Bad loans at seven major banks to hit NT$450 bil. in June

Michelle Hsu, The China Post

The rising bad loans at Taiwan’s seven major banks are estimated to hit another historic high of NT$450 billion at the end of June.”The banks can hardly find an effective solution to tackle the rising overdue loans under the worsening economic situation,” said a banking executive. According to the latest bank statistics, the Bank of Taiwan reported an increase of NT$790 million in overdue loans for June, with the total overdue loans amounting to NT$44.2 billion at the end of last month. Meanwhile, the overdue loan ratio jumped to 3.23 percent from the 3.16 percent one month earlier.

The overdue loans at the Land Bank of Taiwan expanded NT$2.4 billion to stand at NT$77.5 billion at the end of June, leaving the overdue loan ratio up to 6.8 percent from the 6.61 percent one month earlier. The soaring overdue loan ratio at the bank is partly due to the sluggish real estate market and the increase in jobless people. The Land Bank of Taiwan used to be active in extending house mortgage loans. While its overdue loans are estimated to rise by over NT$10 billion in June, The First Commercial Bank was active in extending loans in an attempt to slow the growing pace of its overdue loan ratio — the ratio of overdue loans to the total of bank-extended loans. The bank, however, has not yet published a formal financial report. Among the seven major banks, the Cooperative Bank of Taiwan and Hua Nan Commercial Bank are the two recording a decline in both overdue loans and overdue loan ratio. The former is estimated to have cut its overdue loans by NT$1.3 billion in June to around NT$77.3 billion at the end of last month, leaving its overdue loan ratio down to 6.6 percent from 6.8 percent in May.

Hua Nan Commercial Bank is expected to have reduced its bad loans by NT$150 million to NT$58.4 billion, and cut its overdue loan ratio to 7.12 percent from 7.27 percent in May. Chang Hwa Bank is the only one among the seven banks to still keep the figures confidential.