Performance Analysis of Financial Holding Companies

• Main Authors: Yun Wei-Chiung, 雲惟炯
• Other Authors: David M. Chen
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/91120644527305440699

碩士 === 輔仁大學 === 金融研究所 === 95 === This thesis decomposes ROEs of financial holding companies based on the functional perspective, segmental perspective and the Du Pont model. The goal is to find some performance indicators for the comparison of the relative performance of financial holding companies in Taiwan through the decomposed consolidated balance sheets and income statements from 2003 to 2005. Major conclusions are as follows. First, the functional perspective indicates that companies whose main source of ROE is the rate of return on net interest equity (RoIntE) include Mega, Fubon, Hua Nan, SinoPac, Fuhwa, First, Taishin and Esun, while Cathay and Shin Kong have their main source of ROE came from the rate of return on net insurance equity (RoInsE), China Development has its largest component of ROE from the rate of return on net transaction and investment equity(RoT&IE), Chinatrust and JIH SUN generate most of their ROE from the rate of return on net service equity (RoSerE) and RoIntE, and ROE of Waterland was mainly from RoT&IE and RoSerE. Second, by the segmental perspective, companies whose ROE comes mainly from banking department are Fubon, Hua Nan, SinoPac and First, while securities department contributes most to the ROE of JIH SUN and China Development, insurance department is the main source of ROE of Cathay, banking department and other departments are major contributors to Mega’s ROE, and banking and securities are the two most important departments to ROE of Fuhwa. Third, by the Du Pont analysis, companies with above average profit margin on sales are Mega,Esun, Waterland, Hua Nan and SinoPac, while Cathay and Shin Kong have an above average total asset turnover ratio. Fourth, the average level of ROE was 7.83%, with Cathay (14.3%), Mega (12.06%), Hua Nan (12.61%), Chinatrust (11.05%), Esun (12.74%), Waterland (10.31%) and Shin Kong (11.45%) leading the pack. Finally, bad debt losses and high operation expenses are the two most serious problems facing most of Taiwan’s FHCs and the ability to curtail these costs is critical to their future.