Taishin Financial Holdings Co (台新金控) remains interested in acquiring an insurance company to increase its earnings, but will give top priority to strengthening its existing businesses, president Lin Keh-hsiao (林克孝) said yesterday.
Lin made the remarks after the company lost the bid for MetLife Inc’s Taiwanese unit to Chinatrust Financial Holding Co (中信金控) on Monday.
“It is favorable for Taishin to own a life insurance company, which could boost the group’s overall performance,” Lin said. “We already have a strong bancassurance team and we want to take further advantage of it.”
For the same reason, Chinatrust Financial, the nation’s third-largest financial services provider, on Monday announced its intention to buy MetLife Taiwan Insurance Co (大都會人壽) for US$180 million in a bid to expand into the domestic insurance market and eventually across the Taiwan Strait.
The deal is scheduled to be completed in the second half of the year, pending regulatory approval.
Bancassurance, a business model whereby insurance companies use bank sales channels to sell insurance products rather than rely on sales agents, accounts for 70 percent of the nation’s first-year premiums.
Lin refused to comment on MetLife Taiwan — as is required of bidders — except to say that the review deepened his belief that owning a life insurer was beneficial.
“The issue [of acquisition] does not sit on top of Taishin Financial’s agenda,” he said. “We joined the bid [for MetLife Taiwan] because the opportunity presented itself. Taishin will continue to strengthen its existing businesses.”
While the group did not rule out creating its own life insurance firm, acquiring existing ones is easier because they are already equipped with a competent professional management structure, Lin said.
Despite reviving talks of consolidation among state-run financial firms, Taishin Financial will hold on to its 22.5 percent stake in Chang Hwa Commercial Bank (彰化銀行) for the foreseeable future, Lin said, adding that mergers of state-run banks by their private peers would be beneficial because of increased synergy.
FITCH RATINGS
Meanwhile, Fitch Ratings Ltd yesterday said Chinatrust Financial’s proposed cash acquisition of MetLife Taiwan would have no immediate impact on its rating and those of its subsidiaries because of the relatively small size of the transaction.
“Fitch expects the acquisition to only modestly increase financial leverage at the holding company level, with limited impact on the group’s financial profile, while the rating for Chinatrust Group has already factored in the possibility that it will pursue modest diversification opportunities,” the UK ratings agency said in a statement.
Based on Fitch data, the US$180 million deal represents about 5 percent of Chinatrust Group’s consolidated assets on a pro forma basis.
However, MetLife Taiwan’s capital strength could be a risk. As of the end of last year, the insurer had a risk-based capital ratio of 205 percent, just 5 percentage points higher than the regulatory minimum of 200 percent, according to Financial Supervisory Commission data.
However, both Fitch Ratings and Citigroup Global Markets said yesterday they believed Metlife Taiwan would need no immediate capital injection, citing the insurer’s relatively conservative investment portfolio and the low cost of its insurance liabilities compared with its peers in Taiwan.
MetLife Taiwan has about 88 percent of its investment portfolio in the form of government and corporate bonds, with equities accounting for less than 1 percent, Citigroup analyst Bradford Ti (鄭溫煌) said in a note yesterday.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day