Cathay United Bank’s (國泰世華銀行) Hong Kong unit has allowed some of its employees to work from home and has stopped work early several times due to unrest in the territory, Cathay Financial Holding Co (國泰金控) president Lee Chang-ken (李長庚) said yesterday.
The bank has to ensure the safety of its employees, as it has been difficult for some of them to reach Hong Kong’s Central business district, with anti-government protesters disrupting traffic, Lee said.
The unit is not closed, but some of its peers — including HSBC Holdings PLC, Standard Chartered Bank and Bank of China (Hong Kong) Ltd (中國銀行香港) — have for the past few days faced difficulties in maintaining normal operations, he said.
Cathay Financial is considering setting up a backup information system outside of Hong Kong in case the situation worsens, Lee said.
With the backup system, which would be established in Taiwan or a neighboring country, other units could quickly support the Hong Kong unit if the system there breaks down, he said.
For the moment, Cathay Life Insurance Co’s (國泰人壽) “hundreds of billions of New Taiwan dollars” of investments in Hong Kong and the loans provided by its banking unit there face only a limited effect from the protests, Lee said.
However, Cathay Financial would reduce the amount of investment and lending if tensions continue, he said.
Cathay Financial is the nation’s first financial conglomerate to announce a change in operations in Hong Kong since the protests began in March.
Shanghai Commercial and Savings Bank Ltd (上海商業儲蓄銀行), whose operations are also concentrated in Hong Kong, said its unit there has also adopted a more flexible schedule to help its staff avoid disruptions or traffic congestion, company spokesman Alex Lin (林志宏) said by telephone yesterday.
“Gladly, Taiwanese banks are not the target of the protestors. Most of us [banks] do not rent offices on the first floor, which was not an advantage in the past, but now it means more safety,” Lin said.
Cathay Financial saw its net profit fall 4 percent annually to NT$52.2 billion (US$1.71 billion) in the first nine months of this year, dragged by slowing profit growth at Cathay Life, the company told an investors’ conference in Taipei yesterday.
The insurer posted a 12 percent annual decline in its first-year premiums (FYP) to NT$145.5 billion, as it chose to sell less of its single-payment interest-sensitive policies, which have a lower margin, in a bid to comply with IFRS 17 accounting standards and new regulations set by the Financial Supervisory Commission, it said.
As a result, FYPs generated by its multiple-term and single-payment traditional life policies both posted double-digit percentage growth, company data showed.
“It is the time for insurers to focus more on the sale of traditional products, even though at first it looks negative, with FYPs dropping. In the long run, companies would benefit from the products with higher margins,” Lee said.
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