Taishin says debt problem will be cut by second half

Taishin Financial Holding Co (台新金控), the nation's second largest credit-card issuer, said yesterday it expects to gain control of bad consumer debts by the end of second quarter, and that profits could exceed NT$10 billion (US$306 million) this year.

Provision expenses at the holding firm's Taishin International Bank's (台新銀行) will rise in the first half of this year -- to about NT$1.5 billion per month -- but could drop to about NT$700 million monthly in the second half, according to Taishin Financial spokeswoman Carol Lai (賴昭吟).

According to Taishin Financial's chief risk officer James Lin (林景聰), spiraling bad consumer loans provide the company with an opportunity to strengthen its leading status amid heavy competition in the consumer banking segment, as smaller rivals will drop out of the market through the reshuffle.

Meanwhile, Taishin Financial said it may not pursue additional mergers this year after acquiring a 22.5 percent stake in state-controlled Chang Hwa Bank (彰化銀行) last year.

The company will not need to increase its shareholdings to a 25 percent stake before including Chang Hwa as a subsidiary, as it controls half of the bank's board, Taishin Financial president Julius Chen (陳淮舟) said.

The acquisition boosted Taishin Financial to the position of the nation's No. 2 financial services provider, up from the eighth place, with assets of NT$2.38 trillion as of the end of last year, , according to figures from the Banking Bureau.

Cathay Financial Holding Co (國泰金控), with assets of NT$3.06 trillion, remains in first place, according to Banking Bureau figures.