7 major Taiwanese banks saw average NPL ratio dip to 2.89% in 2004

Taipei, Jan. 17, 2005 (CENS)--Seven leading domestic banks in Taiwan recorded an average non-performing loan (NPL) ratio of 2.89% in 2004, a sharp drop of 1.48 percentage points from 2003's 4.37%.

Last year, the total outstanding NPLs of the banks declined by NT$75.8 billion (US$2.23 billion at US$1 = NT$34) to NT$204.8 billion (US$6.024 billion).

To upgrade its asset quality, Taiwan Business Bank wrote off as much as NT$16.874 billion (US$496.3 million) in bad loans last year, thus reducing its NPL ratio to 4.73% at the end of last December from 9.44% of one year earlier. The bank's NPLs shrank to NT$34.8 billion (US$1.024 billion) from NT$66.4 billion (US$1.95 billion). As a result, the bank suffered after-tax loss of NT$7 billion (US$205.88 million) last year.

Taiwan Business Bank issued NT$12 billion (US$352.94 million) worth of perpetual subordinated bonds and auctioned off bad loans of NT$13.1 billion (US$385.29 million) to interested assets management firms in 2004. With these efforts, the bank's NPL ratio therefore posted a sharp fall of 3.65 percentage points to 4.73% in December of the year from a month earlier.

All of the seven banks met the FSC's requirement of having their NPL ratios fall under in 2004. Of them, First Commercial Bank posted the lowest ratio of 1.27% or NT$10.8 billion (US$317.65 million) in NPLs, and Bank of Taiwan followed with 1.34%.

NPLs of seven leading domestic banks in 2004 Unit: NT$M
Bank	NPLs	NPL ratio (%)	NPLs in 2003	NPL ratio in 2003 (%)
First Commercial	108 (-16)	1.27 (-0.19)	126 (-18)	1.46 (-0.19)
Bank of Taiwan	170 (-11)	1.34 (-0.12)	234 (-64)	2.17 (-0.83)
Hua Nan Commercial Bank	203 (-21)	2.27 (-0.26)	289 (-86)	3.33 (-1.06)
Taiwan Cooperative Bank	426 (-35)	3.37 (-0.32)	576 (-148)	4.66 (-1.29)
Land Bank of Taiwan	446 (-11)	3.41 (-0.15)	555 (-109)	4.57 (-1.16)
Chang Hwa Bank	345 (-6)	3.87 (-0.10)	416 (-71)	4.93 (-1.06)
Taiwan Business Bank	348 (-255)	4.73 (-3.65)	664 (-316)	9.44 (-4.71)
Total	2,048 (-355)	2.89 (-0.69)	2,860 (-812)	4.37 (-1.48)

Sources: The above-mentioned banks