Less than two weeks after joining the financial institution, Shin Kong Commercial Bank (新光銀行) president Lai Chin-yuan (賴進淵) yesterday said he would seek to increase bank services for China-based Taiwanese businesses and others based in Asia.
“We will accelerate our efforts to turn our [to-be-opened] Hong Kong branch into a full-service outlet to meet Taiwanese businesses’ financial needs in the region,” Lai told an investors’ conference yesterday.
He said that lucrative lending businesses in the region usually generate a more than 3 percent net interest margin (NIM), higher than the 1.2 percent NIM from loans granted to local businesses.
Once the government signs a financial memorandum of understanding with China, the bank will increase its presence in China, prioritizing locations with high concentrations of Taiwanese businesses such as Shanghai, Kungshan and Suzhou, he said.
The bank will also explore business opportunities with China-based Taiwanese businesses, especially those focusing on China’s domestic market, he said.
Meanwhile, Shin Kong Life Insurance Co (新光人壽) could have to pay out between NT$100 million (US$3 million) and NT$150 million in insurance claims to typhoon-hit policyholders, Shin Kong Financial Holding Co (新光金控) said yesterday.
“This is just a rough estimate since no claim has been made yet,” Shin Kong Financial president Victor Hsu (許澎) told investors.
Shin Kong Financial posted NT$622 million in net losses for the first half of this year, or NT$0.1 per share, after it wrote off NT$2.81 billion in losses from previous investments in asset-based collateralized debt obligations (CDOs), while setting aside another 1 billion in deferred tax reduction.
The company reported a net loss of NT$12.3 billion in the same period last year.
Chief financial officer Winston Yung (容覺生) said there was small chance of more major writeoffs since its exposure to asset-based CDOs was reduced by three fourths to NT$2.5 billion.
Nick Chen (陳志達), an analyst at Chinatrust Commercial Bank’s (中信銀) financial institution research segment, however, expressed concerns over Shin Kong’s additional NT$20 billion exposure to corporate CDOs, 45 percent of which have a below-BBB rating.
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