Taishin unveils Prudential Life deal

Taishin Financial Holding Co (台新金控) yesterday announced that it is to purchase Prudential Life Insurance Co of Taiwan (保德信人壽) for NT$5.5 billion (US$186.24 million) and would consider selling 300 million shares in state-run Chang Hwa Bank (CHB, 彰化銀行) to fund the deal. It would acquire a short-term loan to buy the insurance company and possibly sell CHB shares to repay the loan, Taishin Financial president Welch Lin (林維俊) told a news conference in Taipei. “It is normal for firms to borrow money to complete an acquisition,” Lin said. “As we would repay the debt quickly, our leverage ratio would not worsen and pose no concerns to regulators.” Taishin Financial owns 2.36 billion CHB shares. It is considering a sale of 300.54 million shares to raise NT$5.5 billion based on CHB’s closing price of NT$18.3 per share yesterday, Lin said. The move would lower Taishin Financial’s stake in CHB to 19.55 percent from 22.5 percent, Lin added. Taishin Financial acquired its CHB stake in 2005. The firm plans to close the Prudential Life deal in the next two years, Lin said. As every increase of 1 basis point in Taiwan’s 10-year bond yield would lead to an increase of NT$150 million in Prudential Life’s book value, the two sides agreed that if the yield rises over the next two years, Taishin would increase its offer to a maximum NT$8.5 billion, Lin added. The deal still needs approval from the Financial Supervisory Commission (FSC), Lin said, adding that the company visited former FSC chairman Wellington Koo (顧立雄) and FSC Chairman Thomas Huang (黃天牧)earlier this year to report its plan to acquire a foreign insurer. The commission in 2013 rejected an application to acquire New York Life Insurance Taiwan Corp (紐約人壽) due to Taishin Financial’s financial strength. The Prudential Life acquisition was a great deal, as its net worth is NT$9 billion, which

By Kao Shih-ching

Net profit of local banks’ HK branches drops 54%

Taiwanese banks’ Hong Kong branches reported an annual decline of 54 percent in combined net profit to NT$15.09 billion (US$510.99 million) in the first half of the year, the largest retreat for the same period in the past decade, the Financial Supervisory Commission said yesterday. The commission attributed the results to a decline in interest income as the Hong Kong Monetary Authority reduced the benchmark interest rate to 0.86 percent in March, and to a slowdown in lending due to the COVID-19 pandemic. However, Hong Kong remained the most profitable overseas market for Taiwanese banks, Banking Bureau Deputy Director-General Huang Kuang-hsi (黃光熙) told a news conference in New Taipei City. Local banks’ Chinese branches came in second with a combined profit of NT$5.04 billion in the first six months, followed by US branches with a net profit of NT$1.85 billion, Cambodian branches with NT$1.57 billion and Vietnamese branches with NT$1.53 billion, Huang said. Japan, after ranking fourth last year, ranked sixth in the first half of this year, as local banks’ Japanese branches posted a decline in combined profit of 73.5 percent from a year earlier to NT$690 million, Huang said. Tokyo Star Bank Ltd, CTBC Bank’s (中國信託銀行) Japan-based subsidiary, reported a net loss of NT$500 million during the first six months, as the lender set higher loan-loss provisions, the bank said. Local banks’ branches in Australia ranked seventh with a combined profit of NT$540 million, followed by Canada in eighth with NT$230 million, Malaysia in ninth with NT$220 million and Indonesia in 10th with NT$190 million, commission data showed. Singapore — which was the fifth-most profitable overseas market for bank branches in the first six months of last year — saw its ranking drop out of the top 10, as local banks’ branches in the city-state posted a net loss of NT$1.42 billion from

