CTBC Financial Holding Co (中信金控) aims to pay a high cash dividend this year, with a payout ratio above 50 percent and a dividend yield of 4 to 5 percent, CTBC spokeswoman Chiu Ya-ling (邱雅玲) told an investors’ conference yesterday.
The company reported earnings per share of NT$2.15 for last year, but its board of directors has not finalized talks on a cash dividend.
However, as the firm’s insurance arm, Taiwan Life Insurance Co (台灣人壽), would retain last year’s net profit as a capital injection, the dividend would not be as high as without this move, Chiu said.
Photo: Lee Chin-hui, Taipei Times
Taiwan Life’s net profit grew 26.1 percent year-on-year to NT$16.53 billion (US$577,770 million) last year, accounting for 38.5 percent of CTBC’s profit of NT$42.85 billion, company data showed.
“As Taiwan Life will be subject to stricter solvency rules, such as the International Financial Reporting Standards 17 and the new Insurance Capital Standard, the capital injection is to help improve its adequacy,” Chiu said.
CTBC paid cash dividends per share of NT$0.85, NT$1.08, NT$1 and NT$1 from 2016 to 2019 respectively, with payout ratios of 59 percent, 56 percent, 54 percent and 46 percent, the data showed.
Market watchers expect a cash dividend per share between NT$0.872 and NT$1.09 this year.
CTBC shares closed at NT$21.8 in Taipei trading yesterday, up 1.4 percent.
Chiu said that CTBC’s banking arm, CTBC Bank (中國信託銀行), is expected to regain momentum this year after reporting a year-on-year net profit decline of 11.8 percent last year to NT$27.26 billion.
“We aim to seize a high single-digit lending increase this year. CTBC Bank’s net interest margin could rise 1 or 2 basis points from 1.4 percent at the end of last year, as we expect that foreign currency loans would rise,” she said.
The bank’s foreign currency-denominated loans last year declined 6.1 percent from 2019, due to the COVID-19 pandemic weighing on business at its overseas branches, Chiu said, adding that the situation is expected to improve.
The bank wrote off bad debts of NT$9.18 billion last year, up 70.2 percent from 2019, as its overseas branches booked nonperforming loans, while its credit cost advanced to 0.36 percent, from 0.22 percent in 2019, the data showed.
Its loan quality would stabilize and credit cost fall to 0.25 percent this year, the bank said.
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