Chinatrust Financial Holding Co (中信金控) is interested in tapping Japan’s banking market, which offers huge potential for selling pension and wealth management products given its aging population and high savings, president Daniel Wu (吳一揆) said yesterday.
Japanese banks have voiced interest in striking a partnership with Chinatrust Financial to deepen penetration in their home market and China after Taiwan and Japan inked an investment protection pact in September 2011, Wu told an investors’ conference.
Wu’s comments came as Chinatrust Financial is reportedly preparing to acquire Tokyo Star Bank next month, allowing the Taiwanese company to boost retail banking business in the world’s third-largest economy.
“The infiltration rate of wealth management products in Japan hovers at about 5 percent, compared with 15 percent in Taiwan,” Wu said.
The figure suggests ample room for growth, aided by Japan’s high bank savings deposits despite ultra-low interest rates, he said.
Japan’s aging population bodes well for pension products. According to Chinatrust, 60 percent of customers with Japan’s four largest banks are willing to switch to smaller local banks because the former fail to meet their needs.
While Japanese Prime Minister Shinzo Abe’s aggressive economic reform measures are favorable to its business expansion in Japan, Chinatrust Financial has no plan to rush the deal because of a weakening yen.
“All acquisitions must be able to generate 15 percent return on equity,” Wu said, refusing to say whether Tokyo Star meets this requirement.
Chinatrust Financial is also eying acquisition opportunities in China and Southeast Asia to take advantage of the fast GDP growth in those areas in recent years, Wu said.
Lenders in Southeast Asia are relatively expensive with price-to-book ratios ranging from two-and-half to three times, Wu said.
In addition, Chinatrust Financial is in talks with Canadian firm Manulife Financial Corp to buy its Taiwanese unit, Manulife Insurance Co (宏利人壽), as the operational environment grows increasingly difficult for foreign players.
The company, which bought MetLife Inc’s local unit for US$180 million in 2011, is financially well-positioned to integrate Manulife given its modest assets — sized at NT$30 billion (US$1 billion) — and has more appetite for expansion if opportunities arise, Wu said, declining to comment on reports that the group is to close the deal for Manulife next month.
Chinatrust Financial has a capital adequacy ratio of 165.5 percent and a double leverage ratio of 90 percent after successfully raising NT$20 billion in new capital through private placement deals last month, company data showed.
Shares in Chinatrust Financial closed up 0.27 percent to NT$18.25 yesterday, bucking the TAIEX’s 0.39 percent drop, Taiwan Stock Exchange data indicated.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by