State-run Hua Nan Financial Holding Co (華南金控) yesterday said that it is seeking to raise fee income by 10 percent this year, but would cautiously pursue loan growth as borrowing costs remain high amid uncertainty.
“We are looking for stable earnings this year in light of ongoing geopolitical tensions and fluid economic scenes at home and overseas,” Hua Nan Financial president Robert Li (李耀卿) told an investors’ conference in Taipei.
The bank-focused conglomerate’s net income last year rose 24.9 percent year-on-year to NT$21.62 billion (US$678.42 million), or earnings per share of NT$1.58.
Photo: George Tsorng, Taipei Times
Li attributed the extraordinary showing to hefty gains from financial product trading and investment at its main subsidiary Hua Nan Commercial Bank (華南銀行), which generated NT$20.05 billion in net income last year, up 20 percent year-on-year and accounting for 89 percent of the firm’s profit.
The lender’s outstanding loans last year grew 10 percent from a year earlier, but interest income dropped 15.1 percent, company data showed.
Li did not mention concrete loan-growth targets for this year, saying the firm prefers to maintain a cautious outlook for the sake of risk control.
Foreign exchange swaps drove NT$10 billion of profit last year, but that might slow down once the US Federal Reserve lowers interest rates, mitigating the interest rate gap between Taiwan and the US, Li said.
Restrictive monetary policy is favorable for interest income and swap operations while raising funding costs and curtailing loan demand, he said, adding that high interest rates benefit financial institutions with many US dollar-denominated assets.
On the other hand, interest rate cuts by the Fed would ease funding costs while raising the value of US dollar debt, the company said.
It added that a 70 percent of its debt position bears fixed interest income, a benefit that does not apply to bonds with floating rates.
Despite shrinking interest income, Hua Nan Bank enjoyed 15.9 percent growth in fee income last year, supported by a 19.2 percent advance in wealth management and a 14.3 percent increase in fund sales, company data showed.
Growth momentum in fee income is expected to continue this year at 10 percent, as demand for wealth management and fund products gains speed, it said.
Hua Nan Bank is expecting to reap a windfall from being the custodian bank of the two new hit exchange-traded funds (ETFs) — UPAMC Taiwan High Dividend Momentum ETF and Yuanta Taiwan Value High Dividend ETF.
The boom in ETFs featuring quarterly or monthly distributions of cash dividends has to do with Taiwan’s aging society, as such products promise better cash flow than time deposits and insurance policies, the firm said.
However, investors should be braced for volatility in their ETF portfolios, it said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
RSS