Fubon Financial Holding Co (富邦金控) yesterday said that wild swings in the value of its investment portfolio last year would not affect its dividend policy this year.
Fubon Life Insurance (富邦人壽), the company’s largest and most profitable unit, saw the value of its holdings drop from NT$31.7 billion (US$1.04 billion) at the end of the third quarter last year to a loss of NT$6.4 billion at the end of last year.
That compares with a portfolio value of NT$15.6 billion at the end of 2015.
Fubon Financial’s holdings have since recovered to about NT$4 billion at the end of last month amid a rally in local stock markets, chief financial officer Eddie Chen (陳彥松) said.
While the group’s dividend policy would not be significantly affected by the metric, the life insurance subsidiary might contribute a smaller share of profits to its parent, Chen said.
Conditions in the local equities market are improving, but the company still faces pressures from a 6 percent appreciation of the New Taiwan dollar so far this year, he added.
Following a surge in demand last year, Fubon Life has set a target of increasing its international bondholdings by US$3 billion to US$3.5 billion this year, adding that it has attained US$2.5 billion of its goal to take advantage of the early-year peak in issuance, Chen said.
Fubon Financial is aiming to raise its annual dividend income from NT$14.9 billion to NT$20 billion this year by expanding its holdings of local equities, he said.
Last year, Fubon Financial’s net income declined 23 percent to NT$48.42 billion from NT$63.6 billion in 2015, with earnings per share dropping to NT$4.73 from NT$6.21.
Fubon Life’s net earnings plunged to NT$28.69 billion last year from NT$41 billion a year earlier, affected by NT$15.7 billion in foreign-exchange losses, according to Fubon Financial’s latest financial statement.
The life insurer reported foreign exchange losses of NT$3.6 billion in 2015.
Fubon Financial’s return on assets and return on equities last year came in at 0.79 percent and 12.19 percent respectively, down from 1.12 percent and 16.4 percent a year earlier.
Total assets rose 6.1 percent annually to NT$6.35 trillion at the end of 2016, according to the statement.
Shares of Fubon Financial fell 0.75 percent to NT$52.70 in Taipei trading yesterday, underperforming the benchmark TAIEX, which declined 0.28 percent to 9,902.98 points.
Fubon shares have increased by 3.33 percent so far this year.
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