Lee: We have no intention to hike interest rates on home loans. State-run lenders do so probably because their mortgage loans approach limits.
We have sufficient scope for more mortgage operations and would lend out more money to increase overall interest income. We would do so with due caution and would pay attention to borrowers’ creditworthiness when reviewing loan applications and collateral values.
Housing prices have showed signs of slowdown and are likely to hold steady in the foreseeable future.
TT: How will Shin Kong Bank explore business opportunities linked with the Chinese yuan as China and Taiwan are soon to work out currency clearing and settlement rules?
Lee: We are ready technologically and professionally. The yuan operations would give a significant boost to our banking business, given the growing importance of the yuan in international trade and warming ties across the Taiwan Strait.
The upcoming extension of yuan products and services — currently limited to corporate customers through offshore banking units — to domestic banking units would allow individuals more investment options. The opening will benefit both banks and their customers.
Shin Kong bank and affiliated asset management units will create funds, securities and other investment tools denominated in yuan, in addition to yuan conversion, deposits and remittance businesses.
The FSC on Thursday approved plans to allow commercial banks to invest in Chinese securities and bonds.
However, we will stay put for the time being as the group’s life insurance company already parks part of its investment funds on Chinese securities and bonds.
TT: Is Shin Kong Bank looking for greater profit growth next year after a strong showing so far this year?
Lee: The economy is likely to have bottomed out and be on track for recovery, though the pace may be slow.
Consequently, I believe core businesses will improve next year, compared with this year. The bank’s larger economies of scale will boost overall earnings. We will pursue balanced growth in corporate banking, consumer banking and wealth management businesses.
In terms of corporate banking, we aim to forge closer ties with small and medium listed firms. Our offshore banking unit is registering rapid growth although its contribution to total revenue remains modest.