02.08.2001
Rising NPL ratio in Jan. 2001

• More banks have released their Jan. NPL ratios. Pan Asia Bank (5810 'Fan Ya Yin') has the largest ratio with 6.96%, followed by

• Ta Chong Bank (2847 'Da Zhong Yin') at 4.2%, and Cosmo Bank (2837 'Wan Tai Yin') at 4.1%. These high ratios are further evidence that Jan. saw few NPLs called back or written off, despite the long holiday period. Taishin International Bank (2844 'Tai Xin Yin') saw NPLs increase 0.3% MoM to 2.57%, largest increase among new banks. Bank Sinopac (2839 'Hua Xin Yin') may possess the highest quality loans, reported to hold a low NPL ratio of only 1.09%.

• Banks are conservative on earning estimates for 2001, reflecting their consensus view of a poor economic outlook. Nevertheless, Taishin and Sinopac have announced aggressive EBT estimates for this year, NT$3.06b and NT$3.01b respectively. We expect that the stock performance of these two banks will continue to lead others in the sector, and believe that both banks have strong M & A and restructuring possibilities.

WilliamFong@Primasia.com +886-[0]2-2547-8864