Q2 2026 CTBC Financial Holding Co., Ltd. Earnings Call Transcript
Key Points
- Record-high net profit of TWD90.39 billion in H1 2026, up 10% Y-o-Y, with total comprehensive income reaching TWD250.5 billion.
- Strong loan growth momentum, with total loans up 17.5% Y-o-Y and new loan origination in H1 surpassing the full-year 2025 total.
- Wealth management fee income surged 44% Y-o-Y, driving overall fee income up 26% Y-o-Y.
- Taiwan Life's FYP grew 139% Y-o-Y, significantly outperforming the industry average of 52%, with CSM balance increasing to TWD177 billion.
- Group shareholders' equity expanded nearly 60% Y-o-Y, with BVPS rising 38.7% in six months, reflecting strong capital accumulation.
- Overseas operations delivered robust growth, with Southeast Asia profit up 46% Y-o-Y and North America up 37%, supported by supply chain restructuring.
- Bank's NIM guidance maintained at 1.7%-1.73%, with cost-income ratio expected to improve to 50%-52%.
- IRB regime approval expected to release approximately TWD100 billion in capital, supporting future business growth and potential dividend increases.
- Q2 net profit declined 12% Q-o-Q at the bank and 67% Q-o-Q at Taiwan Life, due to high base effects and lower investment gains.
- Trading income declined 46.7% Y-o-Y in H1, driven by lower derivatives and swap-related income amid a different market environment.
- NIM narrowed 3 bps Q-o-Q to 1.65% in Q2, pressured by higher funding costs and competitive loan pricing.
- Credit costs increased 20 bps Q-o-Q, partly due to specific provisions at Tokyo Star Bank and a construction-related case in Thailand.
- Taiwan Life's dividend income is forecast to decline by TWD3 billion to TWD11.9 billion in 2026, as the company shifts focus to total return.
- Hedging costs remain a concern, though reduced to 1.19% in H1, with the hedge ratio expected to decline to 25%-30% by year-end.
- LCR tightened to 111% in Q2, reflecting market funding stress, requiring careful liquidity management.
- Group CAR declined to 112.5% as of March, affected by Taiwan Life's transition to the TIS regime, with June figures pending.
Welcome to CTBC Holding 2026 Q2 earnings call. Today's meeting will be Chaired by Rachael Kao, President of CTBC Holding. Also Present are Megan Hsu, CFO of CDBC Holding; Bohong Ye, CFO of Taiwan Life; and Justin Shen, Head of IR of CTBC Holding.
Good afternoon, dear investors and media guests. Thank you for taking the time to attend CTBC Holdings 2026 Q2 earnings call. The format will be a bit different. I will first invite IR to present on Q2's financial performance. And then I will provide more explanations before we enter the Q&A session. So this will be roughly the order.
First, I'd like to invite the IR team to present the financial performance of H1.
First, and the performance highlights on page 4, for the first half of 2026, the holding reported net profit of [$90.39.5 billion], up 10% Y-o-Y and reaching the record high. Total comprehensive income reached TWD250.5 billion in the first half, mainly driven by significant FVOCI gains at Taiwan Life. The holding
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