07.19.2001
UWCCB creditor unable to service debt

• Development: AsiaWorld Group (AWG), with bank loans totaling NT$25bn, reported their subsidiary department store will be unable to repay debts. UWCCB has large exposure to the group (NT$1.4bn).

• Analysis: UWCCB’s exposure to AWG is well covered by property collateral (loans classified as overdue in Jan 01). We estimate bank will recover around 70% of outstanding amount, with remainder already covered by existing provisions.

• Primasia View: Given UWCCB’s sound fundamentals, we believe AsiaWorld NPLs will not crimp bank’s outlook. Recent selling of shares creates opportunity.

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