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September 24, 2017

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Credit card sales reclaim NT$150 billion mark

TAIPEI, Taiwan -- Official data showed that the credit card sales volume in March recovered past the NT$150 billion mark, posting approximately NT$151.6 billion, an increase of NT$3.2 billion as compared to NT$148.4 billion in February 2014.

The Financial Supervisory Commission (FSC), Taiwan's top financial watchdog, earlier said that the credit card sales volume for the first quarter saw an annual growth of 4.7 percent and is expected to touch NT$2 trillion this year.

63.71% of Cards in Circulation Effective

According to FSC data, the 36 credit card issuers operating in Taiwan issued a total of 36.3 million effective cards, 23.13 million of which are active cards. The number of effective cards and active cards amounted to 36.18 million and 23.06 million at the end of February, respectively.

As of March 2014, the balance of revolving credit decreased by NT$2.4 billion from NT$117.2 billion to NT$114.8 billion. The amount of undue balance of installment was approximately NT$67 billion, compared to NT$70.3 billion at the end of February 2014.

The amount of monthly write-off was in the neighborhood of NT$0.4 billion, vis-à-vis NT$0.38 billion for February 2014. The average ratio of delinquency credit — past-due over three months — against account receivables, including non-accrual amounts, was 0.29 percent.

Local news media reported that alongside Cathay United Bank and CTBC Bank, those banks with more than 1 million credit cards in circulation are E. Sun Bank (玉山銀行), Taishin International Bank (台新銀行), Citibank Taiwan (花旗銀行), Taipei Fubon Bank (台北富邦銀行), Bank SinoPac (永豐銀行), Union Bank of Taiwan (聯邦銀行) and Far Eastern International Bank (遠東商銀).

Cathay United Trails CTBC Bank

The credit cards in circulation of Cathay United Bank (國泰世華銀行) grew 30,000-40,000 per month from early 2014 after the launch of an affinity credit card program with Costco, bringing the bank several steps closer to CTBC Bank (中國信託商銀), the long-time top credit card issuer by size in Taiwan.

Cathay United Bank and CTBC Bank posted NT$2.28 billion and NT$2.36 billion for credit card sales volume in March.

Total outstanding loans extended by the current 39 domestic banks increased by NT$132.8 billion as compared to the previous month and amounted to NT$24,199.3 billion at the end of March.

Meanwhile, the non-performing loans (NPL) of these banks totaled at NT$80.9 billion, a decrease of NT$2.2 billion from NT$83.1 billion as of the end of the previous month.

With a decrease of 0.02 percentage points, the average NPL ratio of the 39 banks fell to 0.33 percent, down from 0.35 percent at the end of previous month.

All the 39 domestic banks in Taiwan operated with NPL ratios under 2 percent. The coverage ratios of allowances for NPLs increased by 10.52 percentage points and thereby rose to a figure of 362.60 percent from 352.08 percent in the previous month.

Banks' Asset Quality Manageable

The FSC indicated that the appearance of the asset quality of domestic banks continuously remained manageable according to the above figures as of the end of March 2014.

In accordance with the current regulations, the FSC is required to undertake supervisory measures on a financial institution with a delinquency ratio of over 3 percent for its credit card or cash card operations.

The FSC said that all the card issuers had delinquency ratios below 3 percent while among the 17 financial institutions that are engaging in cash card operations, merely one bank had a delinquency ratio over 3 percent; the bank, Taichung Commercial Bank (台中商業銀行), was suspended to undergo supervisory measures. The delinquency ratios of all the other institutions were lower than 3 percent.

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