O-Bank Co Ltd (王道商業銀行), the nation’s first online bank, is pursuing double-digit percentage growth in core businesses this year on top of last year’s record earnings, undeterred by lingering economic uncertainty, top-ranking officials said yesterday.
O-Bank is optimistic about fee and interest income growth, as well as wealth management and foreign-exchange gains, driven by a strategy focusing on lending with affiliates of major Taiwanese corporations, bank president Elton Lee (李芳遠) said.
Conducting business with corporate clients generates higher margin despite a lack of financial protection from their parent companies, Lee said.
Photo: Lee Chin-hui, Taipei Times
O-Bank considers risk controls essential, as evidenced by its improving return on equity to 13.59 percent and return on assets to 1.5 percent last year, he said.
The “bad loan” ratio stood at a low 0.35 percent, and non-performing loan coverage ratios reached 431.51 percent, affirming healthy asset quality, Lee said.
Pre-tax profit in the first two months of this year totaled NT$950 million (US$30.99 million), rising 10.6 percent from the same period last year and ahead of expectations, Lee said.
The figures showed earnings per share rising 18.75 percent year-on-year to NT$0.19, indicating that the bank “stayed on the right track” and grew more profitable three years after new leadership, said O-Bank chairwoman Tina Lo (駱怡君), who assumed her position in 2020.
The lender last year achieved record profit of NT$5.8 billion, supported by improving commercial and retail banking, along with a merger of its IBT International Leasing Corp (台駿租賃) with Jih Sun International Leasing & Finance Co (日盛台駿租賃), Lo said.
O-Bank has a 44.5 percent stake in Jih Sun and would distribute profit proportionately, she said.
When not including the merger benefit, net income at O-Bank last year would have increased 9 percent to NT$2 billion, better than transforming to a commercial bank, Lo said.
The bank aims to add more than 100 employees to its payroll this year to meet expansion needs at its corporate and retail banking businesses, she said.
O-Bank plans to distribute cash dividend this year similar to last year's level at NT$0.3 per share but the board has not reached a decision on the matter yet, Lo said. Like most other peers, O-Bank lost NT$2.8 billion last year due to the global financial tumult.
Additionally, the online banking environment this year appears to be challenging, as stakeholders must increase their economic scale before seeking profit, Lee said.
Taiwan’s central bank is likely to slow or halt monetary tightening next week to allow economic growth, Lee said.
Other policy tools to fight inflation exist, and rate hikes should be the last resort, he added.
The Investment Commission yesterday approved a Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) application to invest an additional US$3.5 billion in its Arizona subsidiary to manufactured advanced chips. The world’s largest contract chipmaker’s board of directors last month approved the funding project after TSMC started moving manufacturing equipment into the fab in December last year in preparation for the production of 4-nanometer chips next year. TSMC said it has also commenced the second phase of facility construction in Arizona. The second fab is to produce semiconductors using 3-nanometer technology in 2026. Altogether, TSMC plans to spend US$40 billion on the Arizona fabs, doubling its
KEY SECTOR: Taiwan’s new chip legislation is insufficient, and a more strategic ‘chip act’ that covers the whole semiconductor ecosystem is needed, MediaTek’s chairman said MediaTek Inc (聯發科) chairman Rick Tsai (蔡明介) yesterday urged the government to formulate a state semiconductor strategy and comprehensive “chip act” that includes local chip designers and smaller-scale semiconductor companies, as they are facing intensifying competition from China. The government is playing an increasingly important role in safeguarding the local semiconductor industry’s competitiveness, given that the US, the EU and Japan are offering hefty subsidies and significant tax incentives to build semiconductor capacity domestically, as they have realized the strategic importance of semiconductors, Tsai said. To implement such a program, the government should take steps to finance a “chip act,” Tsai said
Microsoft Corp has threatened to cut off access to its Internet search data, which it licenses to rival search engines, if they do not stop using it as the basis for their own artificial intelligence (AI) chat products, people familiar with the dispute have said. The software maker licenses the data in its Bing search index — a map of the Internet that can be quickly scanned in real time — to other companies that offer Web search, such as Apollo Global Management Inc’s Yahoo and DuckDuckGo. Last month, Microsoft integrated a cousin of ChatGPT, OpenAI’s AI-powered chat technology, into Bing. Rivals
MOUNTING PRESSURE: Although bank failures in the US and Europe would not cause systemic risks, it would dampen consumers’ willingness to spend, GlobalWafers said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said that the financial turmoil in the US and Europe has dimmed the outlook for chip demand in the second half of this year, as growing economic uncertainty could dampen consumer spending. The Hsinchu-based wafer manufacturer said it is seeing greater pressure from economic uncertainty on the industry’s recovery, as customers would have not expected Silicon Valley Bank, Signature Bank and a tier-one bank like Credit Suisse Group SA to collapse suddenly. Although the failures are unlikely to cause systemic risks, consumers would be cautious of spending on non-essential items, such
RSS