KGI Bank (凱基銀行), a unit of China Development Financial Holding Corp (中華開發金控), yesterday said that its lending momentum is expected to recover in the second half of this year.
The bank’s outstanding loans rose by NT$8 billion (US$271.11 million) from NT$361 billion as of the end of March to NT$369 billion as of the end of June, company data showed.
However, the increase was 42 percent lower than the NT$14 billion in new lending it recorded a year earlier, the data showed.
In the first half of this year, KGI Bank’s loans to big firms dipped 2 percent annually to NT$211 billion, accounting for 57 percent of all loans, as some debtors repaid their loans, KGI Bank president Amy Tsao (曹慧姝) told an investors’ conference.
Mortgages grew 8 percent year-on-year to NT$84 billion in the first half, while loans to small and medium-sized enterprises rose 28 percent to NT$36 billion, KGI said.
As the central bank’s rate cut has affected its net interest margin, the bank has become more selective in approving loans, Tsao said.
Net interest margin rose to 1.16 percent at the end of June, from 1.07 percent a quarter earlier, Tsao said, adding that the bank’s interest income rose 9.6 percent from a year earlier to NT$3.6 billion.
Slowing COVID-19 infections, a rebound in business activity and investments by returning Taiwanese firms are likely to fuel the bank’s lending business in the second half of this year, Tsao said.
The bank is aiming for an annual growth of 5 percent in lending for this year, she said.
Deposits in the first half grew 10 percent from a year earlier to NT$492 billion, which the bank attributed to demand deposits increasing 47 percent to NT$164 billion and New Taiwan dollar-denominated deposits rising 7 percent to NT$227 billion.
Net fee income declined 10 percent year-on-year to NT$916 million, as fee incomes from credit card and wealth management businesses plunged 26 percent and 13 percent respectively, the bank said.
KGI’s first-half net profit reached NT$1.72 billion, making it the second-most profitable arm of China Development Financial after China Life Insurance Co (中國人壽), which posted a net profit of NT$2.21 billion, data showed.
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