Taiwan’s financial conglomerates reported a total of NT$278.1 billion (US$8.98 billion) in net profit for the first three quarters, an improvement of 12.61 percent from the same period last year, but profit growth slowed last month as US-China trade tensions began to take a bigger toll on the global markets.
Cathay Financial Holding Co (國泰金控), the nation’s largest financial holding firm by market value, posted NT$54.56 billion in net profit for the first three quarters, or earnings per share (EPS) of NT$4.17, making it the most profitable among 15 listed peers in the first nine months, a company filing with the Taiwan Stock Exchange showed.
However, the company’s net profit last month fell to NT$2.14 billion, a 58 percent decrease from August.
Cathay Financial’s main subsidiary, Cathay Life Insurance Co (國泰人壽), saw its net profit last month dip to NT$40 million as the insurer was affected by a stronger New Taiwan dollar at the end of the month, the company said, adding that its first-year premiums for protection-type policies expanded 61 percent year-on-year last month.
The company’s banking arm, Cathay United Bank (國泰世華銀行) was the stronger performer, posting earnings of NT$21.7 billion on the back of strong loan-to-deposit ratios and steady fee income.
Fubon Financial Holding Co (富邦金控) posted a profit of NT$2.9 billion last month to top its peers, while its profit between January and last month rose 13.02 percent year-on-year to NT$50.01 billion, or EPS of NT$4.74.
Fubon Life Insurance Co (富邦人壽) recorded a net profit of NT$30.95 billion for the first three quarters, a 14 percent annual increase on strong investment returns.
Its banking arm, Taipei Fubon Commercial Bank (台北富邦銀行), saw its net income rise 12 percent on the back of higher interest income.
Meanwhile, Shin Kong Financial Holding Co (新光金控) posted a net loss of NT$2.11 billion last month, due to widening foreign exchange losses, as well as higher hedging costs, it said.
However, it reported net income of NT$19.41 billion in the first nine months, or EPS of NT$1.73.
The company said that its foreign exchange losses could begin to narrow in the final quarter if the New Taiwan dollar continues to depreciate against the US dollar.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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