Taishin writes off nearly NT$10bn in asset sale losses

Taishin International Bank (台新銀行), the nation's second-largest credit card issuer, will implement a one-time write-off of NT$9.7 billion (US$299.4 million) in losses incurred from the sale of bad loan assets, its parent company said yesterday.

The bank will also issue a batch of hybrid tier-1 subordinate debts worth NT$17 billion by the end of the first quarter to sustain the bank's capital adequacy ratio, parent company Taishin Financial Holding Co (台新金控) said, citing a bank decision made in a board meeting on Sunday.

The fundraising plan will be submitted to the Financial Supervisory Commission for approval in the near future, the company said.

In response, the financial regulator said it was briefed about the plan and that Taishin Financial would be required to dump more than 3 percent of its holdings in Chang Hwa Bank (彰化銀行) if the company cannot improve its financial structure and meet requirements by the end of this month.

The commission said last June that Taishin Financial could buy an extra 7.5 percent stake on top of its 22.5 percent holding in Chang Hwa on the condition that it keep its capital adequacy ratio for the whole financial group in excess of 105 percent and above 10 percent for Taishin International.

The bank's capital adequacy ratio, however, dropped to 8 percent in September last year after writing off mounting bad debts.

The Financial Supervisory Commission then demanded that the parent company make improvements by the deadline.