CTBC Financial Holding Co (中信金控) aims to raise the general assets of its insurance business to NT$1 trillion (US$31.09 billion) in 2017 — a figure that would represent 25 percent of the financial holding firm’s total assets, a company executive said on Saturday.
The general assets of CTBC Financial’s insurance business — mainly CTBC Life Insurance Co Ltd (中國信託人壽) — now total about NT$350 billion, or 6 percent of the company’s total assets, according to the conglomerate, which has businesses in several areas including banking, insurance, securities, venture capital, asset management and lotteries.
At the same time, the company hopes to lower the proportion of assets of its banking business to around 70 percent of the total from its current position of more than 90 percent, CTBC Financial president Daniel Wu (吳一揆) said.
“Following the strategy to raise the scale of CTBC Financial’s insurance business, the company will seek appropriate mergers and acquisitions,” Wu told reporters on the sideline of an orientation ceremony for newly recruited management associates.
CTBC Financial and its subsidiaries plan to hire up to 3,000 employees this year, including 50 management associates.
The company has been on track to develop into a financial group with strong regional competitiveness in recent years through mergers and acquisitions at home and abroad.
CTBC Financial acquired MetLife Taiwan Insurance Co (大都會國際人壽) in 2011 and Manulife Insurance Co (宏利人壽) in 2013. Last year, the company completed the 100 percent acquisition of Tokyo Star Bank.
The company was absent from a government-held auction for the ownerships of debt-ridden Global Life Insurance Co (國寶人壽) and Singfor Life Insurance Co (幸福人壽) last week. Instead, Cathay Life Insurance Co (國泰人壽) took over the two bankrupt life insurers, assisted by a government subsidy of NT$30.3 billion, according to a Financial Supervisory Commission statement.
The two insolvent companies hold a total of around NT$107.4 billion in general assets, commission data shows.
Asked why CTBC Financial did not participate in the bidding for Global Life and Singfor Life, Wu said the company was not a qualified bidder as then-CTBC Life chairman Scott Chien (簡松棋) had once been the chairman of Singfor Life.
There is another potential acquisition target on the horizon, however, as the company is mulling the acquisition of Taiwan Life Insurance Co (台灣人壽), Wu said earlier this month after a conference call with analysts.
The company has sufficient capital to make investments in the future, Yuanta Securities Investment Consulting Co (元大投顧) said.
The company’s tier-one ratio reached 10.5 percent in the fourth quarter of last year, higher than the Basel III requirement of 8.5 percent. This shows that the company has sufficient capital to grow, Yuanta Investment researcher Peggy Shih (施姵帆) said.
In addition, CTBC Financial’s double leverage ratio was 105.3 percent in the past quarter, far below the regulatory ceiling of 125 percent and more evidence that it has sufficient capacity to make investments, Shih said.
The company posted net income of NT$6.06 billion, or NT$0.4 per share, in the first two months of the year, higher than the NT$5.36 billion it made in the same period last year. However, its shares have underperformed the main bourse by 2.6 percent since the beginning of the year, after dropping 0.97 percent to close at NT$20.45 on Friday last week.
JPMorgan Securities Ltd said the company’s shares might not react positively even after deciding to restart talks with Taiwan Life.
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