Wed, Feb 08, 2012 - Page 12 News List

Taiwan Financial plans new niche

By Crystal Hsu  /  Staff Reporter

State-owned Taiwan Financial Holdings Co (台灣金控) aims to strengthen wealth management and syndicated loan operations this year to boost profits and differentiate itself from its domestic peers, company chairperson Susan Chang (張秀蓮) said yesterday.

Too much overlapping business tops the challenges for lenders, as stiff competition has driven borrowing costs so low that it has squeezed banks’ profits, Chang said.

“We will build our niche market around the provision of wealth management services and syndicated loans,” Chang told the media at a briefing about the group’s development plans for the year.

Bank of Taiwan (台灣銀行), the group’s main source of income, will seek to maintain its leadership in sales of gold investment products and extend its corporate services to small and medium-sized companies, Su said.

Taiwan Financial, the country’s second-largest financial services provider by assets, posted NT$3.94 billion (US$133.21 million) in net profit last year, 11 percent higher than its target of NT$3.55 billion, company data showed.

Its earnings would have hit NT$12.9 billion if it did not have to set aside about NT$9 billion to fund preferential interest payments on savings for government employees and public school teachers, the report said.

Chang, who also heads the nation’s bankers association, pressed the government ahead of a meeting with the Financial Supervisary Commission (FSC) to allow banks greater flexibility in Chinese yuan operations.

Taiwanese banks may not take yuan deposits or provide yuan remittances or purchases of yuan-denominated securities, although such services are available at their offshore banking units for corporate customers, Chang said.

The FSC plans to meet chief executives from all 16 domestic financial holding companies today.

Chang said she would ask the FSC to extend yuan-denominated services to domestic banking units.

The banker further expressed the wish that the commission would help negotiate easier terms for Taiwanese banks to operate yuan businesses in China.

“We hope China would allow Taiwanese lenders to offer yuan banking services without having to wait for one year after entering the system there,” Chang said.

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