State-run Chang Hwa Commercial Bank (CHB, 彰化銀行) aims to increase its corporate lending and mortgage operations in the rest of this year after seeing its profit decline in the first six months, dragged by lackluster fee incomes and investment gains, top executives said yesterday.
Net profit tumbled 8.6 percent year-on-year to NT$6 billion (US$191 million) in the first half, as declining fee income and investment gains offset a mild increase in interest income, CHB chairwoman Joanne Ling (凌忠嫄) told an investors’ conference in Taipei.
Investment gains plunged 18.1 percent to NT$1.9 billion due to shrinking swap transactions, as market players expect interest rate cuts by the US Federal Reserve, she said.
Fee income fell 4 percent to NT$2.3 billion as uncertainty took a toll on fund sales, which were 20 percent lower from a year earlier, company data showed.
In addition, loans denominated in the New Taiwan dollar and foreign currencies all reported declines, the data showed.
“Although downside risks linger, CHB will be strengthening its mortgage operations and lending to small and medium-sized enterprises,” Ling said.
The lender, which relies heavily on corporate banking and international financing, would raise mortgage lending from NT$363.5 billion to NT$400 billion by the end of the year, Ling said.
The target reflects confidence that the local property will continue a stable recovery amid support from companies returning from China to avoid punitive tariffs imposed by Washington on Chinese goods, Ling said, adding that first-time homebuyers would also prove a credit-worthy source of clients.
As of June, mortgage operations accounted for 1.36 percent of total outstanding loans and might climb to 3 percent in late December, she said.
CHB would also reach out to companies that plan to relocate with favorable lending terms, Ling said.
The lender has approved NT$7 billion in loan applications to nine repatriating firms, she said.
Capital repatriation propelled by stricter asset disclosure rules abroad suggests need for wealth management and CHB would court high net-worth clients, Ling said, referring to people with at least NT$30 million in liquid assets.
The bank has achieved loan growth of 1.3 percent this year, short of its target of 3 to 5 percent, company spokesman Philip Tu (涂鴻堯) said.
“The showing suggests room for improvement and the firm already gained headway in July,” Tu said.
CHB said it would pay attention to the financial health of companies dependent on exports to the US from its operations in China, adding that none have reported difficulty so far.
However, the bank has NT$680 million in exposure to financially strained Powertec Energy Corp (寶德能源), but expects to emerge unscathed, as the local solar energy sector accounts for only 0.2 percent of total loans, Tu said.
DEAL LIKELY DEAD: As takeovers of semiconductor firms become national security issues amid a global microchip shortage, deals are becoming more difficult GlobalWafers Co (環球晶圓) failed to reach a breakthrough in a last-ditch bid to salvage its planned takeover of Siltronic AG, likely spelling the collapse of the US$5 billion deal. The Taiwanese technology company did not resolve the government’s concerns during a private meeting between GlobalWafers chairwoman Doris Hsu (徐秀蘭) and German Federal Ministry for Economic Affairs and Climate Action State Secretary Udo Philipp, people familiar with the matter said. Siltronic shares tumbled as much as 4.7 percent on the news on Friday, extending the stock’s decline for the year to more than 20 percent. While the ministry continues to examine the deal,
The US Department of Commerce on Tuesday said that a global survey of semiconductor chip producers and users shows a shortage will persist, sparked primarily by wafer production capacity constraints. The voluntary survey of 150 companies last fall in the supply chain confirmed “there is a significant, persistent mismatch in supply and demand for chips, and respondents did not see the problem going away in the next six months.” US Secretary of Commerce Gina Raimondo told reporters that the department “in a few instances didn’t really get what we needed and we’re going to go company by company and do personal engagement
BOOMING ORDERS: As orders move away from neighboring countries such as India, Pakistan’s economic bright spot has found new customers in South America and Africa Pakistan’s textile sector is bringing cheer to its flailing economy, with exports set to swell to a record after gaining an edge over South Asian rivals during the COVID-19 pandemic. Textile exports are poised to surge 40 percent from a year earlier to a record US$21 billion in the 12 months ending in June, said Abdul Razak Dawood, commerce adviser to Pakistan’s prime minister. Dawood said that the figure would expand to US$26 billion in the next fiscal year, surpassing the nation’s total exports last year, he said. The textiles industry — which supplies everything from denim jeans to towels for buyers
Samsung Electronics Co is stepping up spending on advanced chipmaking technology as it sees growing demand for its smartphones, displays and memory products. South Korea’s largest company reported 43.6 trillion won (US$36.17 billion) in semiconductor capital expenditure last year, eclipsing rivals as it acquired extreme ultraviolet lithography (EUV) machines to pursue an aggressive expansion of its most lucrative memory and system chipmaking. It expects a recovery in server and PC memory demand, and said foldables are already helping its sales growth, although declined to offer a forecast due to the high degree of uncertainty around supply chains and the COVID-19 pandemic. Samsung