SinoPac Financial Holdings Co (永豐金控) yesterday said it expects a modest improvement in profitability in the second half of the year after net income jumped 85 percent on an annual basis to NT$3.34 billion (US$115.15 million) for the first six months on recovering wealth management business.
That translated into NT$0.47 earnings per share (EPS), thanks to banking arm SinoPac Bank (永豐銀行), which contributed 82.03 percent, or NT$2.74 billion, the company’s report showed.
As of the end of last month, SinoPac Financial’s EPS climbed to NT$0.58, placing it 11th among the nation’s 14 listed financial service providers, according to Taiwan Stock Exchange data.
The conglomerate reported NT$1.84 billion in net profit during the second quarter, rising 23 percent from three months earlier, the report showed.
“We expect wealth management fee growth to continue in the second half, but are cautious about the economic outlook at home and abroad,” which may affect the securities unit’s profitability, SinoPac Financial chief executive officer Stan Siao (蕭子昂) told a press conference in Taipei.
Fee income totaled NT$1.12 billion in the second quarter, driven primarily by wealth management services and sales of insurance products, Siao said.
Like its domestic peers, SinoPac Bank has witnessed growing demand for corporate loans from Taiwanese firms in China, where borrowing costs are significantly higher following a series of tightening measures, Siao said.
SinoPac Bank saw its US dollar remittance operations at 129 branches nationwide pick up considerably over the past month, SinoPac Financial chief strategy officer Michael Chang (張晉源) said.
SinoPac Bank’s cooperation agreement with Industrial and Commercial Bank of China (ICBC, 工商銀行) has made its wiring service more efficient and cheaper, Chang said.
“The group aims to deepen services to Taiwanese companies in the Greater China area,” he said.
SinoPac Financial plans to open a capital leasing subsidiary in China next month and set up a banking branch or subsidiary next year, Chang said.
Net interest margin gained 4 basis points to 1.2 percent as of June and is expected to stay flat for the rest of this year, even if Taiwan’s central bank raise interest rates by another 12.5 basis points next month and in December, Chang said.
SinoPac Securities Co (永豐金證券) posted NT$390 million last quarter, skyrocketing 156 percent from the preceding quarter, the report said.
Its securities unit in Hong Kong is helping underwrite the issuance of corporate debts valued at 200 million Chinese yuan (US$31.3 million) to take advantage of increasing demand for the currency.
“The undertaking, which is unprecedented among domestic financial service providers, will strengthen the group’s earnings, although the contribution may not be evident in the near future,” SinoPac Securities president Eric Chuang (莊銘福) said.
Meanwhile, SinoPac Financial said yesterday it had no exposure to cash-strapped ProMOS Technologies Inc (茂德科技), the nation’s third-largest maker of computer memory chips.
ProMOS owes about NT$58 billion in a syndicated loan involving more than 20 state-run and private lenders led by the Bank of Taiwan (台灣銀行). It has proposed a plan to creditor banks to convert part of its debt into shares — if it can secure a strategic partner and an injection of fresh capital.