E.Sun Financial Holding Co (玉山金控) yesterday said it aims to maintain fee income growth this year, despite headwinds in the domestic and international markets.
The company said it plans to achieve the goal partly through improved cross-selling among subsidiaries, after it merged E.Sun Insurance Brokers (玉山經保) and E.Sun Commercial Bank (玉山銀行) in March to raise utilization of client data.
Regulations require the consent of clients before they may be reached by our other subsidiaries, but most customers do not do so, company officials told an investors’ conference in Taipei.
E.Sun Financial said the merger would remove the barrier between its subsidiaries, allowing its insurance policy broker operation greater access to bank clients while conforming to regulatory guidelines.
“The drawback is that following the merger, our banking unit now faces higher costs and complexity in meeting internal control and auditing standards,” E.Sun president Joseph Huang (黃男州) said.
The insurance broker unit in the first quarter contributed net income of NT$146 million (US$4.51 million), and its merger into the bank has raised the bank’s net worth by NT$700 million, while bolstering its capital structure, Huang said.
E.Sun Commercial Bank’s bank of international settlements (BIS) ratio had improved by 7 basis points since the merger, with the figure printing 14.39 percent at the end of March, compared to 13.33 percent in the final quarter of last year, while capital adequacy ratio rose to 148.9 percent from 141.73 percent in the previous period, he said.
Huang said that net fees income in the first quarter rose 12.6 percent annually to NT$3.46 billion and that the company’s goal is to maintain double-digit percentage growth this year.
As for wealth management fees income, Huang said that the bank is working toward adjusting its sales breakdown to raise insurance policies contribution from 55 percent to 60 percent, while lowering fund products contribution from 45 percent to 40 percent.
“The adjustment is aimed at meeting clients’ needs for more stable returns from insurance products amid volatile and inclement market conditions,” he said, noting that fund products are more suitable for active investors looking for higher yields.
The firm also updated investors on its progress in overseas expansions, including the opening of a new banking branch last month in Sydney, Australia, and the January opening of a Chinese branch to serve the Pan Pearl River Delta region.
It said it is awaiting approval from regulators in Japan, Indonesia and Myanmar to open bank branches and representative offices.
In the first quarter, the company’s net income gained 16.3 percent annually to NT$3.7 billion, with earnings per share of NT$0.47.
E.Sun Financial chief financial officer Magi Chen (陳美滿) said net income contribution in the first quarter had doubled from the previous period.
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