Cathay Financial Holding Co (國泰金控) last year raked in a fortune from its investments in local shares, but unrealized gains slowed this year due to market corrections, company officials said yesterday.
The conglomerate is to discuss its dividend policy next month, which is expected to be higher than NT$2 per share, as company data showed that last year’s net income was NT$111.2 billion (US$3.37 billion), or earnings per share of NT$7.29.
Cathay Financial president Lee Chang-ken (李長庚) said that the figures were the second-best on record, but the group is prioritizing adjustments to accounting rule changes next year, so dividend distributions would be conservative.
Photo: CNA
“The company would afford to be more generous after that,” Lee said.
Last year’s strong performance came after its main subsidiary, Cathay Life Insurance Co (國泰人壽). booked NT$114.2 billion in capital gains, 1.8 times higher than a year earlier, the insurer’s executive vice president Lin Chao-ting (林昭廷) said.
The insurance arm also recognized NT$1.14 billion from its bond holdings, but it would not be a profit driver this year, Lin said.
The company has increased its bond holdings and expects a further expansion of its debt portfolio, Lin added.
Overall unrealized capital gains exceeded NT$100 billion last quarter, but eased to NT$80 billion in February, as foreign investors turned conservative and cut their positions on the local stock market to reflect concerns that trade disputes between the US and the rest of the world could weaken corporate margins, Lin said.
Lee said that US President Donald Trump might have been bluffing about tariff hikes, but financial markets remain uneasy, as evidenced by a global stock rout.
The TAIEX has shed 3.78 percent so far this year, Taiwan Stock Exchange data showed, in line with the Dow Jones’ 3.72 percent fall, but milder than a 10.26 percent slump in the tech-heavy NASDAQ Composite.
Cash dividends amounted to NT$16.8 billion last year, softer than NT$19.7 billion in 2023, company data showed.
Lin said that Cathay Life places more emphasis on total returns instead of cash dividend levels, adding that its local share positions rose NT$71 billion to NT$575 billion and generated an annual return of 15 percent on the back of stock market rallies.
Cathay Securities Co (國泰證券) also benefited from the rallies, as seen by an impressive growth in brokerage commissions, clients and market share, officials said.
The showings had much do with artificial intelligence fever following Nvidia Corp founder and CEO Jensen Huang (黃仁勳) attending the Computex Taipei trade show in June last year, officials said.
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