State-run Chang Hwa Commercial Bank (CHB, 彰化銀行) aims to raise bond holdings and loans to small and medium-sized enterprises (SMEs) in the second half of this year to support its profit margin, company officials told an investors’ conference yesterday.
The lender is also to limit its mortgages primarily to first-home buyers, and expects investment gains from currency swap operations to sustain, as the US Federal Reserve has no intention of rate cuts this year, it said.
“We are cautious, but positive about profit growth,” CHB spokesman Chen Bin (陳斌) told an online investors’ conference. “We are not focused on whether the Fed will make another rate hike this year, but rather how long the high-interest-rate environment will last.”
Photo: Chen Chih-chu, Taipei Times
To ensure recurrent and fixed incomes, the bank is to build up positions on medium and long-term bonds in case a turnaround in monetary policies next year or later weighs on interest income, Chen said.
The remarks came after the Taipei-based bank reported a 31.78 percent spike in net income to NT$7.01 billion (US$220.05 million), or earnings per share of NT$0.65, for the first six months of this year.
Interest income drove 56.39 percent of the earnings, although the contribution shed 4.79 percent from a year earlier due to higher funding costs, the officials said.
Fee income generated 13 percent of earnings and investment gains accounted for 30 percent, thanks to its currency swap operations, they said.
Net interest income, a critical gauge of profitability for banking institutes, weakened from 0.89 percent in the first quarter to 0.85 percent in the second quarter, due to higher funding costs, the officials said.
Net interest income could rise as the bank seeks to bolster syndicated loans and lending to SMEs, which generate better profit margins, Chen said.
Loans to SMEs grew 4.96 percent in the first half of this year, while lending to large corporations and government agencies rose 12.12 percent and 6.57 percent respectively, CHB data showed.
Lending at offshore and overseas banking units soared 23.47 percent, it showed.
CHB mortgages fell 1.19 percent, in line with the government’s effort to cool the property market.
The bank has no exposure to cash-strained Chinese developer Country Garden Holdings Co (碧桂園) or asset management firm Zhongzhi Enterprise Group Co (中植企業), nor has it sold their debts or other financial products to Taiwanese customers, the officials said.
CHB’s exposure to China stood at 17.1 percent of its assets as of June, lower than the sector’s average, they said, adding that existing real-estate loans are with Taiwanese firms, which maintain normal operations and honor interest payments.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
RSS