July 9, 2008 / 11:16 AM / 11 years ago

UPDATE 1-Taiwan says companies had $1.4 bln subprime losses

(Adds details, quotes)

TAIPEI, July 9 (Reuters) - Taiwan financial firms have suffered losses of T$42.572 billion ($1.4 billion) since August 2007 in investments related to U.S. subprime products, the island’s top financial regulator said on Wednesday.

Of the total, banks took a hit of T$34.172 billion and insurance companies lost T$8.4 billion, the Financial Supervisory Commission (FSC) said in a statement.

Subprime problems in the United States have pushed global financial markets lower over the past year, including Taiwan shares, although the island’s financial firms had relatively limited exposure.

“The total impact on the financial industry was limited,” Gordon Chen, chairman of the commission, told a news conference.

“The FSC will supervise financial companies to improve their risk control,” he said.

Chen's comments came after Taiwan's stock market closed on Wednesday. The island's financial sub-index .TFNI closed down 0.72 percent, underperforming the broad market .TWII, which ended 0.05 percent lower.

Cathay Financial (2882.TW), Taiwan’s top financial holding company, is expected to post on Thursday a sharp drop in second-quarter earnings as falling share prices and subprime-related write-offs hit profits at its banking and insurance businesses. (Reporting by Faith Hung; Writing by Ralph Jennings; Editing by Paul Bolding)

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