Panhsin to strengthen its financial health

BIG PLANS::The bank is aiming for 5 percent loan growth on demand from small businesses as mortgage lending will be more difficult once the luxury tax takes hold

By Crystal Hsu  /  Staff Reporter

Sat, May 07, 2011 - Page 12

The Bank of Panhsin (板信銀行) aims to strengthen its financial health and expand its scale to help pave the way to becoming a listed lender in the next four years, company executives said yesterday.

The lender, which is based in New Taipei City (新北市), has made risk control its top priority over the past three years, during which its bad loan ratio dropped from 4.57 percent to 1.58 percent as of last month, Panshin chairman Liu Ping-hui (劉炳輝) said.

“The bank will continue to improve its capital structure while consolidating its niche as a small but efficient lender in the area,” Liu told a media briefing to celebrate the inauguration of its new -headquarters in Banciao District (板橋).

The 34-story building, with 20,000 ping (66,116m2) in floor space, is expected to boost Pan-hsin’s net worth from the current NT$9 per share to NT$20 per share after an asset reappraisal next year, Liu said.

Panhsin uses only three floors and plans to lease the extra space for rental income, he said.

“Some had offered to buy the building, but we prefer to make it our corporate base,” Liu said.

Pre-tax earnings equaled NT$150 million (US$5.21 million) in the first quarter and are expected to reach NT$600 million at the end of the year on the back of rental income, Liu said.

Panhsin, founded in 1957 as a credit cooperative and which -became a commercial bank in 1997, is not content with its current size or number of branches, bank spokesman Frank Teng (鄧福財) said.

“Besides pursuing organic growth, the bank is in talks with smaller peers and cooperatives to expand its scale,” Teng said.

Panhsin has a paid-in capital of NT$9.56 billion and has 46 branches nationwide.

“A deal may not be closed this year as acquisitions aren’t at the top of our agenda,” Teng said.

Rather, Panhsin aims to keep its nonperforming loan ratio below 1.4 percent toward the end of the year, while achieving loan growth of 5 percent, Teng said.

Teng expects demand from small and medium-sized companies to drive the loan growth as expansion in mortgage lending will become difficult after the implantation of the so-called luxury tax on short-term property transfers on June 1.

It will take Panhsin a few more years to improve its financial health and qualify to apply to trade shares in the local bourse, Teng said.

The ambition may be realized in four years, Panhsin president Chen An-shiung (陳安雄) recently told the media.