Real Estate Lending Ratio for Taiwanese Banks Hits 15-Year Low Due to Deposit Growth

According to a report by CNA reporter Su Szu-yun in Taipei on the 26th, statistics from the Financial Supervisory Commission (FSC) show that as of the end of April, the average real estate lending ratio for 36 domestic banks dropped to 24.67%, the lowest level since March 2011. The FSC stated that this is mainly due to the growth in total deposits, which increased the denominator, causing the ratio to decline. Overall, the mortgage non-performing loan ratio for April was 0.08%, an increase of 0.01 percentage points from the previous month, with no signs of a significant surge in bad debts. Article 72-2 of the Banking Act, known as the 'ceiling' for real estate lending, stipulates that the total amount of residential and corporate construction loans for commercial banks cannot exceed 30% of their total deposits and financial bonds issued. The government has exempted 'New Youth Housing Loans' from this limit. Wang Yun-chung, Deputy Director-General of the Banking Bureau, stated that the mortgage balance at the end of April was NT$11.65 trillion, a year-on-year increase of 4.46%, driven by banks actively serving first-time homebuyers. The construction loan balance was NT$3.89 trillion, a monthly decrease. While there are concerns about the risk of individuals using multiple types of loans (mortgages, stock financing, personal loans, and auto loans) to invest in the stock market, the FSC believes the overall risk remains within a controllable range, and securities firms have already implemented risk management measures.