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Fubon’s insurance unit to lift real estate investment in Taiwan

Fubon Financial Holding Co. President Victor Kung said on March 11 that Fubon Financial plans to sell some government bonds and invest in real estate ...

Fubon Financial Holding Co. President Victor Kung said on March 11 that Fubon Financial plans to sell some government bonds and invest in real estate ...

Fubon Financial Holding Co., Taiwan’s second-largest financial services company, said its life insurance unit will increase real estate investments to boost returns.

Fubon Financial plans to sell some government bonds and invest in real estate and overseas fixed-income products, Victor Kung (龔天行), president of the Taipei-based company, said at a briefing Wednesday.

“The yield from government bonds is too low,” Kung said. The company aims to raise real estate investments to between 5 percent and 10 percent of the fixed investment portfolio of its life insurance business, Kung said.

Fubon Financial last month completed the acquisition of ING Group NV’s life insurance unit in Taiwan for $600 million to expand its customer base by about a third. The merger is expected to be completed by July.

At the end of last year, Fubon Life Assurance Co.’s real estate investments accounted for 4.3 percent of its investment portfolio, while ING Antai’s made up 2.1 percent, or about NT$12 billion ($348 million). Investment by ING Antai in domestic government bonds and treasury bills combined was 93 percent, according to company data.

Fubon is aiming for a rental yield of about 3.8 percent, Kung said. He declined to say if the company will make a bid for a department store that Shin Kong Financial Holding Co. plans to sell. Shin Kong, owner of Taiwan’s third-largest life insurance company, will auction its property on April 3.

The financial holding company plans to acquire domestic lenders as valuations have fallen because of the financial crisis, Kung said. Fubon didn’t join in the bid by the government to sell Chinfon Bank, he said. Chinfon was seized by the Central Deposit Insurance Corp. in September because of deteriorating finances.

Fubon Financial doesn’t plan to pay a cash dividend for the year ended 2008, Kung said. The company reported 2008 profit fell 25 percent from a year earlier to NT$10.8 billion. Provisions and losses from investments at its units in collateralized debt obligations and Lehman Brothers Holdings Inc.-related assets cut into earnings.

Fubon units include Fubon Securities Co., Fubon Asset Management and Taipei Fubon Bank.


Updated : 2021-05-13 00:59 GMT+08:00