Sat, Jun 15, 2019 - Page 12 News List

Financial firms brace for currency swings

SOUTHEAST ASIA:Cathay Financial president Lee Chang-ken said that the company would expand in Vietnam and assess other investment opportunities in the region

By Kao Shih-ching  /  Staff reporter

Local financial conglomerates yesterday gave a mixed outlook and said they are braced for higher uncertainty and risks in exchange and interest rates stemming from US-China trade tensions.

Cathay Financial Holdings Co (國泰金控) has seen its net worth and return on investment recover in the first quarter, but would remain watchful as the trade situation unfolds, Cathay Financial chairman Tsai Hong-tu (蔡宏圖) told a shareholders’ conference in Taipei.

The US dollar exchange rate has been fluctuating, posing a challenge for hedging and forex business, Cathay Financial president Lee Chang-ken (李長庚) told reporters.

Its insurance arm, Cathay Life Insurance Co (國泰人壽), has adapted, Lee said.

Its business in Southeast Asia has reported stronger momentum compared with local sectors, with the life insurer’s branch in Vietnam seeing 58 percent growth in first-year premiums in the first three months of this year, Lee said.

Cathay would expand its operations in Vietnam when the timing is right and assess other investment opportunities in other countries in the region, he said.

Shareholders of Cathay Financial approved a proposal to distribute a cash dividend of NT$1.5 per common share, representing a payout ratio of 38 percent based on the company’s earnings per share of NT$3.95 last year.

Fubon Financial Holding Co (富邦金控) said it is monitoring the risks of volatile exchange and interest rates amid the trade dispute.

Fubon Financial would diversify its foreign-currency investment and cut its US dollar position to rein in risks, chairman Richard Tsai (蔡明興) told a separate shareholders’ conference in Taipei.

The trade issue is dampening global trade, but is also prompting Taiwanese companies to return home, Tsai said, citing a report by the US Federal Reserve, which said that Taiwan might benefit amid the tensions.

Fubon Financial is No. 1 for earnings per share among local peers and would strive to defend that position, he said.

Fubon Financial shareholders approved a proposal to distribute a cash dividend of NT$2 per common share, representing a payout ratio of 44 percent based on the company’s earnings per share of NT$4.52 last year.

Shin Kong Financial Holding Co (新光金控) said that this year would be better than last year on the back of steady growth in revenue and return on investment, as well as its planned Web-only bank, Shin Kong chairman Eugene Wu (吳東進) told another shareholders’ meeting.

Shin Kong’s shareholders approved a proposal to distribute a cash dividend of NT$0.2 per common share, representing a payout ratio of 22 percent based on the company’s earnings per share of NT$0.89 last year.

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