Tue, Mar 13, 2018 - Page 12 News List

SinoPac Financial to increase cash dividend portion

By Ted Chen  /  Staff reporter

SinoPac Financial Holdings Co (永豐金控) yesterday said it would raise the proportion of dividends paid in cash this year in light of improvements in its capital adequacy ratio last year.

Pending approval by its board of directors, the company aims to raise the proportion of cash in its annual dividend distribution to 60 percent from 44 percent last year, SinoPac Financial acting chief financial officer Kerry Hsu (許如玫) told an earnings conference in Taipei.

The company’s capital adequacy ratio rose to 130 percent at the end of last year from 119 percent in 2016.

During the same period, Bank SinoPac (永豐銀行), its main subsidiary, also saw its resilience improve, with its Bank of International Settlements and Tier 1 capital ratios rising from 14.09 percent to 15.26 percent and from 11.92 percent to 13.24 percent respectively.

To boost the company’s competitiveness in online and mobile services, newly appointed president Stanley Chu (朱士廷) outlined plans to raise information technology (IT) spending to NT$1.5 billion (US$51.23 million), 80 percent higher than the previous year, with 52 percent of IT spending earmarked for infrastructure upgrades.

The company is interested in leveraging technology to improve credit risk, Chu said.

It is set to begin participating in the Credit Research Initiative, an undertaking led by the Risk Management Institute at the National University of Singapore that offers credit ratings based on transaction and organization data.

Lenders currently rely on lagging indicators, such as credit agency ratings, which do not provide a real-time picture of risk, Chu said, adding that the company is hoping to glean insights from the initiative that could be implemented in Taiwan.

The company is also seeking partnerships with start-ups that are developing credit scoring systems to conduct experiments in the upcoming “regulatory sandbox.”

In the meantime, Chu said his primary task is to bolster the role of SinoPac Financial Holdings and position the holding company as a flagship, steering its fleet of subsidiaries as the group recovers from a series of regulatory run-ins.

To improve transparency, the company has cut its number of subsidiaries from 37 to 31, Chu said.

Net income last year rose 9 percent year-on-year to NT$90 billion, with earnings per share of NT$0.81, the financial holding company said.

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