State-run First Financial Holdings Co (第一金控) yesterday said it aims to achieve moderate loan growth next year, driven by demand from non-tech sectors and China-based customers.
“We expect the overall loan book to expand 5 percent next year, slightly faster than the projected GDP growth [of 4.19 percent],” Annie Lee (李淑玲), head of First Financial investor relations, told an investors’ conference.
Foreign currency-denominated loans could increase 10 percent next year, bolstered by demand from Taiwanese firms in China, Lee said.
Corporate lending at home would also continue to grow next year, but the pickup momentum would be significantly slower, she said.
For the first nine months, loan demand from domestic small and medium-sized enterprises grew more than 20 percent from the level seen last year, Lee said, predicting the growth rate would drop to single digits next year.
The sluggish US economy and the eurozone debt crisis would weaken private investment and weigh on consumer confidence next year, although domestic demand-focused sectors have fared well thus far, Lee said.
Credit costs would be driven up next year, but are unlikely to trigger a credit crunch as seen in the 2008 global financial crisis, she said.
Meanwhile, First Financial said its banking arm, First Commercial Bank (第一銀行), reported a write-off of NT$250 million (US$8.2 million) last month because of a default by Prince Motor Group (太子汽車).
The bank holds no collateral on the loan, but may recover some losses if the cash-strapped auto dealer successfully auctions its landmark office building in Taipei later this year, Lee said.
Lee also said the lender has no exposure to Norway’s Eksportfinans ASA bank, whose credit rating was recently downgraded by Moody’s, while flat-panel and DRAM makers accounted for less than 3 percent of the lender’s outstanding loans as of Sept. 30.
The non-performing loan ratio stood at 1.01 percent excluding government loans, she added.
Its net interest margin (NIM) — a gauge of a bank’s profitability — stayed flat at 1.10 percent at the end of last quarter.
The NIM could gain two basis points this year and increase only by four to five basis points next year with the central bank likely to keep key interest rates intact for some time, Lee said.
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