Taishin Financial Holding Co (台新金控) yesterday said that it expects growth in Taishin International Bank’s (台新銀行) corporate loans and wealth management businesses this year, thanks to returning Taiwanese companies and capital repatriation.
The banking unit reported a corporate loan book of NT$481 billion (US$15.31 billion) in the second quarter of this year, increasing 7.5 percent from a quarter earlier and 12.7 percent from a year earlier, company data showed.
Corporate lending was the bank’s fastest-growing lending business, compared with annual gains of 5.4 percent in mortgages and 7.4 percent in consumer unsecured loans over the period.
Photo: CNA
The bank said it expects the growth momentum in corporate loans to continue in the second half, as more Taiwanese companies with overseas operations are expected to return home and they would have higher fund demand for their investments, Taishin Financial head of wholesale banking Sharon Lin (林淑真) told an investors’ conference in Taipei.
“We are particularly upbeat for [the rise in loans to] small and medium-sized enterprises [SMEs], as their demand would increase on the back of a government subsidy of 1.5 percent in the processing fees for loans, compared with a 0.5 percent subsidy for non-SMEs,” Lin said.
Taishin International Bank aims to achieve single-digit percentage growth in loans for the whole of this year, she said.
In the second quarter, loans in New Taiwan dollar terms and those denominated in foreign currencies posted annual gains of 9.1 percent and 6.5 percent respectively, and NT dollar loans are expected to continue outpacing the foreign-currency loans, Lin said.
That is because many clients are holding back or borrowing less in US dollars amid uncertainties in the US Federal Reserve’s interest rate policy, she said.
“It seems to us that Fed might cut rates twice in the second half of this year after one reduction last month,” Taishin Financial president Welch Lin (林維俊) said.
While the US central bank’s rate cuts would drive down Taishin’s interest rate spread and net interest margin (NIM), it might also affect its investment returns, the company said.
NIM, a critical gauge of a bank’s profitability, was 1.23 percent as of the end of June, compared with 1.33 percent a year earlier, company data showed.
The bank in the first half saw its net fee income advance 4.8 percent annually to NT$6.5 billion, a record high, thanks to improvements in its wealth management and corporate financing businesses, Welch Lin said.
The bank has set up a task force to provide tax planning and financial investment advice for wealthy clients and businesses, he said.
To expand into Southeast Asia, the bank plans to open one branch in Vietnam and one office each in Labuan, Malaysia, and the capital, Kuala Lumpur next year, Lin said, adding that it is still waiting for approval to open an office in Shanghai.
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