Mega Financial Holding Co (兆豐金控), the nation's second-largest financial company by assets, expects to post "flat to small" profit growth for this year, due to a slowing economy, said the bank's president, Lin Tzong-yeong (林宗勇).
"This year we are conservative," Lin told reporters at a news conference yesterday.
Mega Financial, which has a 7 percent market share, will make less money this year from selling long-term investments, Lin said.
The lender, however, will focus on retail banking this year, targeting an increase of 50 percent in mortgage business, he added.
Joseph Shieh (謝劍平), an executive vice president, said Mega Financial will increase emphasis on investment-banking business this year as it wants to win more fees to compensate for dwindling interest-income margins.
Mega Financial, for instance, saw an 8 percent increase in loans to small and medium-sized enterprises last year, but expects the growth rate to stay at around 3 percent to 5 percent this year, he said.
To increase fee incomes, the company will strengthen its underwriting, derivatives, syndicated loans and wealth-management businesses.
As a result, Mega Financial hopes to enhance the contribution of fee incomes to account for 25 percent of total revenues this year, up from 16 percent last year, Shieh said.
Mega reported unaudited profit of NT$21.9 billion (US$679 million) for last year on Jan. 10, 21 percent higher than the bank's audited profit of NT18.1 billion in 2003.
Mega is interested in merging with First Financial Holding Co (第一金控), in which the government owns 34 percent, Lin said.
The government said last month that First Financial, the country's fifth-largest financial services company, would be the first holding company to merge.
"Everybody is interested," Lin said, adding, "We are targeting banks. Financial holding companies are even better. We haven't made a formal evaluation yet" of First Financial.
Shieh said Mega Financial is also interested in acquiring small and medium-sized lenders which specialize in consumer banking and have more than 50 branches in this country.
As for the previous bid to acquire President Securities Corp (統一證券), Lin said that the deal was dead already.
Mega Financial started in talks with President Securities over the proposed deal to buy the brokerage from Uni-President Group (統一集團) in the fourth quarter last year. At that time, Uni-President Group had indicated any sale of the brokerage should exceed NT$20 per share.
Lin said yesterday that Mega Financial would only like to offer a bid of between NT$15 and NT$18.5 per share for the brokerage.
Shares of Mega Financial rose 0.95 percent to NT$21.15 on the Taiwan Stock Exchange yesterday.
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