CTBC Financial Holding Co (中信金) is looking to grow its profitability this year by double percentage points from last year on the back of an improvement in banking and life insurance operations.
CTBC Financial president James Chen (陳佳文) shared the positive guidance during an investors’ conference in Taipei, after first-quarter income spiked 61 percent year-on-year to NT$20.92 billion (US$645.28 million), or earnings of NT$1.07 per share.
“We’re cautiously optimistic that earnings this year would make record again so that the company can distribute higher cash dividends next year,” Chen said.
Photo: CNA
The conglomerate said it plans to issue NT$1.8 per share in cash dividends based on last year’s profit once the general shareholders’ meeting on June 14 gives the go-ahead.
Main subsidiary CTBC Bank (中國信託銀行) posted a net income of NT$12.1 billion in the January-to-March period, suggesting a 7 percent advance from a year earlier.
Banking operations were stable, but fee income from wealth management, credit card payment, corporate financing and trust management services swelled from 23 percent to 40 percent, Chen said.
Surges in the TAIEX lent support to wealth management, he said.
The local bourse’s pullback this week likely had to do with profit-taking pressures on the part of institutional investors, as the price-to-earnings ratio for local shares climbed to a relatively high level of 23, Chen said.
Overseas banking generated 35 percent of overall profit, with branches in Hong Kong, China and Japan seeing strong growth in general, he said.
Taiwan Life Insurance Co (台灣人壽) emerged as another main profit driver last quarter by realizing capital gains from its share holdings, although the diminishing chance of rate cuts by the US Federal Reserve weighs on its bond positions, Chen said.
The life insurer is poised to benefit from the dividend season between this month and August, when major listed Taiwanese firms distribute cash and stock dividends from the previous year’s earnings, he said.
The group’s securities and fund houses also recorded income growths of double percentage points, as Taiwanese investors aggressively raised stakes in exchange-traded funds and helped boost stock turnover, Chen said.
Chen also commented on the group’s alleged interest in acquiring Shin Kong Financial Holding Co (新光金) for the first time, saying that the two sides have not made any contact on the issue.
The group has a mergers and acquisitions (M&A) team that would make its move when opportunities arise, Chen said.
A big, healthy bank would be an ideal M&A target, as it would help CTBC Bank expand its market share, he said, adding that the bank has an 8 percent market share in Taiwan despite being the largest private-run lender.
CTBC Bank does not have enough local branches, which explains why customers at most branches have to wait more than 20 minutes to be served, Chen said, adding that M&A deals would provide a solution.
Increasingly more people are opting to transact online, but in-person services remain necessary for complicated banking activity, he said.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in