SinoPac Financial Holdings Co (永豐金控) aims to generate 30 percent of its profits from overseas operations this year, as well as expand its operations in Vietnam and open a Singapore branch, SinoPac Financial president Stanley Chu (朱士廷) said yesterday.
Its banking arm, Bank SinoPac (永豐銀行), set up a branch in Ho Chi Minh City focused on lending to Taiwanese companies with operations in Vietnam, but it is shifting to tap the consumer financing market, spokeswoman Kerry Hsu (許如玫) told the Taipei Times by telephone.
The bank would start with personal loans in Vietnam, as it expects the nation’s rapid economic growth and rising middle class to boost the growth of consumer loans, Hsu said.
Photo: Kelson Wang, Taipei Times
The Financial Supervisory Commission last year approved the bank’s plan to establish a Singapore branch, he said.
The bank expects to receive regulatory approval in Singapore this year to open the branch, which would be its fourth overseas market, after China, the US and Vietnam, he said.
“We had concentrated on expanding our presence in China in the past few years, by establishing units in eastern and western China. Now we are shifting our focus to Southeast Asia, given the region’s growth momentum,” Hsu said.
The ratio of net earnings generated by SinoPac’s overseas operations to its total net earnings rose from 24 percent in 2019 to 30 percent last year, although SinoPac’s overseas units saw profitability deteriorate due to bad loans amid the COVID-19 pandemic, he said.
SinoPac’s offshore banking unit reported higher profit last year because of strong demand for wealth management and capital management from returning Taiwanese firms, Hsu said.
Due to problematic loans to Pharmally International Holding Co (康友製藥) and Shenzhen Zhaoheng Hydropower Group (兆恆水電), a Shanghai-based unit of China Energy Reserve and Chemicals Group Co (中國國儲能源), Bank SinoPac had to recognize loan-loss provisions of NT$790 million (US$28 million) last year, affecting the bank’s profits, she said.
The loss also accounted for the bank’s net profit falling 5 percent year-on-year, despite its net interest income and net fee income rising to their highest level, Hsu said.
Despite the central bank’s interest rate cuts, Bank SinoPac’s interest spread, the difference between its lending and deposit rates, grew 7.9 basis points to 1.3 percent at the end of last year, due to reduced funding costs, she said.
“Demand deposits made up 50 percent of our total deposits, compared with 40 percent a year earlier, which helped lower our funding costs, as the rates we pay demand depositors were the lowest among all kinds,” Hsu said.
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