E.Sun Financial Holding Co (玉山金控) yesterday said that it led its domestic peers in net income growth in the first three quarters, propelled by strong gains in income generated by credit card and wealth management fees.
The company said that net income in the first nine months rose 23.6 percent annually to NT$10.39 billion (US$317.72 billion), or NT$1.32 per share. During the period, return on equity performance was 12.28 percent, higher than the 11.11 percent last year, while its 0.84 percent return on assets performance bested last year’s 0.72 percent.
The company said that in the first three quarters, wealth management fees rose 42.6 percent annually to NT$5.76 billion, with fees from credit cards rising 8.2 percent year-on-year to NT$2.55 billion, while total deposits and total lending grew by 9.4 percent and 7.3 percent from a year earlier.
As of the end of September, the number of credit cards issued by the bank reached more than 2.71 million, or 10.85 percent of the national market, with the company becoming one of the nation’s top-three credit card issuers.
The banking-focused conglomerate said that its net interest income grew 14.6 percent to NT$12.96 billion and overall net fee income grew 23.6 percent to NT$10.52 billion from a year earlier.
“Among the nation’s 39 banks, including branches of foreign banks operating in Taiwan, E.Sun Commercial Bank’s (玉山銀行) ranking rose by one step this year to third place in terms of total fee income,” E. Sun Financial president Joseph Huang (黃男州) told an investors’ conference.
He added that E.Sun Bank recorded NT$11 billion in pre-tax income, pushing its ranking among domestic peers to fourth from 11th last year.
Morgan Stanley said E.Sun Financial's strong earnings growth would continue next year.
“E.Sun is less affected by a slowing China and renminbi [yuan] depreciation and will benefit from a US interest rate hike,” Morgan Stanley analyst Silvia Fun (范思為) said in a note.
Regarding Taiwan’s persistently low interest rates, Huang told investors that the company is seeking opportunities in international syndicated loans.
“Our branches in Hong Kong and Los Angeles have been involved in a few syndicated loans, with some projects yielding as much as NT$500 million in fee income,” he said.
Regarding the Financial Supervisory Commission’s initiative to establish an online platform that allows retail investors to compare and purchase fund products, Huang said that E.Sun’s wealth management earnings would not be affected.
“We believe the trend in the digitization of financial services will result in the integration of virtual and physical channels, the two are not mutually exclusive,” Huang said.
Huang also said that the company is to enjoy its first-mover advantage in the growing market for electronic payments, such as its partnership with China’s Alipay (支付寶), as it is costly to switch partners once the back-end systems are up and running.
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