Chinatrust Financial profit set to hit record high, doubling 1st half
By Ted Chen, The China PostTAIPEI, Taiwan -- Chinatrust Financial Holding (中信金), yesterday announced its midyear results and also forecast that profit this year is poised to reach a record NT$35 billion.
August 14, 2013, 11:49 am TWN
In the first half of this year, the company reported after-tax income of NT$13 billion. Earnings per share is expected to reach an unprecedented high NT$2.07, according to institutional investor estimates. Throughout the period, the company recorded return-on-equity performance of 15.1 percent and a return-on-assets rating of 1.2 percent, with a capital adequacy ratio of 155.6 percent.
Most notably, Chinatrust is poised to benefit from the sales of its headquarters. Based on the asset cost of NT$6 billion, profit from the sale is expected to reach NT$15 billion, representing an earnings contribution of NT$1.09 per share.
The company stated that it has increased its loan coverage ratio by 1 percent by allocating an additional NT$5 billion to NT$6 billion to the effort.
Following the Taiwan Maritime Co. (TMT, 台灣海陸運輸) filing for chapter 11 bankruptcy protection in the U.S. in June, Chinatrust Financial in July recognized 54 percent of associated exposure to the failed bulk shipper and energy transport firm. The company also stated that its financials will not be adversely affected by the impending closure of the Chi Mei Lighting Technology Corp. (奇力光電).
Overall profitability for its banking arm grew by 10.8 percent, with housing mortgage loans seeing a 1.9-percent surge over the second quarter.
Despite the net interest margin declining by 1.52 percent in the second quarter, net interest income exceeded the NT$7 billion mark.
However, the company declined to comment on rumors of its intent to acquire the Japan-based Tokyo Star Bank, but stated that there is no set priority in the company's plans to acquire companies in the banking, insurance, and securities sectors, adding that its decisions are based on favorable emerging opportunities.
The company stated that its board has approved of its bid to acquire Manulife Taiwan (宏利人壽), with the process expected to see completion by the end of this year. The company hopes to increase the number of insurance salespeople to improve market coverage.
The company's life insurance arm produced stellar results, recording a 49.8-percent rise in first-time contract premium collections.