CTBC Financial Expects Central Bank to Hike Rate by 0.125% in June, Sees NTD Appreciating by Year-End
At its Q1 investor conference on May 19, CTBC Financial Holding's President, Kao Li-hsueh, stated that the company internally expects Taiwan's central bank to raise interest rates by half a code (0.125%) in June, with another potential hike before year-end. Regarding the exchange rate, she anticipates the New Taiwan Dollar will appreciate, potentially reaching a range of 30 to 30.5 per U.S. dollar by the end of the year, driven by a strong stock market and tightening monetary policy.
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- 📰 Published: May 19, 2026 at 19:21
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CTBC Financial Holding held its first-quarter investor conference today, where President Kao Li-hsueh stated that the company internally forecasts Taiwan's central bank will raise interest rates by half a code in June, with a potential further half-code hike before the end of the year. On the exchange rate, she expects the New Taiwan Dollar to trend upward, potentially approaching the 30 to 30.5 per U.S. dollar range by year-end, citing a strong Taiwan stock market and tightening monetary policy.
CTBC Financial Holding held its Q1 investor conference this afternoon, with President Kao Li-hsueh and CFO Hsu Min-ching in attendance.
Kao pointed out that CTBC Financial's Q1 consolidated net profit after tax reached NT$23.104 billion, a year-over-year increase of 16%, setting a new record for the same period. Earnings per share (EPS) was NT$1.18. CTBC Bank's Q1 net profit after tax reached NT$16.586 billion, up 23% year-over-year, also a record high for a single quarter. In terms of overseas profits, driven by geopolitics and industrial supply chain restructuring that has seen high-tech industries rapidly move to Southeast Asia, India, and North America, Q1 overseas pre-tax profit was NT$7.1 billion, a 12% annual increase, accounting for 35% of the bank's total profit.
As for Taiwan Life Insurance, its Q1 net profit after tax was NT$7.8 billion. Kao noted this was mainly due to valuation gains on bonds and funds, coupled with the amortization of the contractual service margin (CSM) and the impact of accounting standards adjustments. Both investment-linked and traditional policies saw significant growth, with first-year premiums increasing by 142% year-over-year in the first quarter.
Looking at the macroeconomic outlook, Kao stated that with the U.S. April Consumer Price Index (CPI) announced on May 12 showing a 3.8% annual increase, coupled with the impact of wars and manageable downside risk in the job market, the probability of the U.S. not cutting interest rates this year is high.
Regarding exchange rates, Kao said that although geopolitical factors are causing a flight to U.S. dollar assets, factors such as interest rate differentials and the U.S. fiscal deficit, combined with the very strong performance of the Taiwan stock market and tighter monetary policy from Taiwan's central bank, lead her to see an appreciating trend for the New Taiwan Dollar. She expects it may approach the 30 to 30.5 range by the end of this year.
Kao analyzed that, considering Taiwan's economic growth rate is boosted by strong AI demand and stellar exports, with Q1 economic growth approaching 14%, Taiwan's economic growth rate for the year could exceed 8%. With the central bank's monetary policy tightening, the internal forecast is for a half-code (0.125 percentage points) rate hike in June, and potentially another half-code hike by year-end, considering factors like oil prices.
If interest rates are raised by one code (0.25%), on an annualized basis, it would increase CTBC Bank's Net Interest Margin (NIM) by 1.7 basis points (1 basis point is 0.01%), contributing nearly NT$1.1 billion to Net Interest Income (NII).
The National Development Council (NDC) has planned a "Financing Guarantee Mechanism for Supporting Corporate Investment in the US," to which 15 domestic banks have already responded. Kao stated that CTBC will actively support the NDC's policy. The government's current funding mechanism includes various tiers of amounts, and the bank will make a public announcement after its board confirms the details. Considering CTBC Bank's overseas layout and client needs, it will contribute a corresponding amount.
Regarding the progress of Taiwan Life's retirement village project, Kao pointed out that it is being carried out through the subsidiary CTBC LOHAS. The village is located at the CTBC University of Technology in Tainan and will leverage university resources to create a new type of retirement living environment focused on learning, social community, and life support. It is planned for residents aged 50 and above, with the first phase including 100 rooms. The village is expected to open as early as the first quarter of next year. Whether it will be integrated with insurance policies is still under evaluation by Taiwan Life.
CTBC Financial Holding held its Q1 investor conference this afternoon, with President Kao Li-hsueh and CFO Hsu Min-ching in attendance.
Kao pointed out that CTBC Financial's Q1 consolidated net profit after tax reached NT$23.104 billion, a year-over-year increase of 16%, setting a new record for the same period. Earnings per share (EPS) was NT$1.18. CTBC Bank's Q1 net profit after tax reached NT$16.586 billion, up 23% year-over-year, also a record high for a single quarter. In terms of overseas profits, driven by geopolitics and industrial supply chain restructuring that has seen high-tech industries rapidly move to Southeast Asia, India, and North America, Q1 overseas pre-tax profit was NT$7.1 billion, a 12% annual increase, accounting for 35% of the bank's total profit.
As for Taiwan Life Insurance, its Q1 net profit after tax was NT$7.8 billion. Kao noted this was mainly due to valuation gains on bonds and funds, coupled with the amortization of the contractual service margin (CSM) and the impact of accounting standards adjustments. Both investment-linked and traditional policies saw significant growth, with first-year premiums increasing by 142% year-over-year in the first quarter.
Looking at the macroeconomic outlook, Kao stated that with the U.S. April Consumer Price Index (CPI) announced on May 12 showing a 3.8% annual increase, coupled with the impact of wars and manageable downside risk in the job market, the probability of the U.S. not cutting interest rates this year is high.
Regarding exchange rates, Kao said that although geopolitical factors are causing a flight to U.S. dollar assets, factors such as interest rate differentials and the U.S. fiscal deficit, combined with the very strong performance of the Taiwan stock market and tighter monetary policy from Taiwan's central bank, lead her to see an appreciating trend for the New Taiwan Dollar. She expects it may approach the 30 to 30.5 range by the end of this year.
Kao analyzed that, considering Taiwan's economic growth rate is boosted by strong AI demand and stellar exports, with Q1 economic growth approaching 14%, Taiwan's economic growth rate for the year could exceed 8%. With the central bank's monetary policy tightening, the internal forecast is for a half-code (0.125 percentage points) rate hike in June, and potentially another half-code hike by year-end, considering factors like oil prices.
If interest rates are raised by one code (0.25%), on an annualized basis, it would increase CTBC Bank's Net Interest Margin (NIM) by 1.7 basis points (1 basis point is 0.01%), contributing nearly NT$1.1 billion to Net Interest Income (NII).
The National Development Council (NDC) has planned a "Financing Guarantee Mechanism for Supporting Corporate Investment in the US," to which 15 domestic banks have already responded. Kao stated that CTBC will actively support the NDC's policy. The government's current funding mechanism includes various tiers of amounts, and the bank will make a public announcement after its board confirms the details. Considering CTBC Bank's overseas layout and client needs, it will contribute a corresponding amount.
Regarding the progress of Taiwan Life's retirement village project, Kao pointed out that it is being carried out through the subsidiary CTBC LOHAS. The village is located at the CTBC University of Technology in Tainan and will leverage university resources to create a new type of retirement living environment focused on learning, social community, and life support. It is planned for residents aged 50 and above, with the first phase including 100 rooms. The village is expected to open as early as the first quarter of next year. Whether it will be integrated with insurance policies is still under evaluation by Taiwan Life.