A Study of the Impact of Amortization of Non-Performing Loan Losses on Banking Industries and Their Shares

• Main Authors: Mei-Ping Yang, 楊美萍
• Other Authors: GUANG-DI JHANG
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/17655696187399105629

碩士 === 國立臺灣科技大學 === 財務金融研究所 === 98 === In Taiwan, average of financial institutions’ ratio of Non-Performing Loan (NPL) had increased quickly since 1995 because of the open banking policy. Due to financial industries are very important in every country, which affected economics deeply. Financial supervisory adopted various ways of financial reform to solve the problem of increasing ratio of NPL. Some of which are establishing the Financial Restructuring Fund and introducing asset management company (AMC) mechanism to buy the financial institutions’ NPL. One of the reforming laws permits financial institutions to amortize their NPL losses after they sold NPL to AMC. However this treatment measure does not fit the general accounting principal, and makes the financial reports present unfairly. This article studied the impact of amortization of NPL losses on banking industries and their shares. This study use regression analysis method and chose the equity book value, net income and ratio of NPL to predict the share price. Finding financial information of banks which took the amortization of NPL losses measures were less explanatory than those took the standard accounting principal on shares. Another finding is equity book value and net income from accountant’s opinions is less impact on share price than same information from financial report. Lastly, the banks which took the amortization of NPL losses measure are worse performance than the average of banking industries. The conclusion would like to suggest the supervsory and banks should take notice of the financial reports transparency seriously.