Taishin International reports sizeable loss

Taishin International Bank (台新銀行), a leading cash-advance card issuer, booked the biggest single monthly loss last month among the nation's eight banks established after 1992 when the government lifted its ban on the launch of new banks.

Taishin International reported pre-audited losses of NT$457 million (US$13.8 million) last month, a big drop from a net profit of NT$118 million in August, according to a filing to the Taiwan Stock Exchange.

The lender is burdened with a total of NT$6.8 billion in non-amortized losses from bad loans and is expected to be forced to set aside further provisions to increase its loan reserve coverage.

It registered a cash card defaulted loan ratio at 11.97 percent in August. The bank has not issued any new cash cards since May.

Because of concerns over the bank's deteriorating asset quality, Fitch Ratings last week downgraded its appraisal of Taishin Financial Holding Co (台新金控), the lender's parent company.

Taishin Financial last week made a filing to the stock exchange to auction off NT$5.49 billion worth of bad debts, of which cash cards made up 90 percent, following its move to sell NT$9.5 billion of bad loans in July in a bid to clean up its asset quality.

Cosmos Bank Taiwan (萬泰銀行), which issued the nation's first cash card in 1999, saw its profits shrink by 48 percent from August to NT$170 million last month. The big drop makes it difficult to cover its losses incurred this year.

For the first nine months of the year, Cosmos Bank recorded the deepest deficit of NT$4.37 billion, or minus NT$2.62 per share, among the new-bank group.

According to government data, as of August, the lender reported a cash-card lending balance of NT$50.34 billion, accounting for 23.6 percent market share.

Far Eastern International Bank (遠東商銀), meanwhile, incurred a loss of NT$123 million last month, second only to Taishin International's NT$457 million loss.

However, as Far Eastern International has already managed to write off many bad debts to improve its asset quality, analysts said the lender's profitability would bounce back to a normal level next year, making it a favorable target for foreign financial institutions interested in investing in local banks.

Analysts predicted that Far Eastern International would report an after-tax net profit of NT$1.73 billion with earnings per share at NT$0.92.

Separately, Chinatrust Commercial Bank (中國信託商銀), the nation's No.1 credit card issuer, on Thursday announced unaudited pre-tax profits of NT$67 million for last month.

It saw pre-tax losses for the January-to-September period reach NT$6.49 billion, with earnings per share at minus NT$1.21, it said in a release earlier this week.