Cathay United Bank (國泰世華銀行) yesterday reported NT$6.2 billion (US$200.4 million) in overseas profits for the first nine months of this year, a 23 percent decline from a year earlier, as the firm has cut overseas investment due to strong volatility.
Cathay Financial Holding Co (國泰金控) spokesman Daniel Teng (鄧崇儀) presented the figures at an investors’ conference in Taipei.
The bank last year reported NT$10 billion in overseas profit, a 17 percent increase from 2016 and the highest in five years, Teng said, adding that the bank last year increased investment, especially in Singapore.
“This year, we have been puzzled by the change and trend in overseas markets, and decided to take a break, reducing overseas investment,” Teng said, adding that overseas profit accounted for 29.6 percent of the bank’s total profit as of September, down from 43.1 percent a year earlier.
The nation’s largest financial services provider by assets reported NT$54.6 billion in net profit as of September, a 13 percent growth from a year earlier, but saw net profit last month plummet 82 percent year-on-year from NT$3.38 billion to NT$590 million.
The conglomerate had to raise its hedging costs due to global market volatility last month and is likely to continue increasing them, as it expects to see greater volatility next year due to an escalating US-China trade war, Cathay Financial president Lee Chang-ken (李長庚) said.
The trade war, which has brought greater risks and uncertainty to global markets, is expected to end in two years, as US President Donald Trump wants to win the 2020 US presidential election, but cannot soften sanctions on China in the short term, Lee said.
Cathay Life Insurance Co (國泰人壽) reported NT$36.62 billion in net profit for the first nine months, a 10.5 percent year-on-year increase.
The insurer’s NT$3.32 trillion investment in foreign bonds accounted for 57.8 percent of total investment, generating a 4.7 percent return, company data showed.
Domestic and foreign shares made up 8.1 percent and 7.1 percent of total investment, amounting to NT$464 billion and NT$407 billion and generating 12.1 percent and 10.8 percent returns respectively, the highest return among all of its targets, the firm said.
The insurer said it expects to see the global economy continue to grow in the next six months and plans to increase stock purchases in Taiwan, the US and China, but foreign bonds would remain its major target.
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