CTBC Financial Holding Co (中信金控) yesterday said newly acquired Taiwan Life Insurance Co (台灣人壽保險) contributed to its first-quarter earnings.
Taiwan Life, a smaller rival the company acquired at the end of last year, contributed NT$1.34 billion (US$41.18 million) profit in the first quarter, CTBC Financial said.
Taiwan Life’s contribution reversed a net loss of NT$944 million by the company’s life insurance operations in the final quarter of last year, company data showed.
However, as CTBC Bank Co (中國信託銀行) saw its first-quarter net income drop 67.7 percent to NT$4.72 billion from the previous quarter, CTBC Financial’s net income declined 37.2 percent to NT$6.56 billion.
The parent company attributed the poor performance at its main banking subsidiary to Taiwan’s increasingly inclement interest environment, dim economic growth prospects and lingering volatility in global markets.
Rising regulatory requirements at home and abroad — which led to increased provisions against exposure to risky yuan-linked target redemption forward (TRF) derivatives, as well as higher provisions against non-performing loans for Tokyo Star Bank — also undercut CTBC Bank’s profit last quarter, CTBC Financial said.
Even so, CTBC Financial said that total lending at the bank rose 12.6 percent in the first quarter and the loan-to-deposit ratio improved to 78.12 percent, while its net interest margin rose by 3 basis points to 1.43 percent.
As CTBC Financial’s offshore operations continued to provide contribution, reaching 42 percent of overall earnings in the first quarter, the company plans to continue expanding into Southeast Asia.
However, its progress in attaining a 20 percent stake in Chinese insurer ABC Life Insurance (農銀人壽) is now facing challenges from rivaling bidders, CTBC Financial said.
Regarding rumors of CTBC Financial’s interest in taking over the troubled Taipei Dome development project, company president Daniel Wu (吳一揆) told an investors’ conference that CTBC has not ruled out the possibility, but it would need the Taipei City Government to resolve ongoing disputes with Farglory Group (遠雄集團).
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