Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fubon Financial Holdings Co Ltd (TPE:2881, Financial) reported a record high net profit and EPS for the first half of 2024, leading the industry in Taiwan.
- Fubon Life achieved top rankings in net profit and first-year premium, driven by an investment return of over 5%.
- Taipei Fubon Bank also reached a record high profit, primarily from core earnings such as net interest income and fees.
- Fubon Insurance showed steady growth in net profit due to strong underwriting results and investment performance.
- The company's subsidiaries, including Fubon Bank Hong Kong and Fubon Bank China, also demonstrated earnings growth.
Negative Points
- Recurring investment income slightly decreased by 1.8% year over year, mainly due to a decline in cash dividends from equity.
- Recurring hedging costs remained high in the first half, impacting overall returns.
- Fubon Bank Hong Kong's net profit fell by 1.4% due to an increase in Stage three impairment losses.
- The recurring yield before and after hedge basis showed a decline, reflecting lower cash dividend incomes and higher recurring hedge costs.
- The company's NPL ratio for personal secured loans showed a slight increase due to the expiration of favorable government measures.
Q & A Highlights
Q: Can you provide more details on the strong performance of Fubon Life in the first half of 2024?
A: Amanda Wang, IR Officer: Fubon Life's net profit was driven by an investment return of over 5% and a leading position in first-year premiums. The capital position remains strong with an equity asset ratio of about 11%. The product mix transformation towards higher CSM products, such as regular paid and protection, contributed to this performance.
Q: What factors contributed to Taipei Fubon Bank's record high profit?
A: Amanda Wang, IR Officer: The profit was mainly driven by core earnings, including net interest income and fees. The customer base expansion, particularly from the digital platform, also played a significant role. Additionally, the loan mix showed decent growth in both retail and corporate sectors.
Q: How did Fubon Insurance perform in the first half of 2024?
A: Amanda Wang, IR Officer: Fubon Insurance's net profit grew steadily due to strong underwriting results and investment performance. The written premium growth was over 11%, and the net combined ratio improved to 86.2%, reflecting better business structures and risk management.
Q: Can you elaborate on the investment income results for Fubon Financial?
A: Amanda Wang, IR Officer: The investment income before hedge was 6.19%, and after hedge, it was 5.43%, both higher than the same period last year. This strong result was mainly due to equity investments and realized gains. However, recurring investment income slightly decreased by 1.8% year-over-year due to a decline in cash dividends from equity.
Q: What are the key growth areas for Taipei Fubon Bank's loan portfolio?
A: Amanda Wang, IR Officer: The key growth areas include personal unsecured loans, which recorded nearly 30% growth year-over-year, and SME loans, which grew by 8.7% year-to-date. The mortgage interest also showed steady growth at 7% year-to-date.
Q: How did Fubon Securities perform in the first half of 2024?
A: Amanda Wang, IR Officer: Fubon Securities recorded strong profit and revenue results, benefiting from a bullish market environment. The company also focused on expanding its wealth management services and deepening customer relationships.
Q: What were the main drivers behind Fubon Bank Hong Kong's performance?
A: Amanda Wang, IR Officer: Fubon Bank Hong Kong's net interest margin increased by 22 basis points to 1.79%, driven by asset yield enhancement. However, net profit fell by 1.4% due to an increase in Stage three impairment losses, reflecting the credit environment in the Hong Kong market.
Q: How did Fubon Bank China perform in the first half of 2024?
A: Amanda Wang, IR Officer: Fubon Bank China saw a visible balance sheet improvement with deposits up by 11.5%, primarily due to contributions from Taiwanese customers. The net interest margin remained flat, but adjusted basis increased by 29 basis points. Net profits showed a turnaround due to growth in net interest income, swap, and capital gains from bonds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
