Cosmos Bank (萬泰銀行), the nation’s largest issuer of debit cards, appears to have emerged from a loan default unscathed after Taiwan Ratings Corp (中華信評) reaffirmed its credit ratings despite a steep increase in nonperforming lending.
Shares in the bank ended steady at NT$7.15 on Friday, bucking the TAIEX’s 1.4 percent fall, one day after the Financial Supervisory Commission (FSC) indicated that the lender’s bad loan ratio surged to 3.55 percent in June, from 1.36 percent in May.
That makes Cosmos Bank the only lender with a non--performing loan (NPL) ratio above the 2 percent mark among 37 domestic banks. Based on the commission’s data, the average NPL of the 37 banks fell to 0.48 percent in June from 0.5 percent in May, as the total of bad loans dropped by NT$3.9 billion (US$140 million) from a month earlier to NT$99.5 billion.
Chang Kuo-ming (張國銘), deputy director-general of the commission’s Banking Bureau, said Cosmos Bank faced a bad loan of NT$1.6 billion to the cash-strapped Prince Motor Group (太子汽車) as part of secured lending valued at NT$5.6 billion.
Prince Motor is the local sales agent of Japan’s Suzuki Motor Corp. The company’s chairman, Hsu Sheng-fa (許勝發), is also the founder and former chairman of Cosmos Bank, but relinquished control after selling a combined 80 percent stake to US private equity firm SAC Private Capital Group LLC and GE Money, a unit of General Electric Co, in September 2007.
Prince Motor failed to honor payments in June on a NT$20 billion loan to 30 banks, according to the commission.
Cosmos Bank’s exposure to Prince Motor has not affected its credit profile as Taiwan Ratings, the local arm of Standard & Poor’s, on Friday maintained its “twBBB-” long-term and “twA-3” short-term counterparty credit ratings on the lender.
“Our assessment of Cosmos Bank’s credit profile already factors in the substandard loans and potential credit costs from the bank’s exposure [linked to Prince Motor],” Taiwan Ratings said in a statement.
The ratings agency viewed the bank’s asset quality to be below the domestic industry average as a result of its focus on unsecured consumer lending as well as its substandard loans, the statement said.
As of June, Cosmos Bank had a capital adequacy ratio of 16.02 percent. However, the bank is expected to auction off a plot of land that belongs to Prince Motor in New Taipei City’s (新北市) Tucheng District (土城) worth NT$4.2 billion, which will help lower its bad loan ratio.
The carmaker has filed for permission to convert the plot into a site for commercial and residential properties, thus making it more attractive to potential buyers, local media said.
Cosmos Bank expects to recover the loan fully as it also plans to ask Prince Motor to place a 17-story office building in downtown Taipei back on the market after the previous auction fell through last week.
The building on a 542-ping (1,792m2) plot of land near the intersection of Xinyi Road and Dunhua S Road failed to draw bidders due to development limits, auction organizer DTZ said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”