Fubon Financial Holding Co (富邦金控) this week led its domestic peers in reporting record-high net income of NT$51.5 billion (US$1.6 billion), or NT$5.04 per share in the first seven months, after reporting a rise in earnings of 32.3 percent year-on-year to NT$9.5 billion last month.
The company attributed the strong results to contribution from Fubon Life Insurance Co (富邦人壽), which saw its net income during the first seven months surge 66.9 percent year-on-year to NT$35.8 billion, primarily driven by net interest income and cash dividends.
However, net income for its securities brokerage in the first seven months fell sharply by 40 percent to NT$776 million, due to a persisting slump in the local bourse’s trading volume and lagging trading performance by its dealers, Fubon said in a statement.
Cathay Financial Holding Co (國泰金控), the nation’s leading financial services provider by assets, reported net income of NT$50.42 billion, or NT$3.98 per share during the January-to-July period, gaining 32 percent year-on-year, although net income last month declined to NT$7.5 billion from NT$10.4 billion in June.
The company also attributed its gains in the January-to-July period to contribution from Cathay Life Insurance Co (國泰人壽), which saw profit of NT$36.2 billion in the period, up 41 percent from a year earlier.
However, like other securities brokerages, Cathay Securities Co (國泰綜合證券) incurred losses of NT$12.3 million last month amid heightened market volatility, but it still made a profit of NT$350 million during the first seven months.
Morgan Stanley said dividend income helped both Fubon Financial and Cathay Financial deliver strong profits last month.
“After recording strong dividend income in July, we expect good recurring profit from dividends in August too,” Morgan Stanley analyst Silvia Fun (范思為) said in a note.
CTBC Financial Holding Co (中信金控), the nation’s third-largest financial services company by market capitalization, reported net income of NT$19.9 billion, or NT$1.3 per share in the first seven months, the company said in a statement.
CTBC said that excluding last year’s NT$14.8 billion one-time booking from its acquisition of Tokyo Star Bank, it still produced a 26 percent year-on-year gain in recurring earnings during the first seven months, which it attributed to strong performance in fee and interest incomes by its banking arm, CTBC Bank Co (中國信託銀行).
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
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