O-Bank Co (王道商業銀行) yesterday said its exposure to the Middle East remains limited and manageable despite escalating regional tensions, adding that it maintains a cautious but optimistic outlook for this year.
The Web-only lender’s holdings related to the Middle East account for only 0.76 percent of its total bond portfolio, O-Bank president Elton Lee (李芳遠) said, adding that the bank has no lending exposure to the region.
The bank’s bond investments in the region are mainly issued by large corporations or government-backed financial institutions with high credit ratings, Lee said at an earnings conference in Taipei.
Photo: Lee Chin-hui, Taipei Times
The bank has conducted a comprehensive review of its positions amid the ongoing Middle East conflict, he said.
“We are closely monitoring clients that could potentially be affected by the conflict, but their operations remain normal and the bank’s financial planning and profit outlook have not been materially affected,” Lee said.
At the conference, the bank also addressed investors’ concerns over rising non-performing loans (NPLs) at its Hong Kong branch.
O-Bank’s NPL ratio rose to 0.54 percent at the end of last year, mainly due to specific lending cases in Hong Kong, where some borrowers faced financial pressure amid a prolonged high-interest-rate environment and failed to make interest payments on schedule, Lee said.
All of the problematic loans are backed by sufficient real-estate collateral, and the bank has already begun disposal procedures to recover funds, he said.
The NPL ratio could drop sharply to about 0.07 percent once the collateral is successfully liquidated, Lee said, indicating that overall asset quality remains under control.
Looking ahead, O-Bank plans to issue subordinated bonds this year to strengthen its capital adequacy and support future operations, as it navigates shifting interest-rate cycles and evolving regional risks.
The board of O-Bank recently approved a proposal to distribute a cash dividend of NT$0.52 per common share, marking the highest payout since the bank’s listing on the Taiwan Stock Exchange in May 2017.
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