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Banks' SIV impairment hits NT$4bn

Following the US subprime crisis, 13 of the nation's 39 banks posted a total of NT$4 billion (US$123.5 million) in impaired assets from their NT$21.8 billion investment in structured-investment vehicles (SIVs) as of Oct. 25, the Financial Supervisory Commission (FSC) said yesterday.

Bank SinoPac (永豐銀行) -- a banking unit under SinoPac Financial Holdings Co (永豐金控) -- topped 12 other banks in booking the highest amount, NT$2.3 billion in impaired assets among its NT$11.3 billion investment in SIVs, FSC Vice Chairwoman Susan Chang (張秀蓮) said.

SinoPac said on Tuesday that it would book a NT$1.53 billion charge for the third quarter to reflect losses on the SIV investments.

The commission also disclosed yesterday that 21 of the 39 banks had a NT$56.3 billion exposure to US subprime mortgage-related products.

In August, 16 banks reported to the FSC that they held NT$40.4 billion in investments linked to US subprime loans.

Chang said that, as of last month, the 21 banks had booked less than NT$300 million in losses, and another NT$3.1 billion in outstanding losses.

With wealth management investors selling their subprime investments, the sector's accumulated assets in subprime-related portfolios dropped to NT$1.4 billion last month from NT$4.1 billion in early August.
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