Taipei, March 30 (CNA) LINE Bank, one of the three web-only banks in Taiwan, is planning to raise its capital size to strengthen its capital structure after reporting a loss of about NT$2.2 billion after less than one year of full operations, according to the Financial Supervisory Commission (FSC).
Data compiled and released by the FSC, the top financial regulator in Taiwan, on Tuesday showed that LINE Bank, which opened in April 2021 with paid-in capital of NT$10 billion, reported a loss of NT$2.27 billion, which is close to meeting a requirement for a commercial bank to raise its capital size if its losses reach one-third of its paid-in capital.
LINE Bank has filed a report with the FSC's Banking Bureau stating that it will raise its capital later this year, but the exact amount is still being discussed inside the bank, Tung Cheng-chang (童政彰), deputy director of the bureau, said on Tuesday.
According to the FSC, LINE Bank's losses were the largest among the three Internet-only banks in Taiwan.
Rivals also record losses
The other two web-only banks are Rakuten International Commercial Bank, which began operations in January 2021 and recorded a loss of NT$705 million as of the end of January, and Next Bank, which officially opened on Tuesday but had a trial run of a few months after getting its license in December, and reported a loss of about NT$1.38 billion, the FSC's data showed.
Tung said LINE Bank's higher losses were a result of the bank's aggressive marketing policy to attract customers, which increased its operating costs, adding the losses had been anticipated by the bank.
At the end of December, LINE Bank had a depositor base of 732,600, ahead of Rakuten Bank, which had about 67,200 depositors. In addition, LINE Bank reported NT$28.81 billion in deposits as of the end of January, compared with NT$8.18 billion in deposits for Rakuten Bank, and NT$3 million received by Next Bank.
According to the FSC, Next Bank's losses reflected a management reshuffle and higher spending on its preparatory work before securing its license in December.
Firms behind the three banks
LINE Financial owns a 49.9 percent stake in LINE Bank, while Taipei Fubon Commercial Bank has a 25.1 percent stake, and CTBC Bank, Union Bank of Taiwan, Standard Chartered Bank, Taiwan Mobile Co., and Far EasTone Telecommunications Co. each own five percent.
Rakuten Inc. owns a 51 percent stake in Rakuten International Commercial Bank, while IBF Financial Holdings Co. holds the remaining 49 percent.
Next Bank is owned by a consortium led by Chunghwa Telecom, which has a 41.9 percent stake. Its other shareholders are Mega International Commercial Bank, conglomerate Shin Kong Group, supermarket chain operator PX Mart, KGI Bank, and customs clearance service provider Trade-van.com.
The official opening of Next Bank means there is a total of 39 banks currently operating in Taiwan, according to the FSC.