First Financial Holdings Co (第一金控) yesterday said the loan default caused by Ching Fu Shipbuilding Co (慶富造船) might affect year-end bonuses for its employees, while other state-run banks said the default would not have much of an effect on their bonuses.
Top executives at state-run financial institutions made the assessment at a meeting of the legislature’s Finance Committee on fallout from the Ching Fu case.
First Commercial Bank (第一銀行), the banking arm of First Financial, has yet to settle losses linked to the default and is unable to set a figure for bonuses, acting chairwoman Grace Jeng (鄭美玲) said.
As the lead bank for the troubled syndicated loan of NT$20.5 billion (US$679.75 million), First Commercial Bank would incur the biggest losses, which are estimated at NT$3.5 billion, Jeng said, adding that bonus payouts have averaged 4.6 months of regular pay in the past few years.
The Ministry of Finance, the largest shareholder of state-run financial institutions, said it would appoint a new chairperson at First Financial in three months, after dismissing former chairman Joseph Tsai (蔡慶年) earlier this month.
State-owned Bank of Taiwan (臺灣銀行) and Land Bank of Taiwan (土地銀行) said they would distribute year-end bonuses equivalent to 4.4 months of pay, while Hua Nan Commercial Bank (華南銀行) said it aimed for 4.6 months.
Taiwan Cooperative Bank (合庫銀行), Taiwan Business Bank (臺灣企銀), Chang Hwa Commercial Bank (彰化銀行) and Mega International Commercial Bank (兆豐銀行) said they have set the payout at 4.6 months, because their loan to Ching Fu was modest.
Ching Fu has a navy contract worth NT$35.8 billion to build six minesweepers, but its solvency has been called into question after the Kaohsiung District Prosecutors’ Office named it in a financial fraud investigation.
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