Taiwan's State-Owned Banks See Strong Overseas Profit Growth in First Four Months; Four Banks Exceed 20% Contribution Ratio

In recent years, overseas expansion has become a growth engine for financial institutions. As of the end of April this year, the overseas profit momentum of eight state-owned banks continues to grow. For overseas branches excluding China, plus OBU (Offshore Banking Unit) profit as a percentage of total bank profit, Chang Hwa Bank was the highest at about 27%, while First Bank, Mega Bank, and Bank of Taiwan also exceeded 20%. In terms of profit performance, Hua Nan Bank was the most impressive, with a year-over-year increase of over 100%.

Hua Nan Bank stated that for the first four months, pre-tax earnings from overseas branches (excluding China branches) plus OBU, calculated in USD, grew by over 100% compared to the same period last year, accounting for about 18.52% of the entire bank's pre-tax earnings. Among these, OBU's pre-tax earnings grew by about 280%, mainly due to a narrowing of interest spread losses on some fixed-rate securities held. Other factors included increased provisions for bad debts and write-offs last year due to poor credit asset quality, and an expansion in the scale of interest-earning assets, which boosted net interest income.

Hua Nan Bank explained that this year's overseas expansion will continue to align with government policies and the overseas investment layouts of Taiwanese businesses. Priority will be given to regions with relatively stable political and economic situations or business development opportunities, with active evaluation of the feasibility of establishing operational bases to expand service scale and presence. Additionally, it will strengthen global financial services through its OBU to meet various cross-border financial needs of customers.

Taiwan Business Bank's overseas branches (excluding China branches) plus OBU saw a year-over-year increase of about 50% in the first four months, accounting for about 18.26% of the entire bank's pre-tax earnings. The bank stated that it is currently observing market developments and the actual needs of Taiwanese businesses, and will later assess the feasibility of overseas expansion based on their financial needs and market maturity.

First Bank currently has 44 operational bases in 17 countries. In the first four months, profit from overseas branches (excluding China branches) plus OBU increased slightly by 11% compared to last year, accounting for about 26% of the entire bank's pre-tax earnings. The bank explained that it will continue to leverage its dense network of domestic and foreign bases and the resources of its group subsidiaries to strengthen cooperation between domestic and overseas branches, expand overseas business capacity, and adopt a dynamic overseas layout strategy based on economic development, the openness of foreign financial institutions, and the industrial layout of Taiwanese businesses, to enhance the bank's overall competitiveness.

As for the Bank of Taiwan, it has already established two branches in Singapore and Sydney, Australia, and has seven representative offices in Mumbai, India; Yangon, Myanmar; Bangkok, Thailand; Manila, Philippines; Ho Chi Minh City, Vietnam; Jakarta, Indonesia; and Kuala Lumpur, Malaysia. According to statistics, the Bank of Taiwan's pre-tax earnings from overseas branches (including OBU, excluding China branches) for the first four months increased by 25.24% year-over-year, accounting for about 21.6% of the bank's total.

Chang Hwa Bank explained that its profit from overseas branches and OBU for the first four months grew compared to the same period last year, accounting for about 27% of the bank's total. This was mainly due to the active promotion of business in overseas branches and OBU this year, leading to credit growth and an overall boost in earnings momentum. A Chang Hwa Bank executive pointed out that the current top three profit-making markets are Hong Kong, the United States, and Singapore. In the future, the bank will continue to deepen its presence in the ASEAN, North American, and Australian markets, and is evaluating setting up a location in Phoenix, Arizona, to capture opportunities in the North American semiconductor supply chain.

Land Bank of Taiwan stated that for the first four months, its overseas profit including OBU accounted for about 18.84% of the bank's total, an increase from the same period last year. In terms of overseas base layout, the focus this year is on applying to establish a branch in Tokyo, Japan, and it is actively preparing the necessary documents for the application process with Japan's Financial Services Agency.

Taiwan Cooperative Bank stated that for the first four months, the pre-tax earnings of its overseas branches (excluding China branches) plus OBU fluctuated compared to the same period last year, influenced by risk control policies and asset quality improvement measures. This was mainly due to a continued prudent management strategy, proactively strengthening credit risk management, and setting aside relevant provisions to enhance overall asset quality and operational resilience. The contribution remains at a very important level, serving as a key pillar of its profit sources.

Mega Bank stated that for the first four months, the profit contribution from its overseas branches (excluding China branches) plus OBU reached 23.71%, but its pre-tax net profit showed a year-over-year decrease. This was mainly due to a reduction in net interest income as interest margins narrowed following US dollar interest rate cuts. Additionally, considering that market expectations for rapid easing have clearly converged, the bank adjusted its investment bond structure, resulting in disposal losses. Furthermore, as the loan portfolio expanded, provisions for bad debt increased, putting pressure on profit performance.

Mega Bank explained that this year it will continue to monitor international economic and trade trends, maintain close contact with the parent companies of Taiwanese businesses to grasp industry dynamics and funding needs, and prudently evaluate the feasibility of adding overseas bases in clusters of Taiwanese businesses to expand service capacity and enhance overall competitiveness.