State-run Taiwan Cooperative Financial Holding Co (合庫金控) yesterday said that it is looking at stable profit growth this year, as the improving economy at home and abroad would benefit core businesses and reverse loss-making overseas operations.
The bank-focused conglomerate gave the guidance during an online investors’ conference and said that economic scenes appear less murky, limiting the need for provisions.
Taiwan’s GDP growth this year is predicted to rise more than 3 percent, much faster than last year’s 1.32 percent.
Photo: Chen Mei-ying, Taipei Times
Net income last year totaled NT$17.88 billion (US$558.92 million), or earnings of NT$1.17 per share, company data showed.
The results represented declines of 14.12 percent and 15.22 percent from their levels in 2022, mainly due to provision costs for operations in Cambodia and elsewhere, Taiwan Cooperative Financial president Chen Mei-tsu (陳美足) said.
“Cambodia emerged from the pandemic in a slower-than-expected fashion,” prompting the lender to raise provision costs in the second and third quarters of last year to shore up its capital strength, officials said.
Things started to stabilize in the fourth quarter, when overseas operations squeezed a tiny profit, they said.
A string of rate hikes by the US Federal Reserve also pushed up funding costs more rapidly than the rise in interest income, officials added.
That explains why its main subsidiary, Taiwan Cooperative Bank (合作金庫銀行), last year saw its net income fall 14.95 percent to NT$16.3 billion, despite trading gains from financial products — including foreign exchange swaps — soaring nearly 200 percent.
Foreign exchange swaps generated more than NT$9 billion in profit, but might drop to NT$7.5 billion this year, they said.
This is due to Taiwan’s central bank last week unexpectedly raising interest rates by 0.125 percentage points and given that the US Federal Reserve might lower rates to support the US economy, officials added.
The narrowing difference between the interest rates of Taiwan and the US is unfavorable for swap revenue, officials said.
Even without the provision costs, Taiwan Cooperative Financial would record a net income increase of almost 20 percent, indicating that core businesses remain healthy, Chen said.
High funding costs also affected the results of Taiwan Cooperative Securities Co Ltd (合庫證券) and Taiwan Cooperative Bills Finance Corp (合庫票券), officials said.
In contrast, its venture capital and life insurance units saw robust improvement in their earnings ability, they added.
Taiwan Cooperative Financial said it plans to distribute a cash dividend of NT$0.65 per share and another stock dividend of NT$0.35 from last year’s net income, suggesting a payout ratio of 85 percent.
The plan is still pending approval from a shareholders’ meeting later this year.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS