Cathay Financial Holding Co (國泰金控) reported that last month’s net profit increased 119 percent year-on-year as its main subsidiary, Cathay Life Insurance Co (國泰人壽), reported significant foreign-exchange gains.
The nation’s largest financial holding firm by market value posted NT$11.2 billion (US$356.5 million) in net income, up from NT$5.1 billion for the same month last year, the company reported last week.
Cathay Life’s net income increased 185 percent to NT$8.61 billion, while first-year premiums (FYPs) led local peers at NT$15.3 billion, the company said in a statement.
As the New Taiwan dollar depreciated 2.3 percent last month against the US dollar, Cathay Financial reported foreign-exchange gains of more than NT$10 billion and set aside a special reserve of about NT$8 billion to hedge against currency fluctuations, company executive vice president Lin Chao-ting (林昭廷) told the Taipei Times by telephone on Friday.
“The weakening NT dollar does not necessarily guarantee exchange gains for Cathay Life. Whether we have foreign-exchange gains depends on how much the NT dollar sheds and what kind of currencies it weakens against,” Lin said.
The NT dollar is likely to strengthen against the greenback in the near term, after the US Federal Reserve hinted last week that an interest rate cut is coming, Lin added.
Last month, Cathay life took advantage of recovering financial markets to sell some stocks and bonds at a profit, he said.
“The timing of selling the stocks was good. After we sold them, US trade sanctions on China’s Huawei Technologies Co (華為) immediately drove the market into uncertainty,” Lin said.
Cathay Life did not see more consumers buy insurance savings policies last month, he said, adding that savings policies are not the insurer’s main products and that more sales restrictions from the Financial Supervisory Commission are expected later this year.
The company’s banking unit, Cathay United Bank (國泰世華銀行), reported earnings of NT$2.32 billion on the back of steady fee income.
For the first five months of the year, Cathy Financial reported NT$29 billion in cumulative profits, or earnings per share of NT$2.25.
CTBC Financial Holding Co (中信金控) reported net income of NT$3.51 billion last month, or earnings per share of NT$0.88, with its banking and insurance arms showing stable growth, the company said in a statement.
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