State-run Taiwan Cooperative Financial Holding Co (合庫金控) yesterday said that it plans to keep mortgage operations steady this year and tighten lending for second homes to support the government’s efforts to curb housing prices.
Currently, mortgage operations amount to NT$478.9 billion (US$15.87 billion) and property-linked lending stands at NT$680 billion, accounting for 35.79 percent of total outstanding loans at NT$19 trillion, company executive vice president Hsieh Chung-dea said.
Main subsidiary Taiwan Cooperative Bank (合庫銀行), the nation’s second-largest mortgage operator after state-owned Land Bank of Taiwan (土地銀行), intends to keep property lending steady this year from last year at NT$480 billion, Hsieh said.
The bank could emerge unharmed from home price corrections of up to 45 percent given its low loan-to-value ratio of 56 percent, Taiwan Cooperative Financial chairman Leon Shen (沈臨龍) said earlier this year.
The Ministry of Finance and Taipei City Government have said housing prices should drop by 30 percent, especially in the capital, to be reasonable and affordable.
Minister of Finance Chang Sheng-ford (張盛和) has reportedly asked state-run lenders to raise interest rates on homes not occupied by their owners to deter property speculation.
Taiwan Cooperative Bank has set interest rates at 2.06 and 2.07 percent for mortgage lending and charges an extra 25 basis points on second homes, Hsieh said.
Housing prices in New Taipei City’s Tamsui District (淡水) are under pressure of corrections due to large supply, while improving public infrastructure facilities may support prices in Linkou (林口) and Sansia (三峽) districts, although transactions have conspicuously slowed, Hsieh said.
The bank is seeking to strengthen foreign currency operations and lending to small and medium-sized enterprises to offset stagnant mortgage business, Hsieh said.
Taiwan Cooperative Financial posted NT$3.47 billion in net income as of last month, or NT$0.39 earnings per share.
The company’s shares closed down 0.31 percent to NT$16.15 yesterday, weaker than the TAIEX’s 0.11 percent rise, Taiwan Stock Exchange data showed.
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