To accelerate its move in writing off bad loans from defaults on credit and cash-advance cards, Chinatrust Financial Holding Co (中信金控), announced yesterday that its banking unit plans to auction a total of NT$9.62 billion (US$294.6 million) of bad loans.
The bad loan-sellout includes an auction of NT$4.148 billion of cash card bad loans and NT$5.473 billion of credit card bad loans, Chinatrust Financial said in a statement to the Taiwan Stock Exchange.
The winning bidder will offer the highest price that exceeds an undisclosed minimum, according to the statement.
Chinatrust Financial, which owns the nation's largest credit card issuer Chinatrust Commercial Bank (中國信託銀行), reported a pre-audit net loss of NT$2.19 billion last month. But the company predicted last week a significant improvement in third quarter profit as asset quality of the credit and cash cards is improving.
The company last month set aside a loan provision of NT$4.53 billion to cover potential bad debts. For the first five months of the year, it made an NT$20.76 billion provision for possible non-payments on sour loans, an increase of NT$17.06 billion from the same period last year.
The lender's credit card non-performing loan (NPL) ratio dropped to 2.92 percent last month from 2.95 percent the previous month. This is compared to the industry's average 3.38 percent at the end of April, according to the Financial Supervisory Commission's latest statistics.
Cash card NPL ratio fell to 2.82 percent last month from 2.85 percent in April at Chinatrust, compared with an industry average of 6.75 percent in April, the government's data showed.
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