Epidemic prevention insurance drags down profits, and CITIC Financial's EPS in 2022 will be 1.67 yuan, a 6-year low.

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[Reporter Li Lianghui/Taipei Report] CITIC Financial (2891) will be dragged down by Sun Company China Trust’s property insurance insurance policy in 2022, and its annual profit performance will be greatly affected. 70%; Financial Holdings' annual after-tax profit was 33.606 billion yuan, a year-on-year decrease of nearly 40%, and EPS was 1.67 yuan, a six-year low since 2017.

CITIC Financial announced today (9) that it will self-consolidate its surplus in December 2022. The monthly after-tax surplus in December was 592 million yuan, a decrease of 74% from the 2.313 billion yuan in the same period in 2021; the cumulative after-tax surplus for the whole year 33.606 billion yuan, compared with 54.205 billion yuan in 2021, a decline of 38%, and the after-tax earnings per share (EPS) of 1.67 yuan.

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The main reason for the sharp decline in the profit of the financial holding company is that the Sun company China Trust Property Insurance has incurred huge losses due to the sale of epidemic prevention insurance policies. The cumulative CITIC Financial has made one capital increase for the property insurance, two capital reductions and capital increases, and the cumulative capital increase has reached 155 billion.

The subsidiary Taiwan Life was dragged down by property insurance, with an after-tax loss of 3.084 billion yuan in December, and a cumulative after-tax loss of 1.08 billion yuan for the whole year, but it made a huge profit of 23.131 billion yuan for the whole year of 2021.

Fortunately, China Trust Bank still maintains profit growth. In December, the after-tax profit was 3.765 billion yuan, an annual increase of more than 30%; the cumulative after-tax profit for the year was 37.142 billion yuan, an annual increase of 25%.

Analyzing the reasons for the growth, Xu Minqing, Chief Financial Officer of CITIC Finance, pointed out that due to the strong momentum of deposits, not only did loans grow by 17%, but foreign currency loans with higher interest spreads also grew by 13%. However, other business loans made up for it, and the overall fee income did not decline too much, which is the main reason for the sustainable growth of banks' profits.

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