China Development Financial Holding Corp (中華開發金控) is to focus on developing its commercial and venture-capital (VC) banking businesses following the restructuring of two banking subsidiaries, a top executive said yesterday.
Banking was the largest source of profit for the company in the first quarter, and the firm would continue to concentrate on promoting its consumer and corporate banking businesses, China Development Financial president Paul Yang (楊文鈞) said.
Earlier this month, its main subsidiary, China Development Industrial Bank (中華開發工業銀行), which used to focus on industrial banking, transferred most of its businesses including corporate banking and treasury marketing units (TMUs) to KGI Bank (凱基銀行).
The restructuring helped expand the scale of KGI Bank, which was acquired by China Development Financial in September last year, when it was known as Cosmos Bank (萬泰銀行).
With the infusion of some of China Development Industrial Bank’s business, KGI Bank has seen its assets and net worth double in size to NT$558.9 billion (US$18.17 billion) and NT$56.9 billion respectively, the company said in a statement.
KGI Bank, which has 53 outlets, plans to file an application with the China Banking Regulatory Commission by the end of this month to set up a consumer finance company in China, its parent company said.
Earlier this month, China Development Financial chairman Chen Mu-tsai (陳木在) said KGI Bank’s total assets would likely break the NT$1 trillion mark in three to four years and contribute more than half of net income to the financial holding company.
As for China Development Industrial Bank, Yang said it would focus on venture-capital business, investing directly in companies and managing assets.
The industrial bank expects its asset management scale to increase to NT$26.7 billion at the end of this quarter, mainly relying on five third-party funds, which could help generate NT$509 million in management fees annually, Yang said.
The industrial bank might further lower the outstanding balance of its own investments to 20 percent of China Development Financial’s net worth, while releasing capital to help the development of KGI Bank or other units, he added.
China Development Financial posted NT$2.73 billion in net profit in the first three months of the year, up 1.5 percent from the same period last year, with earnings per share of NT$0.18. The company's banking units contributed the most earnings in the first quarter at NT$1.53 billion, the company said in a statement.
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