Chinatrust Financial Holding Co (中信金控), Taiwan’s third-largest financial services provider, expects earnings to hit a new high in the current quarter, as a result of growing interest income and lower provision, senior executives said yesterday.
However, the group remains cautious about the business outlook next year over concerns of softening demand for corporate loans and wealth management services if the EU fails to find a lasting solution to the sovereign debt crisis.
“We expect profitability to climb further in the fourth quarter after establishing a record in the first nine months,” Chinatrust Financial president Daniel Wu (吳一揆) said as he briefed the media on its third quarter earnings.
Chinatrust Financial reported NT$3.37 billion (US$111.52 million) in net profit from July to September, an increase of 8.88 percent from the previous year, with improved consumer spending boosting core businesses at -Chinatrust Commercial Bank (中信銀), the group’s main source of income, Wu said.
Net income increased 31.8 percent year-on-year to reach NT$14.52 billion for the first nine months of the year, or earnings of NT$1.29 per share, company data showed.
Wu said he was confident the figures would improve even further in the coming months, thanks to sustained loan demand from Taiwanese firms in China, where borrowing costs are much higher due to credit tightening.
Wu declined to speculated about performance over the longer term, saying much depended on how Europe’s debt problem was dealt with.
“The longer the drama lasts, the bigger the blow to the global economy and consumer confidence will be,” Wu said.
Chinatrust Commercial, the nation’s largest credit card issuer, saw its mutual fund sales fall 20 percent last month, Wu said.
The unease could also undermine corporate banking and the wealth management businesses, key growth drivers for the bank this year, he said.
Wealth management generated NT$2.5 billion in fee income in the third quarter, while corporate lending contributed NT$838 million, according to company data.
After completing the acquisition of MetLife Taiwan Insurance Co (大都會人壽) on Tuesday, Chinatrust Financial plans to rename the company Chinatrust Life Insurance Co (中國信託人壽) early next year.
The new subsidiary will be able to utilize the bank’s sales channels and telemarketing to sell insurance products, Wu said, adding that the insurer does not have any exposure to European sovereign debt.
The banking arm appears to have no more write-off this year after setting aside 74 percent of a NT$3.7 billion loan as of last month relating to troubled ProMOS Technologies Inc (茂德科技) with collateral worth 25 percent, the bank’s senior vice president, Rachael Kao (高麗雪), said.
The lender, which has a loan-loss reserve of 1.03 percent, would not see its earnings diluted if the Financial Supervisory Commission raised the statutory requirement to 1 percent, from the current 0.5 percent, Kao said.
“Not having to make such provisions boosts our confidence in achieving better earnings this year,” she said.
Kao expects the firm’s net interest margin to widen to 1.6 percent toward the end of the year, from 1.58 percent in late September, driven by larger loan volume, even though the central bank is expected to keep interest rates low for some time yet.
With just US$24 million in corporate bonds and loans to firms in Italy and Spain, Chinatrust Commercial is not worried about asset deterioration, Kao said.
The group’s bad loan ratio stood at 0.71 percent as of September and the coverage ratio at 166.62 percent, company statistics showed.
Meanwhile, the company plans to establish a venture capital fund and a financial leasing company in China, as it seeks to expand its businesses in the Chinese market, Wu said.
The venture capital fund would invest in Taiwanese companies operating in China and expected its Shanghai-based leasing firm to be open for business next year, he added.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last