The local finance sector reported combined pretax profit of NT$675.7 billion (US$23.77 billion) last year, up 6.5 percent from a year earlier, the Financial Supervisory Commission said yesterday, attributing the record-high to life insurers’ investment gains and securities firms’ fee incomes.
Life insurers reported combined pretax profit of NT$206.1 billion, up 33.2 percent year-on-year, on the back of investment gains of NT$83 billion in global stocks markets, commission data showed.
Meanwhile, life insurers recorded NT$296.8 billion in foreign-exchange losses and hedging expenses last year, up 1.92 percent from a year earlier, due to the New Taiwan dollar’s appreciation against the US dollar, the commission said.
The NT dollar rose 5.6 percent against the greenback last year.
About two-thirds of life insurers’ investment portfolios, totaling more than NT$18 trillion, are overseas investments or denominated in US dollars, it said.
The life insurance industry posted combined losses of NT$581 billion in the valuation of their US dollar-denominated assets as of the end of last month, which was partly offset by gains of NT$436 billion in the valuation of their hedging tools denominated in NT dollar or other Asian currencies, the commission said.
Hedging expenses totaled NT$160 billion last year, it said.
Property insurers’ combined pretax profit grew 6.3 percent annually to NT$17 billion, the data showed.
Last year, securities companies reported combined pretax profit grew 51 percent year-on-year to NT$65.8 billion, futures companies’ pretax profit expanded 17 percent to NT$5 billion and securities investment trust firms’ pretax profit increased 20 percent to NT$10.9 billion, all hitting the highest in nine years, the commission said.
However, banks’ profits fell last year, as their combined pretax profit decreased 13 percent to NT$312.7 billion due to declining interest income, foreign exchange losses and lower investment gains, it said.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
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