State-run Hua Nan Financial Holding Co (華南金控) aims to achieve stable and modest profit growth this year — following last year’s flat results — as it seeks to increase its loan books at offshore banking units and overseas branches, top executives said yesterday.
The bank-focused conglomerate is looking to grow profits this year by 4 percent to 5 percent from last year’s net income of NT$14.1 billion (US$458.31 million), driven mainly by a double-digit increase in its offshore and overseas lending business, Hua Nan Financial president Derek Chang (張雲鵬) said.
Hua Nan Commercial Bank (華南銀行), the group’s main source of income last year with a 97 percent earnings contribution, is seeking to increase its overseas and offshore lending operations by 10 to 15 percent this year, supported by an improving global economy and business environment, Chang said.
“While interest spreads are tapering off in overseas markets, they remain higher than in Taiwan,” which has the lowest borrowing costs in Asia because of excessive liquidity and competition, Chang said.
Offshore and overseas operations are expected to generate 40 percent of overall earnings this year, compared with last year’s 39.2 percent, Hua Nan Financial chairman Wu Tang-chieh (吳當傑) said, adding that the bank would also look for syndicated loan opportunities abroad.
Wu, a former deputy minister of finance, has decided to give top priority to legal compliance and risk control and therefore advocates a cautious and down-to-earth business approach.
“A penny saved is a penny earned,” Wu said, alluding to the US$180 million fine the New York State Department of Financial Services imposed on state-run Mega International Commercial Bank’s (兆豐銀行) New York branch in September last year for compliance failure years ago.
On the domestic front, Hua Nan Bank aims to increase the number of credit cards it has in circulation to 1.05 million this year, from last year’s 930,000 cards, which would allow it to become one of the nation’s top-10 card issuers, a rise from its present 11th place, bank vice president Li Tsung-hsien (李宗賢) said.
Hua Nan Securities Co (華南永昌證券), the group’s brokerage arm, is seeking to outperform its state-run peers in market share this year by courting affluent clients, company president Chen Chin-feng (陳錦峰) said.
The security house has benefited from ongoing liquidity-driven rallies on the local bourse, but it has to brace for uncertainty linked to upcoming US Federal Reserve interest rate hikes, Britain’s departure from the EU and growing tension between the US and its trade partners, Chen said.
In related news, South China Insurance Co (華南產物保險) president Kevin Tu (?志佶) said his company was the provider of compulsory automobile liability insurance for a tour bus that crashed near Taipei’s Muzha (木柵) on Monday night, leaving 33 people dead and 11 injured.
Each dead or seriously injured person could be awarded NT$2 million in compensation, Tu said, adding that the money would come from a reserve fund and would not affect the company’s bottom line.
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
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