Taiwan's financial sector posts record 1st-quarter pretax profits

Taipei, May 11 (CNA) Taiwan's financial firms have posted record first-quarter pretax profits, up more than 37 percent from a year earlier, as the booming local stock market boosted investment returns, according to the Financial Supervisory Commission (FSC).

Data released by Taiwan's top financial regulator on Sunday showed the combined pretax profit of the local banking, insurance and securities industries hit NT$370.997 billion in the January-March period, smashing the previous first-quarter record of NT$317.63 billion from 2021.

According to the FSC, the banking industry posted NT$195.24 billion in pretax profit in the first quarter, up 28.5 percent from a year earlier. Pretax profit at banks registered in Taiwan rose 20.5 percent to NT$174.28 billion.

Speaking with reporters, Chang Chia-kuei (張嘉魁), deputy director of the FSC's Banking Bureau, said banks benefited from an increase in interest income, fee income and investment returns.

A local banking industry source told CNA that the capital market performed well early this year, as optimism surrounding AI helped to offset concerns over the conflict in the Middle East and increase income from wealth management.

The source added that strong global demand for AI prompted semiconductor and other tech suppliers to seek funding for expansion, boosting banks' corporate lending business.

In the insurance industry, pretax profits rose 16 percent from a year earlier to NT$108.2 billion in the first quarter of this year. Pretax profits for life insurers, which make up the bulk of the industry, rose 13.5 percent to NT$96.4 billion, while nonlife insurers saw a 43.9 percent rise to NT$11.8 billion.

With the Taiex, the Taiwan Stock Exchange's benchmark index, repeatedly setting closing highs during the first quarter, pretax profits in the securities industry surged 164 percent from a year earlier to NT$67.56 billion amid increased market turnover, the FSC said.

The rise in stock turnover particularly benefited brokerages, whose pretax profits jumped 225 percent to NT$54.23 billion.