Thanks to healthy loan growth and timely investment portfolio adjustments, state-run Chang Hwa Commercial Bank (CHB, 彰化銀行) yesterday said that earnings in the first 10 months of this year already surpassed its performance for the whole of last year.
The lender posted net income of NT$9.43 billion (US$302.15 million) from January to last month, or earnings per share of NT$0.89, company data showed.
“We will continue to increase US-denominated assets and boost lending in overseas markets while taking heed of credit risks,” CHB spokesman Chen Bin (陳斌) told an online investors’ conference.
Photo: CNA
CHB has benefited from interest rate hikes at home and abroad and was not burdened by COVID-19-related claims that have strained the finances of its peers that have non-life insurance affiliates.
Interest income in the first three quarters spiked 21.51 percent year-on-year and might pick up, as the US Federal Reserve is generally expected to continue raising its policy rates well into next year, Chen said, adding that Taiwan’s central bank would do the same, albeit at a milder pace.
Total loans expanded 7.84 percent, with lending to small and medium-sized enterprises rising 11.54 percent and overseas loans by 18.66 percent, Chen said.
Foreign-currency deposits rose 28.4 percent, as CHB took advantage of a strong US dollar, officials said.
The greenback has risen by double-digit percentage points this year against most other major currencies.
CHB said it has not let its guard down in the pursuit of profit growth, as evidenced by the decline in its bad loan ratio to 0.21 percent in the first nine months, from 0.33 percent during the same period last year. Its coverage ratio stood at 576.07 percent.
The bank said it is confident that its earnings momentum would be sustainable through the rest of the year.
However, the lender has not been spared from the deep corrections in global bond and equity markets, which drove its other comprehensive income into negative territory, with losses of NT$8 billion, and weakened its risk-based capital, officials said.
Things should improve this quarter, in line with a rebound in global financial markets, they said.
Despite the net worth erosion, CHB would still be able to distribute cash dividends next year as it has set aside sufficient provisions, officials said.
The bank would approach the matter cautiously and take cues from domestic financial institutes before making a decision next year, officials said.
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