State-run Hua Nan Financial Holding Co (華南金控) is seeking to pursue stable profit growth in the second half of this year, the conglomerate said on Wednesday, after posting NT$9.29 billion (US$332.53 million) in net income for the first half, 5.3 times than in the same period last year, thanks to improving interest and fee incomes.
Earnings per share were NT$0.72, with main subsidiary Hua Nan Commercial Bank (華南銀行) generating 80 percent of the profit, Hua Nan Securities Co (華南永昌證券) contributing 13 percent and South China Insurance Co (華南產險) generating 5 percent, Hua Nan Financial president Lo Pao-chu (羅寶珠) said.
“We achieve the goal of diversifying the sources of income with non-bank subsidiaries generating more than 10 percent of profit,” Lo told an online investors’ conference.
As of June, outstanding loans totaled NT$1.89 trillion, up 7.8 percent year-on-year, driven by a 5.6 percent gain in corporate banking and a 14.4 percent pickup in consumer banking, Lo said.
Lending to small and medium-sized firms expanded 11.2 percent, while mortgage operations grew 13.4 percent and other retail banking services expanded 18.8 percent, company data showed.
Interest income contributed more than 60 percent of first-half earnings, while fee income made up 30 percent.
The improvement in interest income came after interest spread widened slightly to 1.26 percent in late June, while net interest margin edged up 1 basis point to 0.84 percent, the conglomerate said.
Hua Nan Financial said that it expects the central bank to keep interest rates unchanged next month and beyond as the COVID-19 pandemic persists and measures to stabilize economies create inflation pressure.
Hua Nan Commercial Bank’s financing for urban renewal projects was highest among its eight state-run peers, while financing for renewing old and dangerous buildings was second highest, company data showed.
Hua Nan bank and an asset management affiliate have formed an urban renewal team to provide one-stop renewal financial services, it said, adding that it would support the government in its plan to replace old and dangerous buildings to bolster demand in the construction sector and increase building safety.
Hua Nan’s securities arm has benefited from rallies in global bourses and financial assets, and would raise stakes in assets that have undergone significant price corrections, the conglomerate said.
Hua Nan Financial might receive dividend income of more than NT$9 billion this year, it said.
Fee income increased 22.5 percent in the first half as sales of wealth management products gained momentum, it said.
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