The Financial Supervisory Commission said yesterday there is still room for domestic banks to raise their provisions as they fail to meet capital adequacy requirements and overall real-estate loans remain high.
The commission made the comments after real-estate-linked lending amounted to NT$11.58 trillion (US$372.2 billion) at the end of May, accounting for 50.81 percent of overall outstanding loans.
While all 39 lenders had a bad loan ratio of less than 2 percent, their general provisions stood at 0.93 percent, lower than the 1 percent minimum, the commission said.
“The figures suggest room for improvement and the commission will tell below-par banks to strengthen their financial health and the quality of their assets,” the commission said.
As of May, the sector’s bad loan ratio stayed unchanged at 0.44 percent, with aggregate non-performing loans falling by NT$8 million to NT$99.2 billion, commission data showed.
Total outstanding loans stood at NT$22.79 trillion, down NT$24.1 billion from the end of April, the commission said.
Separately, the commission fined Global Life Insurance Co (國寶人壽) NT$48 million for failing to comply with investment restrictions.
The punishment came after the commission in May banned the insurer from investments in risky assets after Global Life cast a vote in the election of directors at Long Bon International Co (龍邦).
The commission had warned the insurer beforehand not to interfere in the board reshuffle.