First Financial seeks expansion opportunities

By Crystal Hsu  /  Staff reporter

Fri, Mar 01, 2013 - Page 14

State-run First Financial Holding Co (第一金控) is seeking expansion opportunities in China, Southeast Asia and Africa this year to boost its earnings abilities after overseas operations generated decent profits last year.

The conglomerate plans to set up five banking offices in China this year once Taiwan and China give the go-ahead, likely following a meeting of bilateral banking regulators next month, company chairman Tsai Ching-nian (蔡慶年) said last week.

First Financial favors rural areas of Henan Province for those outlets, enabling the group’s main subsidiary First Commercial Bank (第一銀行) to further tap the Chinese market and satisfy demand Taiwanese peers have opted to ignore, Tsai said.

The company plans to create a holding company to run the outlets once it has six of them, Tsai said.

Meanwhile, the bank is awaiting regulatory approval for its second branch in Chengdu, China, and is looking for partners to facilitate expansion in the massive Chinese market, Tsai said.

He added that First Bank prefers to own stakes of 70 percent to 80 percent in potential joint ventures.

Myanmar tops choices for overseas expansion elsewhere in Asia, Tsai said, after its government said it would allow foreign lenders with existing representative offices to acquire local peers or upgrade to branches this year.

“First Financial will take advantage of the regulatory easing,” Tsai said.

Africa represents another opportunity for overseas expansion, with an increasing number of Taiwanese firms establishing a foothold there and only one African state slipping into recession last year, despite the global slowdown, Tsai said.

Overseas operations underpinned an expansion of 6.2 percent in loans last year at First Financial, raising its net interest margin by 11 basis points, even though the stagnant economy and low interest rates squeezed profitability at home, First Financial investor relations head Annie Lee (李淑玲) told an investors’ conference yesterday.

Net income rose 35.5 percent year-on-year to NT$10.13 billion (US$348 million) last year, as profits at First Bank more than offset losses at its insurance, securities and investment trust units, Lee said.

First Financial gave a conservative guidance for this year, with overall lending projected to grow 3 percent and net interest margin to rise by 5 to 7 basis points, Lee said.

“The targets, set last quarter, may need to be revised upward after major economic bellwethers turned out stronger than expected this year,” Lee said.

First Financial shares closed flat at NT$18.9 on Wednesday, Taiwan Stock Exchange data showed.