Taiwan Asset Management Corp (
The company is assessing lending at 15 other banks as it competes with the likes of GE Capital Corp, Cerberus Asia Capital Management LLC and Lone Star Asia-Pacific Ltd for the NT$1.53 trillion (US$45.2 billion) of bad loans the nation's banks held in June.
"A bank is a trust-based business," said Taiwan Asset Chairman Lin Chen-kuo (
The government is pushing banks to get rid of non-performing loans, which last year rose after the nation's worst economic slump on record, so they can resume lending. Total lending dropped 4.1 percent from a year earlier in June, the 11th straight month of decline, according to the central bank.
"Sooner or later, the bad loans have to be cleaned up," said Chiao Tung Bank's (
"This will free our people to go and seek new business, and leave the asset management companies to do their job."
Major shareholders of Taiwan Asset include Chang Hwa Commercial Bank (
State-controlled First Commercial's sales of more than NT$70 billion of non-performing loans earlier this year kicked off a spate of bad loan sales by some of the nation's 52 banks that helped pare bad lending to 10.83 percent of total loans at the end of June from 11.7 percent in March.
First Commercial said earlier this month it recouped about NT$0.25 on the NT dollar in its July auction of NT$56.5 billion.
Taiwan Asset, which won one of four bad-loan lots auctioned in July by First Commercial, reckons it will need to seek new funds to take over non-performing loans at the other 15 banks whose loans it's assessing.
Taiwan Asset bought loans worth NT$7.2 billion at face value from First Commercial in a July auction after missing out on loans in the lender's first auction in March. New funding could come through debt sales, foreign investment or a fresh infusion of shareholders' funds on top of its NT$17.6 billion paid-up capital, Chairman Lin said. He declined to say how much of this the asset manager has used up or to name the lenders that sold it loans.
Taiwan Asset's registered capital of NT$25 billion allows it to raise another NT$7.4 billion. It has 38 employees.
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