Shin Kong Financial (2888) Q2 2024 earnings summary

Executive summary

• Consolidated after-tax profit for 1H 2024 reached NT$20.53bn, reversing a loss in 1H 2023, with total assets surpassing NT$5.1tn and shareholders' equity up 3.4% quarter-on-quarter to NT$270.22bn.

• Book value per share was NT$17.09 at Q2 end; strong capital gains from equities and lower hedging costs supported results.

• Subsidiaries, including Shin Kong Life, Shin Kong Bank, and MasterLink Securities, all posted significant profit growth.

Financial highlights

• First year premium (FYP) increased 21.3% year-on-year to NT$28.60bn, raising market share to 7.6%.

• CSM for 1H 2024 grew 14% year-on-year, with 87% of CSM from protection, health insurance, and riders.

• Annualized investment return after hedging was 4.40%, driven by higher realized capital gains and lower hedging costs.

• Net interest income at the bank grew 8% year-on-year to TWD 6.7bn; net fee income up 36.7% to TWD 2.2bn.

• MasterLink Securities after-tax profit was TWD 2.11bn for 1H 2024, up 37.0% year-on-year.

Outlook and guidance

• Focus on expanding high-value and new businesses, optimizing subsidiary asset structures, and enhancing profitability.

• Full year loan growth at the bank expected to be mid single digits; net interest margin anticipated to remain similar to 2023, with net interest rate expected to rise.

• Wealth management income projected to exceed yearly guidance.

• Plans to deepen cross-selling synergies, grow digital income, and promote sustainable operations.

• SKL will continue to promote FX policies and high CSM products to control hedging cost and accumulate CSM.