E. Sun Financial Holding Co (玉山金控) aims to grow its loan book and fee income by double digits this year, as the banking-focused conglomerate seeks to expand its credit card business and ties with small and medium enterprises (SMEs).
The company posted NT$7.06 billion (US$237.39 million) in net profit last year, more than double the level in 2011, as its rapidly growing wealth management and credit card businesses raised fee income by 19.1 percent, E Sun Financial president Joseph Huang (黃男州) told a media briefing.
“We expect the growth momentum to continue this year, as we strive for better operational efficiency and product innovations,” Huang said.
The results last year translated into earnings of NT$1.46 per share, placing E.Sun fifth among its listed peers, but the most favored by foreign institutional investors, which hold 43.8 percent of the company’s total shares, Huang said.
On a quarterly basis, net income fell 25.6 percent to NT$1.36 billion during the October-to-December period, attributable mainly to provision costs of NT$700 million to meet stricter requirements, Huang said.
Net fee income accounted for 31 percent of the group’s profit, with wealth management and credit cards contributing 37.9 and 34.3 percent respectively, he said.
“E. Sun Financial topped peers in terms of growth rates in wealth management, which gained 38.3 percent, and credit cards, which rose 21.8 percent,” from the same period last year, Huang said.
The two core businesses may see double-digit growth this year, outpacing the market, which is forecast to see only single-digit growth, Huang said.
E. Sun Commercial Bank (玉山銀行), which generated 93.5 percent of the group’s profits, is looking to expand its loan book by 10 percent this year, with a continued focus on SME lending, Huang said.
Mortgage operations would stay flat this year from last year as financial regulators remain concerned about property speculations, Huang said.
He expects net interest margin to inch up 3 to 4 basis points this year, from 1.27 percent at the end of last year, as the central bank is likely to hold interest rates steady in the first half of the year.
Like its domestic peers, E. Sun is seeking to expand in China, after opening its first banking branch in Dongguan in September last year, and plans to file applications in the second half for setting up a second branch, preferably in Shanghai, Huang said.
Offshore and overseas banking operations generated 30 percent of overall profits last year and may contribute a larger share this year, buoyed by higher margins, Huang said.
E. Sun Financial is designing yuan products and services, which may be put on the market later this year, Huang said.
“Yuan-based products and services will be a key driver this year, with related benefits becoming more evident in the second half,” he said.
E. Sun Financial is also exploring Internet and mobile banking related business opportunities, Huang said, adding that whichever player gains a lead in the market will emerge as the winner given the prevalence of smartphones and personal computers.
E. Sun Financial shares ended down 0.56 percent to NT$17.90 yesterday, underperforming the TAIEX, which rose 0.29 percent, Taiwan Stock Exchange data showed.