7 major banks reduce bad loans by NT$29.3 billion

The China Post staff

The total of non-performing loans (NPLs) at the seven major banks shrank to NT$465.79 billion at the end of June, down NT$29.27 billion from a month earlier. Changhwa Bank and the First Commercial Bank wrote off the most NPLs last month, shaving off NT$19.46 billion and NT$11.59 billion, or 1.54 and 1.36 percentage points, respectively.

Among the seven banks, The Land Bank of Taiwan had the highest NLP total of NT$88.27 billion at the end of June while Taiwan Business Bank reported the highest NPL ratio of 12.32 percent.

Taiwan Business Bank reported an increase of NT$3.10 billion, or 0.19 percentage points, in its bad loans last month. Its NPLs amounted to NT$86.57 billion at the end of June, with an NLP ratio still high at 12.32 percent. The bank said that the lasting weak economic climate made it hard to lower the NPL ratio. NPLs increased last month as some overdue loans became non-performing.

Taiwan Cooperative Bank is another bank to report a growth in NPLs, seeing the figure rise to NT$87.93 billion at the end of June from NT$87.46 billion one month earlier. Its NPL ratio, however, was controlled at 7.47 percent in June, up 0.13 percentage point from the 7.34 percent at the end of May.

Among the seven banks, The Bank of Taiwan had the lowest NPL ratio at 4 percent at the end of June, down 0.05 percentage point from May. Hua Nan Commercial’s NPL ratio stood at 4.13 percent, up just 0.01 percentage point in June. The bank said that there was a slim chance for its NPL ratio to increase unless the economy becomes worse. Hua Nan Commercial Bank and the Bank of Taiwan were the only two banks with NPL ratios controlled below the 5-percent level.

While the banks generally have controlled the NPL ratios at their corporate banking departments from ballooning over the past months, they are noticing a gradual increase in overdue loans from their consumer banking departments.