Hua Nan Financial Holdings Co (華南金控) said yesterday it aimed to strengthen its asset profile, earnings of non-bank subsidiaries and presence in the Greater China area next year.
The state-run financial service provider made the announcement after posting a net profit of NT$1.98 billion (US$64.13 million) in the third quarter, rising 5 percent from the second quarter, due to improving fee income from its banking arm, Hua Nan Commercial Bank (華南銀行).
ADEQUACY RATIO
Company vice president David Cheng (鄭永春) said he was optimistic Hua Nan Financial can keep its capital adequacy ratio at 115 percent next year, from 123.36 percent as of the end of September, while lifting the requirement for its banking subsidiary to 12 percent, from the current 11.54 percent.
The group aims to boost the bank’s core capital ratio to 8 percent, from the present 7.66 percent, Cheng said.
Additionally, Hua Nan Financial hopes to complete expansion plans in three areas of China in the next three years, Cheng said.
Hua Nan Bank, which won approval last month from the Chinese authorities to set up a branch in Shenzhen, Guangdong Province, may have the branch ready for operation by the end of the year, Cheng said.
POSSIBLE UPGRADE
The group is also assessing whether to upgrade a representative office in Shenzhen under its non-life insurance arm into a branch, he said.
“We hope to serve more Taiwanese businesspeople in China and vie for initial public offering applications,” Cheng said.
During the first three quarters, overseas units generated 17 -percent of the group’s pre-tax earnings, while non-banking units contributed 16 percent, company data showed.
Hua Nan Bank, the main source of income, reported a net profit of NT$1.68 billion in the third quarter, falling 7 percent from three months earlier, as stiff competition for customers tightened the interest spread by 1 basis point, the report said.
NET INTEREST MARGIN
Net interest margin remained flat at 0.91 percent in September, from the June level, the report said.
Cheng, however, expects the margin to inch up this quarter and next year amid recovering demand for corporate loans and aided by the central bank’s -interest rate hikes.
Net fee income climbed 4 percent quarterly to NT$1.34 billion in the July-to-September period, thanks to an improving wealth management business, the report indicated.
Wealth management generated NT$1.63 billion in net profits for the first nine months of the year, surging 60 percent from the same period last year, according to the report.
Mortgages rose 22 percent year-on-year to NT$353 billion on Sept. 30, while the bad mortgage ratio dropped to 0.58 percent, from 1.35 percent a year earlier, the report indicated.
Cheng credited the credit enhancement partly to the central bank’s tightening measures.
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