By Kao Shih-ching

Hotel chains hit by fewer guests, buoyed by dining

Two major hotel chains reported losses for last quarter, even though their dining facilities proved resilient as international travel bans curtailed guestroom operations. FDC International Hotels Corp (雲品國際) on Monday posted net losses of NT$2.85 million (US$96,509), or losses per share of NT$0.04, during the April-to-June period, compared with NT$29.16 million a year earlier. The New Taipei City-based hospitality provider said that it places responsibility for the losses squarely on COVID-19, which prompted authorities to close the nation’s borders to most foreign arrivals on March 18, diminishing business for Taipei hotels, which depend heavily on foreign tourists and business travelers. From its facilities in Taipei, New Taipei City, Taoyuan and Nantou County, FDC International generated overall revenue of NT$242.72 million last quarter, a decline of 55.41 percent year-on-year, it said in a statement. The company’s Fleur de Chine (日月潭雲品酒店), a luxury resort near Nantou County’s Sun Moon Lake (日月潭), relies more on domestic tourists and has had occupancy rates rebound to 85 percent since the virus situation was brought under control in May, it said. Occupancy last month rose to 90 percent, aided by the government’s Triple Stimulus Vouchers, it added. Occupancy at the company’s Palais de Chine (君品酒店), a hotel near Taipei Railway Station, continued to flounder due to lingering travel bans, but its dining facilities maintained healthy cash flows, as Michelin-starred Chinese restaurant Le Palais (頤宮) remained popular and buffet restaurant La Rotisserie (雲軒西餐廳) saw a noticeable pickup following promotional campaigns, FDC International said. Another luxury hotel operator, My Humble House Hospitality Management Consulting Co (寒舍餐旅), last week posted losses of NT$77.53 million for last quarter, following losses of NT$194.27 million a quarter earlier. “Border controls continued to weigh on guestroom operations, although dining facilities started to regain momentum in May,” My Humble House said in a statement. The group runs Le Meridien Taipei (台北寒舍艾美酒店) and Humble

By Crystal Hsu

Telecoms’ profits decline following rollout of 5G

MAJOR FIRMS: For the first seven months, Chunghwa Telecom said results beat expectations, while Taiwan Mobile’s were expected and Far EasTone’s profit rose

The net profit of major telecom operators, including Chunghwa Telecom Co (中華電信), edged lower last month following the debut of 5G services. Chunghwa Telecom on Monday reported net profit contracted 6.71 percent to NT$2.78 billion (US$94.14 million) last month, from NT$2.98 billion in June, ending four consecutive months of growth. Earnings per share (EPS) dropped to NT$0.36 from NT$0.38. However, Chunghwa Telecom’s revenue advanced 2 percent month-on-month to NT$16.3 billion from NT$15.98 billion. On an annual basis, its net profit rose 2.2 percent from NT$2.72 billion, or EPS of NT$0.35, after operating expenses fell 4.7 percent to NT$12.76 billion from a year earlier. Revenue shrank 2.4 percent annually from NT$16.7 billion. Chunghwa Telecom said that its financial results in the first seven months “exceeded its expectations,” with net profit totaling NT$19.64 billion, little changed from a year earlier, and EPS of NT$2.53. The company earlier predicted net profit this year would contract as much as 5.8 percent annually. Taiwan Mobile Co’s (台灣大哥大) net profit last month edged lower to NT$1.028 billion, from NT$1.03 billion a month earlier, with EPS of NT$0.35. Revenue dropped 2.07 percent to NT$10.38 billion last month from NT$10.67 billion in June. Taiwan Mobile said that its performance in the first seven months was in line with its expectations, as net profit dropped just 1 percent annually to NT$7.39 billion, or EPS of NT$2.63. The company’s operating income shrank 1 percent in the January-to-July period as it started booking depreciation and amortization costs from its investment in 5G bandwidth. Cumulative revenue grew 5.4 percent to NT$73.58 billion in the first seven months, primarily due to strong growth from its e-commerce subsidiary Momo.com Ltd (富邦媒體), Taiwan Mobile said. Far EasTone Telecommunications Co’s (遠傳電信) net profit fell 0.39 percent to NT$763 million last month, from NT$766 million in June, or an EPS slide to NT$0.23 from NT$0.24. However, revenue grew

