Shin Kong Commercial Bank (新光銀行) yesterday sought to reassure its clients that its exposure to a troubled Swiss bank would not affect its financial viability.
The Taiwanese bank’s exposure to Credit Suisse Group AG totaled NT$2.6 billion (US$85.1 million), which would not significantly affect its financial strength, Shin Kong Bank general manger Lee Cheng-kuo (李正國) said.
Lee said the bank had told clients that it had a liquidity coverage ratio of 151 percent, which is higher than the local industry’s average of 134.6 percent.
Adding in Shin Kong Life Insurance Co’s (新光人壽) investment in Credit Suisse, parent Shin Kong Financial Holding Co’s (新光金控) overall exposure to Credit Suisse came in at NT$15.7 billion.
Shin Kong Financial does not plan to recognize credit losses any time soon, it said.
Credit Suisse’s problems are not likely to lead into another global crisis like the collapse of Lehman Brothers, as the Swiss bank has received support from the Swiss central bank, Lee said.
“The two crises are very different, and many experts have said that Credit Suisse’s financial metrics, such as capital adequacy ratio, are fine,” Lee said. “Most of all, the Swiss central bank has offered a lifeline to Credit Suisse. So, as long as the troubled bank has no liquidity problem, it should be able to weather this crisis.”
Credit Suisse’s major shareholder, Saudi National Bank, has said it would not invest more in the Swiss bank due to regulatory reasons, not because it lacks confidence in the bank, Lee added.
Meanwhile, Cathay Financial Holding Co’s (國泰金控) banking and insurance units have a combined exposure of NT$34 billion to Credit Suisse, while CTBC Financial Holding Co (中信金控) has an exposure of NT$12 billion to the Swiss bank and had recognized losses of NT$7 million, data from the two companies showed.
China Development Financial Holding Corp (中華開發金控) has an exposure of NT$15 billion, company data showed.
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,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
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
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS