Over 70 banks list defaulters

The China Post staff

Over 70 domestic and foreign banks operating in Taiwan have unveiled the name lists of their major debtors each with bad debts of over NT$100 million over the past two days, with Chang I Industry Group, based in the central county of Taichung and headed by Yang Tien-shen, recording the most bad loans of NT$13.8 billion, according to industry sources.

The move came as a response to the Cabinet-level Financial Supervisory Commission’s (FSC) issuing of an administrative decree requiring all banks operating on the island to release the lists of major debtors before the deadline of March 15. The FSC, in turn, was acting on an instructions from Premier Su Tseng-chang. It was found that those enterprises caught in financial troubles during the domestic financial storm that occurred in 1988 topped the lists of debtors owing over NT$100 million to banks. In addition, such enterprises were also common debtors of different banks, especially government-linked banks. Based on the figures released by the banks, the Chang I Group registered the largest bad loans at NT$13.8 billion. The An Feng Group headed by Chu An-hsiung, former speaker of the Kaohsiung City Council, ranked second with total delinquent loans of NT$8.81 billion, with its creditor banks including First Bank, Land Bank of Taiwan, Bank of Overseas Chinese, Taishin International Bank, Chang Hwa Bank, Bank of Kaohsiung, Cosmos Commercial Bank, Bank of Taiwan, and Central Trust of China. The Tuntex Group, headed by Chen You-hao, took third place with total overdue loans of NT$8.22 billion. Among the group’s creditor banks are First Bank, Chang Hwa Bank, First Bank, Cosmos Bank, Central Trust of China, E. Sun Bank, and Taishin International Bank.

The fourth place went to Chinese Automobile Co., headed Chang Chao-hsiang, recording total bad loans of NT$8.22 billion. Among the firm’s creditor banks are Hua Nan Bank, Land Bank of Taiwan, Bank of Taiwan, Taishin International Bank, Bank of Overseas Chinese, China Development Bank. No. 5 was Procomp Informatics Ltd., a high-tech firm, headed by Sophie Yeh, with total delinquent loans of NT$3.9 billion, followed by Hua Lung Group, headed by Oung Ta-ming, with NT$3.2 billion, and Kwang San Construction with NT$2.59 billion, among others. Worth mentioning is that the former seven provincial government-run banks posted much higher outstanding non-performing loans than other banks. Of them, Chang Hwa Bank suffered the largest amount of delinquent loans at NT$51.99 billion in 183 cases, followed by Bank of Taiwan with NT$37.15 billion in 98 accounts, Taiwan Cooperative Bank with NT$36.26 billion in 121 accounts, Taiwan Business Bank with NT$22.78 billion in 101 cases, First Bank NT$23.81 billion and Land Bank of Taiwan NT$12.96 billion. Meanwhile, among foreign banks,Citibank posted the largest amount of non-performing loans at NT$2.542 billion, followed by the Hong Kong and Shanghai Banking Corp. with NT$1.681 billion, Bangkok Bank Public with NT$1.2 billion, and ABN AMRO Bank with NT$665 million, among others. On another front, some top bank executives said that publishing the names of those defaulting on major loans won’t help banks to recoup their losses, or make the debtors feel awkward, because most of them have gone abroad with the funds they borrowed from the banks.

Most of these defaulters are already known to the public, the executive said, adding that they doubt publication will subject them to any additional pressure.

Instead of flogging dead horses, the executive said the government should authorize the banks to publish the names of major borrowers who have been overdue in the repayment of debts for more than three months, but have not yet had their debts listed as non-performing loans, and thus a part of banks’ losses.

The executive said most of those lenders are still active in business and thereby may have the ability to repay their loans if they were pressured to do so.