Central Bank of China

PRESS RELEASE Release Date: November 3, 2003




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Overview of offshore banking units (September 2003)

At the end of September, 2003, there were 72 offshore banking units(OBUs)in operation. Of these, 43 belonged to domestic banks and 29 belonged to foreign banks. The combined assets of all OBUs amounted to US$58.921 billion at the end of September, 2003; increased by US$9.978 billion or 20.39%compared with the same month of the previous year. Domestic bank OBUs accounted for US$39.912 billion or 68%of these combined assets, and foreign bank OBUs accounted for US$19.009 billion or 32%of the total.

Based on balance sheet analysis, the OBUs' main sources of funds were due to related offices and deposits by financial institutions, which together accounted for 67%of total liabilities. Of these, due to related offices accounted for 47%of total liabilities, deposits by financial institutions situated locally for 12%, those by financial institutions located overseas for 5%, and inter-OBU deposits for 3%. The other sources of funds included deposits by non-financial institutions, accounting for 27%of total liabilities, and other liabilities plus the equity of head office for 6%. In terms of the area of origin, Asia accounted for 69%, followed by America with 20%, Europe with 8%, and other areas with 3%.

The main uses of funds were due from related offices and deposits with financial institutions which together accounted for 56%of total assets. A further breakdown shows 38%was due from related offices, 11%was deposited overseas, 4%with other domestic financial institutions and 3%with domestic OBUs. The other uses of funds included loans, accounting for 26%of total assets, security investments for 13%, and other assets for 5%. Asia was the main destination for funds, accounting for 66%, followed by America with 21%, Europe with 11%, and other areas with 2%.

The total value of all outstanding loans made by OBUs at the end of September, 2003, amounted to US$15.615 billion, of which 81%was extended to oversea debtors, and 19%to local debtors. Of this amount, long-term loans extended to oversea debtors accounted for US$7.651 billion, followed by short-term loans extended to oversea debtors with US$5.022 billion, and loans extended to local debtors with US$2.942 billion. The volume of export related banking business of all OBUs in September was US$5.575 billion. Of this amount, export collection plus export remittance accounted for US$4.259 billion, and export negotiation for US$1.316 billion.

The turnover of foreign exchange trading by all OBUs in September was US$6.797 billion. Of this amount, spot transactions accounted for US$5.136 billion, followed by outright forwards with US$0.939 billion, and foreign exchange swaps with US$0.722 billion.

The turnover of trading other derivative products by all OBUs in September was US$5.992 billion. Of this amount, options accounted for US$3.633 billion, followed by margin account tradings with US$1.171 billion, foreign currency interest rate swaps with US$0.635 billion, financial futures with US$0.513 billion, and foreign currency forward rate agreements with US$0.04 billion.