Taishin Financial Holding Co (台新金控) yesterday gave a rosy outlook for fee income and the interest rate spread this year, but was silent on progress toward acquiring Prudential Life Insurance Co of Taiwan (保德信人壽).
Taishin Financial in December last year submitted an application with the Financial Supervisory Commission (FSC) regarding its bid for the local unit of US-based Prudential Financial Inc.
The commission has not yet approved the deal and on Monday said that Taishin Financial had failed to explain the financial resources it would use for the acquisition.
Photo: Kelson Wang, Taipei Times
Taishin Financial has said that it plans to raise money by issuing new shares, but it did not present a clear timetable, the FSC said.
“It is unlikely that the commission would approve such an uncertain plan,” FSC Chairman Thomas Huang (黃天牧) said.
Taishin Financial president Welch Lin (林維俊) yesterday declined to comment on the criticism.
“We have strived to meet the regulator’s requirements and we will continue negotiating, hoping to get the green light soon,” Lin told an investors’ conference in Taipei, without disclosing a timeframe for gaining regulatory approval.
Chinese-language media have reported that Taishin Financial must obtain the commission’s permission by the middle of May, or it might be in breach of an agreement with the seller.
Meanwhile, Taishin Financial said that its net fee income is expected to accelerate after a mild gain of 3.9 percent to NT$13.99 billion (US$494.99 million) last year, on expectations that credit card spending would regain momentum this year amid recovering consumption following the COVID-19 pandemic.
Net fee income from credit card services offered by its banking arm, Taishin International Bank (台新銀行), fell 6.2 percent annually last year, offsetting fee income gains in the bank’s wealth management operations and securities trading services at Taishin Securities Co (台新證券), company data showed.
“The syndicated loans halved last year amid the pandemic,” Taishin International Bank head of wholesale banking Sharon Lin (林淑真) said. “We forecast it to be better than last year, but we are uncertain if it can return to pre-pandemic levels.”
Taishin International Bank’s net interest margin, a gauge of profitability, slid to 1.12 percent at the end of last year, while its interest spread, the difference between its lending and deposit rates, climbed 2 basis points to 1.46 percent from the previous quarter, company data showed.
It would boost its net interest margin and spread by improving its loan and deposit mix, the bank said, adding that the two gauges are expected to rise further in the second half of this year.
Demand deposits made up 58.8 percent of its total deposits, compared with 53.9 percent a year earlier, it said.
Taishin Financial’s net earnings remained flat at NT$14.48 billion last year compared with a year earlier, attributable to a 39 percent plunge in Chang Hwa Bank’s (CHB, 彰化銀行) net profit last year, Lin said.
Taishin Financial has a 22.55 percent stake in CHB.
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