Taishin Financial Holding Co (台新金控) yesterday posted a profit of NT$3.9 billion (US$121.57 million) for the first six months, reversing NT$2.58 billion in losses for the same period of last year, on growing interest and fee incomes and recovery of bad loans.
The nation’s fifth-largest financial service provider by assets expected stable growth from its core businesses in the second half, driven mainly by its banking arm, Taishin International Bank (台新銀行), which contributes more than 90 percent of its overall income.
“Taishin Financial will continue to expand its customer base, improve its asset quality and boost its profitability,” company president Lin Keh-hsiao (林克孝) told an investors’ conference in Taipei.
The bank, Taiwan’s third-largest credit card issuer, reported NT$2.6 billion in pre-tax profits in the first half, rising 73.33 percent year-on-year, the statement showed.
Net interest income picked up 21.5 percent year-on-year to NT$2.95 billion for the January-to-June period, while net fee income increased 28.5 percent to NT$1.87 billion, the statement said.
“Deposit cost dropped to 0.54 percent in the first half from 1.19 percent a year earlier, while net fee incomes from credit card and wealth management services rose 28.9 percent and 2.37 percent to NT$454 million and NT$645 million respectively,” said Justin Tsai (蔡榮棟), president of Taishin bank.
The integration of Chinfon Commercial Bank’s (慶豐銀行) credit card business started to pay off, because it has brought in 260,000 new customers since March, the statement said.
Meanwhile, bad loan recovery improved 30 percent and could continue to benefit the bank’s treasury by a similar scale in the coming four to five years, Tsai said.
However, the lender incurred NT$290 million in losses from its investment and other trading activities, the statement said.
Taishin Financial will seek further acquisitions and exploit expansion opportunities in China to increase its business map at home and across the Strait.
Lin said the company plans to open a branch in a second-tier Chinese city, with the site still under study.
“The first-mover doesn’t enjoy much advantage,” Lin said. “For the foreseeable future, the company will focus on the domestic market.”
The company had a capital adequacy ratio of 120.8 percent as of June 30 and coverage ratio at 281 percent, while overall bad loans dropped to 0.42 percent from 1.08 percent a year earlier, the statement said.
Welch Lin (林維俊), chief financial officer of Taishin Financial, said the financial soundness will help the company unaffected by tighter bad loan provision requirement under the new accounting rule change next year.