Ta Chong Bank (大眾銀行) said yesterday it had no investment exposure to three failing banks in Iceland and therefore would not suffer losses.
The bank only took up the originating bank’s role for the issuance of NT$8.6 billion in asset-backed commercial paper (ABCP) distributed by Waterland Financial Holding Co (國票金控) in early 2006, Ta Chong said in a stock exchange filing yesterday.
“The ABCP’s credit default will have no impact on Ta Chong’s finances,” the statement said.
Ta Chong said its financial health remained sound, after reporting NT$746 million in pre-tax profits in the first nine months of this year, a Bank for International Settlements (BIS) ratio of 11.53 percent and a coverage ratio of 101.3 percent as of last month. Its nonperforming loan ratio also remained low at 1.69 percent.
Ta Chong made the clarification one day after the financial regulator said “less than 10 domestic banks” have investments worth “more than NT$10 billion” linked to three Iceland banks — Kaupthing Bank, Landsbanki and Glitnir Bank — seized by the Nordic government.
None of these 10 banks has reported their potential losses from such investments except for Waterland Financial, which said in an exchange filing that it had written down NT$2.15 billion in losses from its NT$4.3 billion investments in synthetic collateralized debt obligations.