(Taiwan) – Following a poor 2001, many Taiwan banks are reporting strong first quarter earnings, benefiting from an aggressive monetary easing last year that has helped widen interest rate spreads and margins.First quarter pre-tax profits at state controlled First Commercial Bank, Taiwan’s fourth largest bank by net assets, for example, have jumped 22.4 percent from 2001 to T$1.12 billion (US$32 million).
Profits at Taiwan’s largest private bank, Chinatrust Commercial Bank, have climbed 76 percent to T$4.28 billion in its first quarter of the year.
Much balance sheet cleansing has been achieved by off-loading non-performing debt. For example First Commercial Bank disposed of T$13 billion in non-performing loans (NPLs) last month, with the Bank planning more such sales.
Industry wide, banks at December last had an overdue loan ratio of 7.48 percent, about US$31 billion, slightly down from 7.79 percent in the September quarter, but the first fall in a year.