Fubon Financial Holding Co (富邦金控) posted NT$16.5 billion (US$554.77 million) in net profit for last quarter, soaring 66.5 percent from the same period last year, thanks to fast-growing investment and interest income at its life insurance and banking units.
The result translated into earnings per share of NT$1.61, helping the firm’s total assets to gain 9.6 percent to a record NT$6.97 trillion and secure second place among its peers next only to Cathay Financial Holding Co (國泰金).
Fubon Financial chairman Richard Tsai (蔡明興) attributed the improvement to steady operations at main subsidiaries Fubon Life Insurance Co (富邦人壽) and Taipei Fubon Commercial Bank (台北富邦銀行).
Fubon Life reported NT$31.9 billion in investment income, a 22 percent increase from a year earlier, even though the New Taiwan dollar’s appreciation eroded profitability, company data showed.
Investment returns averaged 3.68 percent after factoring in hedging costs, lower than funding costs at 3.7 percent, the insurer said.
However, hedging costs dropped to 1.49 percent last quarter, from 2.03 percent a year earlier, and could ease further as the NT dollar has eased against the US dollar since last month.
Fubon Life expects hedging costs to fall within a range of 1 to 1.5 percent.
The insurer holds NT$600 million in unrealized capital gains, reversing losses of NT$3.2 billion a year earlier, it said.
The life insurance arm generated NT$9.29 billion in net income in the first three months of this year, driving 56.3 percent of overall earnings.
The insurer would press ahead with plans to raise its stake in South Korea’s Hyundai Life Insurance Co from 48 to 62 percent through a capital increase and rename the company Fubon Hyuandai Life Insurance Co (富邦現代人壽), Tsai said.
The move would advance Fubon Financial’s attempts to grow into a first-tier financial service provider in Asia, Tsai said.
Fubon Bank saw its interest income pick up 19.2 percent to NT$11.4 billion last quarter, even though fee income softened 8.1 percent, the data showed.
“That is because interest rates for syndicated loans in Asia weakened and fee income for wealth management products retreated 3 percent,” the lender said.
While interest spread shed three basis points, an increase in foreign-currency loans and investments allowed net interest margin to add three basis points to 1.06 percent, the bank said.
Foreign-currency lending last quarter increased 14.9 percent, while corporate banking gained 8.8 percent, Fubon Financial vice chairman Daniel Tsai (蔡明忠) said.
Fubon Financial posted NT$6.01 billion in net income for last month, raising cumulative profits to NT$22.46 billion, or earnings of NT$2.2 per share, the group said.
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