Taiwan Cooperative Financial Holding Co (合庫金控) and Hua Nan Financial Holding Co (華南金控) are looking at stable profit growth this quarter, after reporting robust earnings in the first three quarters.
The two state-run bank-focused conglomerates shared cautious optimism with investors amid stable GDP growth at home and rising uncertainty linked to US president-elect Donald Trump’s vow to add tariffs on all imports.
“We aim to grow profit in a stable fashion going forward, as local firms would continue to benefit from the artificial intelligence boom and the world’s economy would gain a bit more momentum next year,” Taiwan Cooperative Financial president Su Tso-cheng (蘇佐政) told an online investors’ conference yesterday, citing the IMF.
Photo: George Tsorng, Taipei Times
However, the US Federal Reserve is likely to slow interest rate cuts, considering healthy economic data and inflation expectations ahead, Su said, adding that the US labor market and private consumption fared resilient.
The US is the world’s largest end market of consumer electronic gadgets whose critical components are made in Taiwan.
Europe and China would put up a lackluster performance amid rising protectionism and geopolitical tensions, Taiwan Cooperative Financial said.
Net income at Taiwan Cooperative Financial picked up 8.24 percent year-on-year to NT$16.23 billion (US$498.7 million) in the first three quarters, or earnings per share of NT$1.04.
Main subsidiary Taiwan Cooperative Bank (合作金庫銀行) generated NT$15.56 billion, suggesting a 10 percent pickup from a year earlier and driving 95.87 percent of overall earnings, company data showed.
Foreign exchange swap gains were about NT$9.2 billion in the first three quarters and would surpass the NT$10 million mark for the whole of this year, the bank said.
The amount could slow next year if the Fed lowers interest rates and narrows the interest gap between the US dollar and the NT dollar, it said.
Its branches in the US and Hong Kong reported active lending activity, compared with China and Cambodia, it said, adding that it remains to be seen if things would improve next year depending on how China’s stimulus measures pan out.
Hua Nan Financial made similar observations on Wednesday, after posting record-high profit of NT$17.5 billion in the first nine months, or earnings per share of NT$1.3.
The company said it is closely monitoring the Trump effect, which has already fueled volatility in bond and foreign exchange markets.
As of yesterday, the NT dollar weakened 1.8 percent against the greenback and the local bourse shed 2.4 percent since the US presidential election on Nov. 5.
Morgan Stanley said recently that stiffer tariffs would shake export-reliant economies such as Taiwan and South Korea harder.
Taiwan’s central bank might cut interest rates next year to support the economy, Hua Nan Financial said.
Hua Nan Financial and Taiwan Cooperative Financial expect their mortgage operations to subdue next year, as a result of central bank’s credit control measures introduced in September.
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