Fubon Financial : Reports November 2023 Earnings Results

Fubon Financial reported unaudited consolidated net loss of NT$2.671bn in November. Cumulative consolidated net profit was NT$69.157bn, translating into EPS of NT$5.04. Taipei Fubon Bank's November and cumulative net profit both hit record highs for the same period. Fubon Securities' monthly net profit hit a new high for the same period, and cumulative net profit was the 2nd highest in record for the same period. Fubon Insurance has been profitable for eight consecutive months since April.

The performance of the main subsidiaries is as follows:

Fubon Life's November net loss was NT$5,634mn, mainly affected by foreign exchange losses, and cumulative net profit was NT$38,962mn. Fubon Life's capital position remained decent, with RBC ratio above 300% and equity to asset ratio above 9% as of November. Benefiting from the stabilization of the investment market, book value recovered in November due to the improvement in the valuation of stock and bond investments. The main sources of investment income this month were interest income and capital gains on domestic and foreign equities and funds. Fubon Life continued to monitor market fluctuations and maintained a stable investment portfolio. The valuation of domestic stock positions rebounded as the Taiex rose around 9% in November, and Fubon Life seized the opportunities to realize capital gains. In the bond market, the market expects US rate hike cycle to end, driving down government bond yields and thus unrealized balance recovered. Strategically, Fubon Life maintained sufficient liquidity and increased positions timely at relatively high yields this year, aiming to improve the overall recurring income in the future and maintain liquidity. In terms of exchange rates, the slowdown in the US inflation rate and the easing sentiment of bilateral tensions between China and the US, as well as the continued return of foreign capital due to the improvement of market confidence led to a sharp appreciation of the New Taiwan dollar against the US dollar by 3.71% in November, impacting profit and loss of the month. Fubon Life increased the weight of proxy hedging and increased the proportion of traditional hedging, aiming to adjust hedging strategy dynamically. Fubon Life's standalone cumulative FYP and TP reached NT$87,761mn and NT$290,857mn, respectively, both estimated to rank the top 2 in the industry. FYP was NT$6,713mn in November, up 29.0% YoY, with the main growth momentum coming from traditional products. TP was NT$24,570mn, up 3.6% YoY. Monthly FYP was estimated to rank the top and monthly TP the top 2 in the industry in November. Fubon Life continued to focus the product strategy on regular-paid policies, and cumulative FYPE reached NT$36,741mn, up 42.4% yoy. Fubon Life developd a wide range of products, including participating policy that take into account the advantages of protection and long-term accumulation of assets for policyholders. The Company also provides a variety of personal health and casualty policies. FYP of such products increased by 19.3% YoY in the first eleven months, covering the protection needs of different customer groups.

Taipei Fubon Bank's November net profit was NT$1,814mn. Cumulative net profit was NT$23,993mn, up 4% yoy. The growth of cumulative profit would be around 15% if the bargain purchase gain in 2022 was excluded. The momentum of businesses remained stable. Total revenue and earnings grew double-digit yoy, mainly due to steady momentum in loans and deposits balance and widening spread, leading to the steady increase of net interest income by 8% yoy. Net fee income climbed 39% yoy, mainly from rising wealth management fee income and credit card consumption. Meanwhile, treasury revenue rose yoy on back of stock and bonds valuation and increase in FX swap revenue. The number of active credit cards, which was nearly 5.5mn and up over 60% yoy, continued to grow in November. Driven by the November 11 event, the monthly amount of card spending reached NT$53.4bn and exceeded NT$50.0bn for two consecutive months in October and November. Cumulative amount of card spending was NT$436.9bn, up 38% yoy. Asset quality remained benign. NPL ratio and coverage ratio were at 0.12% and 1093%, respectively.

Fubon Insurance's November net profit was NT$103mn and cumulative net loss was NT$2,133mn. The monthly net profit fell slightly mom, mainly due to the New Taiwan dollar's appreciation against the US dollar, leading to exchange losses. The revenue from its core business remained stable, primarily reflecting the selection of business quality and risk control.

In terms of business performance, direct written premium in November was NT$4,568mn. Both personal and corporate insurance lines climbed double digits yoy, driving the total premium growth to 14.5% yoy, of which auto insurance grew 14.8% and new type of insurance increased 12.5% that both outperformed the market. Cumulative premium was NT$54,326mn, up 7.7% yoy. With a market share of 24.1%, Fubon Insurance continued to be the market leader.

Fubon Securities' November net profit was NT$741mn, up NT$502mn mom, benefiting from strong market turnover and uptrend in Taiex. Cumulative net profit was NT$6,469mn, up 69% yoy, mainly due to growth in brokerage, wealth management and proprietary trading businesses compared with the same period last year.