Wed, Apr 11, 2018 - Page 12 News List

TBB to expand loan book by 5.1%

By Crystal Hsu  /  Staff reporter

State-run Taiwan Business Bank (TBB, 台灣企銀) is planning to expand its loan book by 5.1 percent this year by continuing to focus on lending to small and medium-sized enterprises (SMEs), top executives said yesterday.

The lender expects earnings to improve this year after pre-tax income last year fell 8.46 percent to NT$5.79 billion (US$198.36 million) due to its participation in the troubled syndicated loan to Kaohsiung-based Ching Fu Shipbuilding Co (慶富造船).

Net income softened 3 percent to NT$5.04 billion, translating into earnings of NT$0.94 per share, company data showed.

“The result is not that bad after factoring in a write-off of NT$1.8 billion linked to Ching Fu,” newly installed chairman Huang Bor-Yi (黃伯怡) told an online investors’ conference.

The bank opted for a full write-down late last year to clean its asset quality and start anew this year, Huang said, adding that earnings so far this year has lent support to the strategy.

TBB last quarter posted NT$1.74 billion in net profit, or earnings per share of NT$0.28, already 35 percent of the level for all of last year, according to a company filing with the stock exchange.

Loans to SMEs stood at NT$467.4 billion as of December last year, accounting for 45.42 percent of the bank’s lending operations, an investor relations official said.

As a state-run bank, TBB would support firms in the “five plus two” industries to help advance the government’s policy, the official said, referring to the development of an “Asian Silicon Valley,” “smart” machinery, “green” energy technology, biomedicine and national defense — plus setting up a new agricultural business model and a circular economy.

Interest income underpinned last year’s profits while fee income contributed a lackluster 15 percent as domestic life insurance companies lowered commissions for policy sales at its branches, the official said.

The bank owns 125 branches in Taiwan and eight in overseas markets.

Overseas and offshore operations last year generated 36.85 percent of total revenue, rising from 25.1 percent a year earlier, thanks to the opening of new branches in Tokyo and New York, the official said.

TBB is to boost foreign-currency lending this year, as it bore yields of 1.99 percent last year, higher than local currency loan yields of 1.23 percent, the official said.

Net interest margin might not change much from last year’s 0.97 percent, the official said, as the central bank last month kept policy rates unchanged and might continue to stay put amid benign inflation.

TBB plans to hold onto the bulk of its last year’s earnings to shore up its capital strength, the official said.

An earlier board meeting proposed issuing a dividend of NT$0.668 per share, with NT$0.268 in cash and the remaining NT$0.4 in stock.

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