State-run First Financial Holding Co (第一金控) yesterday cut its loan growth target for this year, as mortgage operations slow while corporate loans hold firm to meet demand for supply chain realignments.
The bank-focused conglomerate said it is now looking at loan growth of between 4 and 7 percent due to a slowdown in the housing market, First Financial spokeswoman and investment relations head Anne Lee (李淑玲) told an online news conference.
Mortgage loans edged up 1.5 percent during the first quarter, far weaker than expected, Lee said, as the central bank’s loan restrictions and a negative wealth effect linked to share price corrections dampened buying interest.
Photo: Chen Mei-ying, Taipei Times
The poor showing was in line with the company’s plan to support the government’s effort to rein in real-estate lending and strengthen corporate banking, First Financial chairwoman Chiou Ye-chin (邱月琴) said in an annual report.
“First Financial aims to grow and achieve decent profitability this year, despite US tariff challenges, uncertainty in China’s real-estate market and geopolitical tensions,” Chiou said.
Net income in the first four months of this year increased 1.3 percent year-on-year to NT$9.25 billion (US$308.8 million), or earnings per share of NT$0.66, company data showed.
Main profit driver First Commercial Bank Ltd (第一銀行) would maintain 3 percent growth in loans to small and medium-sized enterprises, and 10 to 11 percent growth in foreign currency loans, Lee said.
Overseas lending in the first quarter grew 4 percent from a year earlier, and First Commercial Bank would prioritize regional and national collaborations among branches to mitigate the risks arising from global supply chain restructuring, she said.
Concurrently, the bank would enhance client engagement and post-lending risk management in an attempt to optimize capital allocation, she added.
Bad loan ratios appear benign and controllable so far, Lee said.
The life insurance arm First Life Insurance Co (第一金人壽) would incur NT$200 million of losses in its foreign currency-based assets for every US$1 depreciation in the greenback against the New Taiwan dollar, she said.
The NT dollar has appreciated 8 to 9 percent this year, deepening the suggested losses by nearly three times, even though 80 percent of assets are hedged and overall exposure is limited, Lee said.
The company has applied for the use of a new mechanism in dealing with foreign exchange reserves. The Financial Supervisory Commission is mulling an oversight amnesty to help domestic life insurers mitigate the impact of foreign-exchange losses.
First Financial raised its currency swap gains this year on par with that of last year, as the US Federal Reserve looks to postpone rate cuts until the fall or winter, which is favorable for currency operations, she said.
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