Fri, Aug 09, 2013 - Page 14 News List

SinoPac optimistic about second half

CHINA MOVES:Bank SinoPac is set to open the first Taiwanese banking subsidiary in Nanjing, while SinoPac Securities is seeking a Chinese partner for a branch in Xiamen

By Crystal Hsu  /  Staff reporter

SinoPac Financial Holding Co (永豐金控) expects earnings to improve for the rest of the year, but can do little to facilitate expansion in China until after the legislature approves the cross-strait service trade agreement, senior executives said yesterday.

The bank-focused financial services provider posted NT$3 billion (US$100.4 million) in net income during the April-to-June period, up 4.7 percent from the preceding quarter and 38 percent from a year ago, its financial report showed.

“We are cautiously optimistic about earnings in the second half of the year,” as the banking business is expected to continue improving, but the securities unit is likely to weaken, SinoPac Financial chief executive officer Stan Siao (蕭子昂) told an investors’ conference.

Bank SinoPac (永豐銀行) generated NT$2.97 billion in net profit last quarter, accounting for 98.5 percent of the parent firm’s income, while SinoPac Securities Co (永豐金證券) contributed a parlous NT$31 million, the report showed.

Bank SinoPac gained some headway in balancing its sources of income last quarter, with fee and interest income accounting for 43 percent and 57 percent respectively, Bank SinoPac president Tina Chiang (江威娜) said, adding the lender favors a 50:50 ratio and will work toward the goal.

Bank SinoPac plans to formally launch online payment services next quarter after regulators make known related details, Chiang said.

“We don’t expect the new service to boost earnings significantly, as electronic payment services are quite mature and commonplace,” Chiang said.

Bank SinoPac is set to open the first Taiwanese banking subsidiary in Nanjing, China, by the end of this year after Chinese regulators gave their go-ahead on July 8, Chiang said.

Apart from that, the conglomerate can do little to deepen penetration in China until the cross-strait service trade agreement clears the legislature, SinoPac Financial spokesman Michael Chang (張晉源) said.

Bank SinoPac has inked a deal with the Industrial and Commercial Bank of China (ICBC, 中國工商銀行), allowing ICBC to buy up to 20 percent of the local lender’s shares via a private placement.

In addition, SinoPac Securities aims to partner with a Chinese firm in setting up a securities company in Xiamen in China’s Fujian Province, where local investors will control a 51 percent stake.

“We will closely monitor any progress on the service trade pact” as the investment agreements would expire after a year, Chang said.

SinoPac Financial is not excited about the inclusion of financial services in the planned “free economic pilot zones,” saying the liberalization would mainly benefit foreign and institutional clients.

SinoPac shares rose 0.67 percent to NT$15 yesterday, outperforming the TAIEX, which slid 0.17 percent, Taiwan Stock Exchange data showed.

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