Profits Soar Despite Market Turbulence! Public Financial Institutions 'Four Financials and Two Banks' Achieve Record-Breaking NT$105.7 Billion in First Seven Months, with Banking, Insurance, and Securities All Thriving

Taiwan's stock market experienced significant turbulence in July, with trading volumes clearly shrinking. Many securities firms and financial institutions faced challenges from market fluctuations, yet the public-sector financial group—comprising Mega Financial, First Financial, Hua Nan Financial, Land Bank Financial, Chang Hwa Bank, and Taipei Fubon Bank—demonstrated resilient profitability.

Collectively known as the 'Four Financials and Two Banks,' these six institutions recorded a total after-tax net profit of NT$105.735 billion in the first seven months of 2024, a substantial 23.7% year-on-year increase, delivering outstanding results. Among them, Mega Financial retained its position as the top earner, while First Financial and Hua Nan Financial both exceeded the NT$20 billion threshold, forming a dominant 'NT$20 Billion Club' trio within the public financial sector.

In terms of profit rankings, Mega Financial led with an after-tax net profit of NT$25.659 billion over the first seven months, achieving an earnings per share (EPS) of NT$1.73. First Financial followed with cumulative profits of NT$20.937 billion, a 23.6% annual increase, while Hua Nan Financial came close behind at NT$20.652 billion. These three financial holding companies emerged as the leading performers among public financial institutions this year.

Mega Financial Maintains Profit Leadership, Core Banking Strength Provides Stability

As the top-performing public financial holding company, Mega Financial's primary growth driver continues to be Mega Bank. In July, Mega Bank benefited from expanded wealth management operations, loan portfolio growth, and approximately NT$1.5 billion in dividend income, boosting both net interest income and fee-based revenues.

Although foreign exchange trading gains declined compared to the previous year due to USD volatility, negatively impacting some financial operations, overall bank profitability remained at a high level. Meanwhile, Mega Securities incurred a monthly loss in July due to the pullback in Taiwan's stock market and reduced trading volume. However, its cumulative profit for the first seven months surged about 1.7 times year-on-year, reaching a new historical high for the same period.

Additionally, Mega Bills & Acceptance benefited from increased bond investment positions and widening spreads, while Mega Insurance saw claims from pandemic-related insurance gradually diminish. Combined with growth in accident insurance premiums and dividend income, both subsidiaries posted over 40% year-on-year profit growth in the first seven months, demonstrating strong earnings support from non-banking units.

First Financial Breaks Through NT$20 Billion, First Bank Sets Monthly Record

First Financial has officially entered the upper tier of public financial holding companies this year, achieving an after-tax net profit of NT$20.937 billion in the first seven months—a record high for the same period in history.

The main profit engine remains First Bank. Benefiting from dividend income recognition and growth in financial transaction gains, First Bank achieved a record-high monthly after-tax net profit of NT$3.202 billion in July. Its cumulative profit for the first seven months reached NT$18.658 billion, a 12.7% year-on-year increase.

Asset quality also maintained excellent performance, with the non-performing loan (NPL) ratio dropping to 0.16% by the end of July and the coverage ratio significantly improving to 876.8%, reflecting continuously enhanced risk management capabilities.

Beyond steady growth in core banking operations, First Securities emerged as the biggest surprise within the group this year. Although brokerage commissions and investment income declined in July due to the stock market correction, its cumulative after-tax net profit for the first seven months reached NT$1.531 billion, a staggering 262.9% year-on-year increase. This not only surpassed last year's full-year profit ahead of schedule but also set a new historical record. First Life Insurance achieved cumulative profits of NT$593 million, also showing significant year-on-year growth, becoming another pillar of the holding company's profitability.

Hua Nan Financial Sets New Records, Non-Banking Profit Share Rises

Hua Nan Financial also delivered impressive results this year. Its after-tax net profit of NT$20.652 billion for the first seven months not only set a new historical high for the same period but also saw record profits across major subsidiaries including Hua Nan Bank, Hua Nan YungChang Securities, Hua Nan Insurance, and Hua Nan Venture Capital.

Among these, Hua Nan Bank remains the core profit source for the group, earning NT$16.2 billion in the first seven months—an annual increase of 15%—accounting for approximately 76% of the holding company's total profit. With continued expansion in deposit and loan scales, a 33% year-on-year increase in wealth management income, and improved financial operation gains, bank profitability grew steadily.

Notably, Hua Nan Financial has actively increased its non-banking business share in recent years, and the results are now becoming evident. The profit contribution from non-banking subsidiaries has risen to 24%. Hua Nan YungChang Securities achieved cumulative profits of NT$3.531 billion, a 285% year-on-year increase. Hua Nan Insurance earned NT$1.321 billion, up 38% annually, benefiting from growth in commercial fire and engineering insurance businesses and improved underwriting profits due to lower loss ratios.

Land Bank Financial and Chang Hwa Bank Continue to Set Highs, Taipei Fubon Bank Shows Strongest Monthly Growth

Land Bank Financial achieved an after-tax net profit of NT$16.077 billion in the first seven months, a 33.2% year-on-year increase, continuing to set a new historical high for the same period. Its subsidiaries—Land Bank, Land Securities, and Land Life Insurance—all simultaneously broke historical records.

Land Bank recorded cumulative profits of NT$14.255 billion, a 12.55% annual increase. Land Securities achieved cumulative profits of NT$1.361 billion, an increase of NT$1.333 billion compared to the same period last year. Land Life Insurance benefited from improved investment returns, achieving NT$1.128 billion in profit for the first seven months, a remarkable 340% year-on-year increase.

Chang Hwa Bank, meanwhile, saw interest income and fee income grow simultaneously, resulting in after-tax earnings of NT$13.492 billion for the first seven months, a 22.34% annual increase, again setting a new historical high for the same period. Chang Hwa Bank noted that wealth management accounts for nearly 80% of total fee income, with continued growth in high-net-worth client services, trust offerings, and retirement planning demand serving as key engines driving profitability.

As for Taipei Fubon Bank, it stood out the most among the six public financial institutions in July. It achieved a monthly after-tax net profit of NT$1.506 billion, a 20.1% year-on-year increase—the highest growth rate among the six—and cumulative profits of NT$8.918 billion for the first seven months, up 16.29% annually.

Taipei Fubon Bank stated that profit growth was primarily driven by expanded corporate lending, stable increases in interest income, and simultaneous growth in wealth management and overseas business revenues. Additionally, the benefits of recent expansions in SME lending and overseas branches have gradually materialized, coupled with stable asset quality, boosting overall profitability.

Analysts believe that with interest rates remaining relatively high, stable net interest margin income, and recovering wealth management and insurance investment returns, the earnings momentum of public financial institutions is likely to continue throughout the year. Even amid July's severe stock market volatility, the 'Four Financials and Two Banks' collectively achieved over NT$100 billion in profits, highlighting their dual strengths of stable income generation and resilience against market shocks, solidifying their role as the foundational profit base within the financial sector.