By Lisa Wang

FSC investigating Taipei Fubon tip

The Financial Supervisory Commission (FSC) is investigating Taipei Fubon Commercial Bank (台北富邦銀行) after receiving an anonymous tip that bank president Roman Cheng (程耀輝) allegedly intended to approve a loan to a Chinese company for his own benefit, FSC Chairman Thomas Huang (黃天牧) said on Monday. The Financial Examination Bureau sent personnel to the bank’s headquarters in Taipei on Friday last week to inspect the lending business of an overseas branch, Huang said. Taipei Fubon should deliver its own investigation report within a week, he said. “We would not wrong innocent people, but would also not let the guilty escape,” Huang said. Cheng allegedly asked subordinates to approve a loan of US$30 million to a China-based company, ECMOHO Ltd (易恒健康), this month, despite the health supplement firm having borrowed US$25 million in 2018 and reported a first-quarter loss, Chinese-language media reported last week. Cheng received a transfer of 1 million yuan (US$143,978) from a major shareholder of ECMOHO in August 2018 through an account in Cheng’s name, the reports said. The loan to ECMOHO had a loan-to-value ratio — a gauge of lending risk — of 61.23 percent as of the end of last month, as the debtor used its own shares as collateral, but the stock has been falling, the reports said. The commission would scrutinize the bank’s lending profile, internal controls and fund transfer information before determining whether Cheng was involved in the lending process, Banking Bureau Director Sherri Chuang (莊琇媛) said. Taipei Fubon Bank chairman Eric Chen (陳聖德) said he believes that Cheng is innocent, as he no longer owns the account. However, he would respect the commission’s investigation and decision, Chen said. Taipei Fubon Bank said in a statement that Cheng only discussed with subordinates how to help clients weather the COVID-19 pandemic without increasing lending risks. The bank dismissed media reports that Cheng had pressed employees to

By Kao Shih-ching

EVA Air’s net loss shrinks in Q2 amid cargo demand

EVA Airways Corp (長榮航空) on Monday reported that a net loss in the second quarter narrowed from the previous quarter, as solid demand for cargo services helped offset a decline in passenger volume amid the COVID-19 pandemic. The airline posted a net loss of NT$614 million (US$20.79 million), or losses per share of NT$0.13, compared with a net loss of NT$1.2 billion, or losses per share of NT$0.25, in the first quarter. EVA reported earnings per share of NT$0.01 in the second quarter of last year. As the pandemic continued to cripple the global airline industry, EVA’s consolidated sales fell 56 percent in the second quarter from a year earlier to NT$19.29 billion, with its revenue from passenger flights plunging 93.6 percent year-on-year to NT$1.52 billion, the company said in a statement. However, the steep decline in passenger revenue was offset by a 137 percent annual jump in cargo services income to NT$14.34 billion in the second quarter, EVA said. Analysts said that the airline benefited from robust demand for shipments of high-tech devices and personal protective equipment in the second quarter. For the first six months of this year, EVA reported a net loss of NT$1.83 billion, or losses per share of NT$0.38. Consolidated sales decreased 44 percent year-on-year, with revenue from passenger flights falling 59.6 percent from the previous year to NT$20.17 billion and revenue from cargo services climbing 70.7 percent to NT$20.72 billion. EVA’s statement of a strong second-quarter increase in cargo revenue followed a similar report last week by China Airlines Ltd (CAL, 中華航空), which reported net profit of NT$2.46 billion, or earnings per share of NT$0.45, for the second quarter, recovering from a net loss of NT$3.77 billion, or losses per share of NT$0.69, in the first quarter. Shares of EVA and CAL fell 1.35 percent and 1.79 percent to NT$10.95 and NT$8.24 respectively

Taiwan Business Quick Take

ELECTRONICS Largan shares face pressure Shares of Largan Precision Co (大立光) came under pressure on the stock’s ex-dividend date yesterday and failed to regain ground lost after the company’s dividend was deducted from the share price. The ex-dividend date is when a stock begins trading without a declaration on the previous year’s earnings. Largan last year issued a cash dividend of NT$79 per share on its earnings per share (EPS) of NT$210.7, so its shares yesterday began trading at NT$3,921, compared with a closing price of NT$4,000 the previous session, but they could not maintain that level, closing down 0.89 percent at NT$3,885. Analysts watch how quickly a stock returns to its price prior to the ex-dividend date to get a feel for investor expectations and their willingness to hold on to the stock. The TAIEX yesterday fell 113.81 points, or 0.88 percent, to 12,780.19 on turnover of NT$205.419 billion (US$6.96 billion). Foreign institutional investors sold a net NT$5.04 billion of local shares, Taiwan Stock Exchange data showed. ECONOMY Voucher exchanges hit NT$19bn As of Monday, local businesses had exchanged NT$19 billion of Triple Stimulus Vouchers at banks or post offices, the Ministry of Economic Affairs said yesterday, after previously estimating that the government program would generate more than NT$100 billion. From July 23 to Monday, about NT$1 billion of vouchers were exchanged by local businesses, Small and Medium Enterprise Administration Director-General Ho Chin-tsang (何晉滄) said. As of 5pm yesterday, about 19.28 million people had claimed their vouchers in paper form and 1.76 million had claimed them electronically since the government started issuing the vouchers on July 15, ministry statistics showed. INVESTMENT Bonds draw NT$25m The central bank at an auction yesterday sold NT$25 billion in 10-year bonds with a yield of 0.37 percent — the lowest in its history — indicating that market liquidity is

