China Development Financial Holding Corp’s (CDF, 中華開發金控) net profit in the first quarter edged downward from a year earlier because of lower investment gains and decreased earnings contributions from its investment and securities arms, the company told an investors’ conference yesterday.
The firm’s investment arm, CDIB Capital Group (中華開發資本), posted a net loss of NT$570 million (US$19.47 million) in the first quarter, compared with net profit of NT$1.62 billion a year earlier, because of investment declines.
Its securities arm, KGI Securities Ltd (凱基證券), posted net income of NT$1.37 billion, down 58 percent from a year earlier, as its trading business and bond investments were hit by market volatility.
Photo courtesy of China Development Financial Holding Co
Its life insurance unit, China Life Insurance Co (中國人壽), posted net profit of NT$8.08 billion, down 10 percent from a year earlier, due in part to credit losses of NT$1.5 billion related to Russian bond holdings.
However, as CDF fully acquired China Life on Dec. 30 last year, the holding company said it could recognize the insurer’s profit of NT$8.08 billion in the first quarter, up from the NT$4.43 billion it recognized a year earlier.
CDF said that China Life has become its most profitable unit.
The insurer posted a pre-hedge recurring rate of 3.15 percent, down from 3.25 percent a year earlier, but it reported a foreign exchange hedging gain of 0.08 percent, compared with a hedging cost of 1.49 percent a year earlier.
The insurer would primarily invest in US bonds and local stocks offering high dividends, president Stephanie Hwang (黃淑芬) said.
Banking unit KGI Bank (凱基銀行) posted net profit of NT$1.33 billion, up 26 percent, due to higher net income and net fee income.
CDF seeks good targets for mergers and acquisitions (M&As) in Taiwan and Southeast Asia to create synergy, chief executive officer Steve Bertamini told investors.
The firm hopes to boost its return on equity by a double-digit percentage through M&As over the next three to four years, he said.
Bertamini’s remarks came after CDF’s board of directors in April approved a plan to raise funds via a private placement of 2.5 billion common stock or preferred stock.
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