Wed, Mar 11, 2015 - Page 13 News List

Shin Kong Financial Holding waves massive wad of cash for Asian tie-ups

STACKING PAPER:Shin Kong has readied more than NT$100 billion for potential investment in the local securities market, a senior vice president said

By Amy Su  /  Staff reporter

Shin Kong Financial Holding Co (新光金控) yesterday said it is ready with more than NT$10 billion (US$315.7 million) in funds to seek potential mergers and acquisitions (M&A) in Southeast Asian markets, demonstrating its determination to join the “Asian League” this year.

Shin Kong is studying markets, including Indonesia, Cambodia and the Philippines, considering banks that have more than a 5 percent risk-based capital (RBC) ratio.

“We hope to make some achievements [in the Asian League issue] this year,” Shin Kong Financial senior vice president Sunny Hsu (徐舜鋆) told an investors’ conference.

Hsu said funding would not be an issue for Shin Kong’s pace of expansion in the rest of Asia, with the company capable of mergers of more than NT$10 billion, due to its strong RBC ratio of more than 300 percent.

The RBC ratio measures the minimum amount of capital appropriate for a reporting entity to support its overall business operations, taking into consideration its size and risk profile.

Shin Kong has also prepared more than NT$100 billion for possible further investments in the domestic securities market, Hsu said.

Additionally, the TAIEX could slide in the second half of this year following a new measure to tax investors’ cash dividends that is set to start in June, creating further incentive for buyers, Hsu said.

Shin Kong posted net income of NT$7.92 billion, or earnings per share (EPS) of NT$0.7, for the whole of last year, down 25 percent from NT$10.27 billion, or NT$1.05 EPS, in 2013.

It attributed the change mainly to losses incurred at its life insurance unit in the first quarter of last year.

In a bid to increase investment returns and secure profitability this year, Shin Kong Life Insurance Co (新光人壽), the group’s main subsidiary and its biggest source of income, aims to raise its holdings of locally issued foreign-currency bonds to NT$200 billion by the end of this year.

The life insurer might also focus on sales of foreign-currency insurance policies, hoping that policy premiums total NT$65 billion in sales this year, from NT$29.2 billion recorded last year, which would translate into 32 percent of its gross premiums.

The term “Asian League” refers the central government’s encouragement of Taiwanese financial institutions to expand to other markets in the region.

In November last year, Financial Supervisory Commission Chairman William Tseng (曾銘宗) called on the nation’s major financial institutions to accelerate their expansion throughout the rest of Asia, for which the commission has been encouraging since late 2013.

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