SinoPac Financial Holdings Co (永豐金控) saw its net income increase 10.3 percent from a year earlier to NT$4.77 billion (US$154.8 million) in the first half of the year as its core operations recovered and are likely to continue improving through the rest of the year, top executives said yesterday.
Addressing concerns over the bank-focused conglomerate’s potential exposure to Turkey, SinoPac said that loans to Turkey constitute a mere 1 percent, or US$45 million, of its overall foreign-currency lending.
“We are not particularly worried about the Turkish exposure, because they are mainly loans to large-cap firms,” Bank SinoPac (永豐銀行) president Eric Chuang (莊銘福) said.
The devaluation of the Turkish lira has to do with ongoing capital outflows from emerging markets, but is unlikely to evolve into a regional financial crisis such as the European debt woes, Chuang said.
The US, the EU, China and other economic powers would not sit around and watch the situation grow out of control, but would take steps to prevent the fallout from hurting their economies, Chuang said.
The Taipei-based group accumulated NT$6.5 billion in net profit for the first seven months of the year, the highest in three years, aided by active wealth management demand and one-off asset disposals, SinoPac managing director Stanley Chu (朱士延) said.
Wealth management fee income picked up 14.4 percent in the first half, while lending fee income gained 10.4 percent from a year earlier, thanks to healthy business growth in corporate and retail banking, Chu said.
SinoPac Securities Corp (永豐金證券), the nation’s fourth-largest brokerage house, reported a 28.2 percent increase in fee income in the first half, but failed to avert a net loss of NT$60,000, company data showed.
Interest rate hikes by the US Federal Reserve prompted investors to trim bond positions and contributed to the losses, SinoPac Securities president Jerry Jiang (江委源) said.
SinoPac Financial expects two more rate hikes by the Fed this year, adding pressure on the local central bank to do the same, next year at the earliest, to narrow the rate disparity.
The group’s net interest income should increase 6 percent in the second half of the year, at about the same pace as in the first half of the year, Chuang said.
Net interest margin shed 1 basis point to 1.1 percent in late June from three months earlier, even though the interest spread climbed from 1.42 percent to 1.45 percent, company data showed.
The trade dispute between the US and China might have a small and bearable impact on Taiwan because the items affected by higher tariffs constitute a tiny share of domestic GDP, SinoPac Financial chief financial officer Kerry Hsu (許如玫) said, citing the official statistics agency.
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