Wed, Jul 03, 2019 - Page 12 News List

New Site Industries loan woes hurt 13 local banks

By Kao Shih-ching  /  Staff reporter

Thirteen local banks last month saw combined loans of NT$7.99 billion (US$257.31 million) to four trading companies turn sour, which accounted for more than 10 percent of their cumulative pretax profits of NT$72.7 billion for the first five months of this year, the Financial Supervisory Commission said yesterday.

Chinese-language Mirror Media magazine yesterday reported that Taipei-based New Site Industries Inc (潤寅實業) had borrowed NT$6.6 billion from 13 banks, but had halted repayments and as of last month could no longer be reached.

While confirming that 13 banks were involved, the commission declined to reveal their names.

Six banks had reported their problem loans to the commission since June 5, Banking Bureau Deputy Director-General Huang Kuang-hsi (黃光熙) told a news conference in New Taipei City.

However, total amount of bad loans as of May to New Site and three affiliated companies was NT$7.99 billion, not NT$6.6 billion, of which NT$7.01 billion, or 87 percent, were unsecured, Huang said.

Although the bad debt accounted for 10.9 percent of the banks’ pretax profits for the January-to-May period, the commission said that the banks had set aside NT$911 million as allowance for bad debts.

As of press time last night, three banks had issued regulatory filings with the Taiwan Stock Exchange: O-Bank Co Ltd (王道銀行), Taiwan Business Bank (台灣企銀) and Mega International Commercial Bank (兆豐銀行).

O-Bank said that it had provided loans totaling NT$1.47 billion and had recognized NT$600 million as potential losses after deducting collateral and other recoverable amounts.

It had secured land and factory equipment worth about NT$800 million as collateral, O-Bank said.

Legal action has been initiated, but the incident would not have a significant effect on its financial management or business, it said.

Taiwan Business Bank and Mega International Commercial Bank said that their estimated losses were NT$1.23 billion and NT$477 million respectively.

The 13 banks told the commission that they suspect some documents provided by New Site for the loans were fake.

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