Cathay Financial Holding Co (國泰金控), the nation’s biggest financial services provider, is looking at flat business in the second half of this year, as it seeks to focus on risk controls amid lingering economic uncertainty, officials said yesterday.
The remarks came after net income in the first half totaled NT$32.91 billion (US$1.03 billion), or earnings per share of NT$1.98. That was a 33.06 percent decline from the same period last year.
The profit retreat had much to do with a weak local currency and capital gains last year, officials said, adding that lower stock holdings would weigh on cash dividend income this year.
Photo: CNA
A soft New Taiwan dollar would boost the value of foreign-currency assets, which account for 70 percent of investments at main subsidiary Cathay Life Insurance Co (國泰人壽), officials said.
Like other peers, Cathay Financial has no lending to cash-strained Chinese developers, although it has NT$400 billion of exposure to China, Cathay Financial president Lee Chang-ken (李長庚) said.
The sum reflected a drop of NT$200 billion over the past three years as a result of sluggish business activity in China due to the COVID-19 pandemic, rather than a strategic pullout, Lee said.
China, while going through some headwinds, is still a major growth driver in the world’s economy this year, according to international research bodies, Lee said, expressing hope that Beijing would take due measures and rein in downside risks.
Total premiums at Cathay Life fell 4 percent to NT$233.7 billion in the first half, easing from a 26 percent decline a year earlier, officials said.
Protection insurance policy sales grew 5 percent, more healthy and profitable in the long term and consistent with regulatory requirements, officials said.
The life insurer is confident of keeping hedging costs within 1 to 1.5 percent as predicted earlier this year after expenses subsided in the second quarter.
Another main subsidiary, Cathay United Bank (國泰世華銀行), saw its number of Cube credit cards soar to 5 million despite ending a partnership with retailer Costco, officials said, attributing the success to strong promotions.
However, the credit card business would make neutral contribution to the bottom line after factoring in promotion costs, officials said.
The lender declined to project profit from swap operations in the second half, saying it took advantage of an opportunity to make NT$3 billion in the first six months, but the business might cease to exist going forward.
Cathay Century Insurance Co (國泰世紀產險), a profit drag last year, would not affect the group’s future financial performance, as the subsidiary has set aside sufficient provisions for residual COVID-19 claims, officials said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS