08.29.2001
MoF approves take-over of 36 financial institutions

• Development: The Ministry of Finance (MoF) approved 8 government-linked and 2 commercial banks to take over 36 problematic community level financial institutions on Sept. 17, 2001. Calculation of actual loan losses incurred by the institutions will take 20 days.

• Analysis: Potential loan losses for the 36 institutions will also be difficult to calculate as amounts of new NPLs have increased. We expect the 10 acquiring banks to begin discussions with accountants about asset qualities of the institutions.

• Primasia View: We believe the RTC will likely provide a subsidy for most of the possible loan losses, but amount has yet to be confirmed.