Cooperative Financial to bet on retirees

CASHING OUT::The group’s bank is the nation’s biggest provider of reverse mortgages, which help older people maintain their standard of living by leveraging their property

By Crystal Hsu  /  Staff reporter

Sat, Sep 01, 2018 - Page 12

State-run Taiwan Cooperative Financial Holding Co (合庫金控) is to sit out the competition among local peers for Web-only bank licenses and focus on business opportunities linked to the nation’s graying population, a company executive said.

“We have no intention of competing for the two Internet-only bank licenses, because such operations are different from the online banking services offered by conventional lenders,” Taiwan Cooperative Financial president Chen Mei-tsu (陳美足) told an investors’ conference on Thursday.

The Financial Supervisory Commission has announced plans to issue two licenses for Web-only banks in Taiwan, which must allow non-banking enterprises to own a controlling stake, in line with international trends.

State-run Mega International Commercial Bank (兆豐銀行), First Commercial Bank (第一銀行) and Taiwan Business Bank (台企銀) have said they are interested in setting up new ventures in partnership with domestic telecoms.

By contrast, Chen said the holding, which focuses on its banking business, prefers a stable and conservative approach to improve its earnings ability.

The conglomerate’s main subsidiary, Taiwan Cooperative Bank (合庫銀行), is to open “digital branches” and expand online banking services to meet client’s needs, Chen said.

The lender, which operates 270 outlets nationwide, ranks first in terms of reverse mortgage operations, which totaled NT$6.4 billion (US$208 million) in the first half of the year, Chen said.

Reverse mortgage operations, part of the government’s response to Taiwan’s fast-growing aging population, help elderly home owners maintain financial independence by mortgaging their property.

The lender is to focus on such activities by providing suchclients with one-stop trust services that cover leasing and property rights, long-term care, prepayment of services and other solutions, Chen said.

Judging by the loans it extended in the first half, the bank also outperformed peers in supporting the government’s New Southbound Policy, she said.

The cautious strategy paid off, as Taiwan Cooperative Financial posted NT$8.09 billion in net income in the first six months of the year, an 8.45 percent increase from the same period last year, Chen said.

Overseas operations contributed 30.26 percent of the company’s total earnings, as lending in Southeast Asia generated higher yields, Taiwan Cooperative Financial said.

Later this year, Taiwan Cooperative Bank is to add two branches in Cambodia, where it already has five offices, Chen said.

The lender is pressing ahead with portfolio adjustments by overweighting assets that generate better yields and underweighting low-yield assets, Chen said.

The bank’s non-performing loan ratio dropped to 0.35 percent by the end of June, down 6 basis points from the end of the second half of last year, company data showed.