Chinatrust Financial Holding Co (中信金控) has the highest level of financial leverage of the nation's 14 financial holding groups, given that its board members have hypothecated over 80 percent of their holdings for cash, the Financial Supervisory Commission (FSC) said yesterday.
Hypothecation refers to the offer of stocks, bonds or other assets as collateral for a loan, without transfer of title or possession.
As of last month, Chinatrust Financial's board members and supervisors had hypothecated 84.92 percent of their shareholdings, followed by Taishin Financial Holding Co's (台新金控) 75.96 percent and Jih Sun Financial Holding Co's (日盛金控) 45.16 percent, according to data released yesterday.
Chinatrust Financial's chairman Jeffery Koo (辜濂松) used 90.96 percent of holdings he controlled as collateral for loans, the FSC data showed.
Board directors at state-controlled Mega Financial Holding Co (兆豐金控) did not use their holdings for loans, while the figures for both Fubon Financial Holding Co (富邦金控) and First Financial Holding Co (第一金控) were less than 1 percent.
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