06.01.2001
First Commercial accepts MoF Policy

• Earlier this week, the Ministry of Finance (MoF) set guidelines to help problematic enterprises prevent loans from being recalled by lending banks. The Ministry of Finance (MoF) has been encouraging Taiwan banks to restructure debt, and First Commercial Bank will be the first to announce a program.

• First Commercial has targeted NT$50b for issuing new loans or extending current maturities. Interest will be attractive, at a proposed rate of 7%, 80 bps lower than prime. The MoF is hopeful that more banks in Taiwan will launch similar programs as an initiative to solve short-term liquidity problems among local businesses.

• VB Primasia Investment Opinion: First Commercial is always fast in adapting to government policy, noting that its upcoming merger with Dah An (2839 'Da An') and Pan Asia (5810 'Fan Ya) may have also been influenced by current government policy. We also believe this development will hardly persuade other private banks (non-government owned) to follow suit, given that many are concentrating on cleaning up loan portfolios rather than boosting total loan amount this year. We will maintain a WEAK HOLD on First Commercial.

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