State-run Mega Financial Holding Co (兆豐金控) and First Financial Holding Co (第一金控) yesterday said that they are aiming for stable profit growth this year, despite lingering uncertainties.
Mega Financial said that the operating environment would turn favorable for financial institutions this year after major central banks worldwide disclosed plans to raise interest rates, which would widen interest spreads and profit margins.
The US Federal Reserve last month said that it would raise interest rates by 25 basis points as early as next month and shrink the central bank’s balance sheet to help contain inflation.
.Photo courtesy of Mega Financial Holding Co
Interest rate hikes would allow Mega Financial to better use its funds and assets and pursue better returns, even though the COVID-19 pandemic and supply chain disruptions would linger, it said.
Mega Financial chairman Michael Chang (張兆順) urged his colleagues to meet the growth challenges by embracing change.
The company’s banking arm, Mega International Commercial Bank (兆豐銀行), has embarked on a transformation process that could take time to bear fruit, Chang said.
Additionally, the bank’s credit card business is now making a profit and its number of cards in circulation has risen above the 1 million mark after three years of effort, he added.
Mega Bank president Robert Tsai (蔡永義) said that the Fed could raise interest rates three to five times this year, which would benefit the Taiwanese lender’s operations.
The bank-focused conglomerate last year posted earnings of NT$1.89 per share, representing a 3 percent increase from a year earlier, although the pace lagged behind its peers, it said.
First Financial Holding said that it is seeking to bolster its operating resiliency and raise profit contributions from non-bank subsidiaries.
First Financial chairwoman Chiou Ye-chin (邱月琴) said that the state-run conglomerate would assign more importance to environmental protection, in line with global efforts to cut carbon emissions.
Its main subsidiary, First Commercial Bank (第一銀行), said that it would deepen relationships with customers and offer wealth management tools that suit their needs.
The lender added that it would make its online banking platform more user-friendly to improve customer service.
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