Cathay reports decline in Q1 profit

Cathay Financial Holding Co (國泰投信), the nation's biggest financial services company by market value, had a 61 percent fall in first-quarter profit as slowing economic growth eroded investment returns.

Unaudited net income declined to NT$4.75 billion (US$150 million), the company said in a filing to the Taiwan Stock Exchange late on Friday that included no figures on lending, deposits or assets for the period. Cathay Financial reported profit of NT$12.04 billion a year earlier.

"Its investment returns weren't good" amid weak securities markets, said Michael Ding (丁予嘉), president of Fubon Securities Investment Co (富邦投信).

Earnings growth at the parent of Cathay Life Insurance Co (國泰人壽), Taiwan's largest life insurer, may slow this year as the pace of the nation's economic expansion eases.

Cathay Financial said on Feb. 24 it plans to expand into property insurance in China after becoming the first Taiwanese financial company to sell life insurance policies there. Its Chinese partner is China Eastern Airlines Corp (東方航空).

Rivals Fubon Financial Holding Co (富邦金控), Hua Nan Financial Holdings Co (華南金控) and First Financial Holding Co (第一金控) also reported a decline in first-quarter profit as the economy slows.

The government forecasts that economic growth will slow to 4.21 percent this year from 5.71 percent last year.

The benchmark TAIEX fell 2.2 percent during the first quarter on concern over the nation's slowing economy. The index gained 11 percent during the same period a year earlier.

Fubon Financial, the nation's second-largest financial services company by market value, posted a 14 percent decline in first-quarter unaudited profit to NT$4.16 billion (US$132 million), the company said in a filing to the Taiwan Stock Exchange on Friday. That compares with NT$4.84 billion in the first quarter of last year. Fubon Financial on Feb. 22 said it expects profit this year to rise 15 percent to 20 percent from last year.

Hua Nan Financial, Taiwan's fourth-biggest financial holding, had a 22 percent unaudited profit drop in the first quarter from a year earlier to NT$2.48 billion (US$79 million). That compares with NT$3.17 billion in the first quarter of last year.

Hua Nan on Jan. 31 forecast profit of NT$10.7 billion for this year, unchanged from last year.

First Financial, the nation's fifth-largest financial-services provider, had a 26 percent decline in first-quarter unaudited profit to NT$2.56 billion (US$81 million). This compares with NT$3.45 billion in the first quarter of last year.