State-run Taiwan Cooperative Financial Holding Co (合庫金控) plans to increase its capital by NT$15 billion (US$476.61 million) to fund expansions overseas next year and beyond, company chairman Liao Tsan-chang (廖燦昌) said yesterday.
The bank-focused conglomerate aims to strengthen its operations in China, Southeast Asia, Europe and the US, Liao said.
The company next week is to approve plans to issue 1.5 billion new shares that may allow it to raise about NT$20 billion after factoring in premiums, Liao said.
The fund-raising, likely to take place between late March and early April next year, may lift Taiwan Cooperative Financial’s capital adequacy ratio from 127 percent to 137 percent above the sector’s average, Liao said.
“We intend to use the proceeds to set up new banking branches in overseas markets,” he said, as Taiwan has the lowest interest margin in Asia, due to excessive competition.
Main subsidiary Taiwan Cooperative Bank (合庫銀行) may increase its core capital ratio to 9 percent following the fund injection, from an estimated 8 percent by the end of this year, Liao said.
The lender plans to add one or two branches in China, one in New York, one in Australia, one in Europe and two in Cambodia over the next one or two years, Taiwan Cooperative Financial spokesman David Hu (胡光華) said.
Overseas earnings may account for between 32 and 35 percent of total profits next year, from 30 percent at present, as a result of increased foreign presence, Hu said.
Taiwan Cooperative Bank’s two Chinese branches are in Tianjin and Suzhou, and it is to open a third one in Fuzhou by the end of the year, Hu said.
The bank is searching for sites for a fourth one, likely in Hunan Province, he said.
For the first 11 months of the year, Taiwan Cooperative Financial made NT$9.95 billion in net income, translating into NT$1.08 earnings per share, company data showed.
Total profits may surpass the NT$10 billion mark this year and may see a 15 percent increase next year on the back of modest loan growth, robust sales of wealth management products and lower personnel costs, analysts forecast.
Taiwan Cooperative Bank plans to cut unprofitable branches across Taiwan next year, vice president Tsai Shih-chih (蔡世智) said, adding that no employees will be let go, but some may have their duties adjusted.
Shares in Taiwan Cooperative Financial ended up 1.25 percent at NT$16.2 in Taipei trading yesterday, lagging the TAIEX, which gained 1.36 percent, according to Taiwan Stock Exchange statistics.
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