Banks report slight lowering of NPLs

The nation's non-performing loan (NPL) ratio, including loans under surveillance, fell slightly to 3.77 percent last month from 3.78 percent in January, the Financial Supervisory Commission said in a statement yesterday.

As of the end of last month, banks had bad loans of around NT$586.2 billion, down from NT$587.9 billion the previous month, the commission added.

The commission said that the coverage ratio for domestic banks also reached 40.89 percent last month. The figure was down by 0.43 percent from January's level but was still higher than its 40 percent target. The coverage ratio is a measure of a bank's ability to absorb potential losses from NPLs.

Among the nation's 48 banks, 42, or 88 percent, reported that their NPL ratio dropped to below 5 percent, said Jong Huey-jen (鍾慧貞), director-general of the commission's Bureau of Monetary Affairs.

The six lenders with NPL ratios above 5 percent were Hualien Business Bank (花蓮企銀), Taitung Business Bank (台東企銀), Chinfon Bank (慶豐銀行), Bowa Bank (寶華銀行), Chung Shing Bank (中興銀行) and the Chinese Bank (中華銀行).

Eight financial institutions, meanwhile, met the Resolution Trust Committee Fund Regulatory Provisions (RTC, 金融重建基金設置及管理條例) requiring them to exit the market, she said, but the number should drop to seven, as one is in merger talks.