State-run Mega International Commercial Bank (兆豐銀行) yesterday said that profitability at its Hong Kong branch might decline this year due to conservative operations amid political uncertainty in the territory.
Robert Tsai (蔡永義), president of the banking arm of Mega Financial Holding Co (兆豐金控), said that the Hong Kong branch has turned conservative in lending operations after Beijing pushed through national security legislation for the territory.
Profitability at the Hong Kong branch weakened 10 percent in the first half of this year, although it remains the most profitable among its overseas units, Tsai said on the sidelines of a public function in Taipei.
Photo: Lee Chin-hui, Taipei Times
It is wise to adopt a wait-and-see attitude when things turn fluid and muggy, which slows the bottom line, Tsai said.
Interest rate cuts around the world also weighed on the branch’s earnings, leaving a 10 percent gap so far from the budget for this year, he said.
The branch is seeking to close the gap by improving profit from its foreign-currency assets and foreign-exchange trading, he said.
In Taiwan, the most profitable state-run lender is teaming up with local property management companies to provide extra solutions for elderly people who are interested in reverse mortgages.
Elderly people can opt to earn rental income from properties they own or sign trust contracts for real-estate so they can enjoy financial freedom in retirement, Tsai said.
The solutions aim to support the government’s response to the nation’s fast-aging population and need for social security.
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