Despite no rating change at Standard and Poor’s, Chinatrust Financial Holding Co (中信金控) saw its share price drop sharply yesterday after the company made a substantial downward revision of its preliminary earnings result for the first half of the year.
Shares of the nation’s largest credit card provider fell 5.53 percent to NT$19.65, underperforming a 3.27 percent decline on the financial sub-index that was also weaker than a 1.55 percent decline on the benchmark TAIEX, Taiwan Stock Exchange data showed.
The stock has risen 41.37 percent this year, while the TAIEX has increased 49.16 percent.
On Tuesday night, Chinatrust Financial said it would cut its first-half profit by 93 percent from a preliminary figure announced last month.
The company said that it set aside NT$4.1 billion (US$125 million) in provisions for the settlement of the structured notes linked to the failed Lehman Brothers sold by its banking unit.
The Financial Supervisory Commission estimated that NT$80 billion in Lehman Brothers products had been sold in Taiwan.
The revision also reflected a NT$1.9 billion cut in deferred tax assets at the bank’s US subsidiary to comply with Generally Accepted Accounting Principles standards in the US, the statement said.
Following the revision, profit at Chinatrust Financial was NT$353 million for the January to June period, down from a preliminary profit of NT$5.23 billion the company reported last month.
It was also a 96 percent decline from the NT$8.9 billion it made a year earlier.
For the April to June period, Chinatrust Financial posted a NT$3.04 billion loss, compared with a preliminary second-quarter profit of NT$1.84 billion posted last month and a NT$3.97 billion profit a year ago.
Standard & Poor’s Ratings Services, however, maintained its ratings on Chinatrust Financial and Chinatrust Commercial Bank (中國信託銀行), citing no immediate concern to address, it said in a press release.
“In our view, Chinatrust Financial still faces uncertainty over potential additional expenses on the settlement of structured notes, but we expect the impact to be absorbable given the company’s core earning capability,” the agency said.
S&P said Chinatrust Financial recorded a 0.04 percent in annualized return on average assets on a consolidated basis for the first half and that the company’s ratio of reported consolidated total equity to assets remained adequate at 8.4 percent, the release said.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to