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.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
WARNING SHOT: The US president has threatened to impose 25 percent tariffs on all imported vehicles, and similar or higher duties on pharmaceuticals and semiconductors US President Donald Trump on Wednesday suggested that a trade deal with China was “possible” — a key target in the US leader’s tariffs policy. The US in 2020 had already agreed to “a great trade deal with China” and a new deal was “possible,” Trump said. Trump said he expected Chinese President Xi Jinping (習近平) to visit the US, without giving a timeline for his trip. Trump also said that he was talking to China about TikTok, as the US seeks to broker a sale of the popular app owned by Chinese firm ByteDance Ltd (字節跳動). Trump last week said that he had
RSS