Chinatrust Commercial Bank’s (中國信託商銀) new president and chief executive officer Michael DeNoma vowed yesterday to double “economic profits” in the next three to five years, totaling a quadrupled growth in the risk-adjusted profit for the next decade.
Economic profits are the difference between a company’s total revenue and its opportunity costs, and thus represent the portion of free cash flows after a capital charge is subtracted.
In the first five-year phase, the doubled economic profit from that delivered last year will come from the local market while the doubled growth in the next five-years would come from overseas markets, DeNoma told a media briefing yesterday.
When asked if the bank would seek mergers and acquisitions in its drive to become a “Chinese international bank” by 2020, he said “our first priority is organic growth.”
The appointment of DeNoma, who had been chairman of the bank after leaving Standard Chartered, was approved by the board of Chinatrust bank yesterday. In replacing DeNoma as chairman, the board is likely to promote from within.
The board also promoted James Chen (陳佳文) from president of institutional banking to the CEO of the global institutional banking group, while Oliver Shang (尚瑞強), who had been president of the retail banking operation has become CEO for global retail banking.
DeNoma also announced a reorganization plan that expands the number of general managers with profit accountability from six to 70.
To expand a 280-member “talent factory,” the 70 general managers will be in charge of training two possible candidates to shoulder profit responsibility, each of whom will train another two candidates, he said.
The general managers “have decision rights,” DeNoma said. “Banking used to be top down.”
Vowing to “listen to the voice of its customers,” Chinatrust would waive or reduce eight major transaction fees imposed on credit card services, including the cost of replacing a card — which will drop from NT$1,000 to NT$100 — starting next month, Shang said.
“By waiving these fees, we aim to better our services to our credit cardholders, which, in return, we believe will help boost our client base,” Shang said.
Meanwhile, in a filing to the stock exchange, parent Chinatrust Financial Holding Co (中信金控) yesterday reduced its net income for last year to NT$2.44 billion (US$77 million), or earnings per share of NT$0.15, from NT$3.34 billion reported in January due to adjustments made for bad debts at its US unit. The company posted a profit of NT$14.7 billion in 2008.
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