Mon, Aug 12, 2019 - Page 16 News List

Overseas bank branches’ profits grow

FOREIGN TRADE:Despite protests, Hong Kong was the most lucrative market for Taiwanese banks, while the US was the only region in which profits took a dive

By Kao Shih-ching  /  Staff reporter

The nation’s banks saw the combined profits of their overseas branches jump 21 percent annually to NT$38.32 billion (US$1.22 billion) for the first six months, the Financial Supervisory Commission said on Thursday.

The banks’ overseas branches saw their profits rise in all regions except the US, where the branches posted a 18.4 percent plunge in combined profits to NT$3.44 billion, due to higher personnel and compliance costs, the commission said.

Mega International Commercial Bank (兆豐銀行) spent more on its compliance program, including risk assessment, responses to regulators, and data tracking and collection, after it was fined for failing to meet anti-money laundering requirements in 2016, the commission said.

“Overall, high personnel costs weighed on profits for branches in the US. Some banks also chose to exit the US market and caused the collective profit decline,” Banking Bureau Deputy Director-General Huang Kuang-hsi (黃光熙) told a news conference in New Taipei City.

By comparison, Hong Kong remained the most lucrative market for Taiwanese banks’ overseas operations, despite pro-democracy protests that began in June over a proposed extradition bill.

Hong Kong Financial Secretary Paul Chan (陳茂波) has said that the Asian financial hub is entering “a very difficult economic environment” as trade declines and growth slows.

“Industries like retail, catering and transportation have taken a hit because of the recent violent unrest, with significant revenue drops,” Chan wrote in his official blog yesterday. “The depressed feeling in society is affecting consumer industries to different degrees.”

The combined profits of Taiwanese banks’ branches in Hong Kong advanced 23.7 percent to NT$20.49 billion in the first half of this year, accounting for 53 percent of total profits, the commission’s data showed.

So far this year, no Taiwanese banks have seen their Hong Kong operations affected by the protests.

E.Sun Commercial Bank (玉山銀行) told an investors’ conference on Wednesday that its Hong Kong branches still performed well.

The banks’ Chinese branches posted a 7 percent pickup in their combined profits to NT$3.78 billion, surpassing profits in the US for the first time, the commission said.

Taiwanese branches in Singapore saw their combined profits skyrocket 260 percent to NT$2.02 billion and branches in Japan reported mild growth of 4 percent to NT$2.6 billion, data showed.

Branches in Southeast Asia also reported strong profits of NT$5.92 billion in the first six months, up 90 percent year-on-year, as Taiwanese banks have expanded into more countries in the region, the commission said.

The total number of overseas branches climbed to 505 as of the end of June, an increase of 18 from a year earlier, it said.

Additional reporting by Bloomberg

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