Softbank returns to black with US$12 billion profit

VIRUS-HIT SECTORS: After a US$8.9 billion annual net loss in May, the firm said it would not offer a forecast ‘due to numerous uncertainties affecting earnings’

Softbank Group Corp yesterday reported a US$12 billion quarterly net profit to June, recovering from eye-watering losses as tech stocks rally and the firm sheds assets to shore up its finances. The results would be a relief for chairman Masayoshi Son, who has faced an increasing drumbeat of criticism after record losses for the firm. Softbank holds stakes in some of Silicon Valley’s hottest start-ups through its US$100 billion Vision Fund. The 11.9 percent rise in net profit to ￥1.26 trillion (US$11.86 billion) puts Softbank back in the black after a turbulent financial year that saw its investment woes magnified by the COVID-19 pandemic and plunges in global stock markets. Son has insisted that his strategy is sound and that Softbank’s portfolio is broad enough to weather the storm, but acknowledged the challenges when the firm reported an eye-watering US$8.9 billion annual net loss in May, hit by the WeWork debacle and stock crashes. The results come after Softbank launched an aggressive plan to sell up to US$41 billion in assets to finance a stock buyback, after Son said that shares were undervalued. The fundraising was also intended to reduce the firm’s debts and increase cash reserves. Softbank shares closed down 2.45 percent to ￥6,361 shortly before the results were announced, up significantly from their March low of ￥2,687. The company also reported ￥983 billion in investment gains for the quarter to June, including profit from its Vision Fund. However, Softbank said that the pandemic continued to cause uncertainty, bolstering its investments in e-commerce and food delivery firms, but hammering those in the hotel and hospitality sectors. The firm said that it would not offer a forecast “due to numerous uncertainties affecting earnings.” Son has struggled to interest investors in a second round of the Vision Fund, as he deals with the woes of some of his most high-profile

Tech says Trump block on worker visas harms US

UNINTENDED CONSEQUENCES? Technology firms said that rather than keeping jobs in the US, the proclamation ensures that firms would need to hire overseas

Amazon.com Inc, Apple Inc and Facebook Inc are among tech industry titans and organizations signing onto a court filing saying that US President Donald Trump’s move blocking visas for skilled workers hurts the US. The brief was on Monday filed in a US federal court in support of a suit by the US Chamber of Commerce and trade groups against a proclamation issued by Trump in June halting visas for categories of guest workers, including highly skilled talent sought by tech firms. “The president’s suspension of non-immigrant visa programs, supposedly to ‘protect’ American workers, actually harms those workers, their employers and the economy,” the brief backed by more than 50 tech firms and organizations said. “Beyond the overwhelming data undermining the proclamation’s purported rationale, the administration’s actions send a fundamentally un-American message to those abroad who might otherwise have brought their skills and ingenuity to the United States.” Trump’s proclamation suspended a group of non-immigrant visa programs, including H-1B visas relied on by many technology firms. The suspension is to last through this year and then as long “as necessary” under the justification of making jobs available to citizens amid economic disruption caused by the COVID-19 pandemic, the filing said. However, evidence overwhelmingly indicates that a suspension of the visa programs would “stifle innovation, hinder growth and ultimately harm US workers, businesses and the economy more broadly in irreparable ways,” the filing said. Rather than keeping jobs in the US, the proclamation “all but ensures” that firms would need to hire abroad, essentially moving jobs to other countries, the firms said. Tech industry competitors in Canada, China, India and other countries are “pouncing on the opportunity” to attract skilled workers being shunned by the US, the filing said. “Other countries are poised to benefit from the US’s wholesale suspension of non-immigrant visas. Global

