State-run Chang Hwa Commercial Bank (CHB, 彰化銀行) aims to keep business growth targets for this year unchanged as many economies around the world recover from the COVID-19 pandemic, the bank said yesterday.
“We strive to boost profitability this year as planned, being aware that the COVID-19 pandemic poses lingering uncertainty at home and abroad,” CHB spokesman Chen Bin (陳斌) told an online investors’ conference in Taipei.
Chen gave the cautiously optimistic outlook after the bank’s financial performance continued to disappoint in the first quarter of this year.
Photo: CNA
Pretax income fell 23 percent year-on-year to NT$2.38 billion (US$85.86 million), while net profit shrank 7.5 percent to NT$6.9 billion, or earnings per share of NT$0.19, company data showed.
The soft earnings were because financing weakened amid the worldwide COVID-19 crisis, and interest rate cuts by global central banks squeezed interest and fee incomes, the bank said, adding that a conservative investment strategy also weighed on trading income.
Interest spread for loans in local and foreign currencies was 1.18 percent last quarter, while net interest income averaged 0.86 percent, it said, adding that both rates were lower than in the previous quarter.
Sentiment has improved, as evidenced by an increase in syndicated loan interest and other banking operations, Chen said, attributing the trend to the rollout of COVID-19 vaccines in the US and Europe.
CHB would increase its overseas banking operations, he said, adding that the bank’s domestic operations would target clients with high net worth.
Overseas branches and local branches’ offshore banking units generated 28.8 percent of pretax profit, down from an average of 37.5 percent last year, Chen said, adding that their contributions would likely gain momentum later this year.
CHB said that it raised stakes in local equities last quarter, and would acquire more local and foreign bonds this quarter to raise yields.
The lender said it would respect the decision by major shareholder Taishin Financial Holding Co (台新金控) to sell its stake in CHB to end a long-standing management dispute with the Ministry of Finance, another major shareholder.
A local COVID-19 outbreak is dampening sales of wealth management products, but the effect would likely be temporary if the authorities keep infections at bay, CHB said.
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