Taiwan's Taishin International Bank (
Taishin extended the loans to Well-Phone and its executives, guaranteed by collateral worth NT$445 million in property and bank deposits, company spokeswoman Sarita Hao said.
The bank will write off NT$340 million in losses from Well-Phone's earnings this month, she said.
Shrinking commission fees as a result of sluggish stock market trading volume and falling asset values over the last six months have put a crimp in the earning power of local brokerages.
Three-fifths of Taiwan's 148 securities companies lost money in May, as business slumped along with the TAIEX, which fell 47 percent in the past year. The market is trading at its lowest level since 1993.
The daily trading average on the TAIEX is currently worth NT$76 billion, 33 percent below the daily average in 2000.
Financial institutions are struggling with a rise in defaults as the domestic economy slows, which expanded 1.1 percent in the first quarter, its slowest pace in a quarter century.
Taishin expects to earn NT$3 billion this year, compared with last year's NT$2.7 billion. Its stock has fallen 22 percent this year.
Well Phone, one of Taiwan's oldest securities brokerages, filed for bankruptcy in early July and closed its doors due to debts in excess of NT$7 billion and other serious irregularities.
Chinese-language media reported at the time that Well Phone Chairman Chen Chien-chi (
Chen reportedly fled to China one day before the commission applied for the travel restriction.
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