Four of the nation’s financial conglomerates posted net losses for last month due to volatile markets amid the COVID-19 pandemic.
State-run Hua Nan Financial Holding Co (華南金控) posted the largest loss of NT$3.59 billion (US$119.19 million), mainly attributable to its securities unit, Hua Nan Securities Investment Management Co (華南永昌證券), which lost NT$4.75 billion, a company filing with the Taiwan Stock Exchange showed.
The loss, a result of derivatives transactions, eroded the parent company’s net profit of NT$2.15 billion in the first two months of the year and resulted in a net loss of NT$1.44 billion in the first quarter.
China Development Financial Holding Corp (CDFHC, 中華開發金控) posted the second-largest loss of NT$1.59 billion, as its investment arm, CDIB Capital Group (中華開發資本), suffered a loss of NT$1.36 billion.
CDIB Capital, with NT$42.3 billion under management and direct investment of NT$30.9 billion in companies worldwide, said the overall value of its investments declined due to the bearish markets.
The last time the value of CDIB Capital’s investments fell was in the third quarter of 2018, a net loss of about NT$300 million, company data showed.
As the unit focuses on long-term investments and does not plan to sell its assets in the short term, it expects to recover when global markets improve, it said.
Another CDFHC subsidiary, KGI Securities Ltd (凱基證券), posted a loss of NT$411 million, while China Life Insurance Co (中國人壽), in which CDFHC has a 35 percent stake, posted a net profit of NT$1.41 billion, the company said.
CDFHC posted a net loss of NT$488 million in the first quarter.
Volatile global financial markets also negatively affected Taishin Financial Holding Co (台新金控) and Mega Financial Holding Co (兆豐金控), leading to net losses of NT$145 million and NT$1.56 billion respectively last month.
However, the two firms remained in the black in the first quarter thanks to profits made during the first two months of the year.
Other financial conglomerates with life insurance arms, which are highly sensitive to volatile financial markets, also reported year-on-year declines in profits.
Cathay Financial Holding Co (國泰金控) posted a net profit of NT$4.46 billion, a 9.8 percent decline; CTBC Financial Holding Co (中國信託金控) posted a net profit of NT$3.6 billion, down 2 percent; and Shin Kong Financial Holding Co (新光金控) posted a net profit of NT$571 million, a 70 percent plunge.
Fubon Financial Holding Co (富邦金控) was the exception, with its net profit growing 83 percent year-on-year to NT$8.12 billion.
The combined net profits of the nation’s 15 listed financial conglomerates declined 60 percent year-on-year to NT$14 billion last month, while first-quarter net profit remained flat year-on-year at NT$86.8 billion, data showed.
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