Hua Nan Financial Holdings Co (華南金控), owner of Taiwan's fifth-largest lender, and Chang Hwa Commercial Bank (彰化銀行), the sixth-largest, posted net losses for the first half after accelerating write-offs of bad loans.
First Commercial Bank (
Hua Nan, Chang Hwa and First Commercial are among lenders forecasting losses this year as Taiwan deregulates its financial industry and spurs a cleanup of bad loans. Almost 12 percent of bank loans, or NT$1.68 trillion (US$50 billion), was nonperforming or in danger of default in March, according to the central bank.
"It's good that they are writing off the bad loans as it helps to increase transparency and may allow them to post better earnings next year," said Steven Chu, who manages NT$2.7 billion of global equities at ING CHB Securities & Investment Trust Co.
"The share prices have risen to reflect that."
Hua Nan and Chang Hwa shares have climbed 25 percent and 19 percent respectively this year, compared with a 3.1 percent decline in the benchmark index. First Commercial shares have gained 7.4 percent in the same period.
Hua Nan Financial had a net loss of NT$30.3 billion for the first half, according to a faxed statement that didn't provide a year-earlier figure. The company started trading as a financial holding company on Dec. 19 after delisting Hua Nan Commercial Bank (
Chang Hwa posted a six-month net loss of NT$18.8 billion after setting aside NT$24.3 billion to cover bad loans. It has written off NT$25.7 billion of overdue loans, it said in a statement. The bank had net income of NT$989.3 million in last year's first half.
First Commercial, which last month sold NT$11 billion of bad loans, reported a pretax loss of NT$17.97 billion. It had a pretax profit of NT$2.3 billion last year.
Companies are resorting to bond sales, making it harder for lenders to achieve profits.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
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The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
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