FCDU lending increased slightly in Q4 2022

Outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks stood at US$15.8 billion as of end-December 2022, an increase of US$117 million or by 0.7 percent from the end-September 2022 level of US$15.7 billion as disbursements exceeded principal repayments.

Despite the net tightening of overall credit standards of lender banks as a result of uncertainty in the economic outlook, outstanding FCDU loans slightly increased due to higher net transactions of non-residents.

Residents’ transactions dropped amid uncertain global environment, rising borrowing cost and FX volatility.

Year-on-year, outstanding FCDU loans increased by about US$69 million or by 0.4 percent from the end-December 2021 level of US$15.7 billion.

As of end-December 2022, 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 comprised 78.3 percent of total, slightly lower than 78.5 percent from the previous quarter.

FCDU loans granted to residents comprised 62.1 percent or US$9.8 billion of total outstanding FCDU loans, of which majority went to the following sector/industries: power generation companies (US$2.7 billion or 27.0 percent); merchandise and service exporters (US$2.5 billion or 25.5 percent); and management/holding and stock brokerage (US$1.2 billion or 12.3 percent).

Gross disbursements in the fourth quarter of 2022 reached US$14.2 billion and were 3.3 percent lower than the previous quarter’s figure mainly due to decrease in funding requirements of a foreign bank branch affiliate. Similarly, loan repayments in the same quarter totaled US$14.1 billion, a 3.9 percent decrease from the previous quarter’s figure. These resulted in overall net disbursement.

FCDU deposit liabilities reached an all-time high of US$47.8 billion as of end-December 2022, higher by US$2.1 billion (or by 4.5 percent) from the end-September 2022 level of US$45.8 billion.

The bulk of these deposits (US$46.5 billion or 97.2 percent) continued 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$1.8 billion (or by 3.8 percent) from the end-December 2021 level of US$46.1 billion.