08.21.2001
ODL ratios staying on uptrend

• Development: The Ministry of Finance (MoF) announced 1H01 total overdue loan (ODL) amounts for all financial institutions had risen to NT$1.06tn, equivalent to 7.44% of total outstanding loans. The ODL ratio for domestic banks increased 0.6% QoQ to 6.63% and community-level financial institution’s ratio rose 1.3% QoQ to 18.5%.

• Analysis: The poor economy has deterred investment growth and created a dismal business environment, which is hindering productivity gains Resolution Trust Company (RTC) has begun to tackle ODL problem at community-level financial institutions.

• Primasia View: ODL ratio likely to peak at close to 8% this year for domestic banks, assuming bottoming of domestic economy in 3Q01