Financial group expects steady profits this year

Shin Kong Financial Holding Co (新光金控) expects profits this year to remain at the same level as last year, but with earnings per share edging slightly down by NT$0.1 due to an increase in capital stock, the financial group's spokesman Victor Hsu (許澎) said yesterday at a press gathering.

Last year, Shin Kong Financial reaped net profits of NT$7.06 billion, or NT$1.74 per share. For the first eight months of this year, the firm posted earnings of NT$7.45 billion, or NT$1.71 per share.

Hsu said that Shin Kong Financial has been looking for potential acquisition targets after taking over Macoto Bank (誠泰銀行), a privately owned lender, last year.

He didn't specify potential candidates, but local media have been speculating that MasterLink Securities Corp (元富證券) and its larger rival First Financial Holding Co (第一金控) are likely targets.

According to the Shin Kong group's statistics, flagship unit Shin Kong Life Insurance Co (新光人壽) has a 6.9 percent stake in the state-controlled First Financial, the nation's fourth-largest financial group by assets.

"We have interests in First Financial and the company also offers good investment value," Shin Kong Financial chairman Eugene Wu (吳東進) said yesterday.

But under current regulations, the company is competing with interested foreign rivals with its one hand tied behind its back, Wu said.

He remained tight-lipped about the firm's plans for First Financial, saying only that it would flexibly respond to future situations.

On Wednesday, Minister of Finance Ho Chih-chin (何志欽) said that the ministry might consider unloading shares in state-controlled banks to top foreign firms.

Ho's remark follows recent announcements by Standard Chartered Bank of its plan to buy Hsinchu International Bank (新竹國際商銀) and Citibank's interest in taking over the Bank of Overseas Chinese (華僑銀行).

The ministry's government shareholding management unit, which oversees state holdings, last week unveiled guidelines for dis-posing of public shares in financial institutions. At the time, the ministry said it preferred the world's top 100 banks to take over state shareholdings in future disposals and that local financial institutions are banned from using insurance funds for takeover investment.

The government currently holds a majority of board seats in eight state-controlled banks, including the Bank of Taiwan (台灣銀行), and expects to keep only one to three in the long term.

Deputy Minister of Finance Liu Teng-cheng (劉燈城) said that public shares must be released through an open and competitive process once the legislature gives the green light.