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FSC examining banks with high shares of realty loans.

Taipei, April 30, 2012 (CENS)--To curb the simmering housing-price hike, the Financial Supervisory Commission (FSC) is comprehensively checking the extension of realty loans by domestic banks, to assure their abidance of the regulations of the FSC concerning realty loans.

FSC statistics show that of 38 domestic banks, 28 still have realty loans accounting for more than 30% of their total loans. An FSC official pointed out that the FSC will continue closely monitoring the concentration of realty loans extended by banks. Two major criteria will be whether outstanding construction loans exceed 15% of total loans and whether housing and home-improvement loans exceed 40% of total loans.

To stabilize the housing market, the FSC zeroed in on 17 domestic banks with higher shares of realty loans last year and required them to make improvement. By the end of last year, realty-loan shares at the 17 banks had been lowered.

In the current initiative, the FSC has been checking realty loans extended by the other 21 banks. For those with higher shares of realty loans, the FSC will ask them to make additional bad-debt provisions, when necessary. Last year, the 17 banks with higher shares of realty loans were required to make bad-debt provisions totaling NT$12 billion. The National Audit Office reported that as of the end of 2010, 28 domestic banks had realty loans exceeding 30% of their total loans, including 6 with such loans accounting for over 50% of the total. As of the end of 2011, 28 domestic banks still had realty loans surpassing 30% of their total loans.
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Title Annotation:Financial Supervisory Commission
Author:Liu, Philip
Publication:The Taiwan Economic News
Article Type:Brief article
Geographic Code:9TAIW
Date:Apr 30, 2012
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