China Development Industrial Bank (中華開發銀行), an arm of Taiwan's third-largest financial holding company, plans to invest as much as NT$5 billion ($145 million) to help expand its bad-loan management unit.
The arm of China Development Financial Holding Corp (中華開發金控) will add to a previous investment of NT$5 billion in China Development Asset Management Co (中華開發資產管理), it said in an e-mailed statement.
The planned investment comes as Taiwan lenders get rid of more of an estimated NT$1.53 trillion of bad loans, the legacy of last year's recession and a decade-long slump in the property market.
Taiwan financial companies will sell as much as NT$350 billion in non-performing loans this year, compared with NT$5 billion last year, according to UBS Warburg.
China Development Industrial's bad-loan management unit has a joint venture with Lone Star Group of the US, which holds a 60 percent stake in that venture. Lone Star, which has raised US$4.3 billion this year to invest in Asia's non-performing loans, is focusing on Taiwan, China Development said.
Lone Star Asia-Pacific Ltd. in July bought bad loans with a face value NT$33.4 billion from First Commercial Bank (第一銀行) in an auction.
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