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Taiwan's Gov't-linked Banks Post Best H1 Profits at H.K. Branches

2014/08/22 | By Judy Li

Taiwan's government-linked banks, including Mega International Commercial Bank, Bank of Taiwan (BOT) and First Bank, all posted 30%-plus total profits in the first half (H1) of the year contributed by branches in Hong Kong, with such percentages being the highest of its kind ever recorded.

Mega's H.K. branch posted profits of nearly NT$800 million (US$26.67 million) in H1, equaling combined profits of its four branches in New York City, Chicago, Los Angeles, and Silicon Valley of the USA.

In the same period, Taiwan Cooperative Bank's corresponding percentage stood at nearly 30% and Hua Nan Bank at 20%.

A manager of First says the bank's H.K. branch scored profits of about US$2 million a month, with yearly profits of about US$24 million or NT$700 million. Last year Taiwan Cooperative saw its H.K. branch score profits of US$11 million, with H1 profits this year  expected to grow 20%.

Insiders attribute such performance of Taiwanese banks in H.K. to the higher interest rates there. Generally loans offered by H.K. banks carry basic rate plus 300-400 basis points (one basis point equals 0.01 of a percentage point), much higher than the 150-200 basis points at banks in China and 160-180 basis points in Taiwan. (JL)

Ratio of Profits of Taiwan's Gov't-linked H.K. Bank Branches in H1, 2014
Bank

Profits gained by overseas branches/total (%)

Profits gained by offshore banking units/total (%)

Profits gained by Hong Kong branch/overseas branches (%)

Total profits in first half (NT$B)

Mega

About 25

About 35

Over 30

16.15

BOT

About 31

About 20

Over 30

5.465

First

About 20

About 20

About 30

8.814

Hua Nan

About 12

About 20

About 20

6.803

Taiwan Cooperative

About 6

About 25

About 25

6.085

Source: the said banks