Two Taiwanese financial holding firms yesterday voiced cautious optimism about business in the second half of this year and reported no exposure to troubled Chinese developers Country Garden Holdings Co (碧桂園) and Zhongzhi Enterprise Group (中植企業).
SinoPac Financial Holdings Co (永豐金控) said it has cut exposure in China by 20 percent in the past few years due to escalating downside risks in the market.
“China’s economic slowdown is not new and SinoPac has adopted a conservative approach in doing business there,” SinoPac Financial president Stanley Chu (朱士廷) told an investors’ conference in Taipei.
Photo: Kelson Wang, Taipei Times
Chu’s comments came after the Financial Supervisory Commission said earlier this week that Taiwan has little exposure to debt problems plaguing China’s property sector.
SinoPac monitors its China exposure on a weekly basis and has not made any new investment for years, Chu said.
Rather, the bank-focused group has placed more emphasis on the local market and Southeast Asia, where Taiwanese firms have moved manufacturing facilities to accommodate global supply chain realignments, he said.
Shares of Taiwan’s financial institutions took a hard hit this month, dragged by ongoing global capital flight from the region and China’s corporate debt problems.
Chu said he is guardedly positive about business going forward, after achieving record earnings in the first half of the year.
SinoPac Financial’s net profit expanded 22.4 percent from a year earlier to NT$10.07 billion (US$314.94 million) in the first six months, thanks to strong profit gains at Bank SinoPac (永豐銀行) and SinoPac Securities Co (永豐金證券), the conglomerate said.
That translated into earnings per share (EPS) of NT$0.85, an annual increase of 0.13 percent.
Similarly, state-run Taiwan Cooperative Financial Holding Co (合庫金控) saw its net profit rise 5.03 percent year-on-year to NT$9.82 billion in the first half, or EPS of NT$0.65.
Relatively stable financial markets at home and abroad allowed different subsidiaries to post profits, Taiwan Cooperative Financial president Chen Mei-tsu (陳美足) told an online investors’ conference.
Main subsidiary Taiwan Cooperative Bank (合庫銀行) raked in hefty gains from foreign currency swap arrangements, aided by interest rate differentials between the US and the local market, officials said, adding that the lender would continue such trading in the second half.
Chen said the company has no exposure to Country Garden or Zhongzhi Enterprise and has not sold related investment products to its clients either.
Offshore and overseas operations incurred losses in the second quarter due to higher provision costs in its Phnom Penh offices, snapping the group’s plan to increase profit contributions from overseas operations.
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