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Shares of Fubon Financial up on 2013 results

Shares of Fubon Financial up on 2013 results

Taipei, Jan. 9 (CNA) Shares of Fubon Financial Holding Co. moved higher Thursday morning after the financial institution a day earlier reported a record high in net profit for 2013, dealers said. The current buying also reflected hopes that the acquisition of an 80 percent stake in China-based First Sino Bank will further strengthen the bottom line of Taipei Fubon Commercial Bank, the financial holding company's banking unit, later this year, they said. As of 11:33 a.m., shares of Fubon Financial had added 0.82 percent to NT$42.85 (US$1.43). The weighted index on the Taiwan Stock Exchange was down 0.06 percent at 8,550.96 points. "The record high profits largely reflected the improving profitability of its flagship insurer, Fubon Life Insurance. It was not surprising that investors took cues from the 2013 earnings to pick up the stock this morning," Asia Securities Investment Consultant analyst Chang Chih-cheng said. In a statement, Fubon Financial posted NT$32.69 billion in net profit, or NT$3.31 in earnings per share (EPS) in 2013, up from NT$28.98 billion, or NT$3.05 EPS recorded in 2012. Fubon Life's net profit rose to NT$19.13 billion last year, up from NT$12.97 billion registered a year earlier. Fubon Financial said that first-year premiums generated by Fubon Life totaled NT$212.9 billion, the highest among the local life insurers, to raise the insurer's earnings, while Chang said the life insurer also disposed of large U.S. treasuries during the year to give another boost to its profits. In 2013, Fubon Securities posted NT$1.35 billion in net profit, compared with NT$980 million recorded in 2012, while Fubon Insurance Co., which specializes in non-life insurance policies, registered NT$2.84 billion in net profit, down from the previous year's approximately NT$3 billion. For its part, Taipei Fubon Bank posted NT$12.12 billion in net profit in 2013, down from NT$12.99 billion in net income recorded in 2012, after the bank assigned NT$18.2 billion in provisions to write down possible losses, including non-performing loans (NPL). Fubon Financial said that after its efforts to get rid of bad loans, Taipei Fubon Bank has a sound financial structure, with its bad loan ratio falling to 0.12 percent last year. "Investors have to pay close attention to how First Sino Bank will make a financial contribution to Taipei Fubon Bank. After completing the acquisition of a major stake in the Chinese bank earlier this month, the effects will become visible in 2014," Chang said. In the acquisition deal, announced December 2012, Fubon Financial and Taipei Fubon Bank, took a 29 percent and 51 percent stake, respectively, in Shanghai-based First Sino Bank. Despite optimism toward the acquisition of First Sino Bank, shares of Fubon Financial still moved in a narrow range after the stock posted significant gains in recent sessions, Chang said. Chang said the stock faced stiff technical resistance after it briefly breached the NT$43 mark in Thursday's morning session. "Before Fubon Financial gives real numbers about First Sino Bank's contribution to its bottom line, I expect that shares of Fubon Financial will continue to move in consolidation mode for some time," Chang said. (By Tien Yu-pin and Frances Huang)


Updated : 2021-03-01 16:29 GMT+08:00