State-run First Financial Holding Co (第一金控) has trimmed its growth target for fee income and its wealth management business this year as the ongoing COVID-19 outbreak could weigh on investment sentiment, the bank-focused conglomerate told an online earnings conference on Monday last week.
“We have adjusted earnings expectations in the wake of the virus outbreak and cut our growth target for wealth management this year from 15 percent to 10 percent,” First Financial investment relations head Anne Lee (李淑玲) said.
First Financial might still achieve a decent improvement in profit this year if authorities could quickly bring the health crisis under control, and if the US and European countries remain on course to emerge from the COVID-19 pandemic in the second half of this year, Lee said.
Photo: Peter Lo, Taipei Times
The company reported NT$5.03 billion (US$181.45 million) in net income in the first quarter, an increase of 71 percent from last year, or earnings per share of NT$0.39.
Net income at its main subsidiary, First Commercial Bank (第一銀行), rose 32.8 percent year-on-year to NT$4.4 billion, but Lee said that fee income, the group’s main profit driver, would remain vulnerable during the outbreak, with the pinch more evident in its wealth management business.
The profit expected from wealth management this year has been adjusted to NT$4 billion, down from the NT$4.4 billion previously forecast, she said, adding that the NT$8 billion projected previously from overall fee income would be somewhat affected.
Although the group obtained a license to manage the wealth of high-end customers, it is having difficulty promoting itself due to social distancing measures, Lee said.
The business would hopefully make a substantial contribution if things return to normal next quarter, she said.
Overseas banking operations accounted for 26.78 percent of its total revenue, a significant retreat caused by higher bad loan provisions at the Hong Kong branch, Lee said, adding that the percentage might return to 40 percent before the end of the year, in line with a recovery in the global economy.
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