Fri, Aug 14, 2009 - Page 11 News List

Taishin sets aside compensation for Lehman notes

By Kevin Chen  /  STAFF REPORTER

Taishin International Bank (台新銀行) said last night it would set aside NT$1.6 billion (US$49 million) to compensate investors for their losses in Lehman Brothers-related structured notes.

Taishin will become the second domestic bank to set aside funds to compensate investors for financial products linked to the failed Lehman Brothers. It had sold NT$10 billion in structured notes.

On Aug. 4, Chinatrust Commercial Bank (中國信託銀行) said it would allocate NT$4.1 billion in provisions for the settlement of the structured notes.

Taishin Bank, a banking unit of Taishin Financial Holding Co (台新金控), said in a stock exchange filing that its board approved the compensation earlier in the day. It added that it hoped to strengthen its relationship with customers.

The NT$1.6 billion in compensation funds was lower than analysts’ projections of a sum between NT$2.5 billion and NT$3 billion, as reported by the Chinese-language Economic Daily News yesterday.

Taishin Financial may have to cut its first-half profit results because of the provisioning, the report said.

Chinatrust Financial Holding Co (中信金控), the parent of Chinatrust Bank, cut its unaudited profits to NT$353 million — down 93 percent from its announcement of NT$5.23 billion last month — because of the compensation outlay, it said.

Taishin Financial reported preliminary net profits of NT$1.82 billion, or NT$0.19 per share, for the first half of the year, it said in a press statement on July 9.

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