Wed, Mar 13, 2019 - Page 11 News List

Taiwan Cooperative eyes modest growth this year

By Crystal Hsu  /  Staff reporter

State-run Taiwan Cooperative Financial Holding Co (合庫金控) is aiming for modest growth in profitability this year by cultivating its wealth management, foreign currency and overseas operations, the company said yesterday.

The bank-focused conglomerate is upbeat about achieving its goal after posting net profit of NT$16.0 billion (US$517.72 million) last year, or earnings per share of NT$1.24.

The showing represented an 8.9 percent pickup from 2017, company data showed.

“Despite lingering uncertainty, the economic scene at home and abroad is less gloomy than expected so far and it might improve in the second half,” Taiwan Cooperative Financial president Chen Mei-tsu (陳美足) said, citing rallies across global bourses as evidence.

The firm’s main subsidiary, Taiwan Cooperative Bank (合庫銀行), plans to grow its outstanding loans by between 3 and 4 percent, faster than GDP growth of 2.27 percent forecast for the nation, Chen said, as the company favors a stable business approach.

Foreign-currency loans, which require higher borrowing costs, could increase by 8 percent, helping to offset ultra-low interest rates on New Taiwan dollar loans, she said.

Foreign-currency deposits are expected to grow 5.2 percent from NT$380 billion in December last year to NT$400 billion, Taiwan Cooperative Bank president Hwang Bor-chang (黃柏川) said.

Interest rates in Cambodia average between 9 and 10 percent, making it the second-strongest earnings contributor next only to Hong Kong among overseas and offshore operations, as firms seek to take advantage of the nation’s fast-growing economy, Hwang said.

Taiwan Cooperative Bank has filed applications to open a new outlet in Cambodia and a new branch in Laos to better serve Taiwanese businesspeople, Hwang said.

However, overall net interest income, a critical profit gauge, is expected to stay flat this year after rising 1 basis point last year, Chen said, as global central banks implement loose monetary policy to cope with an economic slowdown.

Overseas profit contributions could rise from 31 percent to 40 percent, Chen said.

Domestically, Taiwan Cooperative Bank would continue to focus on lending to small and medium-sized enterprises, Hwang said.

In addition, the lender is looking at 7.6 percent growth in mortgages and land financing this year, fueled by demand for factories and industrial plots amid the US-China trade dispute, Hwang said.

Analysts expect the conglomerate to distribute a dividend of more than NT$1 per share.

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