09.07.2001
CDIB makes sizable provisions in August

• Development: China Development & Industrial Bank (CDIB) announced Jan-Aug pretax earnings of NT$10.7bn and pretax EPS of NT$1.66, both lower than expected. Bank reported August overdue loans ratio of 1.94%.

• Analysis: August pretax earnings will amount to NT$1.9bn after provisions of NT$1.5bn, including NT$500m for investment loss and NT$500m for loan loss, eliminating nearly 50% of gains from the sale of holdings in China Securities Investment Trust (unlisted).

• Primasia View: We are positive on CDIB’s provisions for investment and loan loss. However, we remain concerned over investment income in 2H01.