The earnings momentum of Taiwanese banks has tapered off this year due to China’s slowing economy and yuan devaluation, CIMB Securities Ltd said on Tuesday.
Overseas earnings, which drive 35 percent of local banks’ pretax profits, might not see a hefty increase this year as in previous years, as banks have turned cautious about their lending operations in China, Malaysia-based CIMB said in a report.
Offshore banking units (OBUs) have become a particularly important earnings driver since 2011, when authorities allowed them to operate yuan business in the wake of improved cross-strait relations, the report said. Many lenders have also benefited from the yuan’s appreciation.
The cautious sentiment is reflected in the 8 percent contraction in yuan lending for the first eight months of the year and a 2 percent decline in foreign currency-based loans, the report said.
OBUs generate about 65 to 75 percent of banks’ overseas earnings, or up to 25 percent of their total profits, the report said.
As of last month, 13 Taiwanese banks had set up 52 outlets in China.
“We expect the conservative sentiment to persist given uncertainties over the global economy and the slowdown in China,” CIMB analyst Nora Hou (侯乃鳳) said in the report.
Overseas earnings’ contribution rose to 42 percent of the sector’s total pretax profit in the first quarter of last year, Hou said.
Taiwanese regulators have introduced measures to rein in underlying risks, bringing down the sector’s exposure to 62 percent of total net worth, from a peak of 69 percent in the third quarter of last year, the report said.
With the Democratic Progressive Party widely expected to win the Jan. 16 presidential election, the pace of cross-strait exchanges might slow and local banks’ overseas expansion might lose steam, CIMB said, while taking a neutral stance on local financial shares.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”