Wed, Nov 11, 2015 - Page 13 News List

Cathay Life recovers after tumbling in third quarter

By Ted Chen  /  Staff reporter

Cathay Financial Holding Co (國泰金控) on Monday said that its life insurance unit, Cathay Life Insurance Co (國泰人壽) has weathered a spike in global market volatility in the third quarter to report NT$3.4 billion (US$103.5 million) in net unrealized gains for its financial assets available for sale.

Cathay Life, the conglomerate’s most profitable unit, had recorded unrealized gains of NT$20.6 billion at the end of the second quarter, but the figure tumbled to a loss of NT$20.9 billion at the end of the third quarter.

Cathay Life said that following the NT$41.5 billion swing, its unrealized gains has returned to the black with NT$3.4 billion at the end of last month.

After the TAIEX recovered to the 8,600-point benchmark, Cathay Life’s latest unrealized gain was estimated at about NT$8 billion, the company told an investors’ conference.

Cathay Life declined to provide details of its investment strategy and did not confirm whether it has begun weighing in on more active stocks.

Cathay Financial said that after winning the bid for the insolvent Global Life Insurance Co (國寶人壽) and Singfor Life Insurance Co (幸福人壽) in March, effects on its income statement from the acquisition of the pair of troubled insurers has thus far been “positive.”

The company said that the acquisition of the two insurers has resulted in an increase of 1 basis point in cost of liabilities, which stood at 4.34 percent as of the end of the third quarter.

In the first three quarters, Cathay Financial reported that its net income grew 23 percent annually to NT$54.9 billion, or NT$4.33 per share, while the conglomerate’s book value has expanded to NT$44.35 billion from last year’s NT$43.91 billion, partly due to the acquisition of Singfor Life and Global Life.

Regarding expansions into Asian markets, Cathay Financial president Lee Chang-ken (李長庚) said that the company’s shareholders have approved a NT$50 billion capital increase to fund future acquisitions and that it is awaiting Indonesian regulators’ approval to acquire a 40 percent stake in that nation’s Bank Mayapada.

Lee also said that the company would not initiate layoffs as the financial sector transitions toward the “Bank 3.0” trend.

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