State-run Taiwan Cooperative Financial Holding Co (TCFH, 合庫金控) yesterday said that it aims for a slight growth in its mortgage operations this year, but would pursue a double-digit gain in land and construction financing on the back of companies returning home from China.
The bank-focused conglomerate is seeking to raise mortgage business to NT$531 billion (US$17.55 billion), a modest 2.7 percent increase from NT$517 billion at the end of last year, TCFH president Chen Mei-tsu (陳美足) told investors during a Webcast.
Land and construction financing could grow by 13.2 percent from NT$106 billion to NT$120 billion, with firms moving manufacturing bases home providing the catalyst, Chen said.
Real demand and low borrowing costs would lend support to the local property market, although it might be affected by the COVID-19 outbreak in the first half of this year, Chen said.
The market would return to a status of recovery once the virus is contained, she said.
The conglomerate posted NT$2.68 billion in net profit in the first two months of this year, outpacing the same period a year earlier by 4.96 percent and ahead of its budget by 7.9 percent, Chen said.
The performance results came after TCFH’s main subsidiary, Taiwan Cooperative Bank (合庫銀行), set aside NT$838 million in bad loans to the now-defunct Far Eastern Air Transport (遠東航空).
That central banks around the world have cut interest rates to support economic growth would put pressure on Taiwan’s central bank to do the same tomorrow, Chen said, adding that low interest rates would squeeze lenders’ room for profitability.
TCFH has been trimming investment positions amid wild market volatility at home and abroad, she said.
The group has yet to finalize its dividend policy for earnings last year, but would not depart far from previous distributions of NT$0.75 in cash and NT$0.3 in stock, she said.
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