Wed, Oct 13, 2010 - Page 12 News List

Bank SinoPac trims home mortgage loan operations

BALANCE:The bank said its goal was to bring the ratio of its home mortgage loan business down to a level more in line with its corporate banking operations

By Crystal Hsu  /  Staff Reporter

Bank SinoPac (永豐銀行), a subsidiary of SinoPac Financial Holdings Co (永豐金控), said yesterday it has trimmed home mortgage loans both to improve its financial health and to address the central bank’s concerns about the overheating property market.

Currently, home mortgage operations account for 52 percent of the lender’s overall lending, from an average of 55 percent last year, bank president Desmond -Jiang (江宏仁) told reporters on the sidelines of a news conference to launch new credit card services.

“We aim to bring the ratio down to 50 percent, in line with the bank’s strategy to strike a balance between home mortgage and corporate banking operations,” -Jiang said.

The adjustment also came after the central bank repeatedly asked domestic lenders to enhance risk management on home loan applications amid soaring real estate property prices in recent years.

As of Sept. 30, home mortgage loans totaled about NT$370 billion (US$11.91 billion), making Bank SinoPac the largest private-run lender in terms of mortgage operations, said Chen Ting-ju (陳亭如), a senior vice president at SinoPac Financial.

The financial service provider derived more than 70 percent of its income from its banking arm for the first nine months of this year, Chen said.

Jiang said it was time the bank focused more on the profitability, rather than the size, of home loans. To that end, the bank set interest rates for new home loans at 1.7 percent and higher, he said.

The two interest rate hikes make the pursuit more practical with the net interest margin now expanding to 1.25 percent, up 10 basis points from last year, Jiang said.

Like its state-run peers, Bank -SinoPac sets interest rates for land financing at 2 percent and requires applicants to file concrete development plans to help prevent land speculation, Jiang said.

Ted Liao (廖達德), chief financial officer at SinoPac Financial, said the recent steep gains in the local currency has very limited impact on hedge costs as basket currency positions offset losses from a weakening US dollar.

In August, the company’s board gave the go-ahead to expanding to the Chinese market, but the firm has yet to submit an expansion plan to the Financial Supervisory Commission, Liao said.

“We need more time to finalize details of the expansion plan,” Liao said. “Our branches in Hong Kong and Macau have helped serve Taiwanese customers in China.”

Bank SinoPac intends to set up a representative office in Nanjing, China.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top