Fubon Financial

Fubon Financial reported unaudited consolidated net loss of NT$5.79bn in May. Cumulative consolidated pre-tax profit was NT$44.59bn and cumulative consolidated net profit was NT$39.49bn, with EPS of NT$2.89. Specifically, Taipei Fubon Bank’s May monthly and cumulative net profit reached a record high for the same period. Both May monthly net profit of Fubon Securities and cumulative net profit of Fubon Insurance hit the 2nd highest in history. The performance of the main subsidiaries is as follows:

Fubon Life’s May net loss was NT$9.14bn, primarily due to the significant changes across global financial markets, including stocks, bonds, and foreign exchange markets caused by the impact of US tariff policies. These movements led to substantial fluctuations in exchange rates in May, with the New Taiwan dollar appreciating nearly 7% against the US dollar, resulting in FX losses. The cumulative net profit for the first five months was NT$15.81bn. The main sources of investment income this month were interest income, capital gains on domestic and foreign equities and funds, fund dividend income, and stock dividend income.

In the foreign exchange market, the New Taiwan dollar appreciated by 6.98% against the US dollar in May, marking the largest single-month appreciation in over 36 years since April 1989. Since the appreciation trend started in April, Fubon Life has increased traditional hedging and proxy hedging to reduce naked US dollar positions in response to the significant exchange rate fluctuations. Considering the uncertainty in exchange rate, aside from the existing FX reserves, Fubon Life applied for an additional provision of NT$10bn in May to bolster FX reserves. Fubon Life also applied for the new FX reserve rule, reallocating around NT$8bn from certain liabilities items to the FX reserves, which has been approved by regulators. The new rule has been adopted in May. The total FX reserves of around NT$27bn was used entirely to offset FX losses in May. Moving forward, Fubon Life will continue to monitor market conditions closely and dynamically adjust its hedging positions accordingly. In the stock market, the appreciation of the New Taiwan dollar in May attracted capital inflows, which further boosted the TAIEX, rising by more than 1,110 points during the month. Fubon Life continued to realize capital gains in Taiwan stock positions. In the bond market, robust US employment and the Fed's emphasis on needing more time to observe inflation and economic changes resulted in delayed expectations for interest rate cuts. Consequently, treasury yields rebounded in May. Fubon Life maintains sufficient liquidity to flexibly respond to subsequent market conditions.

Fubon Life’s cumulative standalone first year premium (FYP) reached NT$53.6bn, up 15% YoY, and cumulative total premium (TP) reached NT$157.1bn, up 8% YoY. Both cumulative FYP and TP were estimated to rank the top 2 in the industry. Monthly FYP was NT$9.1bn, and TP was NT$29.3bn, up 3% YoY. Both were also estimated to rank the top 2 in the industry. As Fubon Life continued to focus the product strategy on regular-paid policies, cumulative FYPE reached NT$25.9bn, up 20% YoY, and was estimated to rank the highest in the industry. Fubon Life’s capital position remained decent, with equity to asset ratio over 9% and RBC ratio above 350% as of May. Fubon Life will continue to closely monitor exchange rates and market movement, assessing potential impacts to ensure decent capitalization.

Taipei Fubon Bank’s May net profit was NT$2.67bn, up 6% YoY, the highest in record for same period, thanks to steady core business momentum. Cumulative net profit reached NT$15.71bn, up 19% YoY, hitting a historical high. The growth was mainly driven by scale growth, NIM improvement, growth in wealth management business, credit card and syndication loan businesses. Cumulative net interest income and fee income grew 12% and 14%, respectively, resulting in total revenue growth of 11% YoY. Asset quality remained benign. NPL ratio and coverage ratio were at 0.13% and 979%, respectively, as of end-May.

Fubon Insurance’s May net profit was NT$0.35bn. Due to FX losses from the New Taiwan dollar appreciation, profit slightly declined compared to the previous month. However, core business remained stable, reflecting improvements in business quality and risk control. Cumulative net profit reached NT$2.41bn, up 12% YoY. In terms of business performance, direct written premium in May was NT$5.48bn, up 2% YoY. Notably, fire insurance was the outperformer with a growth of 26% YoY, and new types of insurance also outperformed the market by over 4%. Cumulative written premium was NT$30.93bn, up 10% YoY. The market share in total direct written premium was 24.6%. Fubon Insurance continues to be the market leader by offering diverse products and comprehensive services.

Fubon Securities’ May net profit was NT$0.67bn, up 114% MoM. This performance was driven by an increase in the average daily trading volume of Taiwan stock markets and a rebound in TAIEX during May, boosting brokerage income and proprietary trading income. Cumulative net profit was NT$2.64bn, down 32% YoY. The decline was primarily attributed to a YoY reduction of 16% in the average daily trading volume and a drop of over 1,600 points in TAIEX in the first five months, affecting brokerage income and proprietary trading income.