Taishin Financial expects loan growth to slow down

A conservative loan growth forecast.

Taishin Financial based this on the ongoing global economic uncertainty when it announced that it expects loan growth to continue, albeit at a slower pace than last quarter.

The conglomerate's net profits grew 5.7 percent in the July-to-September period to NT$4.93 billion or US$168.3 million, due to stronger sales of wealth management products, better investment returns, more efficient trading and increased exposure to China, notes Taishin Financial's chief financial officer Welch Lin.

Cumulative income for the first nine months rose to a three-year high of NT$8.6 billion, or earnings of NT$1.1 per share, an increase of 15.1 percent from the same period last year, Lin said.

“Looking forward, secured and unsecured lending operations are likely to stay flat in the current quarter from the third quarter, and so is corporate lending,” Lin said.

Lin expects loans to SMEs to expand sequentially by 5 percent and underwriting operations by 15 percent, while wealth management may decline 5 percent in the fourth quarter because of a high base.

Wealth management business, including insurance brokerage, generated NT$1.31 billion in net fee income last quarter, up 9.4 percent from the second quarter, the group’s financial report showed.

Bancassurance accounted for 70 percent, while mutual funds made up the remaining 30 percent, Taishin retail banking executive Oliver Shang said.

Sales of insurance policies through Taishin International Bank peaked in June and July as clients rushed to buy various insurance policies before expense hikes, Shang said.

Taishin Bank, the group’s main source of income, reported NT$2.55 billion in net profits last quarter, a rise of 14 percent from three months earlier, as net interest income grew by 4 percent to NT$3.53 billion, while fee income picked up 6.4 percent to NT$1.96 billion, the report said.

Meanwhile, income from investment and trading operations surged 78.6 percent sequentially to NT$585 million, as the bank made gains on its financial assets, Lin said.

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