Thu, Aug 06, 2020 page12

• Bank SinoPac says profit at HK branch down 10%

  • By Kao Shih-ching / Staff reporter
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  Bank SinoPac (永豐銀行) yesterday said that net profit at its Hong Kong branch fell 10 percent year-on-year in the first half of this year due to civil unrest and the COVID-19 pandemic, which caused the branch’s deposits to drop 3 percent annually over the period.

  The bank did not provide exact profit figures for the branch, which made profit of HK$192 million (US$24.77 million) in the same period last year.

  While the Hong Kong branch is still more profitable than other overseas branches, the passage of Beijing’s National Security Law for the territory at the end of June would mean more challenges for the branch in the long term, Bank SinoPac president Eric Chuang (莊銘福) told reporters on the sidelines of an investors’ conference in Taipei.

  However, the bank expects to see rapid growth in its branch in Vietnam, which reported a 50 percent gain in lending in the first six months, thanks to booming business there, despite the pandemic, Chuang said.

  The lender, the banking arm of SinoPac Financial Holdings Co (永豐金控), reported that net profit declined 11 percent annually to NT$2.19 billion in the second quarter, after an annual drop of 16 percent in the first quarter, in light of lower interest income caused by the central bank’s rate cut in March.

  Net profit in the first six months retreated 15 percent annually to NT$4.81 billion, Bank SinoPac said.

  Net interest margin (NIM), which gauges a bank’s profitability, slid to 0.96 percent as of the end of June, down from 1 percent a quarter earlier, as the bank trimmed lending rates in the second quarter, Chuang said.

  “We forecast the NIM to increase up to 1 percent in the second half of this year, as we would cut deposit rates to improve our profitability,” he said.

  The bank’s lending rose 11.3 percent year-on-year to NT$1.14 trillion in the first half, as companies preferred to have more cash on hand to weather the pandemic, with loans to big companies advancing 23.4 percent and those to small and medium-sized enterprises gaining 12.8 percent, he added.

  Bank SinoPac’s DAWHO digital account service, introduced in June last year, has registered a total of 470,000 accounts as of the end of June, as young consumers favor its interest rates of up to 1.1 percent for demand deposits and no handling fees for fund purchases, Bank SinoPac said.

  The number of DAWHO accounts is forecast to surpass those of a similar service offered by O-Bank (王道商業銀行) in the second half of this year and rank third after Taishin International Bank (台新銀行) and Cathay United Bank (國泰世華銀行), SinoPac Financial president Stanley Chu (朱士廷) said.

  Meanwhile, SinoPac Securities Corp (永豐金證券) posted a 17 percent annual increase in net profit to NT$943 million for last quarter on the back of a 67.6 percent advance in fee income at its wealth management operations.
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