State-run First Commercial Bank forecast that its loan growth would reach 7 to 8% this year, following an 8% increase to NT$1.91 trillion (US$67.5 billion) last year, bank vice president Tsai Su-hwei said.
Benefiting from a low interest rate environment, corporate loan growth at the banking arm of First Financial Holding Co is forecast to reach 8 to 9% this year, along with 4 to 5% growth in mortgage loans, Tsai said at an online earnings conference. In addition, the company’s net fee income is predicted to grow 15% this year on the back of steady growth in the economy, compared with a decline of 6.8% to NT$7.33 billion last year, she said.
The bank’s net interest margin is likely to fall to 0.95% in the first half of this year, from 1% at the end of last year, due to less interest income from bonds, it said.
First Bank’s net profit fell 17.6% year-on-year to NT$15.68 billion last year, as the net interest margin was affected by central banks’ expansionary monetary policies and its investment gains fell amid the COVID-19 pandemic.
First Securities Inc’s net profit reached NT$744 million, up 173.5% year-on-year, while its insurance affiliate First Life Insurance Co’s net profit was NT$485 million, up 98.8%, First Financial data showed.
Overall, First Financial’s net profit fell 13.2% to NT$16.81 billion last year from a year earlier, which translated into earnings per share of NT$1.31. The company’s net value per share was NT$17.23 last year and its return on equity was 7.6%.
It said its asset quality continued to improve as First Bank’s nonperforming loan ratio fell to 0.24 at the end of last year, from 0.29% in the first half of last year, and the bank’s loan-loss coverage ratio stood at 527%, up from 404% at the end of June.
The financial holding’s capital adequacy ratio (CAR) was 125.25% at the end of last year, up from 123.18% at the end of June, while its banking unit’s CAR was 13.63% and tier-1 CAR was 11.66%, compared with 43.43% and 11.44% six months earlier respectively, company data showed.
The company said its dividend payout ratio would remain at about 60% this year.