07.26.2001
Taishin well prepared for Wellphone bad debt

• Development: Taishin Bank is prepared to write-off NT$340m in loss from exposure to Wellphone Securities (un-listed). The bank is determined to maintain high NPL provisions, upwards of 50%. Owing to higher trading income from its bond portfolio, the bank is unlikely to revise down its 2001 earnings forecast.

• Analysis: Taishin’s overdue loan ratio was maintained at 2.8% in June. We expect the bank to successfully control asset quality through aggressive write-offs.

• Primasia View: The bank currently trades at P/B of 0.6x and we believe the market has overreacted to the Wellphone case.