Taipei, May 30 (CNA) Overseas earnings of Taiwanese banks got a boost from the government's New Southbound policy, seeing their first-quarter incomes raked in from the countries covered by the policy hitting a new high since President Tsai Ing-wen took office on May 20, 2016, according to data released Tuesday by the Financial Supervisory Commission (FSC).
In the first quarter, banks' earnings posted in the countries targeted by the policy hit the highest level of NT$1.72 billion (US$56.95 million) since the policy was unveiled.
The initiative aims to forge closer economic ties with the 10 nations of the Association of Southeast Asian Nations (ASEAN), along with South Asia, Australia and New Zealand, to lower economic dependence on China by diversifying investment and trade.
The FSC, the top financial regulator in Taiwan, said that Vietnam, Cambodia and Australia ranked as the largest earnings sources for Taiwanese banks in the first quarter, with income generated in Vietnam at NT$700 million, Cambodia at NT$400 million and Australia at US$200 million.
The commission said that the improvement in banks' profitability also reflected the FSC's efforts to urge the state-owned Export-Import Bank of the Republic of China to provide guarantees and insurance for trade contracts, which have made banks more willing to extend loans to Taiwanese firms that cut deals with their counterparts in the region.
The FSC said that it has also encouraged banks to extend loans to Taiwanese investors operating in the region, while urging Taiwanese firms in the region to raise funds in the local capital market.
In addition, the FSC has issued a green light since the beginning of this year to allow local banking institutions to set up 10 new outlets in the region in a bid to ink more loan deals.
According to the FSC, Taiwan Cooperative Bank, Chang Hwa Commercial Bank and First Commercial Bank have obtained approval to open new branches in Cambodia, while Chang Hwa Bank and Taiwan Business Bank have been permitted to add branches in the Philippines.
Taiwan Cooperative Bank has been approved to open a branch in Melbourne, Bank of Taiwan has received permission to set up three representative offices in Vietnam, Thailand and Indonesia, and the Export-Import Bank has obtained permission to open an office in Mumbai.
