Chinatrust Financial Holding Co (中信金控), which owns the nation’s biggest credit card issuer, is expected to distribute much higher dividends to shareholders this year because of a NT$8.56 billion (US$266.8 million) gain in assets.
The asset gain, which is 2.43 times higher than the company’s net profits last year, could bring this year’s shareholder dividend to the highest level in recent years. Chinatrust Financial issued NT$0.18 in cash dividends and NT$0.32 in stock dividends last year.
Chinatrust Financial yesterday posted net income of NT$2.43 billion, or NT$0.15 per share, for last year, down 83 percent from NT$14.71 billion earned in 2008.
This year, the board would include about NT$10 billion in gains from its holding in local financial service provider, Mega Financial Holding Co (兆豐金), when discussing dividend policy later this year, company financial executive Hsu Miao-chiu (許妙靜) told a media briefing.
Chinatrust originally held a 5.35 percent stake in Mega Financial Holding, but the company planned to unload the holding as investigators found the financial service provider illegally obtained the shares in 2006.
Separately, Chinatrust Financial said expanding into China would be one of its priorities this year.
“Buying a stake in Chinese commercial banks is one of the most important strategies, as it will be the fastest way to expand our banking network,” Chinatrust Financial president Daniel Wu (吳一揆) said yesterday.
Wu said the company would make the move after Taiwan signs a proposed economic cooperation framework agreement (EFCA) with China. Currently, Beijing allows Taiwanese financial service providers to acquire as much as 20 percent of Chinese commercial banks, Wu said.
Chinatrust Financial hopes to form a strategic alliance with medium or large Chinese banks in southeastern provinces of China where Taiwanese businesspeople operate Chinese units, Wu said. Chinatrust Financial also planned to set up a subsidiary in Shanghai, Wu said.
Separately, the company expected net interest margin to improve by between 0.05 percentage points and 0.1 percentage points this year from last year’s 1.44 percent, pinning its hopes on key interest hikes by the nation’s central bank, Wu said.
The central bank may start tightening monetary policy by raising key benchmark interest rates by 0.25 percent, or 0.5 percent in the second half of this year to reduce the risk of inflation, Wu said.
In addition, Chinatrust Financial would stick to its plan to expand into the insurance market by acquiring American International Group Inc’s Taiwanese insurance unit, Nan Shan Life Insurance Co (南山人壽), Wu said.
The acquisition is pending approvals from government units.
Shares of Chinatrust Financial fell 0.97 percent to NT$17.4 yesterday, under-performing the benchmark TAIEX, which edged up 0.12 percent.
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