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.
Photo: Wu Chi-lun, Taipei Times
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 Tjokrosaputro,” Lee said.
“Based on our investment in Vietnam and Cambodia, we believe that if we have controlling power over the investment entity, the returns would be solid. So we are still evaluating if we should be a controlling shareholder in Bank Mayapada,” Lee said.
The insurer might reach a conclusion in three months, he added.
Cathay Life yesterday reported net profit of NT$12.2 billion for last month, the highest for a single month, due to advancing payment of cash dividends, while its cumulative profit for the first seven months rose 29 percent year-on-year to NT$31.5 billion, Lin said.
Intel Corp has talked with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co about the Asian companies making some of its best chips, but the Silicon Valley pioneer is still holding out hope for last-minute improvements in its own production capabilities. After successive delays in its chip fabrication processes, Santa Clara, California-based Intel has yet to make a decision less than two weeks ahead of a scheduled announcement of its plans, people familiar with the deliberations said. Any components that Intel might source from Taiwan would not come to market until 2023 at the earliest and would be based on
MediaTek Inc (聯發科) yesterday announced it would give incentive bonuses totaling NT$1.7 billion (US$59.7 million) to its employees and those at the firm’s major subsidiaries, after the smartphone chip supplier’s revenue hit US$10 billion last year. This is the biggest incentive bonus the Hsinchu-based handset chip designer has ever distributed in its 23-year history. About 17,000 full-time employees of MediaTek and five of its subsidiaries, including Richtek Technology Corp (立錡科技) and Airoha Technology Corp (絡達科技), would receive a “red envelope” of NT$100,000 each, the company said. “Surpassing US$10 billion is just the beginning. We will continue to [grow] on this basis,” MediaTek
TO SPUR REVENUE: The contract chipmaker expects its profit to grow 15 percent this year, outpacing the foundry industry’s projected advance of about 10 percent Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its projected capital spending for this year by 62 percent, a new high, in an attempt to satisfy customer demand for advanced technologies in the production of central processing units, high-performance-computing (HPC) devices and 5G applications. After investing US$17.24 billion last year, TSMC this year plans to spend US$25 billion to US$28 billion on manufacturing equipment and new facilities, including a fab in the US. About 80 percent of the budget would be allocated for developing advanced technologies including 3, 5 and 7-nanometer technologies, the company said. The larger-than-expected capital spending prompted speculation
RIPPLE EFFECTS: Diminished supply, which has for the past few months affected auto firms worldwide, might prove to be a short-term issue due to COVID-19, an expert said A widening global shortage of semiconductors for auto parts is forcing major auto companies to halt or slow vehicle production just as they were recovering from COVID-19 pandemic-related factory shutdowns. Officials at Volkswagen AG, Ford Motor Co, Fiat Chrysler Automobiles NV, Toyota Motor Corp and Nissan Motor Co all say they have been hit by the shortage and been forced to delay production of some models in order to keep other factories running. “This is absolutely an industry issue,” Toyota spokesman Scott Vazin said in an e-mail on Friday. “We are evaluating the supply constraint of semiconductors and developing countermeasures to minimize