Tencent’s grip on music weakening

NetEase Inc (網易) struck a deal to license songs from Universal Music Group for the first time, a move that would further Beijing’s effort to dismantle Tencent Holdings Ltd’s (騰訊) commanding lead in Chinese music streaming. The world’s biggest music company said that it has agreed to license tunes to both Tencent Music Entertainment Group (騰訊音樂娛樂) and closest rival NetEase, ending an exclusive arrangement with China’s dominant musicstreaming platform. The move gives NetEase new ammunition in a fight against Tencent. The Chinese antitrust authorities had investigated Tencent’s dealings with the world’s three biggest record labels, but the probe was suspended this year, people familiar with the matter said in February. The pact with NetEase lets subscribers get Vivendi SA-controlled Universal Music’s full roster and the two would work on ways to let customers interact with artists. Tencent Music’s separate deal with Universal Music extends a current licensing agreement by multiple years and the duo would establish a joint music label in China, a separate statement said, without disclosing financial terms. Universal Music, Sony Music Entertainment and Warner Music Group Corp have sold exclusive rights to a major part of their music catalogs to Tencent Music, which is backed by Sony and Warner. Tencent Music then sublicenses that content to smaller platforms such as those operated by NetEase, Alibaba Group Holding Ltd (阿里巴巴) and Xiaomi Corp (小米). Competing platforms like NetEase have to “pay two to three times the reasonable cost” for content under such arrangements, NetEase chief executive officer William Ding (丁磊) told an earnings conference call in February. Tencent Music’s revenue grew 17.5 percent in the second quarter to 6.93 billion yuan (US$996.75 million), beating analysts’ estimates.

China resumes tourist visas to Macau

China is to resume issuing tourist visas for visitors to Macau, paving the way for the mass return of Chinese punters to the world’s largest gaming hub after months of losses. Zhuhai, Guangdong Province, would today begin issuing tourist visas, including individual and group tours, for Chinese residents to travel to Macau, Macau Secretary for Social Affairs and Culture Ao Ieong U (歐陽瑜) on Monday in a news briefing. The move reverses a ban implemented in late January to contain the spread of COVID-19. The resumption of tourist visas could gradually be expanded to the rest of China, Ao Ieong said. “By resuming Zhuhai visas first, we will monitor the situation and see if we could strive to achieve more convenience for residents in Guangdong or other places to come to Macau,” she said. “Our economy needs tourists.” The resumption of visas effectively allows for the revival of the gambling enclave whose revenue had been five times that of the Las Vegas Strip before the pandemic, driven largely by Chinese demand. Without Chinese visitors, Macau’s gaming revenue plunged by more than 90 percent for four consecutive months and operators have been losing US$15 million per day in expenses, Morgan Stanley estimated. Yesterday’s news caused a Bloomberg gauge of Macau stocks to jump as much as 6.9 percent in morning trading. In addition to the resumption of visas, a two-week quarantine imposed on Macau travelers upon their return to China would be lifted throughout the country from today, the Chinese Hong Kong and Macao Affairs Office said in a statement. Macau’s GDP, heavily reliant on tourism and gaming, shrank 49 percent in the first quarter of this year. Even though casino operators reopened after an unprecedented 15-day shutdown in February, travel curbs meant that tourists and high rollers could not travel there. The latest moves are a “huge

