Wed, Feb 20, 2019 - Page 12 News List

Hua Nan Financial to diversify income sources

By Crystal Hsu  /  Staff reporter

State-run Hua Nan Financial Holding Co (華南金控) this year aims to diversify its income sources and boost earnings contributions from non-banking units, chairman Wu Tang-chieh (吳當傑) said yesterday.

Wu unveiled the goals after the conglomerate reported that net income last year rose 21 percent annually to NT$14.59 billion (US$473 million), thanks to improving corporate banking and financial trading operations.

Last year, bank-focused financial institutions fared better than life insurance-focused peers, which took a hit in the second half from heavy hedging costs amid volatility in the foreign-exchange market.

“It is time for Hua Nan Financial to take action to diversify its sources of income, as it has depended heavily on interest income,” Wu told a media briefing.

Interest income accounted for 53.65 percent of overall profits at main subsidiary Hua Nan Commercial Bank (華南銀行), much higher than the sector’s 38.5 percent average, a report by the Legislative Yuan showed.

The bank is to expand its wealth management operations, product lines and sales channels to boost fee and trade incomes, Wu said, adding that exchange-traded funds are popular product options among investment tools.

Employees can seek to enhance cross-selling benefits by taking advantage of branches at home and abroad, he said.

The group would hire more financial professionals to improve personnel quality toward the end of the year, Wu said.

Hua Nan Financial is also seeking to grow multiple profit drivers and raise earnings contributions from securities, insurance and other subsidiaries, Wu said.

The securities arm has expressed its intention to pursue the goal and the insurance division is likely to follow suit soon, he said.

The banking unit generates more than 90 percent of profits at the company.

Hua Nan Financial would deepen financial technology operations, as technology is reshaping the banking industry, Wu said.

The company would closely track big data trends and tap further into mobile payments and other digital banking businesses, he added.

Hua Nan Bank is looking to grow its consumer banking business by 3 percent and mortgage operations by 2 percent from about NT$500 billion at the end of last year, a company official said, adding that wealth management and evolving credits segments are expected to grow by 1 percent.

The lender last month introduced three new credit cards targeting high net worth clients, the official said.

The bank has 1.07 million credit cards in circulation, with the ratio of effective cards standing at 76.5 percent, they said.

Net interest margin held at 1.43 percent last year and might stay flat this year, the official said.

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