Taiwanese banks saw NPL coverage rate soar to 41.41% in Dec. 2004

Taipei, Jan. 31, 2005 (CENS)--The average non-performing loan (NPL) coverage rate of Taiwan's domestic banks climbed 41.41% at the end of December 2004, exceeding the world's standard of 40% for the first time and up 3.69 percentage points from 37.72% posted a month earlier, according to the statistics released by the Cabinet-level Financial Supervisory Commission (FSC).

In the same month the NPLs recorded by domestic banks shrank by NT$61.6 billion (US$1.8 billion at US$1 = NT$34) from the preceding month to NT$432.7 billion (US$12.73 billion), with NPL ratio down by 0.44 of a percentage point to 2.78%.

Compared to the same month of 2003, domestic banks saw an average decline of 35.8% in NPLs. Of them, seven banks posted a whopping annual drop of over 50%, including Industrial Bank of Taiwan, EnTie Commercial Bank, and Bank Sinopac Bank.

In terms of broad NPL ratio, the percentage was 3.8% at the end of December 2004, down 0.55 of a percentage point from 4.35% recorded a month earlier. And the ‘under watch' problem loans accounted for 1.02% or NT$158 billion (US$4.65 billion) of the total outstanding loans, down 0.11 of a percentage point or NT$16.2 billion (US$476.47 million).

FSC's statistics showed that some 53 credit-card issuers in Taiwan floated about 44.18 million credit cards here by the end of December 2004, with 24.59 million cards in effective use and outstanding revolving credit of NT$457.9 billion (US$13.47 billion). The card loans that have been due over six months accounted for only 0.51% of the total receivable accounts, edging down 0.07 of a percentage point from the previous month.

Meanwhile, the number of cash cards in effective use amounted to 3.76 million at the end of December 2004, with outstanding loans of NT$241.5 billion (US$7.1 billion). In the same month, the NPL ratio of such cards stood at 0.626%, down 0.185 of a percentage from a month earlier. Currently Taiwan has some 35 financial institutions issuing cash cards.