Fubon Financial Holding Co (富邦金控) yesterday told its investors that its cash dividends policy would remain stable, and that it has retained earnings of NT$110 billion (US$3.56 billion) that can be used for cash dividend payments next year, although it reported a significant decline in net profits so far this year.
The nation’s second-largest financial conglomerate in terms of assets saw cumulative net profit plummet 36 percent year-on-year to NT$83.7 billion during the first three quarters, driving down its shareholders’ equity 35 percent to NT$552 billion, company data showed.
The company aims to maintain stable cash dividends, although it is too early to consider next year’s distributions, Fubon Financial president Jerry Harn (韓蔚廷) told an online investors’ conference yesterday.
The financial service provider has about NT$110 billion available for cash dividends issuance next year, after deducting some special earnings reserves from the company’s NT$390 billion in retained earnings, Harn said.
Fubon Financial has no plan to raise new capital in the near term, given its healthy capital adequacy of 130 percent and a double-leverage ratio of 110 percent after injecting NT$15 billion into its property insurance arm Fubon Insurance Co (富邦產險) in August, Harn said.
Fubon Life Insurance Co (富邦人壽), the flagship unit of Fubon Financial, did not reclassify its assets as its local peers did. Its equity-to-asset ratio fell to 5 percent at the end of September amid plunging bond prices, corporate data showed.
The life insurer’s major solvency gauges are higher than regulatory thresholds. Its equity-to-asset ratio is higher than the regulatory threshold of 3 percent, while its risk-based capital ratio stood at more than 300 percent, also above the minimum of 200 percent, the company said.
Taipei Fubon Commercial Bank (台北富邦銀行) is the only arm under Fubon Financial that saw growth in net profit. The bank reported annual growth of 28.4 percent in net profit to NT$18.1 billion in the first nine months, due to a 12.7 percent gain in its interest income to NT$22.9 billion, driven by key interest rate hikes and asset growth, it said.
However, Taipei Fubon’s net fee income fell 10 percent to NT$7.7 billion, as more clients of its wealth management business turned conservative amid tumbling stock markets, it said.
Despite the central bank’s rate hike in September, its net interest margin, a gauge of banks’ profitability, dropped from a quarter earlier to 1.04 percent, as the loan-to-deposit ratio of its foreign currencies declined, it said.
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