Fri, Nov 15, 2002 - Page 11 News List

Business briefs

STAFF WRITER, WITH AGENCIES

Life insurance outlook still poor

Taiwan Ratings Corp (中華信評), a local arm of Standard & Poor's ratings agency, said yesterday that outlook on the life insurance sector remains negative, despite a recent regulatory change to help improve life insurers' competitiveness amid unfavorable economy and investment environment.

"A successive reduction of interest rates, both globally and domestically, has increased concern about negative interest spreads -- the gap between guaranteed interest rates on policies and actual investment returns -- in the island's life insurance sector," Taiwan Ratings said in a statement.

The central bank on Monday cut the rediscount rate from 1.875 percent to 1.625 percent, the 14th rate cut within the past two years.

Finance minister in hot water?

The government may replace Minister of Finance Lee Yung-san (李庸三), reflecting dissatisfaction with the way Lee has handled the cleanup of grassroots credit associations, a Chinese-language newspaper reported yesterday.

The report, without citing the source of its information, said Premier Yu Shyi-kun may replace Lee after Nov. 23, when farmers and fishermen are scheduled to hold demonstration in Taipei to protest against Lee's decision to restrict lending by their local credit associations and curb an increase in bad loans.

The Cabinet immediately denied the story, saying the report was unfounded and that the newspaper had not interviewed Yu.

Company wants more bad loans

Taiwan Asset Management Co (台灣金聯) plans to buy NT$50 billion (US$1.4 billion) of lenders' bad loans this year, a Chinese-language newspaper reported, citing company chairman Lin Chen-kuo (林振國).

The company has bought about NT$30 billion of bad loans since March from eight financial companies, the newspaper said.

Taiwan Asset, co-owned by 33 banks and bills finance companies, is competing with the likes of GE Capital Corp, Cerberus Asia Capital Management LLC and Lone Star Asia-Pacific Ltd for the nation's NT$1.4 trillion of loans that were non-performing or at risk of turning sour in the third quarter.

Bank may sell shares abroad

Chang Hwa Commercial Bank (彰化銀行) said it may sell new shares to overseas investors next year to top up funds after writing off bad loans.

As of September, 7.3 percent of the bank's loans were classified as non-performing.

"The plan hasn't been fixed, we are just talking about it," said bank Executive Vice President Hsieh Chao-nan (謝昭南), who declined to estimate how much the bank plans to raise.

Chang Hwa, which is forecasting a net loss this year, plans to raise US$1 billion in the sale. The bank's current market value is US$1.5 billion.

Taiwan Cellular plans bond sale

Taiwan Cellular Corp (台灣大哥大) said it plans to sell as much as NT$15 billion (US$432 million) in bonds to help repay debt.

The bonds will have a maturity of no longer than seven years, the company said in a statement to the stock exchange. The interest rate hasn't been set, the company said.

NT dollar slide continuing

The New Taiwan dollar yesterday continued to trade weaker against its US counterpart, down NT$0.117 to close at NT$34.736 on the Taipei foreign exchange market. Turnover was US$426 million, compared with the previous day's US$484 million.

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