Yuanta Financial Holding Co (元大金控), which owns the nation’s biggest securities brokerage, aims to strengthen earnings of its banking arm next year by cutting bad loan costs, chairman Yen Ching-chang (顏慶章) said yesterday.
Yuanta Bank (元大銀行), which contributed about 17 percent of Yuanta Financial’s net income total of NT$4.99 billion (US$161 million) in the first nine months of the year, could boost its contribution to 20 percent next year, Yen said on the sidelines of a news conference to launch new credit card services.
“The bank’s growth momentum is just about to take off,” Yen said. “The strong asset profile will translate into greater profit, with non-performing loans lower than 0.62 percent and the coverage ratio hitting 343 percent.”
The bank had a near-zero average of bad loan ratio in the last three years, meaning its bad loan losses did not affect its profitability, the chairman said.
He expressed confidence that asset quality will remain healthy in the foreseeable future while the bank moves to expand loan growth. Currently, the bank has a loan-to-deposit ratio of 78 percent.
“We aim to boost the bank’s total asset to NT$500 billion in the first quarter of next year, from NT$430 billion at present,” Yen said.
The acquisition of the 18 branches of Chinfon Commercial Bank (慶豐銀行) in April might help boost Yuanta’s lending business, Yuanta Bank president Chester Chin (金家琳) said. Most of the branches would begin operations by the end of the year, he said.
The bank derives about 17 percent of its net profit from fee income this year, up from 11 percent last year, Chin said. He expects the share to be more than 20 percent next year.
With the economy recovering, credit card and wealth management businesses may see a steady pickup, cutting Yuanta Financial’s dependence on its securities house for the source income, Yen said.
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