Taiwan Business Bank (台灣企銀) yesterday said it is seeking to improve profitability this year by expanding loans to small and medium enterprises (SMEs) and overseas operations as they generate higher margins.
The state-run lender made the announcement after posting NT$2.12 billion (US$72.74 million) in net income for the first quarter — its highest in two-and-a-half years — or earnings per share of NT$0.27.
The lender’s efforts to enhance asset quality and diversify sources of income have started to pay off, bank officials told an online investors’ conference, adding that increases in wealth management and fee income helped offset losses linked to volatile financial markets.
Photo: Chen Mei-ying, Taipei Times
The uptrend is expected to continue for the rest of this year, benefiting from monetary tightening cycles at home and abroad, the officials said.
As of March, lending to small and medium-sized enterprises totaled NT$66.85 billion, an increase of 10.04 percent from a year earlier, they said, adding that the business would continue to provide momentum to loan growth this year.
Interest spread widened from 1.31 percent in March to 1.42 percent last month, following the central bank’s interest rate hike of 25 basis points on March 17, the officials said.
The gap would increase if the central bank raises interest rates later this year, in line with global peers, they added.
Taiwan Business Bank said it would hold mortgage operations steady by focusing on first-home buyers and people with real demand, while supporting selective credit controls on multiple-home mortgages.
Banks intent on active mortgage lending would have to demonstrate higher capital adequacy to meet stricter risk requirements.
Taiwan Business Bank said it would also work toward improving business at its branches in Australia, China, Hong Kong and the US, with the aim of boosting their revenue contributions to 20 percent this year.
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