Chinatrust Financial Holding Co (中信金控), which owns the nation’s biggest credit card issuer, said its net profits in the first quarter rose 10.7 percent from a year ago to NT$3.76 billion (US$120 million), or earnings per share of NT$0.38, as the company’s core businesses have gradually recovered from the financial crunch.
Net interest margin (NIM) in the first three months was 1.48 percent, up slightly from 1.47 percent recorded in the previous quarter, due to the current low-interest rate environment and fierce competition in the market, the company said.
“With improving asset quality and a good bad-loan recovery, the first quarter posted solid profits,” financial executive Hsu Miao-chiu (許妙靜) told a media briefing, adding that net interest income edged up 2.4 percent in the first quarter from a year ago.
With economic growth picking up momentum, total fee income grew for the fifth consecutive quarter to NT$6.4 billion, representing a 2.7 percent quarterly increase and a 21.2 percent growth from a year ago, she said.
Wealth management businesses benefited from rising global investment and growing demand for financial management as fee income from such services climbed 47.4 percent year-on-year in the first quarter, the company’s report showed.
The non-performing loan ratio dropped for three quarters to 1.33 percent, compared with 1.45 percent recorded in the previous quarter, because of improved domestic asset quality, leading provisions to decline to NT$267 million, the lowest level in the firm’s history, the report said.
James Wu (吳永新), an analyst with BNP Paribas Securities, Asia, Ltd said in a statement before the company released its results that he expected Chinatrust’s net profit to be in line with market expectations.
Wu forecast that growth momentum in earnings this year will be “brighter as fundamental drivers are at work.”
“A mild pickup in NIM, a better fee income and low provisions coming out of the 2009 recession will all add up to better earnings this year,” he said.
Separately, Hsu said that Chinatrust was in the final stage of raising 2.5 billion shares — nearly NT$4.2 billion, or NT$16.8 per share — in private-placement equity, hoping that the capital raising project will be completed by June 25.
However, when asked whether Peter Kwok (郭炎), a former member of the Chinese People’s Political Consultative Conference, would be among the investors for the private raising, Hsu said Chinatrust would be cautious about its fundraising sources.
Shares of Chinatrust Financial rose 1.14 percent to close at NT$17.8 in Taipei trading yesterday.
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