Chang Hwa Commercial Bank (CHB, 彰化銀行) is aiming for record earnings this year after posting a high single-digit percent gain in profit in the first half of the year, aided by better financial operations.
The Taipei-based state-run lender saw its net income increase 8.5 percent from a year earlier to NT$6.57 billion (US$213.84 million) in the first six months, while revenue rose 5.2 percent to NT$7.47 billion.
The results translated into earnings of NT$0.67 per share, better than NT$0.63 for the same period last year.
“A stable economy at home and abroad might continue to lend support for core businesses,” CHB chairman Chang Ming-daw (張明道) told reporters on the sidelines of an investors’ conference on Monday.
Fair economic scenes and low borrowing costs encourage firms to expand capital spending and upgrade facilities.
Analysts expect CHB’s pretax income for the whole year to approach NT$15 billion, after reaching NT$9.05 billion in the first seven months.
Trade and investment income soared 58.6 percent in the first half, while net interest income picked up 4.4 percent, the bank’s statement said.
Outstanding loans rose 2.5 percent to NT$1.39 trillion, with New Taiwan dollar loans increasing 3.2 percent while foreign currency lending shrank 0.7 percent, the bank said.
The changes had to do with ongoing adjustments to strengthen ties with small and medium enterprises and cut dependence on large-cap clients, because the latter generated lower yields, the bank said.
Deposits rose 4.6 percent to NT$1.68 trillion with a 4.5 percent increase in NT deposits and a 12 percent gain in US dollar deposits, the bank said.
Investment interest in the US dollar picked up significantly following a series of rate hikes by the US Federal Reserve.
However, fee income declined 4.4 percent due to adjustments in its wealth product portfolio that favored fund products over insurance policies, it said.
The bank said it plans to offer more fund products in the coming months to reduce its dependence on insurance policies to drive fee incomes.
CHB shrugged off concerns over the quality of its assets, saying its bad loan ratio has tapered off after reaching 0.4 percent in June due to irregular interest payments by an energy company.
“The client resumed normal payment in July,” it said, adding that it has also been cautious with mortgage operations.
Total mortgage lending stood at NT$271.9 billion this year, lower than last year’s NT$286.7 billion, company data showed.
CHB has been reducing its mortgage operations since 2013, Chang said.
The bank on Tuesday next week is to distribute a cash dividend of NT$0.45 per share and an extra stock dividend of NT$0.4 per share from last year’s earnings.
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