Hua Nan Commercial Bank (華南銀行), Taiwan's fifth-biggest bank by assets, said it's offering to sell NT$10 billion (US$288 million) of bad loans to Lehman Brothers Holdings Inc and two rivals to clean up its balance sheet.
Hua Nan asked Lehman, China Development Financial Holding Co (中華開發金控) and Lone Star Asia-Pacific Ltd to evaluate and bid for the loans, said Executive Vice President Ed Liu (劉茂賢). Separately, Hua Nan also said it's planning a public auction of about NT$10 billion of bad loans in April.
Taiwan's lenders are trying to clean up more than NT$1.4 trillion of bad loans accumulated in a recession last year and a decade-long property slump.
That's providing opportunities for foreign investors like Lone Star and Lehman, though a Chinese-language newspaper reported today that Hua Nan and Lehman have scrapped plans for a joint-venture asset management unit.
Liu declined comment on whether the unit has been scrapped, though the two companies haven't been able to agree on a price for the bad loans since they signed a venture agreement last year.
Lehman's bad-loan bid will get priority over those of its rivals, he said.
Disagreements over the value of the bad loans have led to the failure of other bad-loan ventures. China Development said in November it ended a venture with Texas-based Lone Star Funds to manage bad loans.
Taiwan lenders' bad-loan ratio fell to 10.17 percent in the third quarter from 10.8 percent three months earlier, as banks wrote off some bad loans and sold others, the central bank said last month.
Cosmos Bank Taiwan (萬泰銀行), a Taipei-based lender, said it plans to sell NT$6.18 billion (US$177 million) of bad loans to Lone Star and Taiwan Asset Management Co (台灣金聯) to lower its bad-loan ratio.
Cosmos plans to sell NT$3.5 billion of bad loans to Lone Star and NT$2.67 billion of troubled credits to Taiwan Asset Management, Cosmos said in a statement.
Meanwhile, Lehman and Colony Capital Inc bought bad loans with a face value of NT$25.1 billion (US$720 million) at an auction by Taiwan Business Bank (台灣企銀), which is seeking to accelerate bad-loan write-offs.
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