Cathay Financial Holding Co (國泰金控), Taiwan’s biggest financial services company and owner of the nation’s largest life insurer, posted a loss of NT$6.04 billion (US$199 million) in the first quarter.
Cathay Financial announced the unaudited net loss for the three months to March 31 in a filing to the Taiwan Stock Exchange yesterday. It compares with a net profit of NT$10 billion a year earlier. The company gave no further details in its statement.
Cathay and rival firms have posted higher writedowns and provisions related to the collapse of the US subprime market, which has triggered more than US$230 billion of losses at banks and securities firms globally. Taiwan’s stocks have advanced though on hopes president-elect Ma Ying-jeou (馬英九) will woo China.
“Cathay Financial might post a profit in the second quarter although it won’t be too good as further provisions for CDO investment losses may be needed,” said Parker Wu (吳年恭), a fund manager at Agricultural Bank of Taiwan (全國農業金庫) who helps manage the equivalent of US$150 million in Taipei. “Profitability will definitely improve as stock investments should be good after Taiwan’s new president vowed to improve ties with China.”
Wu attributed Cathay’s first quarter loss to provisions for losses related to investments in collateralized debt obligations and foreign exchange losses after the New Taiwan dollar rose 6.3 percent in the first quarter.
The TAIEX beat the world’s biggest stock markets in the first quarter as investors bet that the election of a president who favors opening toward China will ease travel and investment restrictions with the fastest-growing major economy.
The election of Ma from the Chinese Nationalist Party (KMT) on March 22 helped the TAIEX race past Brazil’s Bovespa Index, the best performer in the first two months. Cathay made a provision last year for a NT$3.27 billion loss related to investments in collateralized debt obligations, it said in March. The owner of the nation’s largest life insurer held NT$29 billion worth of investments in CDOs at the end of last year, Lee Chang-ken (李長庚), Cathay Financial’s executive vice president, said on March 21.
Net income last year tripled to NT$30.7 billion from 2006. Lee attributed the surge to higher investment income, rising fees from wealth management and a smaller provision for bad loans.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s
RSS