State-run Taiwan Cooperative Financial Holding Co (合庫金控) yesterday said it would keep its loan growth target of 7 percent for this year, even though its first-half growth lagged far behind its ambition.
The banking-focused conglomerate’s outstanding loans rose 2.42 percent in the first six months of this year, with lending to small and medium-sized enterprises expanding 3.56 percent and loans to retail customers gaining 4.51 percent, it told an online investors’ conference.
However, the conglomerate said it is unnecessary to revise the target because loan demand is expected to pick up if unfavorable factors ease, such as Russia’s invasion of Ukraine.
Photo: Lu Kuan-cheng, Taipei Times
Momentum would also improve if global inflationary pressure mitigates and the domestic COVID-19 situation improves, it said.
Interest spread and net interest income are forecast to increase on the back of further monetary tightening, Taiwan Cooperative president Chen Mei-tsu (陳美足) said.
The conglomerate’s net income for the first six months totaled NT$9.34 billion (US$311.43 million), down 8.35 percent year-on-year due its financial assets losing value.
Earnings per share were NT$0.64 for the first six months, less than NT$0.7 in the same period a year earlier.
The conglomerate’s net worth shrank 14 percent annually, corporate data showed.
Local shares account for 3 percent of Taiwan Cooperative’s investments, it said, adding that it favors high-dividend stocks, but would adopt a cautious approach amid concerns over market volatility.
The conglomerate’s total net fee income increased 1.35 percent, while income from wealth management operations fell 10.27 percent and income from its credit card business slumped 40.98 percent because market corrections chilled investment interest and a surge in COVID-19 cases curbed consumer spending, it said.
Private consumption regained momentum this quarter, as the government eased COVID-19 control measures amid an approach to “live with the virus,” it said.
The property market, a key source of retail banking, could see resilient housing prices and lackluster transactions for the rest of this year, Taiwan Cooperative officials said.
Developers are expected to keep their pricing policies given rising construction costs, but buyers would turn conservative given monetary tightening and an economic slowdown, the officials said.
Taiwan Cooperative would press ahead with expansions in overseas markets that are expected to generate higher margins, they said.
Its overseas and offshore banking operations contributed 35.32 percent to this year’s earnings as of June, compared with 28.7 percent at the end of last year, corporate data showed.
Banking operations in Cambodia were the conglomerate’s second-most profitable overseas operations, the officials said, adding that it is planning to open branches in central Europe.
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