Guotaishou Gold Shareholders Adjust Debt Structure and Prepare for Funding Needs
Table of Contents
You might want to know
- What are the implications of Guotai Shanghao Gold's debt structure adjustments?
- How does Rakuten Bank plan to achieve financial equilibrium by year-end?
Main Topic
During the Guotaishou Gold (2889-TW) Annual Shareholders Meeting held today, a cash dividend of 0.3 TWD and a stock dividend of 0.287 TWD were approved, totaling 0.587 TWD. Wei Chi-lin, the Chairman of Guotaishou Gold, highlighted the importance of maintaining stable operations for the year by continuing to adjust the structure of their bonds and notes. Furthermore, Rakuten Bank, a subsidiary of Guotaishou known as a purely online bank, anticipates needing additional capital by the end of this year or early next year. This will be the first time the bank seeks funding since its inception. Chairman Wei expressed optimism about future opportunities to streamline operations and reach the balance of profit and loss more quickly.
Reflecting on the international economic landscape in 2024, Wei noted that the U.S. had experienced a slowdown in inflation and a robust job market, facilitating steady economic growth. Despite the Federal Reserve's initiation of a rate cut cycle, adjustments occurred in response to tariff policy changes following President Trump's election, affecting their cuts' magnitude. Meanwhile, Taiwan's economy was buoyed by the information and communication technology sector, driven by artificial intelligence opportunities. This led to a rise in exports of electronic products and a stable domestic market. The central bank's interest rate hikes last year increased overall market rates, concurrently implementing a seventh round of credit controls to deter excessive flows of banking credit into the real estate sector.
Among company subsidiaries, International Securities optimized its bond investment portfolio by dynamically adjusting its positions, raising overall returns and achieving a post-tax profit of 1.68345 billion TWD in 2024. Similarly, Guotai Securities saw benefits from a surge in the Taiwan stock index and daily trade volumes, reporting a post-tax profit of 1.65911 billion TWD, with a 41.12% annual growth rate. In contrast, Guotai Venture Capital's market performance was moderate, yet its investments in China's Guowang Leasing Company proved profitable despite economic challenges, resulting in a full-year post-tax net profit of 135.19 million TWD.
Last year's establishment of a new subsidiary, Guotai Financial Leasing, focused on medium-sized enterprises, offering a variety of financial services and achieved a balanced profit and loss by controlling operational costs and capital allocation efficiently. Rakuten International Bank, in its fourth operational year, experienced a customer base growth to 273,000, a 34% year-over-year increase, alongside substantial growth in deposits, loans, and net interest income. However, despite these strides, it posted a loss of 573.67 million TWD due to insufficient economic scale, but plans to speed up asset expansion for better financial health.
Chairman Wei reiterated the group's commitment to stabilizing operations while continuing strategic adjustments in bond and note structures, leveraging institutional financial advantages for Rakuten Bank to accelerate profitability. Key focus areas include assisting Rakuten in capital raising and building corporate deposit-and-loan services, aligning with the Financial Supervisory Commission's encouragement of corporate Internet banking development. Cooperation between financial holding subsidiaries should enhance comprehensive corporate financial services and overall performance.
Post-meeting, Chairman Wei addressed the barrier faced by Rakuten Bank in expanding corporate accounts due to its original focus on consumer finance, which contrasted traditional digital banks' offerings. This discrepancy led to a conservative stance from Japanese shareholders. However, with the appointment of Jinyong Peng as the Financial Supervisory Commission's chair, there has been a push towards establishing an Asian asset management hub and liberalizing "online finance, offline assistance," providing a significant opportunity for pure online banks. Current trials are underway for corporate accounts, with hopes for more liberal policies.
In comparing cumulative losses among three major online banks, Rakuten Bank recorded a loss of over 2 billion TWD, the least among its peers. Despite never having raised additional capital post-launch, regulatory forecasts suggest a capital requirement by year-end or early next spring, with completion anticipated in the first half of the year.
Key Insights Table
| Aspect | Description |
|---|---|
| Dividend Declaration | Guotaishou Gold approves a 0.587 TWD total dividend. |
| Rakuten Bank's Funding | First-time capital needs anticipated by end of year for operational scale. |
Afterwards...
Looking towards the future, the emphasis on continued innovation within the financial sector cannot be overstated. Particularly, the exploration of more liberal policies concerning online banking's corporate capabilities, such as establishing smoother processes for account setup and management, remains vital. Additionally, broadening the focus to incorporate artificial intelligence within banking systems to enhance security and personalized services is a promising frontier that warrants deeper investigation. The key focus on harmonizing technological advances with regulatory frameworks will ensure robust growth and stability in financial services worldwide.