Taishin Shin Kong Financial Reports NT$21.1 Billion Q1 Profit; Lin Weijun 'Cautiously Optimistic' on Dividends

(CNA, Taipei, June 3) Taishin Shin Kong Financial Holding Co. President Lin Weijun stated today that the financial holding company's first-quarter profit reached NT$21.1 billion, a 150% increase year-on-year. Regarding the dividend policy, he said it will reference the company's profitability and aim to provide investors with predictable, stable growth. He expressed cautious optimism for stable dividend growth, but the actual figures will be decided by the board of directors next year.

Taishin Shin Kong Financial held its first-quarter online investor conference this afternoon. Lin Weijun said the group's net profit after tax for the first quarter was NT$21.1 billion, with earnings per share of NT$0.82, a 150% increase year-on-year. The three main engines of banking, insurance, and securities maintained steady momentum, and the group's total assets exceeded NT$9 trillion at the end of March.

Lin stated that benefiting from growth in net interest and net fee income, Taishin Bank's first-quarter net profit after tax was NT$6.3 billion. Combined with Shin Kong Bank's net profit of NT$2.2 billion, the total reached NT$8.6 billion. Shin Kong Life Insurance, driven by stable amortization of Contractual Service Margin (CSM) and recurring investment income, posted a first-quarter net profit after tax of NT$11.9 billion. First-quarter new contract premiums reached NT$37.7 billion, an annual increase of 78%, and the company will continue to build CSM. Taishin Securities reported a first-quarter net profit after tax of NT$1.6 billion. Combined with the profit of Masterlink Securities for the same period, the total net profit after tax was NT$3.1 billion.

Regarding the macroeconomic outlook, Lin said that global demand for AI continues to grow, leading to a tight supply of computing power. He expects Taiwan's exports to hit a new record high this year, but non-AI related consumer electronics and traditional industries are underperforming due to inflation. He estimated that Taiwan's economic growth rate could approach 10% this year, and the US economy will maintain a moderate expansion, with the biggest uncertainty being the conflict in the Middle East.

On the dividend policy, which was a focus for institutional investors, Lin said it is a bit too early to discuss dividends. However, the reference indicators for the financial holding company's dividend distribution include company profitability, the desire to provide investors with predictable stable growth, and a comparison of cash dividend yield and payout ratio with major peers. Given the strong first-quarter performance, dividends are expected to grow steadily, but the actual figures will be decided by the board in the first quarter of next year.

Regarding monetary policy in Taiwan and the US, a Taishin Shin Kong Financial executive pointed out that based on historical experience, as long as inflation does not exceed 2%, the central bank is unlikely to make significant interest rate adjustments. Regarding the US Federal Reserve, if the Middle East conflict eases, there may be two opportunities for rate cuts between the end of the third quarter and the fourth quarter. However, if the war escalates, there may be no room for rate cuts.

Shin Kong Life Insurance's opening Contractual Service Margin (CSM) balance on January 1 was NT$260.7 billion. New contract CSM contributions in the first quarter were NT$17.7 billion. After deducting CSM amortization of NT$4.7 billion and adding other items of NT$6.5 billion, the CSM balance at the end of the first quarter was NT$280.3 billion.

Shin Kong Life spokesperson Lin Yijing said the target for new contract CSM this year remains NT$70 billion. Benefiting from channel synergies after the merger and strong premium income in the first quarter, the company will focus on core products such as high-protection, long-term, and health insurance. Shin Kong Life's hedging ratio at the end of March was 54.5%, and the overall hedging ratio for this year is expected to be in the range of 40% to 50%.

Regarding the system issues that occurred after Taishin Securities merged with Masterlink Securities on April 6, Lin Weijun apologized to investors for the inconvenience. He said the company will conduct a thorough review, and in addition to the securities subsidiary, the financial holding company's IT team has been actively involved, and the system is now very stable.

On the progress of the 'Trillion-dollar Investment Trust' goal, Lin said the subsidiary's investment trust has good growth momentum. Shin Kong Life also plans to entrust some of its assets to the investment trust for management. He is optimistic that the trillion-dollar investment trust target can be achieved within one year. (Editor: Lin Shuyuan) 1150603