Shin Kong Financial Holding Co (新光金控) on Thursday reported net losses of NT$2.27 billion (US$69 million) for last quarter, mainly due to heavy losses on unrealized equity investments.
In comparison, the company posted net profits of NT$2.9 billion in the second quarter and NT$4.2 billion in the third quarter of last year.
From January to September, the company said its aggregate profits decreased 41.4 percent year-on-year to NT$4.04 billion, or earnings per share of NT$0.4.
Shin Kong Financial attributed the decline to its culling about NT$40 billion of poor-performing equities investments from its domestic portfolios, even though it booked unrealized property gains of NT$5.25 billion and a contribution of NT$3.8 billion from its banking unit, Shin Kong Commercial Bank (新光銀行).
The equity portfolio adjustments led to aggregate losses of NT$31 million for its life insurance arm, Shin Kong Life Insurance Co (新光人壽), in the first three quarters, driving down total investment yield to 3.37 percent, down 47 basis points from the prior three months.
Analysts said the decline in total investment yield was largely due to investment losses of NT$6.9 billion in the past quarter following a 12 percent contraction in the Taiwanese stock market and the significant losses from its equity investment in HTC Corp (宏達電).
The company said Shin Kong Life’s situation is expected to improve next year as the unit aims to lower its costs of liabilities by 10 basis points to 4.4 percent on the back of improving fixed-income earnings as it invests more cash in US stocks and international bonds.
At the end of September, Shin Kong Life’s fixed-income portfolio had expanded 32 percent year-on-year to NT$1.15 trillion.
While unrealized losses of its financial assets available for sale had worsened to NT$40 billion at the end of September, compared with NT$29.7 billion at the end of June, the figure had recovered by NT$9 billion at the end of last month, the company said.
In addition, the company last month reported NT$2 billion in pre-tax operating income, ending a two-month streak of losses.
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