State-run Mega Financial Holding Co (兆豐金控) yesterday said its four US branches position the company to capitalize on opportunities linked to Taiwanese technology firms’ investments in the US.
“The group’s main profit driver, Mega International Commercial Bank (兆豐銀行), is in the best position to seize upon business opportunities arising from US-bound investments from local electronics firms,” Mega Financial president Hsiao Yu-mei (蕭玉美) told at an online earnings conference.
The lender, which specializes in international financing, would serve local customers by leveraging its long-established branches in New York, Los Angeles, Chicago and California’s Silicon Valley, Hsiao said, after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week announced plans to invest an additional US$100 billion in the US.
Photo courtesy of Mega Financial Holding Co
Local firms in TSMC’s supply chain are expected to follow suit to better serve their customers’ operations in the US.
Mega Bank can provide a full range of overseas financial services, Hsiao said.
The company said it is eyeing loan growth aligning with Taiwan’s expected GDP growth of 2.5 to 3.42 percent.
Toward that goal, the lender would tap corporate lending opportunities, green energy financing projects and syndicated loan services, it said, adding that the bank also plans to bolster its foreign currency operations.
At the same time, Mega Bank would deepen inclusive financing by offering loans to urban renewal projects, while enhancing digital services for small and medium-sized enterprises, it said.
The bank would also capitalize on green energy financing, and extend loans to micro businesses and young entrepreneurs, it said.
With an ongoing slowdown in its mortgage operations following central bank credit controls, Mega Bank would shift its focus to other consumer banking needs secured by real estate, it said.
Although the housing market is cooling, steady employment and rising wages would keep consumer spending and credit demand resilient, Mega Financial said.
Mega Bank’s net interest margin would improve if US dollar loan demand picks up — which could happen if the US Federal Reserve lowers interest rates by 25 to 50 basis points later this year as expected, the company said.
Taiwan’s central bank is likely to keep interest rates unchanged in light of stable economic growth and benign inflation below 2 percent, the company said.
Mega Bank reported strong loan growth last year, driven by the housing market and Taiwan’s stable economy.
Mortgage lending increased 11 percent from a year earlier, faster than overall loan growth of 7.9 percent, it said.
Hsiao said Mega Financial would discuss its dividend policy next month on how to use its net income of NT$34.77 billion (US$1.05 billion) from last year, which was up 4.6 percent year-on-year. Earnings per share came in at NT$2.35.
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