By Crystal Hsu / Staff reporter
The Financial Supervisory Commission (FSC) yesterday said it is stepping up monitoring of household leverage and bank lending risks linked to the stock market rally, warning it would conduct targeted inspections if it detects abnormal credit growth or weakening asset quality.The commission’s Financial Examination Bureau said it would strengthen scrutiny of leveraged borrowing across multiple channels, including mortgage top-ups, housing-backed loans, personal credit and stock margin financing.The strategy has gained traction amid a buoyant equity market, enabling investors to amplify exposure by stacking debt across property, consumer credit and securities-related lending.
A man stands in front of an electronic stock board at the Taiwan Stock Exchange in Taipei on Monday.
Bureau Deputy Director-General Ku Kun-jung (古坤榮) said regulators are monitoring banks for “abnormal” loan growth and early warning signals in risk indicators, particularly overdue loan ratios. Special inspections would be launched immediately if such anomalies emerge, he added.
The banking sector’s non-performing loan ratio stood at 0.15 percent at the end of last month, down 0.01 percentage point from a year earlier, indicating no current systemic stress, Ku said. Regulators are closely watching stock-collateral loans, mortgage-linked financing and personal credit expansion, he said, citing past lessons from the 2000s, when aggressive credit card issuance and unsecured lending triggered widespread defaults. Banking Bureau Deputy Director-General Wang Yun-chung (王允中) said regulators are assessing lending risks through oversight of compliance with the debt cap, asset quality and borrowers’ repayment capacity.Loans from domestic banks reached NT$47.35 trillion (US$1.5 trillion) as of last month, with corporate lending accounting for 47.12 percent and household lending 47.43 percent, broadly in line with historical norms, Wang said.On monthly changes, banks added NT$428.3 billion in lending last month, with corporate borrowing outpacing household loans, indicating that business investment and working capital demand remained the main driver of credit growth.Year-on-year, mortgage lending rose NT$483 billion, auto loans increased NT$17.5 billion, and small personal loans expanded NT$75.8 billion — figures that Wang said remain within a “reasonable range.”While personal lending growth cannot be directly attributed to equity investment, the FSC said it would continue to monitor developments closely.
