Fubon Financial Holding Co (富邦金控) yesterday reported a mixed business performance, as its banking unit gained momentum while its insurance units lost steam given volatile financial markets and huge compensation payments for COVID-19 policies.
Taipei Fubon Commercial Bank’s (台北富邦銀行) net profit rose 24 percent from a year earlier to NT$11.3 billion (US$376.42 million) in the first half of the year, as interest rate hikes led to a 13 percent increase in net interest income, erasing a 6.4 percent drop in net fee income, company data showed.
Its net interest margin — a gauge of banks’ profitability — was 1.08 percent at the end of last month, slightly ahead of last year’s 1.07 percent, while the spread between deposit and lending rates widened to 1.35 percent from 1.28 percent a year earlier, the data showed.
Photo: Wu Hsin-tien, Taipei Times
Fubon Bank’s lending grew 12.4 percent year-on-year, but as its deposits rose at a faster 20 percent pace, its loan-to-deposit ratio edged down to 89.5 percent from 89.8 percent a year earlier, the data showed.
In contrast, Fubon Life Insurance Co (富邦人壽) reported a 3.6 percent fall in net profit for the first six months of the year, and Fubon Insurance Co (富邦產險) slid into red, with a net loss of NT$3.4 billion, compared with a net profit of NT$4.3 billion a year earlier, companies’ data showed.
Fubon Insurance said that its cumulative net losses widened to nearly NT$30 billion for the first seven months, because it expedited writing off COVID-19 insurance policies and compensating policyholders last month.
However, “the peak of compensation should have already passed,” Fubon Financial president Jerry Harn (韓蔚廷) told an investors’ conference.
Fubon Life Insurance’s capital gains from fixed-income plunged 74 percent, company data showed.
The life insurer’s book value plummeted 45 percent year-on-year to NT$312 billion, because the monetary value of its financial assets shrank amid the volatility in global markets, it said.
However, the company said that its risk-based capital ratio — a gauge of a financial firm’s capital adequacy and solvency — remained above 300 percent, above the regulatory minimum of 200 percent.
Harn said that the company is conservative about applying to set up a Web-only insurance company.
Fubon Financial said that net profit fell 21.3 percent to NT$69.4 billion in the first half of this year, compared with NT$88.2 billion in the same period of last year. Earnings per share dropped to NT$5.62 in the first two quarters, from NT$7.59 a year ago.
Harn said that Fubon Financial plans to complete its merger with Jih Sun Financial Holding Co (日盛金控) by the end of this year, and to finish merging their units next year, after which it would evaluate whether it needs a capital injection, Harn said.
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