State-run Hua Nan Commercial Bank (華南銀行) — the main subsidiary of Hua Nan Financial Holding Co (華南金控) — aims to increase its loan book by 4.2 percent this year, driven by corporate lending, senior bank executives said yesterday.
The target is lower than the 5 percent increase last year, as the bank-focused conglomerate is seeking to cut its dependence on interest income, while boosting wealth management and investment gains.
Hua Nan Bank, which drives more than 90 percent of the group’s profit, posted NT$12.49 billion (US$395.68 million) in net income last year, up 30.49 percent from 2013, company data showed.
The increase came even though the lender’s market share dropped to 6 percent last year, from 6.01 percent in 2013 and 6.19 percent in 2012. Interest income gained 10 percent to NT$24.94 billion last year, with fee income growing by 19 percent, according to company figures.
With market share stalling, the bank expects net interest margin to rise by 5 basis points this year, Hua Nan Bank executive vice president Derek Chang (張雲鵬) told an investors’ conference in Taipei.
Toward that end, Hua Nan Bank is to strengthen its wealth management, and overseas and offshore banking businesses, as they generate much higher yields, Chang said.
Foreign currency-based lending can generate 11 percent returns while New Taiwan dollar operations might yield only 3 percent, Chang said.
Furthermore, the lender is to set up a wealth management platform with a view to growing the business by 26.9 percent this year on the top of a 33 percent increase to NT$3.31 billion last year, the company said.
The lender is expected to gain an extra NT$200 million in rental yields this year by leasing out partial floors at its new headquarters in Taipei’s Xinyi District (信義) and partial floors in its former headquarters in the Zhongzheng District (中正).
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