Hua Nan Financial Holding Co (華南金控) is seeking stable profit recovery for the rest of this year after net income in the first six months declined 14 percent from a year earlier amid drastic financial market volatility, the state-run conglomerate said yesterday.
Hua Nan said it would turn conservative about investment and stay on the sidelines to see how inflation and geopolitical tensions pan out.
Financial market volatility caused by Russia’s invasion of Ukraine, inflation and interest rate hikes squeezed profitability at the group, Hua Nan president Robert Li (李耀卿) told an online investors’ conference.
Photo: Chen Mei-ying, Taipei Times
Net income for the first half was NT$7.99 billion (US$266.85 million), down 14 percent from last year, company data showed.
Earnings per share were NT$0.61, the data showed.
“Downside risks will linger throughout the year, and we will make sure all subsidiaries take precautions to strengthen proficiency and meet the annual budget goal,” Li said.
Hua Nan Commercial Bank (華南銀行), the group’s main banking subsidiary, posted a 1.6 percent profit drop for the first half, as interest income gained 20 percent, but fee income rose just 0.3 percent, it said.
The lender said the US Federal Reserve would likely raise policy rates by 3.25 percent this year, while the central bank in Taipei would hike interest rates by 0.625 percent to fight inflation.
That scenario would lead to Hua Nan Financial’s interest spread increasing 10 basis points, generating an extra NT$1.58 billion in interest income, which would help the conglomerate meet its net interest income target, Hua Nan officials said.
However, returns from stock and bond holdings might be lower than expected, as monetary tightening could drain liquidity, they said.
Against that backdrop, Hua Nan Financial would adopt a conservative investment approach, and trim bond and stock positions this month and next month to avoid volatility from negatively affecting its bottom line and net worth, officials said.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
RSS