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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) secured a record 70.2 percent share of the global foundry business in the second quarter, up from 67.6 percent the previous quarter, and continued widening its lead over second-placed Samsung Electronics Co, TrendForce Corp (集邦科技) said on Monday. TSMC posted US$30.24 billion in sales in the April-to-June period, up 18.5 percent from the previous quarter, driven by major smartphone customers entering their ramp-up cycle and robust demand for artificial intelligence chips, laptops and PCs, which boosted wafer shipments and average selling prices, TrendForce said in a report. Samsung’s sales also grew in the second quarter, up
LIMITED IMPACT: Investor confidence was likely sustained by its relatively small exposure to the Chinese market, as only less advanced chips are made in Nanjing Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) saw its stock price close steady yesterday in a sign that the loss of the validated end user (VEU) status for its Nanjing, China, fab should have a mild impact on the world’s biggest contract chipmaker financially and technologically. Media reports about the waiver loss sent TSMC down 1.29 percent during the early trading session yesterday, but the stock soon regained strength and ended at NT$1,160, unchanged from Tuesday. Investors’ confidence in TSMC was likely built on its relatively small exposure to the Chinese market, as Chinese customers contributed about 9 percent to TSMC’s revenue last
LOOPHOLES: The move is to end a break that was aiding foreign producers without any similar benefit for US manufacturers, the US Department of Commerce said US President Donald Trump’s administration would make it harder for Samsung Electronics Co and SK Hynix Inc to ship critical equipment to their chipmaking operations in China, dealing a potential blow to the companies’ production in the world’s largest semiconductor market. The US Department of Commerce in a notice published on Friday said that it was revoking waivers for Samsung and SK Hynix to use US technologies in their Chinese operations. The companies had been operating in China under regulations that allow them to import chipmaking equipment without applying for a new license each time. The move would revise what is known
UNCERTAINTY: A final ruling against the president’s tariffs would upend his trade deals and force the government to content with billions of dollars in refunds The legal fight over US President Donald Trump’s global tariffs is deepening after a federal appeals court ruled the levies were issued illegally under an emergency law, extending the chaos in global trade. A 7-4 decision by a panel of judges on Friday was a major setback for Trump, even as it gives both sides something to boast about. The majority upheld a May ruling by the Court of International Trade that the tariffs were illegal. However, the judges left the levies intact while the case proceeds, as Trump had requested, and suggested that any injunction could potentially be narrowed to apply
RSS