State-run Hua Nan Financial Holding Co (華南金控) aims to increase its net profit by 10 percent this year from last year while pursuing better-balanced contributions among its subsidiaries, company chairman Liu Teng-cheng (劉燈城) said yesterday.
The bank-reliant conglomerate posted NT$10.05 billion (US$331.25 million) in net income last year, or earnings per share of NT$1.11, company data showed.
FAVORABLE CONDITIONS
“We are looking for a 10 percent growth in net income this year, with the macroeconomic environment becoming more favorable for financial business operations,” Liu told a media briefing.
The result last year was a 13 percent increase from 2012’s profit of NT$8.87 billion and was the highest since the global financial crisis hit in 2008.
Liu attributed the pickup mainly to increased interest revenue at its flagship subsidiary, Hua Nan Commercial Bank (華南銀行), that amounted to NT$22.77 billion, up 4 percent from 2012’s NT$21.8 billion.
The bank plans to expand its loan books by 4 percent this year, including a 6 percent increase in lending to small and medium-sized enterprises, a 3 percent gain in consumer banking business, Hua Nan Bank executive vice president Derek Chang (張雲鵬) said.
Overseas branches are expected to expand loans by 12 percent due to a lower base and less intense competition compared with the home market, Chang said.
Overseas operations and offshore banking units generated 29 percent of the group’s earnings last year, which may rise to more than 30 percent this year on the back of higher yields, bank executive vice president York Lai (賴明佑) said.
Hua Nan Bank, a major home loan operator, can survive housing price corrections of up to 30 percent unscathed, based on an internal stress test, thanks to a conservative loan-to-value ratio of 58 percent, Lai said.
The conglomerate is also seeking to develop into a regional international financial service provider, Liu said.
THIRD BANK IN CHINA
Hua Nan Bank is soon expected to open a second branch in Shanghai, China, and is planning a third branch in the market, Liu said, adding that the group is in talks with potential partners to set up a full-service securities house and non-life insurance company.
Meanwhile, Hua Nan Financial will improve non-bank subsidiaries so they can make greater profit contributions, Liu said.
Shares in Hua Nan Financial closed unchanged at NT$17.05 yesterday, but did better than the TAIEX which edged down 0.51 percent, Taiwan Stock Exchange data showed.
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