Taishin Financial Holding Co (台新金控) and Yuanta Financial Holding Co (元大金控) unexpectedly reported losses for last month, as seen by the financial sub-index decline of 2.17 percent, or 19.97 points, to 899.86 points, deeper than the TAIEX’s 1.34 percent fall to 7,788.42 points.
Taishin Financial reported a net loss of NT$460 million (US$13.67 million) last month, with net income for last year tallied at NT$13.2 billion, or NT$1.39 per share, company data showed.
However, Taishin Financial’s earnings last year rose 740.76 percent, due to a low base set in 2014 when it had to book an investment loss of NT$14.8 billion following its botched plans to acquire state-run Chang Hwa Bank (彰化銀行).
The company attributed last month’s loss to an additional NT$1.5 billion in provisions against exposure from selling yuan-linked target redemption forwards (TRF), a relatively risky financial derivative.
The bank-focused group said that a large proportion of the TRFs it sold matured last month and that more contracts are due to expire by the end of this month.
The conglomerate emphasized that its core earnings drivers in investments and fees income remain healthy.
Likewise, Yuanta Financial reported a net loss of NT$558 million last month, dragged down by additional provision requirements against rising exposure to China for Yuanta Bank (元大銀行), its banking unit.
The securities and banking-focused group said earnings were also affected by growing pains for its newly established life insurance operation, a local unit of New York Life Insurance, which it acquired in 2014 and later renamed Yuanta Life Insurance Co (元大人壽保險).
Yuanta Financial said that, because its life insurance unit had seen record-high policy sales last month, it had to set aside additional provisions to meet regulatory guidelines.
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