Taishin FHC delivered stable profitability in 2020. Increasing momentum expected in 2021.
As part of an ongoing effort to prevent exposure to COVID-19, Taishin FHC today held its 4Q20 analyst meeting online. Taishin FHC’s President Welch Lin, CFO Carol Lai, and Chief Investment Officer Eric Chien, alongside Taishin Bank’s President Oliver Shang, Wholesale Banking Group CEO Sharon Lin, and Retail Banking Group CEO Wilson Chou jointly presented at the live webcast to address the operating results of 2020 and the outlook for 2021. In 2020, the Group delivered a net income after tax of NT$14.49bn, equaling 2019’s result. The EPS was NT$1.17, the ROE was 9.05%, and the book value per common share was NT$13.22. Steady growth for wealth management business and demands for mortgages, unsecured personal lending, and corporate loans are expected in 2021.
Welch Lin commented that TFHC’s subsidiaries rose above the disruptive impacts of the pandemic and maintained stable performances, delivering 10.6% and 3.9% growth YoY in NII and NFI, respectively. Subsidiary Taishin Bank’s total deposit grew by 11.9% YoY, and total loan growth reached 9.0% YoY, with NTD and FCY loans increasing by 9.6% and 6.1% YoY, respectively. Personal lending showed strong momentum, up by 13.6% YoY. The credit card business reached over 4 million active cards (+5.9% YoY) and remains champion of the industry with nearly 154,000 merchants served (+6.5% YoY). Credit card spending declined slightly due to the pandemic but was higher than the industry’s 2020 average. Wealth management’s net fee income grew by 4.5% YoY, supported by strong mutual fund sales. Subsidiary Taishin Securities’ net fee income soared by 42.8% YoY, with its brokerage business’ market share and trading volumes advancing thanks to high market turnover. At the end of 2020, Taishin maintained a strong capital position, with FHC CAR at 130.0% and bank BIS at 16.3% when adopting the revised loan-to-value (LTV) ratio based risk-weights. The Bank's asset quality remained benign with NPL% at 0.15% and coverage at 855.3%.
Regarding the closely-watched acquisition of Prudential Life Insurance Company of Taiwan Inc. (POT), Welch Lin explained that TFHC has been expending all efforts to meet the requirements stipulated by the competent authorities (with whom TFHC continues to communicate to secure prompt approval of the deal). In addition, Welch Lin shared the latest updates on TFHC’s overseas expansion. In Dec. 2020, Malaysia’s Labuan Financial Services Authority (LFSA) granted approval for TSIB to set up a Labuan Branch and a Kuala Lumpur Marketing Office; both are set to open in 2Q21. Also in Dec. 2020, the Thai Ministry of Commerce issued a registration for TSIB’s Bangkok representative office, which will likewise open in 2Q21. Furthermore, preparations are underway to open a Long An Branch in Vietnam in the near future. These upcoming branches will expand the existing platform of branches in Hong Kong, Singapore, Tokyo, and Brisbane, and they will jointly provide superior international financial services and ramp up overseas profits.
As internet-only banks make preparations to open in 2021, Oliver Shang reminded attendees that healthy competition fuels motivation, and to that end TSIB will continue to implement UX enhancements and offer special products to ensure customer retention. To deepen Richart Life’s ecosystem, more crossover collaborations among merchant partners, merchant-specific promotional deals, and innovative services can be expected soon. TSIB strives to provide the most user-friendly digital financial services that encompass daily payments, bonus points, and promotional deals for clients.
Welch Lin emphasized that in Nov. 2020, for the third consecutive year, TFHC was selected as a constituent stock of both the DJSI World Index and the DJSI Emerging Markets Index. In 2020, TFHC’s MSCI ESG rating was “AA,” placing it in the “Leader” category, the highest standing ever achieved by a Taiwanese corporation operating in the financial sector. In addition, TFHC was included on CDP’s prestigious “A List” for the first time thanks to its efforts in addressing climate change. Going forward, TFHC will build on its leading ESG practices and implement yet more sustainability initiatives to fulfill both stakeholders’ expectations and its corporate social responsibilities.