Fubon Financial Holding Co (富邦金控) the nation’s most profitable financial services provider, is to accelerate its expansion in China, as its Chinese banking subsidiary, Fubon Bank (China) Co Ltd (富邦華一銀行), is set to launch its debit card business next month and open five to seven new branches next year.
The company inked a deal with Shanghai-based First Sino Bank (華一銀行) to buy an 80 percent stake in the Chinese lender for 5.65 billion yuan (US$920 million) in 2012 and later renamed it Fubon Bank (China), making it the financial holding firm’s banking arm in China.
“We hope Fubon Bank (China) will strengthen and diversify its business further,” Fubon Financial chairman Daniel Tsai (蔡明忠) said in a statement yesterday, after holding the company’s quarterly investors’ conference.
The plan by Fubon Bank (China) to launch its debit card business next month will make the company the first Taiwanese bank to obtain permission from the Chinese government to step into the sector.
In addition, with the opening of the new branches next year, Fubon Bank (China) will see the number of its total branches increase to more than 20, according to Fubon Financial.
Fubon Financial posted net income of NT$56.59 billion (US$1.83 billion), or earnings per share (EPS) of NT$5.53 per, from January through last month, the company said in its stock exchange filing. Both net income an EPS figures for the first 10 months of the year reached their highest levels in the company’s history.
Although there is concern in the market that Fubon Financial’s earnings growth could slow next year in the wake of lower trading gains from its life insurance subsidiary, Fubon Life Insurance Co (富邦人壽), Yuanta Investment Consulting Co (元大投顧) remains bullish about the company’s growth momentum next year.
“We believe unrealized gains of NT$31 billion in the third quarter of next year can support earnings in 2015,” Yuanta Investment researcher Peggy Shih (施姵帆) said in a client note yesterday.
Shih said Yuanta Investment maintained a “buy” rating for Fubon Financial’s shares and lifted its 12-month target price on the stock to NT$69, from the NT$65 it forecast previously.
Fubon Financial shares decreased slightly 0.59 percent to close at NT$50.2 yesterday in Taipei trading. They have risen 15.14 percent since the beginning of the year, higher than the broader market’s 6.43 percent increase over the same period.
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