Taipei Fubon Commercial Bank (台北富邦銀行) plans to issue up to NT$23 billion (US$726.2 million) in debentures to meet regulatory capital reserves and coverage requirements as well as pay for cash dividends, its parent company said yesterday.
“Due to operating constraints, cash contribution from subsidiaries’ earnings is limited, and issuing unsecured debt will enable the company to raise cash without diluting its earnings per share,” Fubon Financial Holding Co (富邦金控) president Vivien Hsu (許婉美) told an investors’ conference in Taipei.
CONSUMER FINANCING
Fubon Financial’s board on Wednesday approved plans to spend 125 million yuan (US$18.7 million) to create an online consumer financing company in China with a local partner, pending regulatory approval in both countries.
“We hope to gain experience in China’s market for online financial services,” Hsu said, adding that the project is still in the early stage.
Plans for overseas expansion are still focused on China, as opposed to Southeast Asia, Hsu said, citing a lack of compelling targets in terms of price and shareholding limits in other countries.
LANDHOLDINGS
Hsu also addressed questions over Fubon Financial’s recent forays into the hotel business, saying the company does not expect any conflict of interest arising from utilization of its life insurance subsidiary’s landholdings.
Hsu was responding to accusations by independent board member Chen Jin-ji (陳錦稷) that a privately controlled hotel management consulting affiliate was seeking to profit from development projects built on land owned by Fubon Life Insurance Co (富邦人壽).
Hsu said Fubon Life has not begun evaluating development contracts for a number of prime land parcels it owns in Taipei.
She said the hotel management affiliate is controlled by a Fubon Financial shareholder and the company would meet all regulatory guidelines in declaring transactions and land lease agreements with an interested party.
In the first half of this year, Fubon Financial’s net income plunged 43.7 percent annually to NT$23.7 billion, or earnings per share of NT$2.32, but still topped its domestic peers.
Over the same period, its return on assets reached 0.79 percent, down from 1.53 percent a year ago, while return on equity slid to 11.79 percent from 21.25 percent last year.
With total assets of more than NT$6 trillion, the company is the nation’s second-largest financial group.
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