Taiwan's Domestic Banks See Profits Surge 24% to NT$83.75B. in Q1, 2014

Taiwan's 39 domestic banks scored pretax profits of NT$83.749 billion (US$2.79 billion) in the first quarter of the year, for a sharp annual growth of 24%. If the banks keep seeing double-digit growths, their aggregate annual profits are likely to hit a record high of over NT$300 billion (US$10 billion) in 2014, according to the Financial Supervisory Commission (FSC).

In January alone the domestic banks scored combined profits of NT$29.5 billion (US$983.33 million) for an annul rise of 15%, which grew to 22% in February and further expanded to 24% in March.

Insiders attribute such promising profitability to the banks' overseas operations, particularly in Southeast Asia including Cambodia, Myanmar, Vietnam and Laos where banks can have wider interest margin.

Mega International Commercial Bank boasted the highest pretax profits of NT$7.748 billion (US$258.27 million) in the first quarter and was followed in sequence by CTBC Bank (NT$6.762 billion or US$225.4 million), Taipei Fubon Commercial Bank (NT$6.658 billion or US$221.93 million), and Cathay United Bank (NT$6.126 billion or US$204.2 million).

Last year the pretax profits of all domestic banks reached NT$257.6 billion (US$8.59 billion), the fourth consecutive annual record high; and the profits this year may again break the record.

As of the end of March the outstanding loans held by the 39 domestic banks came to NT$24.1993 trillion (US$806.64 billion), up NT$132.8 billion (US$4.43 billion) from a month earlier, with outstanding deposits surging NT$230.9 billion (US$7.697 billion) from the previous month, resulting in the loan-to-deposit gap rising to NT$6.9649 trillion (US$232.16 billion).

Currently the average non-performing loan (NPL) ratio of all domestic banks hit a new low of 0.33% and their NPL coverage ratio a new high of 362.6%, showing healthy status of the banks. (JL)