E.Sun Financial Holding Co (玉山金控) yesterday said it aims to expand into China, Singapore and Vietnam next year to capitalize on the region’s growing demand for corporate banking and wealth management services.
“Overseas expansion in China, Singapore and Vietnam sits on top of the company’s agenda next year,” E.Sun Financial president Joseph Huang (黃男州) said on the sidelines of a public function.
The bank-centric financial service provider plans to establish a banking branch in Dongguan, China, late this year or early next year once it receives regulatory approval form China, Huang said.
Huang said E.Sun Financial intends to provide its first Chinese branch with 700 million yuan (US$110 million) in capital, which is much higher than the 200 million yuan previously allowed to Taiwanese firms now that the Financial Supervisory Commission has increased the investment ceiling.
E.Sun Commercial Bank (玉山銀行), the group’s main source of earnings, had its plan to establish a branch in Sinapore approved by the commission on Tuesday and Huang said the bank hopes to enter the Singaporean market toward the end of the second quarter next year.
“We intend to focus on corporate banking, providing syndicated loans and wealth management services, in line with the group’s mid and long-term development plans in Asia,” Huang said.
E.Sun Bank is also looking to upgrade its representative office in Vietnam into a full branch to take advantage of the country’s fast-growing need for banking services, Huang said.
To back the overseas expansions, the medium-sized financial conglomerate last month raised NT$7.5 billion (US$250 million), which will be used to strengthen its overall capital to NT$45.75 billion, from the current NT$38.03 billion, Huang said.
The group’s capital will grow to NT$50 billion next year or in 2013 to meet tightening capital requirements as the overseas expansions unfold, Huang added.
E.Sun Financial aims to boost its core capital ratio to 9 percent toward the year end and its capital adequacy ratio at 12 percent, Huang said.
“We’re satisfied at the bank’s asset health, with the bad loan ratio standing at 0.19 percent and the coverage ratio at 312 percent as of September,” he said.
However, the lender would set aside more loan loss reserves to cooperate with regulators if they deem it necessary as global economic uncertainties increase, Huang said.
The commission has floated the idea of raising the minimum required reserves to 1 percent of total lending, from the present 0.5 percent, a move that might weaken banks’ earnings this year, and E.Sun Bank is expected to be one of the hardest hit given its credit profile.
The group reported a net profit of NT$4.29 billion during the January-to-September period, rising 9.33 percent from the same period a year ago, company data showed.
This translated to earnings per share of NT$1.05, up from NT$1.04 last year, as the group was less affected by the global market volatility than other domestic lenders.
Shares in E.Sun Financial shed 1.05 percent to NT$14.20 at the close of local trading yesterday.
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