萬國法律事務所

Taiwan’s Financial Supervisory Commission recently announced additional relaxation measures aimed at helping banks deal with debt. The commission has indicated recently that it will permit banks with capital adequacy ratios that do not meet the Taiwan government’s minimum requirement of eight percent with respect to non-performing loans (NPL) the option of selling off some, rather than all, of their branches, provided they first submit a restructuring plan. These relaxations mark the first time that banks have been permitted to sell of a portion of, rather than all of their branches.

The government hopes that the new relaxation will prove helpful to financial institutions dealing with debt that are endeavoring to successfully manage the same, as this could likewise help to reduce the government’s costs associated with dealing with these lenders.

Under the relaxation measures, a bank dealing with debt and seeking to take advantage of the option to sell off a portion of its branches must submit a business and financial restructuring plan that includes an indication of how the bank intends to recapitalize and improve its assets. After such a bank attains its first-phase recapitalization goal, it will be permitted to sell off a portion of its branches to other financial institutions. However, the use of proceeds from such sales of branches are restricted to satisfying defaulted loans or to increasing reserves to cover bad loans.