Taishin Financial Holdings Co (台新金控) remains interested in acquiring an insurance company to increase its earnings, but will give top priority to strengthening its existing businesses, president Lin Keh-hsiao (林克孝) said yesterday.
Lin made the remarks after the company lost the bid for MetLife Inc’s Taiwanese unit to Chinatrust Financial Holding Co (中信金控) on Monday.
“It is favorable for Taishin to own a life insurance company, which could boost the group’s overall performance,” Lin said. “We already have a strong bancassurance team and we want to take further advantage of it.”
For the same reason, Chinatrust Financial, the nation’s third-largest financial services provider, on Monday announced its intention to buy MetLife Taiwan Insurance Co (大都會人壽) for US$180 million in a bid to expand into the domestic insurance market and eventually across the Taiwan Strait.
The deal is scheduled to be completed in the second half of the year, pending regulatory approval.
Bancassurance, a business model whereby insurance companies use bank sales channels to sell insurance products rather than rely on sales agents, accounts for 70 percent of the nation’s first-year premiums.
Lin refused to comment on MetLife Taiwan — as is required of bidders — except to say that the review deepened his belief that owning a life insurer was beneficial.
“The issue [of acquisition] does not sit on top of Taishin Financial’s agenda,” he said. “We joined the bid [for MetLife Taiwan] because the opportunity presented itself. Taishin will continue to strengthen its existing businesses.”
While the group did not rule out creating its own life insurance firm, acquiring existing ones is easier because they are already equipped with a competent professional management structure, Lin said.
Despite reviving talks of consolidation among state-run financial firms, Taishin Financial will hold on to its 22.5 percent stake in Chang Hwa Commercial Bank (彰化銀行) for the foreseeable future, Lin said, adding that mergers of state-run banks by their private peers would be beneficial because of increased synergy.
FITCH RATINGS
Meanwhile, Fitch Ratings Ltd yesterday said Chinatrust Financial’s proposed cash acquisition of MetLife Taiwan would have no immediate impact on its rating and those of its subsidiaries because of the relatively small size of the transaction.
“Fitch expects the acquisition to only modestly increase financial leverage at the holding company level, with limited impact on the group’s financial profile, while the rating for Chinatrust Group has already factored in the possibility that it will pursue modest diversification opportunities,” the UK ratings agency said in a statement.
Based on Fitch data, the US$180 million deal represents about 5 percent of Chinatrust Group’s consolidated assets on a pro forma basis.
However, MetLife Taiwan’s capital strength could be a risk. As of the end of last year, the insurer had a risk-based capital ratio of 205 percent, just 5 percentage points higher than the regulatory minimum of 200 percent, according to Financial Supervisory Commission data.
However, both Fitch Ratings and Citigroup Global Markets said yesterday they believed Metlife Taiwan would need no immediate capital injection, citing the insurer’s relatively conservative investment portfolio and the low cost of its insurance liabilities compared with its peers in Taiwan.
MetLife Taiwan has about 88 percent of its investment portfolio in the form of government and corporate bonds, with equities accounting for less than 1 percent, Citigroup analyst Bradford Ti (鄭溫煌) said in a note yesterday.
TARIFFS: The global ‘panic atmosphere remains strong,’ and foreign investors have continued to sell their holdings since the start of the year, the Ministry of Finance said The government yesterday authorized the activation of its NT$500 billion (US$15.15 billion) National Stabilization Fund (NSF) to prop up the local stock market after two days of sharp falls in reaction to US President Donald Trump’s new import tariffs. The Ministry of Finance said in a statement after the market close that the steering committee of the fund had been given the go-ahead to intervene in the market to bolster Taiwanese shares in a time of crisis. The fund has been authorized to use its assets “to carry out market stabilization tasks as appropriate to maintain the stability of Taiwan’s
STEEP DECLINE: Yesterday’s drop was the third-steepest in its history, the steepest being Monday’s drop in the wake of the tariff announcement on Wednesday last week Taiwanese stocks continued their heavy sell-off yesterday, as concerns over US tariffs and unwinding of leveraged bets weighed on the market. The benchmark TAIEX plunged 1,068.19 points, or 5.79 percent, to 17,391.76, notching the biggest drop among Asian peers as it hit a 15-month low. The decline came even after the government on late Tuesday authorized the NT$500 billion (US$15.2 billion) National Stabilization Fund (國安基金) to step in to buoy the market amid investors’ worries over tariffs imposed by US President Donald Trump. Yesterday’s decline was the third-steepest in its history, trailing only the declines of 2,065.87 points on Monday and
TARIFF CONCERNS: The chipmaker cited global uncertainty from US tariffs and a weakening economic outlook, but said its Singapore expansion remains on track Vanguard International Semiconductor Corp (世界先進), a foundry service provider specializing in producing power management and display driver chips, yesterday withdrew its full-year revenue projection of moderate growth for this year, as escalating US tariff tensions raised uncertainty and concern about a potential economic recession. The Hsinchu-based chipmaker in February said revenues this year would grow mildly from last year based on improving supply chain inventory levels and market demand. At the time, it also anticipated gradual quarter revenue growth. However, the US’ sweeping tariff policy has upended the industry’s supply chains and weakened economic prospects for the world economy, it said. “Now
An employment discrimination lawsuit against contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) might soon be expanded after a hearing in a federal court in San Jose, California, on Tuesday to add 15 plaintiffs to the case. According to a court document, the lawsuit, which was refiled in November last year as a form of a class action with 13 plaintiffs in California, wants to add 15 plaintiffs from Arizona, where TSMC is building up its wafer fab capacity. TSMC first committed between 2020 and last year to invest US$65 billion in three advanced wafer fabs in Arizona. It then pledged an
RSS