Mega, ICBC sign overseas expansion cooperation pact
Mega International Commercial Bank (兆豐國際商銀) has inked a new cooperation pact with the Industrial and Commercial Bank of China (ICBC, 中國工商銀行), as part of the state-run lender’s move to expand its operations overseas, the Taiwanese bank said yesterday.
Mega Bank chairman McKinney Tsai (蔡友才) on Wednesday signed a memorandum of understanding (MOU) with his counterpart, Jiang Jianqing (姜建清), at ICBC’s headquarters in Beijing.
The MOU would allow the two banks to strengthen corporate lending, trade financing, cross-border yuan and capital funding businesses, Mega Bank said.
Mega Bank — whose overseas operations including offshore banking units generate more than 50 percent of its total income — has outlets in 19 countries and regions, while ICBC has exposure in more than 40 places abroad.
Trade financing apart, Mega Bank has sought to expand its Internet and mobile banking business through its global capital management platform online, the lender said, adding that the platform has accumulated 60,000 accounts this month.
The platform processed more than NT$5 trillion in assets last year, with the number of accounts and transactions accelerating by double digits every year, Mega Bank said.
Credit Suisse AG yesterday raised its earnings forecast for Mega Financial by 3 percent for this year after the bank-focused group fared better than expected in the first nine months.
Mega Financial reported a net profit of NT$7.7 billion last quarter, boosting cumulative net income to NT$23.8 billion for the first nine months, company data showed.
That translates into earnings per share of NT$1.91 and a 31 percent increase from the same period last year.
Earnings improved although net interest margin softened last quarter because lower yuan interbank yields neutralized better yields on US currency-based loans, Credit Suisse’s Taipei-based analyst Chung Hsu (許忠維) said in a client note.
Mega Bank set aside an additional NT$400 million in provisions for loans to lossmaking Taiwan Polysilicon Corp (福聚), Hsu said, adding that the lender could make full provisions by the year end without material impact on its earnings momentum.
The bank’s net credit costs translated into only 5 basis points of outstanding loans in the first half and should stay moderate in the second half, he said.
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