McDonald’s sues ex-CEO over alleged employee trysts

McDonald’s Corp on Monday sued former CEO Steve Easterbrook for allegedly lying about inappropriate sexual relationships with employees, the latest twist in a corporate #MeToo saga that has rocked the fast food giant. Easterbrook was dismissed in November last year over his “poor judgment” in engaging in a consensual relationship with a member of staff in breach of company policy. McDonald’s said that it had subsequently learned that Easterbrook lied and “destroyed information regarding inappropriate personal behavior” and relationships with three other employees. It added that the 53-year-old Briton had provided stock worth hundreds of thousands of dollars to one of those employees. The chain is seeking to recover compensation and severance benefits paid to the executive under the terms of his departure last year, a securities filing said. The lawsuit, which said that Easterbrook allegedly committed fraud by misleading the company over the separation agreement, has been filed in a state court in Delaware. “[He] was knowingly untruthful with McDonald’s investigators,” the complaint said. Last month, McDonald’s received an anonymous tip-off that Easterbrook had engaged in a sexual relationship with someone who worked for him while he was CEO. An internal investigation found evidence of that relationship, and of two others, McDonald’s said. “That evidence consisted of dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees,” the filing said. Easterbrook had sent the photographs, which were allegedly taken in late 2018 and early last year, as attachments to messages from his company e-mail account to his personal e-mail account, it said. In 2018, his base pay was US$1.3 million and his total compensation including bonus and stock options was US$15.9 million. Easterbrook’s separation agreement included six months’ severance pay, plus stock options.

Singapore’s Q2 recession worse than July estimate

Singapore’s virus-hammered economy shrank almost 43 percent in the second quarter, in a sign that the country’s first recession in more than a decade is deeper than initially estimated, official data showed yesterday. Tough curbs within the city-state to contain the COVID-19 pandemic took a heavy toll on the economy, which is largely dependent on global trade and tourism. GDP in the second quarter fell 42.9 percent on a quarterly basis, worse than the government’s estimate of a 41.2 percent contraction released last month based on two months of data, the Singaporean Ministry of Trade and Industry said. On an annual basis, the economy shrank 13.2 percent, more than the initial estimate of 12.6 percent. It marked the second consecutive quarter of contraction, meaning that the city-state has entered a recession for the first time since 2009 during the global financial crisis. Trade-dependent Singapore is one of the first countries to report growth data for a period when many nations entered lockdowns and offers an ominous warning of the devastation being wrought on the global economy. The worse-than-estimated figures are likely to ring alarm bells for other Asian economies reliant on trade — typically, Singapore is affected first before economic woes ripple across the region. For the full year, the government said that it expects the economy to contract between 5.0 and 7.0 percent, compared with an earlier forecast of between 4.0 and 7.0 percent, but added that the road to recovery remains rough. “Many of Singapore’s key final demand markets saw worse-than- projected economic disruptions in the second quarter,” the ministry said. These markets “are also expected to experience a more gradual pace of recovery in the second half of 2020 due to the threat of localized outbreaks and the continued need for restriction measures to contain such outbreaks as they occur,” it added. Singaporean Prime Minister Lee Hsien

World Business Quick Take

JAPAN Fewer firms file bankruptcies Bankruptcies last month edged down from a year earlier, suggesting that government measures might be helping keep businesses afloat amid the COVID-19 pandemic. The number of bankruptcies last month fell 1.6 percent to 789 cases, data released yesterday by Tokyo Shoko Research showed. About 89 firms said that the coronavirus was a factor that drove them out of business, with restaurants and hotels hit hardest. There has so far not been a surge of local bankruptcies during the pandemic. CONSUMER GOODS Tax risks Unilever’s UK plan Unilever said that the consumer goods maker would abandon its plan to unify its headquarters in London and scrap its Dutch base if a proposal by an opposition party for a corporate exit tax goes ahead. Unilever said that it believes the proposal, submitted by the opposition Green party, is contrary to international law, but if it were implemented, the company would face a bill of about 11 billion euros (US$12.96 billion). The proposal would need to go through both houses of the Dutch parliament and it is not clear how long that would take, or how probable it would be. CHINA Auto sales continue recovery Auto sales last month rose by 16.4 percent to 2.1 million units from a year earlier in a sign of sustained recovery for the industry’s biggest global market, an industry group said yesterday. The China Association of Automobile Manufacturers reported that sales of passenger cars jumped 8.5 percent to 1.67 million from a year earlier. In the first seven months of this year, passenger vehicle sales tumbled 18.4 percent to 9.5 million from a year earlier, the association said, as many cities imposed shutdowns during the first quarter to battle COVID-19. UNITED KINGDOM Q2 employment dipped The number of employed people fell by 220,000 in the three months after the country

Average take-home pay rises in June

‘POSITIVE MOVEMENTS’: Monthly wages increased as the COVID-19 outbreak eased in Taiwan and most companies emerged from its effects, the DGBAS said

