Yuanta Bank keeps growth momentum with acquisition and diversification strategy

Country Business Reports interviews and articles by Discovery Reports www.discoveryreports.com

With total assets exceeding NT$1.3 trillion (HK$330.15 billion), Yuanta Commercial Bank (Yuanta Bank) has emerged as Taiwan’s seventh-largest private bank.

Fresh from its union with Ta Chong Bank (TC Bank) early this year, Yuanta Bank has strengthened its operating foundation and enhanced its competencies, resulting in a well-balanced business structure that covers corporate and international banking, consumer banking, wealth management, investment and trading.

Notwithstanding the effects of the post-merger process, Yuanta Bank reported a strong performance for the half-year period ended June 2018, with net revenue up 2.9 per cent to NT$11.6 billion and income before tax 6 per cent higher at NT$5.8 billion.

“We saw our overall profits rise in the first half of 2018 even as we were going through completing the acquisition of TC Bank,” says Tony Fan, chairman of Yuanta Bank. “With this strategic acquisition, we’ve achieved more – a strong asset quality, high profit and effective performance, showing that one plus one can have a result that’s more than two.”

After its merger with TC Bank, Yuanta Bank has doubled its service territory to 152 branches, which are spread across Taiwan’s major metropolitan areas. Yuanta Bank has also gained control of its first Hong Kong branch that will play a key role in extending its business scale in the Greater China market.

The Hong Kong branch provides a wide range of banking services, including deposits, remittance, foreign currency loans, international syndication loans, and import and export trade financing.

With a foothold in Hong Kong complemented by established subsidiaries in South Korea and the Philippines, and a representative office in Myanmar, Yuanta Bank will accelerate development of its operations in Asia and cultivate business opportunities in the region. The bank also relies on the extensive network of its parent firm Yuanta Financial Holdings – a comprehensive financial group that maintains a leading market share in securities brokerage.

To further broaden its risk profile and maintain a stable growth in fee income, Yuanta Bank nurtures strategic alliances with global investment banks such as Morgan Stanley and UBS.

“We are actively growing our presence in the international banking market with the goal of realising higher profitability under manageable risks,” Fan says. “We are now focused on building more connections with private equity funds, and we’re ready to venture into project financing.”

Apart from China and South Korea, Yuanta Bank, through its offshore banking unit, seeks to deliver diversified cross-border financial services in Australia, Myanmar, Indonesia and Vietnam.

The bank welcomes opportunities to work with reputable local partners to fast-track its entry into these regional markets. In Indonesia, Yuanta Bank has started providing syndicated loans and is seeing a strong reception.

Founded in 1992 and headquartered in Taipei, Yuanta Bank has achieved significant growth by diversifying its industry risks and carving a presence in sectors such as education, medicine, green energy and e-commerce.

The bank has also built strong relationships with clients in the fishery industry , and has also created a solid automotive financing portfolio by cooperating with several auto companies.

“For the years 2015 to 2017, income before tax of all domestic banks dropped, but we dodged the downtrend, partly owing to our strong diversification strategy,” Fan says. Yuanta Bank saw its income before tax surge 38.77 per cent from NT$5.6 billion in 2015 to NT$7.8 billion in 2017.

Seizing business opportunities arising from the increasing use of mobile communications and the internet in banking, Yuanta Bank has actively moved to integrate digital channels and develop digital products.

The bank is encouraging clients to move from traditional banking to digital channels by optimising user experience through improved functionality and security. Yuanta Bank is also continuing to invest in fintech technology.

www.yuantabank.com.tw