The nation’s financial holding companies have mostly reported robust earnings for last month boosted by stronger wealth management business and a weaker local currency, analysts said yesterday.
The 15 listed financial holding companies posted a combined NT$24.59 billion (US$808.66 million) in net profit last month, more than three times that of a month earlier and up 16.4 percent from the year-ago level, as the New Taiwan Dollar weakened 1.71 percent against the greenback, boosting demand for investment products and lowering currency hedging costs, SinoPac Securities Investment Trust Co (永豐投信) said.
Cathay Financial Holding Co (國泰金控), the nation’s largest by assets, reported after-tax income of NT$4.03 billion, or NT$.033 earnings per share (EPS), on the back of favorable bond yields and exchange rates, the company said in a statement on Monday.
The earnings reversed losses in December last year and represented an increase of 32.6 percent from a year earlier, company data showed, after yields on 10-year government bonds in Taiwan and the US slipped last month, raising bond prices.
Cathay Life Insurance Co (國泰人壽) generated NT$2.15 billion in net profit, while Cathay United Bank (國泰世華) contributed an extra NT$1.7 billion, the conglomerate said.
However, the strong showings may not be sustainable because a tapering of US quantitative easing (QE) would be a double-edged sword for life insurers, as they would gain from declining exchange rates, but suffer losses from rising interest rates, Primasia Securities Ltd said.
Fubon Financial Holding Co (富邦金控), the second-largest by assets, topped peers in terms of profitability last month with NT$6.7 billion in net income, or an EPS of NT$0.66, the company said in a statement released on Monday.
Taipei Fubon Commercial Bank (北富銀) reported a robust NT$2.8 billion in net profit, while Fubon Life Insurance Co (富邦人壽) posted NT$3.3 billion net income.
The group attributed the results to equity and foreign-exchange hedging gains, while improvement in interest and fee incomes also contributed, the statement said
For the whole year, Fubon Financial may earn NT$38.65 billion in net income or even NT$40 billion including contributions from its Chinese subsidiary, First Sino Bank (華一銀行), SinoPac Securities said.
Bank-focused CTBC Financial Holding Co (中信金) reported NT$2.9 billion in net profit, or EPS of NT$0.2 last month, contrasting provision-induced losses one month earlier, the company said in a statement.
The conglomerate also benefited from currency volatility and a pickup in wealth management business, the company said.