Tue, May 14, 2019 - Page 12 News List

Taiwan Cooperative earnings rise

By Crystal Hsu  /  Staff reporter

State-run Taiwan Cooperative Financial Holding Co (合庫金控) yesterday said that it expects further improvement in its earnings ability in the rest of this year after achieving a modest earnings increase last quarter.

The bank-focused conglomerate reported net profit of NT$NT$4.06 billion (US$130.6 million) for the January-to-March period, up 5.67 percent from the same period last year, as interest and fee incomes rose, it told an online investors’ conference.

The uptrend continued last month with net income of NT$1.45 billion, pushing cumulative earnings to NT$5.51 billion in the first four months, or earnings per share of NT$0.42, company data showed.

Main subsidiary Taiwan Cooperative Bank (合庫銀行), which generated 86.36 percent of the total profit, aims to grow foreign-currency deposits by 10 percent this year, as foreign-currency based operations yield higher margin, it said.

The interest spread rose 5.3 basis points to 1.427 percent last quarter, allowing interest income to rise 1.03 percent and fee income 1.4 percent, the company said.

Subdued global trade tensions and a dovish monetary stance by the US Federal Reserve last quarter helped boost corporate confidence and financial markets, it said.

The landscape looks turbid ahead after Washington on Friday imposed 25 percent tariffs on US$200 billion of Chinese goods, while terms for Brexit remain moot, the company said, adding that Taiwan’s presidential election in January next year is adding uncertainty.

Taiwan Cooperative Bank has set aside NT$10 billion to support the “Invest Taiwan” program to woo local firms with plans to move manufacturing facilities from China to avoid heavy tariffs.

The lender said it would set up two branches in Cambodia and Laos later this year after obtaining regulatory approval in Taiwan.

They might help raise the overseas earnings contribution toward 40 percent, from slightly more than 30 percent, it said.

The expansion would help advance the government’s New Southbound Policy, which aims to encourage Taiwanese firms to cut dependence on China as their main export destination, it added.

Taiwan Cooperative Bank would continue to boost lending to small and medium-sized enterprises, as well as wealth management and digital banking, it said.

The lender plans to hire 110 new management associates to meet the goal, it added.

Wealth management business contributed 51 percent of total fee income, while syndicated loans generated the rest, it said.

The bank, a major mortgage operator in Taiwan, expects housing transactions to stay put this year after increasing 4.5 percent last year.

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