11 Foreign Banks in Taiwan Posted Losses in First 5 Months

Taipei, Aug. 1, 2006 (CENS)--Plagued by the storm of bad card loans, a as many as 11 foreign banks in Taiwan suffered operating losses in the first five months of the year and some others saw their profits shrink sharply.

During the period, the three most profitable foreign banks in Taiwan were Citibank, BNP Paribas, and the JP Morgan Chase Bank. Of them, BNP Paribas and JP Morgan Chase Bank squeezed into the top-three list for the first time as they have long focused on investment banking instead of consumer financing.

Last year the top three foreign banks in terms of profits, were Citibank, the Hongkong and Shanghai Banking Corp., and ABN AMRO Bank, all focusing on wealth management and credit card services. In the first five months of this year, the Hongkong and Shanghai Banking was replaced by BNP Paribas and ABN AMRO by JP Morgan on the “top three” ranking list. ABN AMRO even suffered a sizable loss of NT$577 million (US$17.49 million) during the period.

In the first January-May period, Standard Chartered Bank suffered the largest loss of NT$1.559 billion (US$47.24 million) among foreign banks in Taiwan, although it ranked fourth on the “top 10” list last year. American Express Bank posted the second largest loss of NT$1.235 billion (US$37.42 million), and ABN AMRO the third with a red ink of NT$577 Million (US$17.49 million). All of the said three banks were seriously affected by bad card loans.

In the same period, Citibank raked in NT$2.925 billion (US$88.64 million) in pretax profits, the highest among foreign banks, and yet the profits recorded a sharp fall of 29% from the corresponding figure of last year. BNP Paribas and JP Morgan ranked second and third with profits of NT$1.098 billion (US$33.27 million) and NT$1.064 billion (US$32.24 million), respectively.

Insiders disclosed that the combined profits earned by a total of 34 foreign banks in Taiwan in the first five months amounted to NT$5.213 billion (US$157.97 million), plunging 36% from the like figure of a year earlier. Of the 34 banks, 11 money-losing ones were Metropolitan Bank and Trust Co., the Bank of East Asia, the Standard Bank of South Africa, ING Bank N. V., Well Fargo Bank Minnesota, N. A., the Bank of Tokyo-Mitsubishi, Cetelem Bank, Sumitomo Mitsui Banking Corp., American Express, ABN AMRO, and Standard Chartered.