Chinatrust Financial Holding Co (
The Taipei-based financial services group had an unaudited net profit of NT$5.59 billion (US$170.4 million) in the April to June period, reversing a net loss of NT$3.08 billion a year earlier.
Chinatrust Financial said its six-month profit totaled NT$8.17 billion. That compares with a loss of NT$2.25 billion during the same period last year.
Most of the nation's banks are recovering from a surge in defaults on loans that eroded earnings last year and in 2005. The latest government data suggested a turnaround in the credit card business in May, after 15 months of losses since the beginning of last year.
credit card earnings
Aggregate credit card net earnings reached NT$190 million (US$5.8 million) in May, after booking of reserves for potential bad debts, data released by the Financial Supervisory Commission (FSC) showed.
The commission appeared optimistic about the outlook for the credit spending and consumption sector.
"Things have become much better now compared with last year, and we expect to see a clearer upturn in the second half of this year," the Chinese-language Commercial Times cited the commission's spokeswoman Susan Chang (
However, Chinatrust Financial said that revolving credit continued to contract despite the recovery on the spending side because of banks' tightening in the wake of the industrywide consumer credit abuse storm.
Banks are still cautious about the future impact after the passing of the controversial personal bankruptcy law, the company's spokesman Jason Wang (
In contrast, foreign lenders have grown aggressive in expanding their business base. Citibank took over the first place in the balance of revolving credit with NT$42.1 billion in May.
The US bank said in April it might acquire a credit card section from rivals to expand its business base, adding that it expected an annual increase in the number of card holders of up to 40 percent.
Meanwhile, Chinatrust's fee income from selling mutual funds or structured products surged 57 percent from a year earlier to NT$6.37 billion in the first half of the year, the company said in the statement yesterday.
"It's a positive transition for Chinatrust to focus more on wealth management, which generates fee income that is more stable than interest income from its credit card business," said Steven Chen (陳智誠), an analyst with Taiwan Ratings Corp (中華信評).
Growing fee income helped Chinatrust Financial offset a fall in profit from its high-yielding credit-card business, Chinatrust said, without providing specifics.
Chinatrust Commercial Bank (
That's less than half the NT$8.69 billion it wrote off in the same period last year.
Chinatrust Financial posted a net loss of NT$10.2 billion last year.
Additional reporting by staff writer
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