First Financial and Mega Financial see last month’s earnings take a dive

By Crystal Hsu  /  Staff reporter

Tue, Sep 10, 2019 - Page 12

Wild market swings and tapering interest rates on US dollar-based assets dealt a blow to two major state-run financial companies last month.

First Financial Holding Co (第一金控) said in a statement yesterday that net income totaled NT$1.97 billion (US$63.04 million), an 8.5 percent drop from July.

The financial conglomerate attributed the decline to a significant drop in earnings at its securities and life insurance arm, as business at its main subsidiary, First Commercial Bank (第一銀行), was relatively resilient.

First Securities Inc (第一金證券) reported NT$35.36 million in net profit, a monthly decline of 41.7 percent, due to dwindling gains in proprietary and brokerage business, while net income at First Life Insurance Co (第一金人壽) declined 34.6 percent to NT$63.85 million because of a drop in dividend income, the statement said.

First Commerical Bank reported NT$1.9 billion in net profit, 1.9 percent lower than July, as stable interest income and dividend income mitigated a 17.7 percent fall in fee income, it said.

Wild market volatility at home and abroad dampened interest in wealth management and investment products, the statement said.

Cumulative earnings totaled NT$14.03 billion for the first eight months, or earnings per share (EPS) of NT$1.13, it said.

Mega Financial Holding Co (兆豐金控) reported NT$2.25 billion in net income for last month, down from NT$2.69 billion a month earlier.

With a focus on international financing, Mega said that a thin interest spread and shrinking market values of foreign currency-based assets weighed on its earnings ability.

Profit at Mega Financial’s securities arm tumbled more than 40 percent and more than 10 percent at its bills finance unit, it said in a statement last week.

From January to last month, Mega Financial reported NT$20.29 billion in cumulative net income, or EPS of NT$1.49.

Meanwhile, Fubon Financial Holding Co (富邦金控), the nation’s second-largest financial services provider by assets, reported that net profit last month jumped 59 percent from a year earlier to NT$7.22 billion, or EPS of NT$4.58, thanks to higher investment returns at its insurance unit, Fubon Life Insurance Co (富邦人壽).

The insurer’s business grew stably, with first-year premiums increasing 23 percent year-on-year to NT$153.8 billion and total premiums expanding 13 percent to NT$410.7 billion, Fubon Financial said in a statement.

Taipei Fubon Commercial Bank (台北富邦銀行) saw net profit increase 10 percent annually to NT$1.96 billion due to higher interest income and fee income.

Overall Fubon Financial was ahead of its local peers, reporting a total net profit of NT$49.45 billion in the first eight months, with EPS of NT$4.58.

Additional reporting by Kao Shih-ching