Taishin Financial Holding Co (台新金控) said yesterday it was planning to expand its share of the consumer finance market this year but would be cautious in dealing with corporate loans amid predictions of an industry-wide restructuring caused by the current economic crisis.
The seven-year-old company posted an after-tax loss of NT$5.4 billion (US$154.5 million) last year, including one-time provisions in the fourth quarter of NT$5.5 billion to clean up its debt relief portfolio and reserve for weakening corporate loans, its financial report said.
“We will adopt a cautious strategy in coping with the downturn that is expected to last until the fourth quarter,” Taishin Financial president Lin Keh-hsiao (林克孝) told an investor presentation. “We’ll embark on brand reposition, cost control and risk reduction.”
Lin, whose company has predicted Taiwan’s economy would contract 4.9 percent this year, said it would also seek to raise its capital adequacy ratio to 105 percent, from the current 101 percent.
The company plans to raise NT$3.5 billion by the end of the third quarter through the issuing of 700 million new shares at NT$5 each, he said.
Tashin Financial’s stock traded at NT$4.95 per share yesterday on the Taiwan Stock Exchange, down from its peak of NT$16.5 last year.
Lin was more cautious when asked to comment on a potential merger with Chang Hwa Commercial Bank (彰化銀行). Taishin Financial controls a 22.5-percent stake in the bank.
“That was a move agreed upon when we purchased the bank’s shares,” Lin said. “We will pursue the direction when the environment turns favorable.”
Minister of Finance Lee Sush-der (李述德) said in an interview with the Chinese-language Economic Daily News on Thursday that a merger was not up to Taishin Financial to decide but to the board of state-run Chang Hwa, in which the government has an 18 percent stake.
Meanwhile, Greg Gibb, Taishin Financial’s chief operating officer, said the firm was assessing cooperation with a strategic partner to inject more capital to fortify its financial strength.
Gibb said the company is in talks with two to three potential investors, but refused to provide further details.
As for the company’s plan to form a life insurance venture with Dutch insurer Aegon NV, announced in December 2007, Lin said that the project would continue even though Aegon is reportedly looking for buyers for its local operation.
He declined to say if Taishin was interested in Aegon’s local operations.