Fri, Aug 25, 2023 page12

• Fubon Financial cautiously optimistic

  CHINA EXPOSURE: The conglomerate said it has no exposure to troubled Chinese developers, as it has focused on loans to Taiwanese firms and national enterprises

  • By Crystal Hsu / Staff reporter
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  Fubon Financial Holding Co (富邦金控) yesterday projected stable profit growth for the rest of this year even though net income in the first half shrank 38.2 percent annually to NT$42.9 billion (US$1.35 billion).

  The conglomerate made the cautiously optimistic remarks during an investors’ conference after major subsidiaries reported that business improved amid a relatively favorable operating environment compared with last year.

  Fubon Financial president Jerry Harn (韓蔚廷) said he believed China would introduce more stimulus measures to help its stalling economy.

  

  Fubon Financial Holding Co president Jerry Harn speaks at an investors’ conference in Taipei yesterday.

  Photo courtesy of Fubon Financial Holding Co

  The group estimated its exposure in China at NT$840 billion, but the net sum would be NT$340 billion after factoring in NT$500 billion of assets at its Chinese banking subsidiary Fubon Bank China (富邦華一銀行).

  That translates into a small 3 percent of Fubon Financial’s overall assets of NT$10.9 trillion, Harn told investors.

  Fubon China incurred minor losses in the first six months after raising its general position at the request of Chinese financial regulators, officials said, adding that the conglomerate has no exposure to troubled Chinese developers.

  

  Signage outside a Taipei Fubon Commercial Bank branch in Taipei is pictured on Thursday last week.

  Photo: An Rong Xu, Bloomberg

  The nation’s most profitable financial conglomerate attributed the cash woes plaguing Chinese developers and local governments to years of COVID-19 lockdowns and the property sector’s overexpansion, but said it does not expect the problem to escalate into a financial storm.

  “We have been cautious about China’s property sector and have focused on lending to Taiwanese firms there and Chinese national enterprises,” Harn said.

  Fubon Life Insurance Co (富邦人壽) would see its income bolstered this quarter by cash dividends, which would be higher than last year, officials said.

  The insurer hesitated to lower its hedging cost projection, saying they would amount to 100 to 150 basis points this year and would be higher than last year, as major central banks have no intention of easing interest rates in the near term.

  By contrast, Taipei Fubon Bank (台北富邦銀行) might see its wealth management business grow 20 percent this year, faster than earlier predicted, officials said.

  “Investment sentiment has improved much this year due to fewer black swan events,” officials said, adding that the recovery in financial markets at home and abroad also lent support.

  While the group’s debt position remains in the red, stock holdings have turned positive, officials said.

  Like other lenders in Taiwan, Taipei Fubon Bank raked in hefty profits from its currency swap operations, which might continue to generate earnings ahead under a similar environment, officials said.

  Still, Fubon Insurance Co (富邦產險) accumulated losses of NT$3.22 billion in the first half due to lingering COVID-19 claims, although it swung to profit in April, officials said.

  Things would gradually brighten at the subsidiary, the nation’s biggest with a market share of more than 20 percent, officials said.
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