HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) is aiming for significant earnings growth next year as it emerges from bad loans linked to the acquisition of The Chinese Bank (中華銀行) by the end of this year, company executives said yesterday.
The London-headquartered bank acquired the troubled lender in late 2007 and bad loans remain a drag on its bottom line to date, president and chief executive officer John Li (李鐘培) told reporters.
“Our top challenge this year is to wrap up the write-off and break even for money-losing operations or diminish their losses,” he said.
Li, who assumed his current post last summer, said the bank was struggling to find commercially viable business models for its consumer and private banking, as well as insurance divisions.
The insurance business poses the biggest headache, but the bank has no intention of pulling out, he said.
Against this backdrop, HSBC Taiwan has no expectations of earnings growth and is unlikely to overtake foreign peers in the near future, Li said.
Neither pursuit is pressing or fair at present given the gaps in company size and resources, he said.
Still, the lender managed to stay in the black last year, posting a pre-tax income of US$147 million, thanks to its edge in transactional banking and asset management. That figure, however, was down 8 percent from 2009.
“We expect earnings to improve substantially next year after adjustments come to an end late this year,” he said.
James Binns, head of commercial banking, said his section was aiming for growth of more than 20 percent this year amid a rosy economic outlook and the firms’ niche in cross-border services, especially in Greater China.
Last year, HSBC saw its presence expand in Asia, which accounted for 61 percent of the group’s profit.
The region, excluding Hong Kong, contributed US$5.9 billion, or 31 percent, to the group’s total revenue, indicating that the expansion strategy is bearing fruit, as Hong Kong and Singapore used to take up a lion’s share, Li said.
To strengthen its presence here, HSBC Taiwan intends to expand to 46 branches by the end of the year, from the current 42, he said.
In addition, the lender plans to recruit 200 people this year, after hiring 300 new workers last year, the company said.