Fubon Financial Holding Co (富邦金控) plans to put an additional NT$18 billion to NT$63.5 billion (US$521.7 million to US$1.84 billion) into real-estate investments that generate a minimum rental yield of 3.8 percent, a company executive said yesterday.
“We hope to increase our property investments in the near future to account for 5 percent to 10 percent [of our total NT$894.6 billion investment portfolio], up from the current 2.9 percent level,” company president Victor Kung (龔天行) told reporters on the sidelines of its investors’ conference.
Fubon Financial will be aggressive in acquiring properties such as the Shin Kong Mitsukoshi A11 department store building in the upscale Xinyi District (信義), to be auctioned off by Shin Kong Life Insurance Co (新光人壽) for a floor price of NT$10 billion, Kung said, adding that the company would soon reinvest its government bond portfolio, positioned by subsidiary ING Antai Life Insurance Co (ING安泰人壽), to options with better returns like overseas fixed-income and real-estate investments.
The nation’s second-largest financial service provider also vowed to “continue to be a consolidator” in the banking industry, which Kung said was one of the firm’s strategic initiatives for this year. He did not elaborate.
However, he said the company may be more interested in Chinfon Commercial Bank’s (慶豐銀行) Vietnam-based branch than its Taiwanese assets.
Meanwhile, Fubon Financial yesterday reported NT$10.8 billion, or NT$1.4 per share, in net income for last year — a 25 percent year-on-year decline — with its two banking subsidiaries contributing 57 percent of group earnings.
Its life insurance and securities arms, however, saw their net incomes drop 64 percent and 68 percent respectively to NT$1.4 billion and NT$1.25 billion.
Amid a protracted economic slowdown this year, Fubon Financial expects to see more earnings risk from a narrowing net interest margin following the central bank’s interest rate cuts; lower income from wealth management fees; and higher volatility in investment returns.
But the company sees opportunities this year to expand its financial services to 2,450 Xiamen-based Taiwanese businesses that have invested a total of US$2.9 billion there via Xiamen City Commercial Bank (廈門市商銀). Fubon Financial owns a 19.9 percent stake in the Xiamen lender.
Boasting strong capitalization, Fubon Financial aims for a full post-merger integration with Antai Life this year.
The new life insurance arm, whose risk-based capital (RBC) ratio reached 250 percent as of the fourth quarter of last year, will maintain an RBC ratio of more than 200 percent over the next three years, Fubon Financial president Kenneth Shih (石寶忠) said yesterday.
After Standard Chartered Bank Taiwan (渣打銀行) and Ta Chong Bank (大眾銀行) yesterday said they would charge maintenance fees of NT$85 and NT$95 respectively for savings accounts with less than NT$10,000 in deposits starting later this spring, Fubon Financial said it would not follow suit.
“This new fee may make sense in terms of reflecting costs, but it may not be in line with market expectations,” Kung said.
Fubon Financial shares rose NT$0.6, or 3.4 percent, yesterday to close at NT$18.2 per share.
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