The non-performing loan ratio of Taiwanese banks edged up in August, the first increase in two years, and last month’s figure may climb higher as the risk of a default by embattled memory chipmaker ProMOS Technologies Inc (茂德科技) looms larger, the Financial Supervisory Commission said yesterday.
The domestic banking sector’s bad loan ratio stood at 0.47 percent at the end of August, compared with 0.46 percent in July, the commission’s latest data showed.
The 0.01 percentage point increase in the bad loan ratio in August was attributable to Cosmos Bank (萬泰銀行) recognizing its loan loss caused by Prince Motors Group (太子汽車), the local sales agent of Japan’s Suzuki Motor Corp.
Prince Motors chairman Hsu Sheng-fa (許勝發) is also the founder and former chairman of Cosmos Bank, but relinquished control of the nation’s largest issuer of debit cards after selling a combined 80 percent stake in 2007.
Cosmos Bank has about NT$5.6 billion (US$182.53 million) in secured lending to the cash-strapped Prince Motors. The lender earlier said that it might recover losses later by auctioning the motor company’s real-estate collateral.
Still, the lender is the only bank among 37 domestic peers with a bad loan ratio above the 2 percent level with 6.66 percent, the commission said.
Overall, bad loans with domestic banks totaled NT$98.7 billion as of Aug. 31, up NT$1.8 billion from a month earlier, while outstanding loans increased by NT$247.7 billion to NT$21.12 trillion, the commission’s data showed.
Prince Motors’ default has had little negative impact on the banking sector, compared with that of ProMOS Technologies, which owes about NT$58 billion in a syndicated loan to scores of state-run and private lenders, Chang Kuo-ming (張國銘), deputy director-general of the commission’s Banking Bureau, said yesterday at a press conference.
A ProMOS default would lift the bad loan ratio by another 0.2 percentage points, Chang said, adding that the commission has urged creditor banks to increase provisions as a rescue package remains a pipe dream so far.
The regulator has also asked financial institutions to step up risk-hedging for overseas investments even though their exposure to Greece is modest at NT$1.8 billion, Chang said.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
Japan approved ￥631.5 billion (US$3.97 billion) in additional subsidies to hasten Rapidus Corp’s entry into the high-stakes artificial intelligence (AI) chipmaking arena, ramping up support for a project widely regarded as a long shot. The capital is intended to bankroll Rapidus’ work for information technology firm Fujitsu Ltd, one of the initial customers that Tokyo hopes would get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the start-up to ￥2.6 trillion by the end of the current fiscal year to March next year, the Japanese Ministry of Economy, Trade and
The founder of Chinese property giant Evergrande Group (恆大集團) has pleaded guilty to charges of fraud and bribery, a court said yesterday, the latest blow for what was once the country’s leading developer. Evergrande’s rise was propelled by decades of rapid urbanization and rising living standards, but in 2020, its access to credit dramatically narrowed when the government introduced curbs on excessive borrowing and speculation. The company defaulted in 2021 after struggling to repay creditors. Founder Xu Jiayin (許家印), 67, known as Hui Ka Yan in Cantonese, was reportedly held by police in 2023, with Evergrande saying he had been subjected to
RSS