The board of Taishin International Bank (台新銀行), a subsidiary of Taishin Financial Holding Co (台新金控), yesterday approved a plan to sign a cooperation memorandum with East West Bank China Ltd (華美銀行) to pave the way for its expansion into the Chinese market.
The Taiwan lender said it would ink the memorandum as soon as the Financial Supervisory Commission (FSC) gives the go-ahead.
Taishin Bank is the second local lender proposing to sign a memorandum of understanding (MOU) with the Shanghai--headquartered bank in a week. On Nov. 24, Ta Chong Bank Co (大眾銀行) announced a similar financial deal with the Chinese subsidiary of East West Bank, a Chinese-US bank in California serving consumers and businesses in the US and Greater China.
With expectations of increased cross-strait financial exchanges, financial stocks gained the most among major sectors on the main bourse yesterday, up 1.29 percent compared with a 0.77 percent increase on the TAIEX, Taiwan Stock Exchange data showed.
“Financials gained on news that the Chinese government will allow Land Bank of Taiwan (土地銀行), First Commercial Bank (第一銀行), Chang Hwa Commercial Bank (彰化銀行) and Taiwan Cooperative Bank (合庫銀行) to start banking operations in China,” -SinoPac Securities Corp (永豐金證券) said yesterday in a client note.
The four Taiwanese banks won regulatory approval to open branches in China in September.
Meanwhile, the central bank said yesterday in a statement that it, the FSC and the Mainland Affairs Council were studying a proposal from state-run Mega International Commercial Bank (兆豐國際商銀) to sell yuan--denominated traveler’s checks.
Financial shares also attracted investors’ interest because of their improving asset quality, strong momentum in earnings growth and low valuation, Primasia Securities Co (犇亞證券) said in a separate note.
During the first 10 months of the year, domestic banks posted NT$156.3 billion (US$5.08 billion) in pre-tax profits, which was higher than the previous peak of NT$155.4 billion recorded in 2004, according to the latest figures from the FSC.
The overall non-performing loan ratio of local banks dropped to 0.73 percent last month from 0.78 percent in September, while the coverage ratio rose to 135.83 percent from 128.91 percent, indicating signs of improving asset quality, the FSC said on Tuesday.
“Backed by this strong bottom line performance and with a positive 2011 outlook, we see the current valuation of 1.3 times price-to-book ratio for domestic banks as undemanding,” -Primasia said, adding that investors should load up on more financial shares whenever they see pullbacks in prices.
Shares in First Financial Holding Co (第一金控), parent of First Bank, rose 4.59 percent to finish at NT$22.80 and Chang Hwa Bank added 3.23 percent to close at NT$22.35. Shares in Mega Financial Holding Co (兆豐金控) gained 1.18 percent to end the day at NT$21.5, while shares in Taiwan Cooperative Bank fell 0.22 percent to NT$22.85.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The US Department of Commerce last week ordered multiple chip equipment companies to halt shipments of certain tools to China’s second-largest chipmaker, Hua Hong Semiconductor Ltd (華虹半導體), its latest action to slow the country’s development of advanced chips, two people familiar with the matter said. The department sent letters to at least a handful of companies informing them of restrictions on tools and other materials destined for two Hua Hong facilities US officials believe make China’s most sophisticated chips, the people said. Top US chip equipment companies Lam Research Corp, Applied Materials Inc and KLA Corp, each of which has significant
RSS