Shin Kong Financial Holding Co (新光金控) expects its life insurance unit to grow first-year premiums by 15 percent this year and its banking arm to expand lending by 5.5 percent amid an improving operating environment for businesses, senior executives said yesterday.
The life insurance-focused conglomerate gave the guidance after posting NT$9.99 billion (US$329 million) in net income last year, or earnings per share of NT$1.11, company data showed.
The results represented a 0.9 percent decline from the previous year after the group incurred net losses of NT$982 million in the final quarter of last year attributed to hedging costs of NT$5.2 billion, company data showed.
“We expect first-year premiums to reach NT$65 billion this year,” Shin Kong Financial senior vice president Sunny Hsu (徐舜鋆) told an investors’ conference.
To that end, Shin Kong Life Insurance Co (新光人壽), the group’s main subsidiary and its biggest source of income, will strengthen sales of protection-type insurance policies and foreign currency-based lump-sum products, Hsu said.
In addition, the insurer aims to underscore policies offering long-term healthcare, as 1.31 million people would need such services in 17 years, Hsu said.
Shin Kong Life also plans to increase its holdings in foreign government and corporate bonds, as they generated fixed income of NT$3.19 billion last year with average returns standing at 4.63 percent, Hsu said.
The yield is higher than the 3.54 percent return on domestic bonds and equities, Hsu said.
The insurer intends to lower its cash position to NT$30 billion from NT$53.5 billion, or 3.2 percent of total investment funds at the end of last year, Hsu said.
Shin Kong Bank (新光銀行) looks to boost its loan book by 5.5 percent this year, from NT$450.82 billion in December last year, Hsu said.
As net interest margin gained only 1 basis point to 1.4 percent in the final quarter of last year, the lender is seeking double-digit expansion in its wealth management business this year to boost fee income, Hsu said.
Higher-yielding yuan products and services would lend support to the goal, he said.
The lender plans to set up representative offices in China once the cross-strait service trade agreement clears the legislature, Hsu said.
The pact would allow local banks without operations in mature markets to set up in China.
Shin Kong Bank is also studying investments in Vietnam, Cambodia and Myanmar to take advantage of their growth, Hsu said.
Shin Kong Financial shares closed up 0.71 percent at NT$9.98 yesterday, just below their face value of NT$10, weaker than the TAIEX’s 0.94 percent rise, Taiwan Stock Exchange data showed.