FCDU lending declined by 0.7 percent in Q4 2021

Outstanding loans granted by Foreign Currency Deposit Units (FCDUs) of banks stood at US$15.7 billion as of end-December 2021, recording a slight decline of US$115 million (or by 0.7 percent) from the end of previous quarter’s outstanding FCDU loan level of US$15.8 billion as principal repayments exceeded disbursements.

Outstanding FCDU loans recorded another decline during the fourth quarter of 2021 following its downward trend for the last six consecutive quarters since the onset of the pandemic despite signs of economic recovery in recent quarters.

The decline in FCDU loans may be attributed to: (a) lender banks’ tightened credit standards resulting in a slowdown in their lending operations and credit activity; and (b) availability of other sources of funding.

Year-on-year, outstanding FCDU loans decreased by US$938 million (or by 5.6 percent) from the end-December 2020 level of US$16.7 billion.

As of end-December 2021, the maturity profile of the FCDU loan portfolio remained predominantly medium- to long-term debt [or those payable over a term of more than one (1) year], which represented 80.0 percent of total, the same level as of end-December 2020.

Of the total 66.0 percent outstanding loans to residents, 59.7 percent went to the following resident industries: (1) power generation companies (26.8 percent); (2) merchandise and service exporters (22.5 percent); and (3) public utility firms (10.4 percent).

Gross disbursements in the fourth quarter of 2021 reached US$15.7 billion and were 20.5 percent higher than the previous quarter’s figure mainly due to increase in funding requirements of an affiliate of a branch of a foreign bank.

Similarly, loan repayments in the fourth quarter of 2021 totaled US$15.8 billion, a 17.9 percent increase from the previous quarter’s figure. These resulted in overall net repayments.

FCDU deposit liabilities stood at US$46.1 billion as of end-December 2021, higher by US$217 million (or by 0.5 percent) from the end-September 2021 level of US$45.9 billion.

The bulk of these deposits (97.0 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves.

Year-on-year, FCDU deposit liabilities increased by US$1.0 billion (or by 2.3 percent) from the end-December 2020 level of US$45.1 billion.