State-run Hua Nan Financial Holding Co (華南金控) aims to increase its profits by 6 percent this year, driven by fee income as the low interest rate environment may constrain interest income, top executives said on Monday.
The bank-focused conglomerate announced the target during a spring gathering on Monday, after posting a record net income of NT$14.1 billion (US$421.1 million) last year. The results represent a 6.87 percent increase from 2014 and translated into earnings of NT$1.42 per share.
“We are seeking to increase profit by 6 percent this year despite the continued global slowdown and uncertainties,” company chairman Shiu Kuang-si (徐光曦) said, adding that all subsidiaries are to make contributions.
Hua Nan Financial vice chairman Lin Ming-cheng (林明成) said the goal is achievable if the main subsidiary, Hua Nan Commercial Bank (華南銀行), exercises caution and boosts fee income.
The lender lags behind peers in terms of fee income increase, suggesting room for improvement, Lin said.
Lin urged colleagues to design competitive investment products that will help clients better manage their wealth without incurring unnecessary risks.
Many Taiwanese banks report significant losses from yuan-based target redemption forwards, an investment tool that allows clients to bet on yuan appreciation.
The conglomerate is looking at flattish net interest margin (NIM) this year, as the central bank is widely expected to cut interest rates next month and in June to help prop up the economy.
NIM stood at 1.08 percent in December last year.
To raise income, Hua Nan Bank is to adjust its loan books, lowering loan positions that generate low yields and enhancing operations that bear higher returns, Hua Nan Bank president Bruce Yang (楊豐彥) said.
The lender is to increase loans to small and medium-sized enterprises and at offshore banking units by double-digit percentage points and cut lending based in yen now that Japan’s central bank introduced negative interest rates, Yang said.
Taiwan has no need for such a drastic monetary policy to encourage corporate lending that has increased at a modest pace, despite the economic weakness, Lin said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
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Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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