Decade-Long Mortgage Data Concealment Exposes Taiwan Bank Asset Quality Crisis

The Financial Supervisory Commission recently confirmed a rare and major reporting error in the domestic banking sector, revealing that a local bank had continuously submitted incorrect statistical data regarding its mortgage-related business for nearly a decade. The error covered key indicators such as mortgage balances and overdue mortgage loans, resulting in a long-standing discrepancy between official financial supervisory data and actual market conditions. This incident highlights that some financial institutions still need to comprehensively review and upgrade their internal control mechanisms and data review processes, while also raising public concern regarding the authenticity of risk management data in the banking industry.

According to the FSC's investigation and data correction, the bank's erroneous mortgage data reporting dates back to 2016, spanning a period of nearly ten years. In past official statistics, it was generally believed that the amount of overdue mortgage loans in the market had only crossed the NT$9 billion mark in July of this year. However, after the bank completed a comprehensive correction and resubmission of its historical data, the actual risk profile emerged. The data showed that the bank's overdue mortgage amounts had actually surpassed NT$9 billion as early as April of last year, meaning there was a time lag in the market and regulatory authorities' understanding of the deterioration rate of the bank's asset quality.

During the subsequent observation period, the bank's overdue mortgage loans continued to rise, reaching a cyclical peak in May 2026, with monthly overdue mortgage amounts hitting NT$9.717 billion, the highest level in nearly five years. This figure not only reflects the deterioration of asset quality in the bank's specific mortgage portfolio, but also directly impacts risk assessments for the domestic real estate lending market as a whole. Mortgage business has traditionally been regarded as a relatively stable core asset for domestic banks; therefore, the emergence of high overdue amounts lasting several years, accompanied by long-term reporting errors, has naturally become a focal point of concern for the financial market and the legislature.

In response to external doubts regarding asset quality, the FSC specifically clarified that although the bank's overdue mortgage amount did increase significantly after the correction and reached a five-year high in May 2026, the overall "overdue mortgage ratio" still remains within a relatively reasonable range, and the overall asset quality is considered sound. The FSC emphasized that regulatory authorities have instructed the bank to conduct a comprehensive internal control review and will continue to closely monitor its subsequent changes in overdue loans, bad debt provisioning, and capital adequacy performance to ensure the sound operations of the financial institution and the rights and interests of depositors.

This nearly decade-long reporting error serves as a serious warning to the domestic financial regulatory system and bank governance. The accuracy of data reporting is the cornerstone of financial supervision; any omission or negligence in any link can lead to regulatory blind spots and even delay the disclosure and handling of risks. As the domestic housing market and lending environment face mounting uncertainties, how the banking industry can strengthen data governance in the digital age and implement internal audit and review mechanisms will remain a core issue closely monitored by regulatory authorities in the future, in order to prevent similar long-term reporting anomalies from happening again.

(Source: Central News Agency)