Taishin expecting high single-digit loan growth

By Crystal Hsu  /  Staff reporter

Wed, Mar 06, 2013 - Page 13

Taishin Financial Holding Co (台新金控) expects its overall lending to grow by high-single digits this year with flattish interest margin after profits rose to an eight-year high last year, senior executives said yesterday.

“We expect high single-digit loan growth with steady net interest margin this year,” compared with last year, Taishin Financial chief financial officer Welch Lin (林維俊) told an investors’ conference.

Loans to small and medium-sized enterprises (SME) and unsecured lending may drive the growth, while corporate and secured lending would stay flat, Lin said, as the bank-centric conglomerate recovers some risk appetite amid an improving economic outlook.

Taishin Financial is looking for faster pickup in its underwriting and wealth management businesses as the company seeks to strengthen sales channels, customer bases and product lines, Lin said.

Net profit totaled NT$10.2 billion (US$337.15 million) last year, rising 8.5 percent from NT$9.4 billion the previous year, on the back of improved interest and fee income, company data showed.

Earnings per share were NT$1.29 last year, the highest in eight years.

“Last year was a good year for Taishin Financial in terms of earnings results,” Taishin Financial president Joseph Jao (饒世湛) said. “The strong performance may extend into this year.”

However, from October to December last year, net income slowed by 54 percent to NT$2.33 billion from the third quarter, attributable mainly to provision costs of NT$628 million, the firm said.

Net interest margin, a critical gauge of profitability for financial institutions, dropped to 1.43 percent last quarter, from 1.44 in the third quarter.

Taishin International Bank (台新銀行), the group’s main source of income, is still not qualified to set up branches in China due to its limited prior banking experience in the nation, denying it access to higher-yielding operations in the massive market.

As of Feb. 28, the bank posted only 200 million yuan (US$32.15 million) in yuan-denominated loans, Lin said.

A stalled attempt to integrate Taishin Bank and Chang Hwa Commercial Bank (彰化銀行), in which Taishin Financial owns a 22.5 percent stake, has limited expansion at home and abroad, Jao said.

“We will slow down our integration move and communicate with the Ministry of Finance first,” Jao said, after the ministry last month dismissed the proposed merger as “infeasible.”

Deutsche Bank financial analyst Pandora Lee (李懿璇) gave a “sell” rating on Taishin shares. “Investors may want to trim holdings in Taishin unless technology firms remain weak, making financial stocks better investment choices,” Lee said.

Taishin shares have rallied 5.19 percent so far this year, compared with the TAIEX’s 3.03 percent gain, Taiwan Stock Exchange data showed.