Breaking News, World News and Taiwan News.

Bank earnings to decrease by NT$50 billion next year: Fitch

Taiwan banks are expected to see earnings reduce by NT$50 billion next year, due to a government measure that may increase the cost of operations, said Fitch Ratings yesterday.

Meanwhile, Fitch also lowered its forecast of China's economic growth this year from 8 percent to 7.8 percent, and Taiwan's from 3.1 percent to 1.56 percent.

Yet the firm forecast for Taiwan's gross domestic product (GDP) is expected to grow to 4 percent next year.

According to Lee Hsin-chia, senior vice president with Fitch, Taiwan banks last year made total pre-tax profit of NT$201 billion, a historic high.

This year, banks' total profits are expected to reach NT$190 billion, Lee said.

The expert mentioned that banks' earnings will be affected by a new measure by the Financial Supervisory Commission (FSC) requiring banks to boost funds intended to cover nonperforming loans. The measure would increase banks' operating costs and erode earnings.

According to the FSC, banks' Type One bad loan coverage funds should be increased from the current 0.5 percent to 1 percent. The 0.5-percent increase translates into an additional NT$50 billion to NT$60 billion that banks should set aside for covering bad loans, Lee said.

As a result Taiwan banks are expected to see their earnings lowered to NT$140 billion in 2013, a reduction of some NT$50 billion from this year, Lee said.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   English Courses  |   Terms of Use  |   Sitemap
  chinapost search