Shin Kong Financial Holding Co (新光金控) yesterday posted its strongest earnings for the first six months of the year since the global financial crisis of 2008, thanks to one-off gains from real-estate investments.
Net income grew threefold from a year earlier to NT$7.66 billion (US$255.25 million) during the January-to-June period, or earnings of NT$0.91 per share, driven mainly by the booking of profits from real- estate asset trust investments, senior vice president Sunny Hsu (徐舜鋆) said.
However, the life insurance-focused financial group saw its net worth falling 15 percent in the first half as a result of unrealized losses on stock investments, Hsu said. The losses eased somehow following the recent rebound in the local bourse, he added.
The TAIEX recovered 2.9 percent to 7,507.17 points yesterday, compared with 7,296.28 at the end of June, Taiwan Stock Exchange data indicated.
Shin Kong Life Insurance Co (新光人壽) reported 5.04 billion in net profit in the first half, reversing NT$120 million in net losses during the same period last year, as sales of traditional insurance policies more than doubled to NT$30.5 billion while accident, medical and other protection policies rose 16 percent to NT$2.1 billion, company figures said.
As of June 30, first-year premiums rose 2 percent to NT$39.4 billion at the life insurer, from the year-ago level, earning it a market share of 6.2 percent, company statistics showed.
Both sales of investment-linked insurance policies and interest-sensitive annuity products totaled NT$3.4 billion for the first six months, down 78 percent and 60 percent respectively from June last year, the company’s report showed.
Hedging costs averaged 1.74 percent at the end of June and dropped below the target of 1.5 percent, Hsu said.
Shin Kong Life president Jason Tsai (蔡雄繼) said the insurer plans to increase real estate investments to 9 percent from the current 7.4 percent of the overall portfolio.
“It will become more difficult to find ideal targets now that the Financial Supervisory Commission has raised minimum yields to 2.125 percent from 1.875 percent,” Tsai said.
Shin Kong Life joined the bid for the office building on Xinyi Rd Sec 4, but could not offer more than NT$7 billion to toe the line, Tsai said.
Shin Kong Commercial Bank (新光銀行), the banking subsidiary, posted NT$2.57 billion in net profit in the first half, up 26.6 percent from last year as double-digit loan growth boosted interest and fee income, Hsu said.
The bank has an extra NT$20 billion fund for mortgage lending this year while most other peers nearly meet the limits, Hsu said, adding Shin Kong Bank aims to expand its assets further to qualify for expansion in China.
Two analysts from local financial institutions voiced neutral views on Shin Kong Financial given its mediocre earnings abilities.
Without one-off gains, the group’s financial results would weaken significantly, both analysts said anonymously.
The shares in Shin Kong Financial ended flat at NT$8.65 yesterday, weaker than the TAIEX’s 0.11 percent advancement.