Taishin Financial Holding Co (台新金控) might cut dividend payouts this year, as a significant asset impairment from its Chang Hwa Commercial Bank (CHB, 彰化銀行) holding hurt the company’s profits last year.
Taishin Financial distributed cash dividends of NT$0.43 and stock dividends of NT$0.99 per share last year, based on its 2013 net profit of NT$13.84 billion (US$436.6 million), or NT$1.57 per share, the company’s financial statement showed.
However, the company recognized a one-time asset loss of NT$14.78 billion in the fourth quarter last year after failing to obtain controlling seats on the CHB board. That brought Taishin Financial’s annual net profit down to NT$1.57 billion, or NT$0.08 per share, the statement said.
That represented an annual 88.7 percent decline, making Taishin Financial one of the nation’s poorest performing financial holding companies last year.
“This will definitely influence the company’s dividend strategy [this year],” Taishin Financial president Joseph Jao (饒世湛) told an investors’ conference yesterday.
The company filed a lawsuit against the Ministry of Finance in December last year, accusing the ministry of falsely breaking the commitment between the two sides and manipulating CHB’s board election.
Taishin Financial is asking the ministry to return the right to manage CHB to the company and to compensate the company’s losses in the lawsuit, Jao said, adding that the lawsuit is scheduled for its first court session on Thursday next week.
The company also said its board of directors decided not to dispose of its 22.5 percent CHB stake before the end of the lawsuit, and already submitted an explicatory report earlier this week to the Financial Supervisory Commission — which had asked Taishin Financial to sell its CHB holding under the terms of current regulations, Jao said.
Excluding the losses related to CHB, Jao said Taishin Financial saw its core business maintain steady growth last year — showing an annual 15.8 percent increase in profits.
The company still plans to raise employees pay by between 3 and 5 percent later this year, Jao said.
For this year, Taishin Financial expects the growth of its banking arm and major source of net profit — Taishin International Bank (台新銀行) — to focus on home equity and wealth management sectors, company chief financial officer Welch Lin (林維俊) said.
The two businesses could see a 15 percent year-on-year increase in profits, Lin said.
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