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.
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