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September 24, 2017

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CTBC Holding reports stellar Q1 performance

TAIPEI, Taiwan -- In an earnings conference CTBC Holding (中信金控) yesterday announced the company's performance results over the first quarter of this year, yielding earnings of NT$0.53 per share, improving over the NT$0.52 seen in the same period last year.

The company reported first-quarter after-tax revenues of NT$7.795 billion, with return on shareholders' equity performance reaching 15.76 percent and after-tax return on assets performance reaching 1.25 percent.

Most notably, the company acknowledged that technical hurdles still remain in its bid to acquire Taiwan Life (台壽保). The company stated that they are working toward finalizing the specifics of the swap of shares to complete the merger process, which is set to take place shortly after this year's shareholders' meeting. The date of the share swap, however, has not been set, said the company. The company stated the process will forge forward and that they will remain undisparaged in the endeavor in the event that the swap of shares overruns the previously allotted time table.

Meanwhile, the company also acknowledged that its treasury marketing unit (TMU) has seen its market share decline to 11-12 percent at the end of the first quarter of this year. The company stated that a number of its large-scale specialist clients have been markedly impacted by the waning strength of the renminbi. Consequently, in the first three months of the year, monthly revenues from its TMU arm dwindled from NT$900 million to NT$450 million, then to NT$230 million in March. The company stated that it is not actively marketing renminbi-denominated derivatives to its general clientele, and only offering the instruments to experienced institutional clients to hedge against risk. In addition, the company has also raised internal auditing measures, raising requirements to screen out clients who are not equipped to take on the risks of derivatives investments.

Over the course of the first quarter the company's banking arm CTBC Bank (中信商銀) generated after-tax revenues of NT$5.899 billion, improving 6.6 percent year-on-year, while its life insurance arm CTBC Life (中信人壽) garnered after-tax revenues of NT$728 million, swelling 50.9 percent year-on-year.

Overall, excluding its life insurance arm, the company's net revenues improved by 13.7 percent year-on-year, propelled by a coinciding 19.6-percent year-on-year rise in revenues derived from its wealth management, lottery, transaction fees and institutional and individual investors' services. In addition, the company's loan activities saw strong growth in net interest margins (NIM) performance rating, with interest earnings seeing a 15.80-percent year-on-year growth, excluding the contributions of the company's life insurance arm.

Throughout the period the company exhibited stellar asset quality, maintaining a low non-performing loans ratio at 0.25 percent, while improving its bad debt coverage ratio from last December's 344.5 percent to the current 509.7 percent and maintaining capital adequacy ratios exceeding regulators' guidelines.

For its life insurance arm the company revenues from first-year premiums reached NT$17.405 billion and NT$5.796 billion for first-year premium equivalent sales, improving 165.9 percent and 242.9 percent, respectively, while exceeding averages for the sector.

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