In a move apparently aimed at cleaning up problematic loans at First Commercial Bank (
Chen, known in southern Taiwan for his clean up of overdue loans at the Bank of Kaohsiung, is the first heavy-weight banker tapped by the DPP administration to run one of the "Big Three" state-run banks.
First Commercial has more than NT$1 trillion in assets -- much larger than the Bank of Kaohsiung. The challenge for Chen is to see whether he can repeat his prior success by reducing First Commercial's overdue loan ratio.
Last month Chen was thrust into the media spotlight when he said the Bank of Kaohsiung was interested in taking over Bank of Overseas Chinese (
That bank's chairman, Day Li-nin, accused Chen of colluding with a local newspaper to spread misinformation and damage the reputation of the Bank of Overseas Chinese.
Day said he was prepared to file a NT$5.2 billion lawsuit against Chen.
Chen is a relatively new figure in Taiwan's banking circles. A close associate of Lin I-hsiung (林義雄), Chen came back to to Taiwan after Lin becoame DPP chairman.
Upon his return, Kaohsiung Mayor Hsieh Chang-ting (
During his 14-month tenure, Chen hasn't wasted any time getting the bank's financial books in order.
"The Bank of Kaohsiung had overdue loans totalling NT$8.6 billion before Chen took over, and he eliminated NT$5.6 billion," Hsieh said.
The bank's overdue loan ratio has dropped from 5.09 percent to 2.43 percent today.
Chen achieved this through one-time write-downs, the practice employed by many Western banks.
Chen also recently forced out as many as 20 bank managers who were said to be responsible for creating problematic loans over the past few years.
While many industry watchers have questioned Chen's qualification Minister of Finance Shea Jia-dong (許嘉棟) said Chen had performed satisfactory while managing the Bank of Kaohsiung.
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