CTBC Bank (中國信託銀行), Cathay United Bank (國泰世華銀行), Taipei Fubon Bank (台北富邦銀行), Mega International Commercial Bank (兆豐銀行) and Taiwan Cooperative Bank (合庫銀行) are categorized as “domestic systemically important banks (D-SIB)” and are therefore subject to higher capital standards, the Financial Supervisory Commission (FSC) announced on Thursday last week.
These D-SIBs would also be subject to tighter supervision and new rules, as their failure would cause significant disruption to the nation’s banking system and the overall economy, FSC Chairman Wellington Koo (顧立雄) told a news conference.
The commission would require these banks to maintain a minimum common equity tier-1 ratio of 11 percent, a minimum tier-1 capital ratio of 12.5 percent and no less than 14.5 percent in total capital adequacy ratio, Koo said.
The new capital cushion standards are 4 percentage points higher than those for regular banks, he said, adding that the five banks would have four years to increase their capital to meet the new standards.
Overall, banks in Taiwan reported an average common equity tier-1 ratio of 11.37 percent, tier-1 capital ratio of 12.04 percent and total capital adequacy ratio of 14.14 percent, Banking Bureau data showed.
The commission formed a task force two years ago to set the criteria for identifying D-SIBs to limit potential contagion risks in times of crisis.
The five banks were selected based on their market capitalization, their interconnection with peers, their substitutability by peers in terms of functions and services, as well as the complexity of their operations, which are in line with the standards set by the Basel Committee on Banking Supervision, Koo said.
“Being a D-SIB is honorable, but also means more responsibility. There is an advantage, as they will have privileges when applying to launch new business or products,” Koo said.
However, he rejected the idea that the D-SIBs are “too big to fail,” saying that every bank matters, given that they all have a similar shares of the Taiwan market.
Among the five banks, only CTBC has met the new standards, while Cathay United, Taipei Fubon and Mega do not meet one or two ratios and Taiwan Cooperative does not meet any, the Banking Bureau data showed.
The commission said it plans to review and update its D-SIB designations annually.
VALUABLE STOCK: The company closed at NT$1,005 a share, on demand for AI and HPC chips, and is expected to issue a positive report during its earnings conference Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares rose 2.66 percent to close at a record high of NT$1,005 yesterday. as investors expect the company to continue benefiting from strong demand for artificial intelligence (AI) and high-performance computing (HPC) chips. TSMC is the 19th member of the local bourse’s NT$1,000 stock club, which includes smartphone chip designer MediaTek Inc (聯發科) and electric transformer manufacturer Fortune Electric Co (華城電機). Yesterday’s rally swelled TSMC’s market capitalization to NT$26.06 trillion (US$802.3 billion) and contributed about 211 points to the TAIEX, which closed up 350.1 points, or 1.51 percent, to 23,522.53, another record high, Taiwan Stock
The waves of the Aegean Sea lap gently at the tables and chairs of two beach restaurants on Greece’s Halkidiki peninsula. It is an idyllic scene, but one that is totally illegal. Like many others in Greece, the two establishments on Pefkochori Beach do not have a license to set up shop so close to the water. After a wave of protests last summer by locals about bars and restaurants illegally covering beaches with sunbeds and tables, the Greek state is taking action. It is cracking down on rogue tourist practices with surveillance drones, satellite imagery and a special app
Luxgen Motor Co (納智捷汽車), a subsidiary of Yulon Motor Co (裕隆汽車), yesterday said it is again offering a NT$100,000 discount for its entry-level n7 electric vehicle models. The n7’s price has gone down from NT$1.099 million to NT$999,000, Luxgen said, adding that there are 25,000 preorders for the model. MG Motor’s electric hatchback, the MG4, entered the market in the middle of last month, with a starting price of NT$990,000. China Motor Corp (中華汽車), which distributes MG vehicles in Taiwan, said it aims to sell 1,600 MG4s this year. MG, originally a British brand, was acquired by China’s SAIC Motor
South Korea’s SK Hynix Inc, the world’s No. 2 memorychip maker, is to invest 103 trillion won (US$74.6 billion) through 2028 to strengthen its chips business, focusing on artificial intelligence (AI), its parent SK Group said yesterday. SK Group also said it plans to secure 80 trillion won by 2026 to invest in AI and semiconductors as well as fund shareholder returns, while streamlining its more than 175 subsidiaries. The sprawling conglomerate outlined the plans following a two-day strategy meeting, aiming to revive the group after SK Hynix, its main money maker, and the group’s electric vehicle battery arm suffered heavy losses. SK