UCBH Holdings has finalised an action plan to strengthen capital and manage its loan portfolio and non-performing assets, and improve core business performance. The key elements of the plan include: development of a comprehensive capital plan, including the engagement of a financial advisor, suspension and/or deferral of the cash dividends on common and preferred stocks, progress on the financial restatement efforts (including a reassessment of the company’s credit risk profile), and execution of strategies to improve core business performance (including execution of nonperforming asset disposition strategies).
As part of its comprehensive capital planning initiatives, the company has performed stress tests of its loan portfolio under a number of different scenarios, including the US Treasury’s Supervisory Capital Assessment Program (SCAP) methodology as applied to the top 19 US banks.
The company has engaged a financial advisor as part of its capital planning activities, and expects to take actions that will improve its tangible common equity in conjunction with the completion of the financial restatement and the subsequent issuance of current financial statements.
Thomas Wu, chairman, president and CEO, said: “The challenging economic and operating environment calls for difficult decisions and a specific action plan that puts UCBH on a solid foundation for the future as we continue to work toward completing our financial restatements in the current quarter. By conserving and building capital, focusing on our core banking businesses and continuing to provide exceptional service to our customers, we will be in a stronger position to realize our long-term growth potential.”
San Francisco-based UCBH Holdings is the holding company for United Commercial Bank, a state-chartered commercial bank. It offers commercial real estate and construction loans, commercial credit facilities, international trade finance, asset-based financing, cash management, commercial, multifamily and residential mortgages, home equity lines of credit, and online banking services.
