Fubon Financial : Reports September 2023 Earnings Results

Fubon Financial reported unaudited consolidated pre-tax profit of NT$7.207bn and net profit of NT$5.403bn in September. Cumulative consolidated pre-tax profit and net profit was NT$78.733bn and NT$67.782bn, respectively, translating into EPS of NT$4.94. Taipei Fubon Bank's cumulative net profit in hit a record high for the same period. Fubon Securities' cumulative net profit in the first nine months were the 2nd highest for the same period. Fubon Insurance has been profitable for six consecutive months since April.

The performance of the main subsidiaries is as follows:

Fubon Life's September net profit was NT$4,184mn and cumulative net profit was NT$43,126mn. The main sources of investment income this month were interest income, domestic and foreign stock cash dividends, fund dividend income, and net exchange gains. In the bond market, the strong performance of the US economy pushed up government bond yields. Strategically, Fubon Life continued to maintain sufficient liquidity positions to facilitate flexible response to subsequent market movement. The Fed in September left room for another rate hike this year and lowered its forecast for rate cuts next year, which boosted the dollar. In September, the US dollar appreciated against the New Taiwanese Dollar by 1.3%, contributing to monthly exchange gain. Fubon Life's standalone cumulative FYP and TP reached NT$72,869mn and NT$238,053mn, respectively, both estimated to rank the top 2 in the industry. Fubon Life continued to focus the product strategy on regular-paid policies, and the cumulative FYPE reached 29,984 mn, up 39% yoy. FYP was NT$7,656mn in September, with the main growth momentum coming from traditional products. TP was NT$24,816mn. Both FYP and TP in September was estimated to rank the top in the industry. Fubon Life's capital position remained decent, with RBC ratio above 300% and equity to asset ratio above 8% as of September.

Taipei Fubon Bank's September net profit was NT$1,738mn, and cumulative net profit was NT$20,239mn, up 4% yoy. The growth of cumulative profit would be around 17% if the bargain purchase gain in 2022 was excluded. The earnings growth was mainly due to steady momentum in the core business, with double-digit revenue growth yoy. Net interest income grew 7% yoy, benefiting from asset growth and spread expansion. Net fee income rose 38% yoy, mainly from wealth management fee income growth and credit card spending increase. Meanwhile, treasury revenue rose yoy. The number of active credit cards continued to increase to5.17mn cards, up over 60% yoy in September. The monthly card spending in September was NT$43.8bn, up over 50% yoy, and the cumulative amount of card spending grew 31% yoy. Asset quality remained benign. NPL ratio and coverage ratio were at 0.11% and 1147%, respectively.

Fubon Insurance's September net profit was NT$181mn and cumulative net loss was NT$2,416mn. The monthly net profit was slightly affected by the loss of commercial fire insurance, but it was still maintained at a stable level, reflecting the effectiveness of business quality and risk control. In terms of business performance, direct written premium in September was NT$4,779mn, up 23.4% yoy, of which the written premium of corporate insurance climbed 72.3% yoy. Meanwhile, marine insurance and new type of insurance outperformed the market by around 3% to 5%. Cumulative premium as of September was NT$44,448mn, up 5.2% yoy. With a market share of 24.1%, Fubon Insurance continued to be the market leader.

Fubon Securities' September net profit was NT$343mn, lower mom, affected by the decline in the stock and bond markets globally. Cumulative net profit was NT$5,489mn, up 51% yoy. Taiwan's stock market performance this year was better than the same period last year, as the average daily turnover increased by 11% and TAIEX climbed 2,216 points year-to-September. As a result, the revenue in brokerage, wealth management and proprietary trading businesses was significantly higher than the same period last year.