TMCnet News
Banks Tightening Loans for Some Businesses(Taiwan Economic News Via Thomson Dialog NewsEdge) Taipei, Jan. 22, 2007 (CENS)--Affected by the Rebar Group's financial crisis, domestic banks have begun to tighten up their loans for textile and dyeing/finishing companies and affiliates of conglomerates with shady finance, like the Rebar Group. An executive of a bank focusing on corporate loans pointed out the problem of Chia Hsin Food & Synthetic Fiber of the Rebar Group highlighted the plight facing companies in textile and dyeing/finishing businesses similar to the former. Meanwhile, financial institutions have also become very cautious in dealing with affiliates of conglomerates bearing features similar to the Rebar Group, including family enterprise, opaque finance, high cross shareholding, and numerous affiliates. Eighteen domestic banks, including The Chinese Bank, have fallen a victim to the financial crisis, with loans for the group totaling NT$24.8 billion, including NT$5.4 billion of Mega Bank, the highest. Cathay United Bank is one of the fortunate ones escaping the brunt of the storm, as it ceased to loan Chia Hsin Food & Synthetic Fiber and China Rebar several years ago, due to its suspicion of their finance. The company pays attention to the state of individual companies, rather than their industries, in its loan extension policy. Smaller enterprises or those capable of applying for syndicated loans appear to benefit from the crisis, as some small and medium banks have switched the focus of their loan business to smaller enterprises to diversify risk. Meanwhile, banks have more confidence in syndicated loans due to joint examination of the operations and assets quality of borrowers by the participating banks. Copyright 2007 China Economic News Service. Source : Financial Times Information Limited (Trademark) |