CTBC Bank Co (中信銀行) might record slower growth in its mortgage business this year as central bank rate hikes and selective credit controls affect the local real-estate market, CTBC Financial Holding Co (中信金控) president James Chen (陳佳文) said yesterday.
CTBC Bank's mortgages rose 13.7 percent year-on-year to NT$974 billion (US$31.61 billion) in the first quarter of this year, the second-largest kind within its loan pipeline after foreign currency-denominated lending of NT$1.15 trillion, it told an investors’ conference in Taipei.
Chen said that whole-year mortgage growth is expected to be lower than last year, increasing by a single-digit percentage, as the real-estate market is on a downward trend.
Photo: Lee Ching-hui, Taipei Times
However, as CTBC Bank has concentrated on providing home loans to civil servants and teachers, its mortgage quality remains solid, he said.
CTBC Bank’s net profit rose 52.9 percent from a year earlier to NT$11.36 billion in the first quarter, making up 88 percent of its parent company’s net profit. The bank's net profit grew 37.9 percent from the previous quarter.
Chen said the bank’s overseas branches contributed 35 percent to CTBC Bank’s net profit in the first quarter, supported by strong growth in Hong Kong, Singapore and Thailand.
As the bank has large US dollar deposits, it earned more interest income with the US Federal Reserve hiking rates, while corporate lending in Thailand also showed marked growth as Taiwanese companies continued to shift their operations away from China to Southeast Asia, he said.
In the first quarter, CTBC Financial reported net profit of NT$12.96 billion, down 20.5 percent from a year ago. On a quarterly basis, net profit surged by 1,528.3 percent. Earnings per share were NT$0.66 in the quarter.
The company's life insurance unit, Taiwan Life Insurance Co (台灣人壽), remained in the red in the first quarter with net losses of NT$882 million. But the figure was down 21 percent from a year earlier, CTBC Financial said, adding that the insurer has passed the worst after COVID-19 insurance claims caused greater chaos for the sector last year.
Meanwhile, CTBC Financial plans to expand CTBC Finance Co’s (中國信託資融) business from car loans to “buy now, pay later” and corporate lending operations, to enhance its competitiveness, while CTBC Insurance Co (中國信託產險) plans to raise NT$5 billion later this month to boost its risk-based capital ratio to 200 percent, he said.
Overall, CTBC Financial is expected to report better profit this year than last year, he said.
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