Chang Hwa Commercial Bank (2801) Q2 2024 earnings summary

Executive summary

• Net income after tax for 6M24 reached NT$7.444bn, up 6.19% year-over-year, with EPS at NT$0.66 and ROE at 3.90%.

• Loans comprised 62% of total consolidated assets as of June 30, 2024, with impairment assessment highlighted as a key audit matter.

• Consolidated financial statements for the six months ended June 30, 2024, were audited and received an unmodified opinion.

• Loans grew 8.76% YoY to NT$1,871bn, and deposits increased 8.47% YoY to NT$2,548bn.

• Asset size expanded to NT$3,102bn as of 2Q24, with net worth at NT$194bn.

Financial highlights

• Net revenue for 6M24 was NT$20.754bn, up 5.26% YoY; net income before tax rose 9.65% YoY to NT$9.429bn.

• Net fee income surged 50.67% YoY, mainly from wealth management and loan-related fees.

• Cost-income ratio improved to 47.15% in 6M24 from 49.01% in 6M23.

• NIM for 2Q24 was 1.12%, with total loan-to-deposit spread at 1.64%.

• Total comprehensive income for the six months was $11,638,087 thousand, down from $12,527,754 thousand year-over-year.

Outlook and guidance

• Economic growth momentum is expected to continue, supported by cooling inflation and improving terminal demand.

• The Group continues to monitor the impact of new and upcoming IFRS standards, including IFRS 18 and amendments to IAS 21.

• Management is assessing the impact of Pillar Two income tax legislation in Japan and the UK, with no current tax exposure but ongoing evaluation.

• Risks from global geopolitics, US-China trade frictions, and rising operating costs due to green inflation and carbon fees remain.

• Domestic economy remains robust, with strong private consumption, tourism, and real estate activity.