Bad Credit Card
The entire banking system in Taiwan is estimated to write off a total of NT$252.5 billion in non-performing loans this year, including NT$100 billion in credit-card loans and NT$69.8 billion in cash-card loans, a senior bank said at a seminar yesterday.
Tsai You-tsai, president of the International Commercial Bank of China (ICBC), made the remarks at a seminar hosted by the Taiwan Thinktank on the problems and solutions concerning the development of the island's consumer banking industry.
Since the credit-and cash-card debt storm broke out in November 2005, the quality of the credit-card and cash-card assets has deteriorated rapidly. The overdue credit-card loan ratio rose 1.12 percentage point from December 2005 to May 2006, and the non-performing cash-card loan ratio shot up 5.4 percentage points during the same period, according to Tsai.
He said in the first five months of the year, all credit-card and cash-card issuers in Taiwan erased as much as NT$88.2 billion in bad card loans, more than double the combined earnings of NT$35.4 billion posted by a total of 44 domestic banks.
The ICBC chief expected the entire banking system in Taiwan to write off NT$252.5 billion in non-performing loans, including NT$100 billion worth of credit-loans, NT$69.8 billion in cash-card loans and NT$82.7 billion in other individual consumer loans.
He said the credit-card and cash-card debt storm has not only led to suicides of those unable to repay their loans, but has also seriously undermined the earnings of banks.
In 2005, all the domestic banks together raked in total profits of NT$59.8 billion, representing a sharp drop of 60 percent from 2004, according to Tsai.
He continued that the banking system in Taiwan raked in a total revenue of NT$104.7 billion, but 60 percent of which was used to write off bad loans and the remaining 40 percent used to cover issuing costs, personnel and marketing expenses.
In order not to suffer a similar undesirable situation, Tsai urged banks to develop their risk concept and reinforce their risk management ability.
Meanwhile, Chairman Chen Po-chih of the Taiwan Thinktank yesterday noted that the worst time for the bad card debt issue has gone, as following negotiations between banks and customers, the card loan repayment by customers is improving significantly.
Chen said what counts most now is that smaller banks should consider merging with larger banks to secure robust financial structures and become more competitive in the market.
Copyright © 1999~2006 The China Post. All rights reserved.
posted by News at 3:57 AM
Tsai You-tsai, president of the International Commercial Bank of China (ICBC), made the remarks at a seminar hosted by the Taiwan Thinktank on the problems and solutions concerning the development of the island's consumer banking industry.
Since the credit-and cash-card debt storm broke out in November 2005, the quality of the credit-card and cash-card assets has deteriorated rapidly. The overdue credit-card loan ratio rose 1.12 percentage point from December 2005 to May 2006, and the non-performing cash-card loan ratio shot up 5.4 percentage points during the same period, according to Tsai.
He said in the first five months of the year, all credit-card and cash-card issuers in Taiwan erased as much as NT$88.2 billion in bad card loans, more than double the combined earnings of NT$35.4 billion posted by a total of 44 domestic banks.
The ICBC chief expected the entire banking system in Taiwan to write off NT$252.5 billion in non-performing loans, including NT$100 billion worth of credit-loans, NT$69.8 billion in cash-card loans and NT$82.7 billion in other individual consumer loans.
He said the credit-card and cash-card debt storm has not only led to suicides of those unable to repay their loans, but has also seriously undermined the earnings of banks.
In 2005, all the domestic banks together raked in total profits of NT$59.8 billion, representing a sharp drop of 60 percent from 2004, according to Tsai.
He continued that the banking system in Taiwan raked in a total revenue of NT$104.7 billion, but 60 percent of which was used to write off bad loans and the remaining 40 percent used to cover issuing costs, personnel and marketing expenses.
In order not to suffer a similar undesirable situation, Tsai urged banks to develop their risk concept and reinforce their risk management ability.
Meanwhile, Chairman Chen Po-chih of the Taiwan Thinktank yesterday noted that the worst time for the bad card debt issue has gone, as following negotiations between banks and customers, the card loan repayment by customers is improving significantly.
Chen said what counts most now is that smaller banks should consider merging with larger banks to secure robust financial structures and become more competitive in the market.
Copyright © 1999~2006 The China Post. All rights reserved.
posted by News at 3:57 AM
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