CTBC Financial Holding Co’s (中信金控) net income plunged to NT$481 million (US$16.24 million) last month, from NT$3.2 billion in the same period last year, as the company paid about NT$2 billion in taxes on undistributed earnings.
The company has about NT$50 billion of undistributed profit as it aims to strengthen its capital adequacy in the face of the COVID-19 pandemic and stricter regulations in the years ahead, CTBC Financial head of financial management Chiu Ya-ling (邱雅玲) told the Taipei Times by telephone on Wednesday.
The stricter regulations include the Financial Supervisory Commission’s new capital cushion standards for “domestic systemically important banks” such as CTBC Bank (中信銀行), as well as the International Financial Reporting Standards 17 for insurance firms, Chiu said.
CTBC Bank reported a capital adequacy ratio of 14.14 percent on March 31, down from 14.17 percent a quarter earlier, compared with an industry average of 14.28 percent, commission data showed.
However, the lender’s common equity tier 1 ratio and tier 1 capital ratio remained higher than the industry average, the data showed.
“There will be more pressure on us to maintain strong capital adequacy, as we begin to comply tighter banking rules this year,” Chiu said.
CTBC Financial reported a loan-loss provision of NT$1.3 billion last month after its debtor, Hin Leong Trading Pte Ltd (興隆貿易), filed for bankruptcy in April.
CTBC Financial, which lent US$90 million to the Singapore-based oil trader, would continue negotiating with the debtor to minimize its losses, she said.
CTBC Financial posted net income of NT$19.17 billion for the first six months of the year, down 6 percent year-on-year from NT$20.39 billion.
Earnings per share were NT$0.93, compared with NT$1.01 the previous year.
Tax payments on undistributed earnings also eroded their net income at Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控) last month.
Cathay Financial posted net income of NT$5.94 billion for last month.
In the first six months, cumulative net profit increased 15 percent year-on-year to NT$39.29 billion on the back of steady growth in its banking and insurance operations, Cathay Financial said.
Fubon Financial paid NT$2.6 billion in taxes and posted net income of NT$3.03 billion for last month.
In the first six months, cumulative net profit increased 3.7 percent year-on-year to NT$37 billion, the company said.
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