Taiwan banks’ OBU profits down in January; DBU gains up

Taipei, March 7 (CNA) Banks incorporated in Taiwan saw profits in their offshore banking units (OBUs) falling year-on-year in January, while earnings in their domestic banking units (DBUs) were up for the same month, the Financial Supervisory Commission (FSC) said Saturday.

The FSC, the top financial regulator in Taiwan, said the OBUs of the 39 banks registered in the country posted NT$6.99 billion (US$222 million) in pretax profit in January, down from NT$NT$9.79 billion recorded over the same period of last year.

The FSC said that the decline in profit partly reflected a smaller number of sales in derivative financial products in their OBUs, while relatively narrower interest spreads in China also dragged down the profit.

However, the DBUs of the 39 banks posted NT$19.29 billion in pretax profit in January, up from NT$16.08 billion recorded over the same period of last year, the FSC data shows.

The financial regulator said the increase in the DBUs’ profits resulted from a change in the banks’ business strategies, but did not elaborate.

After including profits posted in the banks’ branches overseas, which reached NT$2.93 billion, their combined pretax profits totaled NT$29.2 billion in January, the FSC said.

Meanwhile, as of the end of January, non-performing loans of Taiwanese banks rose NT$5.7 billion from a month earlier to NT$67.4 billion since loss-incurring touch panel maker Wintek Corp. (勝華) sought bankruptcy protection from the courts, the FSC said.

About NT$5.2 billion out of the increase in the overdue loans came from Wintek, the FSC said. As of the third quarter of last year, Wintek shouldered NT$53.50 billion in total loans.

As a result, the overdue loan ratio of Taiwanese banks as of the end of January rose 0.02 percentage points from a month earlier to 0.27 percent, the FSC said. As of the end of January, outstanding loans extended by Taiwan’s banks fell NT$35.1 billion from a month earlier to NT$24.89 trillion, the FSC said.

(By Wu Ching-chun and Frances Huang)
ENDITEM/J