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Banks' bad loan ratios decline again

The nation's non-performing loan (NPL) ratio dropped to 2.87 percent last month, down from 3.24 percent in June, while the amount of NPLs decreased to NT$457.9 billion from NT$518.1 billion during the same period, the Banking Bureau under the Financial Supervisory Commission said yesterday.

Regulators adopted a new, stricter definition to measure the NPL last month that takes loans in default for over three months into account.

At the end of last month, 39 out of the nation's 47 banks had an NPL ratio of below 5 percent, while 21 banks reported NPL ratios of less than 2.5 percent, the bureau's deputy director-general Jong Huey-jen (鍾慧貞) said.

As for credit cards, 454.7 million cards were in circulation as of the end of last month, with revolving credit lending amounting to NT$480.4 billion, and cash-advance lending totalling NT$18.5 billion, according to statistics from the bureau.

The credit card sector had an NPL ratio of 2.34 percent last month, up marginally from 2.26 percent in June.

Beginning this month, Bowa Bank (寶華銀行) was banned from issuing new credit cards because its NPL ratio reached 10.67 percent, which is far above the regulatory level of 8 percent, Jong said.

At the same time, the nation had 3.8 million cash-advance cards in effect, with total lending of NT$306.7 billion and an NPL ratio of 2.14 percent, up significantly from 0.91 percent in June after adopting the new NPL definition, Jong said.
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