Shin Kong Commercial Bank (新光銀行), the banking subsidiary of Shin Kong Financial Holding Co (新光金控), is poised to expand overseas after meeting the requirement of growing its assets to US$20 billion (NT$589 billion) ahead of schedule, senior executives said yesterday.
The lender’s assets surpassed the threshold on Tuesday, ahead of its original plan for the year-end, bolstered by rapid improvement in its core businesses, bank chairman Lee Tseng-chang (李增昌) told reporters on the sidelines of a public function in Taipei yesterday.
The achievement qualifies Shin Kong Bank for setting up branches in China and Vietnam as its Taiwanese peers are doing to boost revenue sources.
“The bank will continue to strengthen its product lines and service quality to grow customers and profits,” Lee said.
The planned liberalization of banking rules may further speed up the pace, Lee said.
The Financial Supervisory Commission indicated on Wednesday it might ease investment requirements on banks expanding in China.
Shin Kong Bank posted NT$3.25 billion in net income for the first eight months of the year, surpassing its full-year earnings of NT$3.14 billion last year. The bank also had a record return on assets at 0.8 percent and return on equity at 17 percent, company data showed.
Its risk-based capital adequacy ratio stood at 10.94 percent and its Tier 1 adequacy ratio was 7.86 percent — both above statutory requirements.
Lee said he was upbeat about earnings for the rest of the year as the fourth quarter is a high season for consumer spending.
“The bank’s revenue is set to expand in coming months, with major department store chains soon commencing anniversary campaigns,” Lee said, but added that consumer spending “may cool somewhat from last year amid the economic uncertainty.”
Consumer lending accounts for 48 percent of the bank’s loanbook, while corporate lending makes up the rest, Shin Kong Bank president Lai Chin-yuan (賴進淵) said.
A bigger asset scale allows the bank more room for mortgage operations, while most of its peers are already near their limits, Lai said.
Larger loans are expected to keep the net interest margin steady at 1.45 percent this year, even though central banks around the world are cutting rates, Lai said.
A middle-sized credit-card issuer, Shin Kong Bank nonetheless outperforms its peers in terms of number of affluent customers and infinite card spending, Lee said.
The bank issued about 33,000 infinite cards for customers with annual income in excess of NT$2 million, Lee said, adding that consumption from this income bracket totaled more than NT$10 billion from July last year to June this year.