02.19.2001
Hua Nan Bank in discussion with Lehman to form AMC

• Hua Nan Commercial Bank (2803 'Hua Yin') is having discussions with Lehman Brothers on the possibility of forming an asset management company (AMC) in order to help the bank tackle its non-performing loans (NPLs) problem.

• Hua Nan has more than NT$10b in NPLs and in January had an overdue loans ratio of 6.25%. Although Hua Nan's is the lowest ratio among the big three commercial banks, NPLs remain a major concern as overdue loans, according to MoF regulations, should be brought under 2.5% within three years. It is generally believed that the Taiwan Bankers Association's AMC is too small to solve the NPL situation effectively, hence the need for banks to seek partners elsewhere.

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