Average monthly take-home pay in June rose 1.41 percent from a year earlier to NT$42,352, while total wages including overtime and performance-based compensation increased 4.09 percent to NT$50,581, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The data represented a pickup from May, as the effects of the COVID-19 pandemic subsided in Taiwan and most companies began recovering from the outbreak, the statistics agency said. The improvement is also evidenced by an enlarged job pool — the workforce expanded slightly by 0.08 percent to 7.9 million — the first increase since the virus broke out in late January, DGBAS Deputy Director Chen Hui-hsin (陳惠欣) told a news briefing in Taipei. “The [employment] situation reported the first positive movements in June after seeing job losses between February and May,” Chen said. A recovery in shopping activity and domestic trips lent support, she added. Compared with a year earlier, the total number of people employed was 0.42 percent lower, the steepest decline in 11 years, indicating that the market has not completely returned to normal, Chen added. Service-oriented sectors put up a better recovery, especially restaurants, hotels and entertainment facilities, which have benefited from pent-up demand, she said. The manufacturing industry continued to cut payroll by 7,000, raising cumulative job losses to 25,000, mainly among machinery, metal and textile businesses, she added. It is not clear when the manufacturing industry will come out of the woods, as uncertainty is building up due to renewed US-China trade tensions and the resurgence of virus infections in many countries, Chen said. By sector, airline employees had the highest monthly take-home pay at NT$65,728, while workers at financial and insurance companies enjoyed the highest total wages at NT$84,405, aided by the distribution of bonuses, the agency said. People worked an average of 168 hours in June, an increase of 5.4 hours from

By Crystal Hsu

Cathay to recognize NT$8.8bn loss

CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment

Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president Lin Chao-ting (林昭廷) told a news conference in Taipei. Cathy Life has invested NT$13.3 billion in Bank Mayapada since 2015 and recognized a net profit of NT$700 million over the past five years. However, the recognized investment loss of NT$8.8 billion has completely written off its investment in the Indonesian lender, Lin said. The company conducted due diligence of Bank Mayapada at the end of last month, discovering that the lender’s non-performing loan ratio stood at 6.94 percent, higher than the industry average of below 3 percent, although it still made a profit of 143.6 billion rupiah (US$9.73 million) for the first half of this year, Lin said. Benny Tjokrosaputro, one of the lender’s debtors, was in January named a suspect in a bribery case involving PT Asuransi Jiwasraya, which had also triggered a run on the bank, he said. Despite its losses of NT$14 billion in the lender, Cathay Life is still considering whether to raise its stake in the lender from 37.33 percent to 51 percent, Cathay Financial Holding Co (國泰金控) president Lee Chang-ken (李長庚) said. “We are still talking with the Indonesian government and the bank’s controlling shareholder Tahir family about many issues, including how to handle the loans offered to Benny

By Kao Shih-ching

TSMC revenue increases 25 percent from last year

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to ship wafers to Huawei after Sept. 14, as Washington has not made a final decision on the matter yet, it said. Losing Huawei’s orders seemed not an issue for TSMC as its chief executive officer C.C. Wei (魏哲家) told investors last month that he was not worried about filling its 5-nanometer capacity. Separately yesterday, United Microelectronics Corp (聯電) said that revenue last month grew 12.87 percent annually and 6.24 percent monthly to NT$15.49 billion, a record high. Its revenue in the first seven months reached NT$102.15, up 24 percent from a year earlier, it said. Chip designer MediaTek Inc (聯發科) said that revenue last month jumped 29 percent year-on-year and 5.59 percent month-on-month to NT$20.69 billion. MediaTek is considered a major beneficiary of the US’ ban on Huawei, as it could win new orders from the Chinese technology giant to supply advanced 5G chips after Huawei runs through stockpiles of Kirin chips designed by its semiconductor arm, Hisilicon Technologies Co (海思). TSMC’s sole supplier of extreme ultraviolet light pods, Gudeng Precision Industrial Co (家登), reported that revenue last month grew 24.13 percent annually to NT$214.59 million, but dropped 33 percent from the previous month. During the first seven months, cumulative revenue advanced 16.3 percent

By Lisa Wang