State-run Hua Nan Financial Holding Co (華南金控) is looking to grow its lending operation by 5 to 7 percent next year and expects its currency swap business to continue to be the main profit driver.
The bank-focused conglomerate gave the positive guidance after net profit in the first three quarters totaled NT$16.89 billion (US$527.65 million), suggesting an increase of 21.6 percent year-on-year and earnings per share of NT$1.24.
Main subsidiary Hua Nan Commercial Bank (華南銀行) generated NT$15.64 billion, accounting for 90 percent and growing 17 percent from a year earlier, company data showed.
Photo: Chen Mei-ying, Taipei Times
“The earnings represent a record high for both the financial holding company and the banking subsidiary,” Hua Nan president Robert Li (李耀卿) told an online investors’ conference on Wednesday.
Currency swap operations, which thrived on the interest rate differential between Taiwan and the US, contributed NT$6.6 billion as of September and might reach NT$9 billion for the whole of this year, officials said.
Hua Nan Bank intends to raise swap stakes next year, as the US Federal Reserve has reiterated its intention to keep interest rates high for a longer period to tame inflation, which would be favorable to swap operations, officials said.
Net interest margin (NIM) last quarter shed 2 basis points to 0.74 percent due to higher funding costs, but should reach 0.97 percent — similar to the second quarter — after factoring in swap gains, officials said.
“We aim to keep NIM at about 1 percent this year and next year,” officials added.
Toward that end, Hua Nan Bank would seek to increase foreign-currency loans and fee incomes, officials said, expecting fee income to grow 8 to 12 percent next year.
Wealth management would emerge as the bright spot as investment interest picks up, officials said.
Its stock brokerage unit, Hua Nan Securities Co (華南永昌證券) posted a 28.7 percent advance in net income to NT$1.17 billion in the first nine months, already beating the record for the whole of last year, officials said.
Hua Nan Financial should be able to offer better dividends next year if things proceed well, Lee said.
By contrast, state-run Taiwan Cooperative Financial Holding Co (合庫金) reported a 2.04 percent decline in its net income in the first three quarters to NT$14.99 billion.
Relatively high holdings of US government bonds accounted for the lackluster performance as the Fed’s hawkish rhetoric drove investors to dump US bonds and weakened their prices, officials told an online investors’ conference on Wednesday.
Taiwan Cooperative president Chen Mei-tsu (陳美足) said that operating conditions would improve next year and so would the company’s earnings ability.
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