China Development Financial Holding Corp’s (中華開發金控) board of directors on Friday decided not to distribute a cash dividend this year.
It is the first time in 11 years that the company is not rewarding its shareholders.
As of Friday, 13 financial holding firms had unveiled their dividend plans, with Taishin Financial Holding Co (台新金控) the only one remaining to announce a dividend proposal.
Photo courtesy of China Development Financial Holding Co
In a filing to the Taiwan Stock Exchange, China Development Financial said it incurred unrealized losses of NT$73.8 billion (US$2.41 billion) last year due to volatility in capital markets, while net profit halved from the previous year to NT$16.3 billion.
The company said it has set aside large reserves to cover the unrealized losses and is unable to use its capital surplus of NT$33.6 billion due to regulatory restrictions, leaving it no extra earnings for dividend payouts.
The company’s decision is expected to affect about 900,000 investors holding the company’s common shares or preferred shares.
China Development Financial joins IBF Financial Holdings Co (國票金控), whose net profit dove 66 percent year-on-year to NT$1.28 billion last year, and Shin Kong Financial Holding Co (新光金控), whose net profit plunged 90 percent to NT$2.08 billion, to withhold dividend payouts this year.
Several other financial holding companies have reduced dividends in light of weaker performance last year.
Cathay Financial Holding Co (國泰金控), whose net profit fell 73 percent to NT$37 billion last year due to investment losses, has proposed a cash dividend of NT$0.9 per share, the lowest since 2013. Fubon Financial Holding Co (富邦金控), whose net profit dropped 68 percent to NT$46.9 billion last year, plans to pay a cash dividend of NT$1.5 per share, the lowest since 2014.
No major financial holding firm has posted a dividend yield of more than 4 percent, except for CTBC Financial Holding Co Ltd (中信金控), whose dividend yield was 4.3 percent based on its cash dividend of NT$1 per share and share price of NT$23.05 on Friday.
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