Chang Hwa Commercial Bank (CHB) aims to keep business growth targets for this year unchanged as many economies around the world recover from the COVID-19 pandemic, the bank said yesterday.

“We strive to boost profitability this year as planned, being aware that the COVID-19 pandemic poses lingering uncertainty at home and abroad,” CHB spokesman Chen Bin told an online investors’ conference in Taipei.

Chen gave the cautiously optimistic outlook after the bank’s financial performance continued to disappoint in the first quarter of this year. Pretax income fell 23% year-on-year to NT$2.38 billion (US$85.86 million), while net profit shrank 7.5% to NT$6.9 billion, or earnings per share of NT$0.19, company data showed.

The soft earnings were because financing weakened amid the worldwide COVID-19 crisis, and interest rate cuts by global central banks squeezed interest and fee incomes, the bank said, adding that a conservative investment strategy also weighed on trading income.

Interest spread for loans in local and foreign currencies was 1.18% last quarter, while net interest income averaged 0.86%, it said, adding that both rates were lower than in the previous quarter.

Sentiment has improved, as evidenced by an increase in syndicated loan interest and other banking operations, Chen said, attributing the trend to the rollout of COVID-19 vaccines in the US and Europe. CHB would increase its overseas banking operations, he said, adding that the bank’s domestic operations would target clients with high net worth.

Overseas branches and local branches’ offshore banking units generated 28.8% of pretax profit, down from an average of 37.5% last year, Chen said, adding that their contributions would likely gain momentum later this year. CHB said that it raised stakes in local equities last quarter, and would acquire more local and foreign bonds this quarter to raise yields.

Taipei Times