Yuanta Financial Holding Co (元大金控) yesterday reiterated its aim of operating a life insurance arm to boost the group’s asset size and overall business efficiency.
Yuanta Financial chairman Yen Ching-chang (顏慶章) made the statement after shareholders approved a plan to acquire Polaris Securities Co (寶來證券) for NT$48.9 billion (US$1.69 billion).
The two firms struck an agreement in April to consolidate their securities and futures brokerages as well as trust fund businesses. The buyout still needs the approval of the Financial Supervisory Commission (FSC).
Yen said he expected the integration to be completed in the first half of next year after the commission approves the merger probably around November.
However, that would mean its planned venture into life insurance might not be realized this year.
“The group will focus on accelerating the integration [of the two securities companies,] but will seize opportunities [in the life insurance field] when they arise,” he said.
The group is weighing the possibility of acquiring an existing life insurer or establishing its own insurance unit, Yen said.
“It is common for financial institutions worldwide to expand their economies of scale through mergers and acquisitions,” Yen said. “Yuanta Financial has scored some in recent years and sees no reason to slow the pace in the future.”
Yen said he saw great business opportunity for protection policy sales as the market is saturated with unit-linked products.
Shareholders also agreed to a capital increase plan whereby the conglomerate will issue 742.86 million new common shares with NT$7.43 billion in retained earnings from last year to finance the acquisition of Polaris Securities.
The capital injection will lift Yuanta Financial’s capital to NT$125 billion, from the current NT$100 billion.
Polaris shareholders also gave their go-ahead to the buyout, which allows them to swap each of their shares for 0.5 shares in Yuanta Financial plus a cash per share of NT$12.20.
Polaris Securities will be delisted from the local bourse upon integration.
Yuanta Financial posted a net income of NT$8.16 billion last year and will distribute a stock dividend of NT$0.92 per share.
Net earnings totaled NT$8.03 billion in the first five months of this year, surging nearly fourfold from the same period last year, after Yuanta Financial sold its 29.12 percent stake in Singapore-listed brokerage Kim Eng Holdings Ltd (金英控股) to a Malaysian lender.
Yen expects the group to deliver stronger earnings in the second half, although the market share of its banking unit, Yuanta Bank (元大銀行), remains small in loan terms.
Shares of Yuanta Financial gained 0.26 percent to close at NT$18.95 yesterday, outperforming the TAIEX, which slid 0.25 percent.
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