BNP Paribas says outlook on Taishin remains poor

Despite successful fundraising, the outlook for Taishin Financial Holding Co (台新金控), the nation's second largest credit card issuer, remained gloomy due to possible investment impairment and swelling consumer bad debts, BNP Paribas Securities (Taiwan) Co said yesterday.

"Although the worst seems to be over, it is still too early to turn bullish on the company," BNP Paribas Securities' head of research Jesse Wang (王嘉樞) said in his latest report released yesterday, adding that the company had traveled half of the way down a long, winding road.

Taishin Financial's prospects remained clouded by a possible asset impairment charge on Chang Hwa Bank (彰化銀行), the likely approval of an amendment to the Bankruptcy Law that raised concerns over another round of extraordinary provisioning to cover expanding consumer bad debt, and a lack of underlying profitability growth in the near term, Wang explained.

The French brokerage, however, upgraded its rating of Taishin Financial to "hold" from "reduced" and raised its target price by 9.7 percent to NT$22.1 per share in the wake of the financial group's introduction of a total of NT$31 billion of foreign capital.

Taishin Financial shares fell for the second day by 1.93 percent to close at NT$20.30 yesterday.

Taishin Financial announced earlier this week that it would sell a 3.38 percent stake to Nomura Group of Japan.