Sat, Jun 15, 2013 - Page 14 News List

Financial firms upbeat despite sluggish recovery

EXTERNAL INFLUENCE?At its annual general meeting, Cathay Financial Holding Co elected new board members, including outside directors Peter Kwok and Zhong Chi-wei

By Crystal Hsu  /  Staff reporter

Several major financial holding companies yesterday convened their annual general meetings, where top executives expressed confidence in better earnings this year despite the sluggish economic recovery.

Cathay Financial Holding Co (國泰金控), the nation’s largest financial service provider by assets, has gradually improved its financial outlook over the past year even with the global economic slowdown affecting business in different sectors, company chairman Tsai Hong-tu (蔡宏圖) said.

“The company may fare better this year in terms of profitability from last year with the specter of downside risks easing,” Tsai told shareholders in Taipei.

The conglomerate earned NT$17 billion (US$567.2 million) in net income last year and shareholders gave their go-ahead to plans to distribute a dividend payout of NT$1.4 per share based on the earnings with half in cash and the other half in stock dividends.

The general meeting also elected new board members, including two outside directors, Peter Kwok (郭炎) and Zhong Chi-wei (仲躋偉), with vested financial ties with China, as Cathay Financial aims to strengthen its presence in the vast market.

Kwok is a former member of the Chinese People’s Political Consultative Conference who in 2010 tried unsuccessfully to acquire a 9.9 percent stake in Chinatrust Financial Holding Co (中信金控) for NT$21 billion via a private placement.

Zhong gained recognition for helping set up credit card business for China Merchants Bank (中國招商銀行), after leaving Chinatrust Commercial Bank (中國信託銀行), Taiwan’s largest credit card issuer and main subsidiary of Chinatrust Financial.

“Cathay Financial hopes to take advantage of the pair’s experience in China to help strengthen its consumer banking,” Cathay Financial president Lee Chang-ken (李長庚) told reporters on the sidelines of the meeting.

Shareholders yesterday voiced support for the company’s capital increase plans of up NT$40 billion in cash or via issuance of global depositary receipts with the proceeds to be used in later expansions, Lee said.

Separately, shareholders of Fubon Financial Holding Co (富邦金控), the second-largest financial service provider by assets, approved plans to increase the company’s capital by up to NT$40 billion, likely through sales of global depositary receipts.

Fubon Financial chairman Daniel Tsai (蔡明忠) said the extra funding is intended to shore up the group’s capital strength as the purchase of an 80 percent stake in Shanghai-based First Sino Bank (華一銀行) and other spending would require NT$30 billion.

Tsai said China is likely to approve the buyout this quarter or next quarter.

Shareholders also gave the green light to the distribution of NT$1 per share in cash dividend from net income of NT$28.99 billion last year, down from a cash dividend of NT$1.5 paid a year earlier.

Tsai attributed the reduction partly to the unprofitable unit Taiwan Sports Lottery Corp (運彩科技) that will cost more than NT$2.5 billion in profits this year.

“Fubon Financial will get rid of the burden next year when the contract with the government expires,” Tsai said.

Meanwhile, shareholders in SinoPac Financial Holding Co (永豐金控) approved plans to raise the company’s capital by NT$30 billion as the group seeks to facilitate expansions in China and ASEAN markets.

This story has been viewed 1586 times.
TOP top