Banks were the only segment in the local financial sector that reported growth in pretax profit from Jan. 1 to Aug. 31, thanks to the central bank’s rate hikes, the Financial Supervisory Commission said on Thursday.
Banks in Taiwan reported a combined pretax profit of NT$291.32 billion (US$9.2 billion) in the first eight months of the year, up 7.1 percent annually, as rate hikes drove up interest income, commission data showed.
Taiwanese banks’ pretax profit grew 9.3 percent from a year earlier to NT$267.3 billion in the eight months, the highest for the period on record, while credit co-operatives’ pretax profit rose 12.6 percent to NT$2.64 billion, commission data showed.
Photo: Kelson Wang, Taipei Times
However, foreign banks’ local units saw pretax profit drop 11 percent to NT$9.88 billion, as funding costs increased amid widening interest spreads between the US and Taiwan, the commission said.
Securities companies’ combined pretax profit decreased 59.19 percent to NT$35.62 billion in the first eight months, as fee income was dented by declining turnover in the local stock markets, the data showed.
Meanwhile, futures companies’ pretax profit dropped 0.7 percent to NT$3.43 billion, and investment trust firms’ pretax profit fell 9.76 percent to NT$9.39 billion, as investors became conservative about investments, the commission said.
Securities and Futures Bureau Deputy Director Kao Ching-ping (高晶萍) said the turnover in local stock markets shrank by NT$29.76 trillion in the first eight months after the TAIEX fell by 3,123.4 points during the period, causing the brokerage and proprietary trading businesses to see their income reduce by NT$37.86 billion and NT$30.67 billion respectively.
As for the investment trust firms, their asset management business declined to NT$4.76 trillion over the eight months, compared with NT$4.84 trillion in the same period last year, which affected fund managers’ fee income, Kao said.
Life insurance companies’ combined pretax profit dropped 22 percent to NT$264.3 billion, as investment income plunged amid market routs and rate hikes worldwide, while non-life insurance companies reported combined net losses of NT$76.5 billion due to sizable payments to COVID-19 insurance policyholders, the data showed.
Overall, financial companies in Taiwan reported a combined pretax profit decline of 27.7 percent year-on-year to NT$527.56 billion in the first eight months, the commission said.
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