03.08.2001
14 of the newer banks report a drop in equity

• The Ministry of Finance has announced the total equity values of Taiwanese banks as of the end of December 2000. 14 of the 16 newer banks showed a YoY decrease in equity. This is due to large scale write-off of bad debts in an effort to reduce overdue loans (ODL) ratios.

• Cosmos Bank's (2837 'Wan Tai Yin') total equity fell by the largest margin with a 27.4% YoY decline to NT$4.6b. Fubon Commercial Bank (2842 'Fu Bang Yin') saw its equity value increase NT$4.43b to NT$26.6b after the share swap with Citibank.

• Taishin International Bank (2844 'Tai Xin Yin') remained the largest among the 16 newer banks in terms of equity, with NT$29b, ahead of Bank SinoPac's (2839 'Hua Xin Yin') NT$22.7b and E. Sun Bank's (2840 'Yu Shan Yin') NT$21.4b.

• Some banks also released February ODL ratios. Bank SinoPac has the lowest ratio with 1.09, followed by Fubon with 2.34, E. Sun with 2.49 and Taishin with 2.52. Banks with lower ODLs are in a better position to protect earnings against the negative effects of debt write off amid the current gloomy economic outlook. We recommend investors focus on banks with low ODL ratios.

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