State-run Hua Nan Financial Holding Co (華南金控) yesterday said that it is seeking to raise fee income by 10 percent this year, but would cautiously pursue loan growth as borrowing costs remain high amid uncertainty.
“We are looking for stable earnings this year in light of ongoing geopolitical tensions and fluid economic scenes at home and overseas,” Hua Nan Financial president Robert Li (李耀卿) told an investors’ conference in Taipei.
The bank-focused conglomerate’s net income last year rose 24.9 percent year-on-year to NT$21.62 billion (US$678.42 million), or earnings per share of NT$1.58.
Photo: George Tsorng, Taipei Times
Li attributed the extraordinary showing to hefty gains from financial product trading and investment at its main subsidiary Hua Nan Commercial Bank (華南銀行), which generated NT$20.05 billion in net income last year, up 20 percent year-on-year and accounting for 89 percent of the firm’s profit.
The lender’s outstanding loans last year grew 10 percent from a year earlier, but interest income dropped 15.1 percent, company data showed.
Li did not mention concrete loan-growth targets for this year, saying the firm prefers to maintain a cautious outlook for the sake of risk control.
Foreign exchange swaps drove NT$10 billion of profit last year, but that might slow down once the US Federal Reserve lowers interest rates, mitigating the interest rate gap between Taiwan and the US, Li said.
Restrictive monetary policy is favorable for interest income and swap operations while raising funding costs and curtailing loan demand, he said, adding that high interest rates benefit financial institutions with many US dollar-denominated assets.
On the other hand, interest rate cuts by the Fed would ease funding costs while raising the value of US dollar debt, the company said.
It added that a 70 percent of its debt position bears fixed interest income, a benefit that does not apply to bonds with floating rates.
Despite shrinking interest income, Hua Nan Bank enjoyed 15.9 percent growth in fee income last year, supported by a 19.2 percent advance in wealth management and a 14.3 percent increase in fund sales, company data showed.
Growth momentum in fee income is expected to continue this year at 10 percent, as demand for wealth management and fund products gains speed, it said.
Hua Nan Bank is expecting to reap a windfall from being the custodian bank of the two new hit exchange-traded funds (ETFs) — UPAMC Taiwan High Dividend Momentum ETF and Yuanta Taiwan Value High Dividend ETF.
The boom in ETFs featuring quarterly or monthly distributions of cash dividends has to do with Taiwan’s aging society, as such products promise better cash flow than time deposits and insurance policies, the firm said.
However, investors should be braced for volatility in their ETF portfolios, it said.
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
On Ireland’s blustery western seaboard, researchers are gleefully flying giant kites — not for fun, but in the hope of generating renewable electricity and sparking a “revolution” in wind energy. “We use a kite to capture the wind and a generator at the bottom of it that captures the power,” said Padraic Doherty of Kitepower, the Dutch firm behind the venture. At its test site in operation since September 2023 near the small town of Bangor Erris, the team transports the vast 60-square-meter kite from a hangar across the lunar-like bogland to a generator. The kite is then attached by a
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
RSS