CTBC Financial Holding Co (中信金控) yesterday said it has small exposure to Turkey, whose ongoing economic woes might not sweep across Asia as some experts have said.
Asian economies have strengthened since the 1997 regional financial crisis and would emerge unharmed from the financial tumult embroiling Turkey, CTBC Financial president Daniel Wu (吳一揆) told an investors’ conference.
Wu’s assurance came after the bank-focused conglomerate released strong first-half earnings and reported a rosy view for the rest of this year.
The conglomerate’s Taiwan Life Insurance Co (台灣人壽) has NT$4.1 billion (US$132.87 million) in exposure to Turkey, accounting for a miniscule share of the insurer’s assets, Wu said.
Although small and open, Asian economies have grown significantly stronger, making them less susceptible to capital outflows and other external risks, Wu said.
Nobel-winning economist Paul Krugman has raised concerns that the Turkish problem might have a contagion effect on other emerging economies, whose currencies could collapse as global funds pull out.
However, Wu said that Turkey’s woes would be limited to Europe, even though it is also fueling uncertainty.
The global economy would continue to expand in the second half, with the US Federal Reserve to make at least one more rate hike, a backdrop that is favorable for CTBC’s core operations, he said.
The group posted NT$21.9 billion in net income for the first six months, translating into earnings per share of NT$1.12, it said in a statement.
Main subsidiary CTBC Bank (中信銀行) saw its profit grow 6 percent from a year earlier on the back of investment, capital and other gains, it said.
This enabled CTBC Bank to generate 70 percent, or NT$15.99 billion, of its parent company’s overall earnings in the first half, with net interest income increasing 11 percent from the same period last year, it said.
Taiwan Life reported a steeper year-on-year increase of 62 percent in earnings to NT$6.79 billion as of June, it said.
Total premiums amounted to NT$131.54 billion, with first-year premiums standing at NT$68.68 billion, Taiwan Life said, adding that the volume allowed it to claim a 9.7 percent market share as the nation’s fifth-largest insurer.
Trade wars between the US and other major economies are to have a limited effect on Taiwan, which might achieve GDP growth of between 2.6 percent and 2.7 percent this year, Wu said.
CTBC Financial welcomes regulatory easing to facilitate the integration of the financial industry, and would seize merger and acquisition opportunities to grow its scale, he said.
The conglomerate would not miss opportunities to develop Web-only banks, even if such ventures might not pay off in the first five years, Wu added.
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