Wed, Jan 02, 2019 page12

• Bank pretax profits could hit record

  GREEN HOLDING BACK: If the 14 banks that lent to Green Energy and CPT decide to recognize their loans as losses last month, then 2014’s record will not be reached

  • By Kao Shih-ching / Staff reporter
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  Banks reported combined pretax profits of NT$318.05 billion (US$10.35 billion) in the January-to-November period, up 7.5 percent from the same period in 2017, with total pretax profits for last year likely to set a new record, the Financial Supervisory Commission said last week.

  Banks in 2014 posted pretax profits totaling NT$320.1 billion, commission data showed.

  As the first 11-month figure is only NT$2.1 billion less than the record and banks usually earn more than NT$20 billion per month, it is possible that local banks’ profitability reached a new high for the whole of last year, Banking Bureau Deputy Director Sherri Chuang (莊琇媛) told a news conference.

  However, if the 14 banks led by Bank of Taiwan (台灣銀行) — which have lent NT$16.9 billion to Chunghwa Picture Tubes Ltd (CPT, 中華映管) and Green Energy Technology Inc (綠能科技) — decide to recognize their loans as losses in the month, then local banks’ combined pretax profits for last month would fall from a year earlier, meaning that the entire year’s pretax profits would not reach the record, Chuang said.

  Thus far, only King’s Town Bank (京城銀行) has decided to recognize its lending of NT$1.64 billion to CPT as a potential loss, Chuang added.

  The commission’s tallies also showed that banks’ domestic branches reported pretax profits of NT$209.32 billion in the January-to-November period, accounting for 65.8 percent of total pretax profits, while their overseas branches saw the number rise 12.3 percent annually to NT$32.17 billion for the same period, the highest-ever growth rate.

  However, branches in China saw pretax profits for the 11-month period plunge 16.7 percent year-on-year to NT$3.23 billion, affected by a depreciating yuan and poor returns on investments in Chinese equities, the commission said.

  Separately, the commission said that local banks lent NT$148.7 billion in November, including NT$88.9 billion to private companies.

  Lending had advanced for the 21th consecutive month, meaning that demand for funds was still strong, Chuang said, adding that aggregate lending by local banks reached NT$28.47 trillion for the year as of the end of November.

  Loan quality remained sound over the period, as non-performing loans totaled NT$74.3 billion as of the end of November with the average non-performing loan ratio staying flat at 0.26 percent, commission data showed.

  The commission had asked lenders to reduce non-performing loans to China as long as they made profits, but three of the nation’s 37 lenders still reported non-performing loans as of November — Chang Hwa Commercial Bank (彰化銀行) with NT$407 million, CTBC Bank (中信銀行) with NT$425 million and Bank of Taiwan with NT$6 million, Chuang said.

  The agency would continue to monitor the situation, she added.
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