State-run Chang Hwa Commercial Bank (CHB, 彰化銀行) aims to increase profits this year by strengthening overseas operations and loans to small and medium-sized enterprises (SMEs), despite economic uncertainty at home and abroad, bank officials said yesterday.
The lender, in which the two largest shareholders, Taishing Financial Holding Co (台新金控) and the Ministry of Finance, are disputing management rights, achieved a record pre-tax income of NT13.75 billion (US$412.05 million) last year, up 10.64 percent from 2014, thanks to rapid growth in earnings contributions from overseas branches, company data showed.
The figures help boost returns on equities to 11.05 percent, and on assets to 0.32 percent, while the banking sector saw a mild decline caused by losses related to yuan-based financial derivatives, CHB chairman Chang Ming-daw (張明道) said.
“We are aiming to increase profits this year by expanding loans to SMEs and wealth management operations,” Chang said.
The bank aims to grow SME lending by at least 10 percent this year, higher than the 8 percent target for its loan book as a whole, CHB executive vice president Anita Chen (陳金英) said.
The bank is to upgrade its wealth management division to a department and acquire its own life insurance subsidiary next month to strengthen bancassurance and lower operating costs, Chen said.
Despite various uncertainties, the nation’s economy might fare slightly stronger this year compared with last year and that suggests room for CHB to improve earnings, Chang said.
Overseas operations would supply the catalyst, after NT$2.1 billion was generated overseas in pre-tax income last year, a jump of 51 percent year-on-year, Chang said.
The bank’s Hong Kong branch is its most profitable overseas arm, while the branch in New York reported the fastest advance in earnings contribution improvement, CHB president James Shih (施建安) said.
CHB has nine overseas branches.
The bank intends to raise its presence abroad and is waiting for approval from local authorities to set up operations in Vietnam, Cambodia and Myanmar.
CHB was in talks to buy a local bank in Cambodia last year, but called off the deal as a sales price could not be agreed upon, Chang said.
Chang said that in his opinion, CHB had fulfilled its legal obligations with Taishin Financial, although the latter has filed a lawsuit to invalidate the 2014 board elections.
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