State-run First Financial Holding Co (第一金控) is aiming for modest loan growth next year, driven by its foreign currency lending operations in Greater China, as the economic picture at home is not very exciting, the company said at an investors’ conference yesterday.
To deepen its presence in China, the conglomerate is facilitating a “rural bank” project under which its banking arm, First Commercial Bank (第一銀行), plans to spend 384 million yuan (US$61.7 million) setting up 12 outlets in rural areas of Henan Province over the next few years, First Financial investor relations head Annie Lee (李淑玲) said.
“We’re looking for moderate growth [in core businesses] next year as the macroenvironment may improve, but not significantly,” Lee said, forecasting that total loans would increase 3.5 percent.
Net interest margin is expected to gain 5 basis points next year, half the increase of the past year after the critical profitability gauge was flat at 1.2 percent at the end of the third quarter, she said.
“With downside risks lingering, the low-interest-rate environment may stay for a while, limiting room for rate increases,” Lee said.
The bank-centric group expects fee income to expand by between 9 and 10 percent next year, as an improving economy boosts its wealth management business from the second quarter onward, Lee said.
First Commercial Bank, which generated 98.5 percent of the group’s earnings during the July-to-September period, may see credit costs rise by 43 to 44 basis points next year, from 40 basis points this year, she said.
The bank’s non-performing loan ratio rose to 0.5 percent in the third quarter, from 0.47 percent three months earlier, because of loans to troubled power systems company RPTI International Ltd (榮電), in which the Veterans Affairs Commission is the biggest shareholder.
The bank is to put aside NT$1.6 billion at the end of the year to raise its bad loan reserves to 1 percent of Tier 1 lending to meet tighter regulatory requirements, Lee said.
“First Bank will quit pursuing small and medium-sized enterprises, as they are having less success adapting to the tough business environment,” Lee said.
Instead, it would strengthen its overseas operations, especially in the Greater China area, after overseas pre-tax profits jumped 46.88 percent to NT$3.93 billion in the third quarter, from NT$2.68 billion a year earlier, Lee said.
The rural bank project would allow the bank to further tap the Chinese market and satisfy demand its peers have opted to ignore, Lee said, adding that the lender may bring the business model to Taiwan if it proves successful.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day