Shin Kong Financial reports solid Q1 by core businesses
By Ted Chen, The China Post
May 19, 2014, 12:02 am TWN
TAIPEI, Taiwan -- Shin Kong Financial Holding Co. (新光金控) recently held its earnings conference, reporting revenues of NT$1.41 billion over the first quarter of this year, while yielding after-tax earnings of NT$0.13 per share improving markedly from the minus NT$0.11 seen in the previous period.
As of the end of the first quarter, the company's shareholders' equity reached NT$100.56 billion, with its per-share book value rated at NT$10.78.
Most notably, the company announced that the embedded value of its life insurance arm, Shin Kong Life Insurance Co. (新光人壽), at the end of last year reached NT$214.3 billion, gaining 10.2 percent following a restructuring of assets. In addition, the company's life insurance arm recorded a 0.08 percent gain annualized hedging profits after allocating NT$2 billion as contingency against foreign exchange rate volatility. The life insurance division, however, recorded a net loss of NT$54 million. The company explained that profits were eroded by a surge in expenses following a rapid 91.9 percent year-on-year growth in first year premiums.
The company's banking arm, Shin Kong Bank (新光銀行) recorded a 16.3 percent year-on-year gain in net interest income, with net fee income seeing a 5-percent year-on-year improvement. Pre-provision profit rose 20.6 percent year-on-year to NT$1.81 billion, with net interest spread rising by 1 basis point to 1.8 percent, and net interest margin rising by 4 basis points to 1.44 percent. The company noted that its banking arm is maintaining growth momentum, with lending activities seeing a 5.3-percent quarter-on-quarter growth, reaching NT$474.85 billion. Deposits saw a 4.6-percent quarter-on-quarter growth, swelling to NT$642.77 billion.
For the rest of the year the company expressed an upbeat outlook, indicating that it will continue in striving towards improving performance and profitability by seeking viable investments in high quality corporate bonds and U.S. dollar denominated government bonds issued by developing nations. In addition, the company will bolster synergies between its subsidiaries while continuing to expand in the China, Hong Kong, and South East Asian markets.