Taiwan’s credit cooperatives have significantly improved their asset quality over the past eight years as evidenced by low bad-loan and high coverage ratios, the Financial Supervisory Commission (FSC) said yesterday.
As of May 31, the 25 grassroots-level lenders had an average non-performing loan ratio of 0.37 percent, compared with 5.97 percent in June 2004, the financial regulator said.
Meanwhile, their coverage ratio jumped from 29.98 percent to 427.09 percent, higher than the average 185.36 percent for the nation’s 38 banks at the end of May, the FSC said. In terms of profitability, the credit cooperatives posted NT$1.78 billion (U$59.49 million) in pretax income last year, up NT$110 million from a year earlier, the FSC said.
The earnings momentum extended into this year with before-tax earnings totaling NT$1.17 billion for the first five months of this year, the FSC said.
The figures showed the credit cooperatives survive competition from banks and will continue to serve customers in areas outside the reach of banks because of their small scale of economies, the FSC said.
E. Sun Commercial Bank (玉山銀行), the banking arm of E. Sun Financial Holding Co (玉山金控), bought Chu Nan Credit-Cooperative Association (竹南信用合作社) last year to expand its customer base and service network beyond Greater Taipei and Kaoshiung.