State-run Taiwan Business Bank (TBB, 台企銀) is looking to benefit further from interest rate hikes this year, but expects loan growth momentum to slow, as firms turn cautious amid economic uncertainty, senior officials said yesterday.
The lender gave the cautious outlook during an online earnings conference after reporting that net income last year soared almost twofold to a record NT$10.1 billion (US$331.6 million), or earnings of NT$1.26 per share.
TBB plans to distribute a small cash dividend of NT$0.34 per share as it has to raise provisions to tackle a negative other comprehensive income (OCI) caused by unrealized losses in bond and stock holdings, spokesman Chen Shao-huang (陳紹晃) said.
Photo: Chen Mei-ying, Taipei Times
For this year, TBB is to focus on loans to small and medium enterprises, syndicated loans, foreign currency operations and mortgages for people with self-occupancy needs, Chen said.
Furthermore, it would boost financing for development of renewable energy and urban renewal projects to support the government’s policy.
Interest income underpinned 71 percent of last year’s profit, aided by monetary tightening at home and abroad, while fee income accounted for a moderate 14 percent, company data showed.
A widening interest rate gap between the US and Taiwan helped TBB post a profit of NT$1 billion from foreign-currency swaps, officials said, adding that the bank would continue such operations, but does not have a profit target for this year as the tight monetary cycle is expected to come to an end soon.
TBB plans to raise its holdings in government and corporate bonds whose prices are expected to stabilize amid a pause in interest rate hikes, officials said.
The bank is also seeking to increase its holdings of stocks that offer decent business prospects and pay high dividends, officials said, adding that it would boost its portfolio ahead of dividend payouts, mostly in June to August in Taiwan.
OCI consists of long-term bonds and stocks, which together accumulated NT$3.77 billion in unrealized losses at the end of last year, wiping out potential dividends by NT$0.47 per share, TBB accounting official Lai Li-chin (賴莉青) said.
The losses eased by NT$1.08 billion this year after the US Federal Reserve slowed the pace of rate hikes, Lai said.
Improving bond and stock values might give TBB room to pay higher dividends next year, Chen said.
TBB has no exposure to troubled regional banks in the US, but would heighten risk controls to avoid any spillover, Chen said.
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Huawei Technologies Co’s (華為) latest smartphones carry a version of the advanced made-in-China processor it revealed last year, results from an independent analysis showed. This underscored the Chinese company’s ability to sustain production of the controversial chip. The Pura 70 series unveiled last week sports the Kirin 9010 processor, research firm TechInsights found during a teardown of the device. This is a newer version of the Kirin 9000s, made by Semiconductor Manufacturing International Corp (SMIC, 中芯) for the Mate 60 Pro, which had alarmed officials in Washington who thought a 7-nanometer chip was beyond China’s capabilities. Huawei has enjoyed a resurgence since
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li