CTBC Financial Holding Co (中信金控) yesterday gave an upbeat earnings outlook for this year on expectations that its large overseas investments would take advantage of economic growth across the globe, as well as in Taiwan.
A victory over France’s far-right candidate in that nation’s presidential election at the weekend will mitigate uncertainties in European markets, while two more US Federal Reserve interest-rate hikes on the back of continued economic growth in the US would also help, CTBC Financial president Daniel Wu (吳一揆) told an investors’ conference.
These factors are anticipated to boost earnings at the company’s extensive international operations and foreign-currency-denominated lending, Wu said.
CTBC Financial’s banking business accounted for 82 percent of the company’s overall earnings last quarter, of which 45 percent originated from subsidiaries abroad, company data showed.
The company’s overseas businesses are tipped to expand further after the NT$15.4 billion (US$509 million) acquisition of a 35.6 percent stake in Thailand’s LH Financial Group PLC, which is scheduled to complete before the end of next quarter.
The company reported that net income last quarter rose 55.6 percent annually and 122 percent quarterly to NT$10.21 billion due to strong fee-income growth and investment gains, as well as diminishing effects from yuan-linked target redemption forwards (TRF). Earnings per share were NT$0.52.
Net income contribution from its life insurance unit, Taiwan Life Insurance Co (台灣人壽保險), rose 389.2 percent quarterly and 5.8 percent annually to NT$1.42 billion, CTBC Financial said.
Wu said that the effects of the strengthening New Taiwan dollar — which has surged 6.4 percent against the US dollar this year — has strained Taiwan Life and its domestic peers, but the effect is expected to begin diminishing.
Wu said that the NT dollar is expected to trade at between NT$30 and NT$31 against the US dollar, while the local currency would see only limited gains going forward.
Taiwan Life sustained NT$2.7 billion in foreign-exchange-related losses in the first quarter, while its foreign-exchange valuation reserves fell to NT$270 million, it said.
Meanwhile, CTBC Financial said that its co-branded Line Pay credit card has had a favorable take-up rate since its launch in December last year.
The company has issued 360,000 Line Pay cards, of which 40 percent were to new customers who migrated from other banks, while many of its existing customers have increased credit-card spending by as much as 60 percent, CTBC Financial senior vice president Chiu Ya-ling (邱雅玲) said.
The company is prioritizing Android Pay over Samsung Pay, the company said.
Choosing a payment service displaces others because of one-month exclusivity agreements.
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