Release Date: March 17, 2025

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) reported record-high net profits across its subsidiaries, including Fubon Life, Taipei Fubon Bank, Fubon Securities, and Fubon Asset Management.
• The company's total assets increased by 8.7%, and net worth grew by over 18%, showcasing strong financial health.
• Fubon Life achieved a net profit of over TWD102 billion, leading the life insurance sector in Taiwan with a high investment return of 5.48%.
• Taipei Fubon Bank's net profit exceeded TWD30 billion, driven by strong net interest income and net fee income.
• Fubon Securities reported a record-high net profit of over TWD10 billion, indicating robust market momentum and growth across major business lines.

Negative Points

• The recurring investment income only slightly increased by 0.9%, reflecting a decline in cash dividends as the investment strategy shifted towards growth stocks.
• The recurring hedging costs increased, impacting the spread between breakeven point and recurring return after hedge, which remained negative.
• The loan-to-deposit spread decreased by 11% year over year, mainly due to a higher increase in time deposits.
• The non-performing loan ratio for personal unsecured loans slightly edged up, although it showed improvement in Q4.
• The monthly per card spending in the credit card segment decreased slightly, primarily due to an increase in active cards and lower spending in insurance payments.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with TPE:2881.

Q: Can you elaborate on the key drivers behind Fubon Financial's record net profit in 2024? A: The Unidentified Company Representative highlighted that Fubon Financial's record net profit was driven by strong performances across its subsidiaries, including Fubon Life, Taipei Fubon Bank, Fubon Securities, and Fubon Asset Management. Notably, Fubon Life achieved a net profit of over TWD102 billion, leading the life insurance sector in Taiwan. Key contributors included investment returns, net interest income, and net fee income.

Q: What strategic initiatives are planned for Fubon Life in 2025? A: The focus for Fubon Life in 2025 will be on transitioning the product mix towards long-term protection and regular paid products. The company aims to maintain a positive investment spread and strengthen its sales channels to solidify its market position.

Q: How is Fubon Financial addressing the challenges and opportunities in the financial market? A: The company is closely monitoring market volatility and uncertainties while seizing opportunities in wealth management, cross-selling, ESG stability, and digitization. They are also focusing on risk management and operational improvements across their subsidiaries.

Q: What are the key highlights of Fubon Bank's performance in 2024? A: Fubon Bank's total revenue increased by 17%, driven by an 8% rise in net interest income and a 37% increase in fee income. Retail loans grew by 14%, outpacing corporate loan growth, and the bank's overall loan growth exceeded the Taiwan market average.

Q: How is Fubon Financial preparing for the adoption of IFRS 17 in 2026? A: Fubon Financial is adjusting its product mix, focusing on regular-paid policies and participating policies. The company expects lower capital requirements under the new regime and aims to maintain a strong capital position with a Taiwan ICS ratio of 150% or above.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.