State-run Mega Financial Holding Co (兆豐金控) has proposed issuing a dividend of NT$1.32 per share based on last year’s profits, despite hefty unrealized losses in bond and securities holdings.
The dividend proposal, which needs to be approved in a shareholders’ meeting on June 16, would comprise NT$1.24 in cash and NT$0.08 in stock, Mega Financial said on Monday.
The company distributed NT$1.65 in dividends last year — NT$1.45 in cash and NT$0.2 in stock.
Photo: Ritchie B. Tong, EPA-EFE
This year’s proposed NT$1.32 dividend is equivalent to last year’s earnings per share, translating into a payout ratio of 100 percent, higher than the 80 to 87 percent in the previous four years.
The company’s net profit last year fell 28.8 percent year-on-year to NT$18.34 billion (US$600.8 million), as its insurance unit posted NT$9.52 billion in losses due to COVID-19 insurance claims, while its brokerage unit’s profit dropped 78.1 percent to NT$600 million amid volatility on financial markets.
Mega Financial president David Hu (胡光華) last month told an investors’ conference that the company would distribute a dividend at a level similar to last year’s by using more than NT$100 billion in retained earnings and statutory reserves collected over the past few years.
The company’s unrealized losses of NT$15.33 billion had as of late last month eased from three months earlier, as financial markets have somewhat recovered from upheavals caused by global inflation and monetary tightening.
The dividend policy reflects the banking-focused firm’s improving bottom line this year, after first-quarter net profit hit NT$10.78 billion, the best quarterly performance in the company’s history, with earnings per share of NT$0.77.
In related news, Mega Financial chairman Michael Chang (張兆順) is to step down after board elections this year. The government plans to fill the vacancy with Taiwan Cooperative Financial Holding Co (合庫金控) chairman Lei Chung-dar (雷仲達), Chinese-language media reported over the weekend, citing unnamed sources.
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