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Central Bank of the Republic of China

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Overview of offshore banking units (September 2007)

Central Bank of the Republic of China (Taiwan)
PRESS RELEASE Release Date: November 7, 2007

Overview of offshore banking units (September 2007)
At the end of September 2007, there were 65 offshore banking units (OBUs) including 38 domestic banks and 27 foreign banks. The combined assets of all OBUs amounted to US$85.847 billion at the end of September 2007, an increase of US$10.886 billion or 14.52% compared to the same period of the previous year. Domestic bank OBUs accounted for US$63.281 billion or 74% of these combined assets, and foreign bank OBUs accounted for US$22.566 billion or 26% of the total.
The turnover of foreign exchange trading by all OBUs in September 2007 was US$9.120 billion consisting of (1) spot transactions for US$5.093 billion, (2) outright forwards for US$2.398 billion, and (3) foreign exchange swaps for US$1.629 billion.
Based on balance sheet analysis, the OBUs main sources of funds were due to related offices and deposits by financial institutions, which accounted for 60% of total liabilities including (1) due to related offices for 52%, (2) deposits by financial institutions situated locally for 5%, (3) inter-OBU deposits for 1%, and (4) deposits by financial institutions located overseas for 2%. The other sources of funds included deposits by non-financial institutions accounting for 31% of total liabilities, and other liabilities plus the equity of head office for 9%. In terms of the area of origin, Asia accounted for 68%, followed by America for 22%, Europe for 8%, and other areas for 2%.
The main uses for funds were due from related offices and deposits with financial institutions, which accounted for 51% of total assets including (1) due from related offices for 31%, (2) deposits overseas for 17%, (3) deposits with other domestic financial institutions for 2 %, (4) deposits with domestic OBUs for 1%. The other uses of funds included (1) loans for 27%, (2) security investments for 15%, and (3) other assets for 7%. Asia was the main destination for funds, accounting for 54%, followed by America for 27%, Europe for 17%, and other areas for 2%.
The total value of all outstanding loans made by OBUs at the end of September 2007 was US$23.397 billion, of which 96% was extended to overseas clients, including long-term loans for US$13.844 billion and short-term loans for US$8.655 billion. The remaining 4% was extended to local clients for US$898 million.
The volume of export related banking business of all OBUs in September 2007 was US$19.266 billion including (1) export collection, export remittance, and accounts receivable factoring for US$17.849 billion, and (2) export negotiation for US$1.417 billion. The volume of import related banking business of all OBUs was US$17.899 billion.
The turnover of other derivative products trading by all OBUs in September 2007 was US$19.532 billion including (1) financial futures for US$12.076 billion, (2) options for US$6.553 billion, (3) credit derivatives for US$578 million, (4) foreign currency interest rate swaps for US$175 million, (5) margin account trading for US$110 million, (6) commodity swaps for US$21 million, and (7) equity swaps for US$19 million.

Note: The next dissemination will be made at 16:20 p.m. on December 7, 2007.
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