07.20.2001
Bank SinoPac faces NPL pressure

• Development: Bank SinoPac reported overdue loan amounts reached NT$1.4bn in 1H01, up from NT$1.0bn recorded in 4Q00. Coupled with much slower loan growth compared to last year, the bank showed on ODL ratio of 1.57% in June.

• Analysis: We expect the bank’s NT$1.5bn exposure to Tuntex Group to continue impeding the bank’s asset quality. Any increase in provisions will further suppress the bank’s earnings this year and next.

• Primasia View: We believe the bank’s valuation remains higher than firms of similar scale though a major correction appears underway.

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