Cathay Financial Holding Co (國泰金控) yesterday said it is still seeking viable investment opportunities for its NT$159.8 billion (US$4.96 billion) cash position.
“We retain a high level of interest in long-term domestic investments, including equities, commercial real estate and other projects,” Cathay Financial president Lee Chang-ken (李長庚) said on the sidelines of an investors’ conference.
The company said it would continue expanding in Asia, including the Philippines, where the company has acquired a 21.93 percent stake in Rizal Commercial Banking Corp, and in Indonesia, where the company holds a 24.9 stake in Bank Mayapada. The company also has investments in Vietnam and Cambodia.
However, the nation’s largest financial service provider by assets would pay attention to the quality of its asset this year, in light of the current economic downturn, Lee said.
Lee’s remarks came after Cathay Financial released its latest embedded and appraisal values.
Embedded value is used to gauge the value of insurance firms, while appraisal value measures future profits.
As of the end of December last year, the company’s embedded value increased to NT$58.5 per share from NT$56.4 a year earlier.
The gain was mainly driven by a rise in value of Cathay Life Insurance Co (國泰人壽), the company’s most profitable unit, which at the end of last year, saw its embedded value grow 4 percent annually to NT$735 billion, or NT$138.5 per share.
The value of its insurance policies in force grew 12 percent annually to NT$342 billion, the company added.
In terms of appraisal values, the insurer saw the figure rise 5 percent annually to NT$1.25 trillion, translating to NT$235.3 per share, and NT$99.4 per share for the parent.
However, following adjustments, the insurer’s net worth at the end of last year fell 2 percent annually to NT$393 billion.
Cathay Financial shares yesterday closed flat at NT$36.5.
Regarding the shortfall between its share price and its valuation, Lee said the management team must work hard to raise investors’ confidence in the company.
The company’s net income dipped 54 percent annually to NT$8.3 billion in the first quarter. Earnings per share were NT$0.65.
During the period, Cathay Life saw net income drop precipitously to NT$2.7 billion, from NT$12.5 billion a year ago, while investment yield after hedging fell to 3.6 percent from 4.5 percent a year ago amid rising volatility in the global markets.
Cathay United Bank Co (國泰世華銀行) reported that last quarter’s net income gained 1.8 percent annually to NT$5.6 billion, but the bank’s net interest margin fell to 1.07 percent from 1.24 percent a year ago.
In the January-to-March period, the bank reported a 38 percent annual gain in overseas profits to NT$2.9 billion, representing 45.9 percent of its total earnings, compared with 33.4 percent in the same period last year.
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