank’s logo at its building in Taipei on May 5 last year.
The five banks reported an average interest rate of 2.206 percent on newly booked loans last month, up 0.101 percentage point from 2.105 percent in March, the central bank said.The increase was broad-based, with higher rates recorded across all major lending categories, indicating a general repricing of credit rather than a shift confined to any single segment, it said.
Working capital loans, typically used by companies to manage short-term liquidity needs, posted the strongest growth in borrowing demand, the central bank said. That reflected expanding activity among local technology firms as they scale up capacity to meet customer orders, it added.In the housing segment, the average mortgage rate edged up slightly to 2.307 percent last month from 2.306 percent the previous month, the central bank said.While the rise in lending rates could help improve banks’ net interest margins, it also increases financing costs for borrowers, particularly businesses reliant on short-term credit to fund day-to-day operations.
