First Financial Holding Co (第一金控) said yesterday it had sold retail investors NT$80 million (US$2.5 million) in structured notes linked to US automaker General Motors Corp (GM), but its clients should not suffer losses.
Most of these structured notes are principal-guaranteed, Annie Lee (李淑玲), deputy head of First Financial’s strategy and planning division, told an online investors’ conference.
“There should be no losses incurred by our retail investors,” she said, adding that the company itself has no investment exposure to GM.
The Financial Supervisory Commission said on Tuesday that 20 local banks had a total of NT$4.4 billion in investment exposure linked to GM, including NT$3.45 billion worth of structured notes. It said a total of NT$3.33 billion of the notes were principal-guaranteed.
Lee told the online conference that First Financial also had an exposure of NT$23 billion in loans to the loss-making Taiwan High Speed Railway Corp (台灣高鐵) as well as another NT$2 billion in the railway’s preferred shares.
Facing a protracted slowdown, First Financial expects its full-year earnings to decline this year, including a 20 percent year-on-year drop in fee income, Lee said, refusing to provide details.
Its banking subsidiary will see a slightly higher bad-loan ratio of 1.8 percent, up from 1.55 percent as of March, she said.
As for its China expansion plans, Lee said that the company was not ruling out any possibilities to expand and serve its Taiwanese business clients although any such deals would require regulatory approval.
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