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Cathay sees loan growth in CRE, residential helping bank hit growth targets


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Cathay sees loan growth in CRE, residential helping bank hit growth targets

executivessaid the company believes it can hold its net interest margin steady until it receivesa boost early next year.

The companyhas about $200 million in structured repurchases that will mature in early January2017 and add about 13 basis points to its NIM, Executive Vice President, Treasurerand CFO Heng Chen said during a July 20 call to discuss the company's second-quarterresults.

Cathaysaid its NIM was 3.38% for the quarter and averaged 3.40% during the first halfof the year. "We're optimistic that we'll hold there until January," Chensaid, adding that the company was gradually deploying the high cash reserves ithas kept with the Federal Reserve in recent quarters.

Chairman,President and CEO Dunson Cheng said the company expects to see loan growth matchits target of 7% to 8% for the year, and said that because of challenges in theC&I space, growth will continue to come in commercial real estate and residentialreal estate, which drove much of the bank's loan growth in the first half.

"Ithas been quite challenging to grow the [commercial and industrial] portfolio forseveral reasons. Of course the economy growing slowly does not induce a quick loangrowth in C&I, and we also noticed that the retail sector of the economy hasbeen quite slow," Cheng said in response to an analyst question during thecall. Still Cheng noted that the bank has formed a new C&I-focused lending teamwhich is still "ramping up" and said he was "hopeful" that theteam will stabilize its C&I portfolio in the second half of the year and begingrowing the bank's business in the space.

Cathaysaid earlier this month that it had agreed to buy Los Angeles-based SinoPac in a $340 million deal.