Koo Jr. returns to lead CTBC as profits soar, stock climbs

TAIPEI (Global Views/TVBS News) — The financial industry, buoyed by substantial profits, has taken center stage during the peak season of shareholder meetings. While dividends, mergers, and profit forecasts are top concerns, small shareholders are particularly anxious about who will lead in these turbulent times.

CTBC Financial Holding Co. (CTBC Financial, 中信金控) has been thrust into the spotlight, undergoing a pivotal leadership transition. On May 17, the company announced that Jeffrey Koo Jr. (辜仲諒), who had been embroiled for years in the "Red Fire" case (紅火案) — a financial scandal involving an offshore empty shell firm — rejoined the board after a 17-year absence. His trusted former vice chairman, Daniel Wu (吳一揆), also returned to the same role.

A Discreet Comeback as the Major Shareholder
In 2023, Fubon Financial Holding Co. (富邦金) maintained its top spot in profitability, but CTBC Financial followed closely. CTBC recorded a post-tax profit of NT$56.081 billion, surpassing Cathay Financial Holding Co. (國泰金控) to take second place. Its earnings per share (EPS) ranked among the top three, driven by robust performance in the banking and insurance sectors.

Taiwan Life Insurance Co. (台壽), a CTBC subsidiary, benefited from the depreciation of the New Taiwan dollar, generating foreign exchange and capital gains during favorable stock market conditions. For the first five months of this year, its net profit reached NT$31.151 billion, a 113% year-on-year increase.

CTBC Financial's stock has surged to a new high, exceeding NT$38, with an annual gain of over 51%, making it a key market indicator.

Koo's return was anticipated following his acquittal in the third trial of the Red Fire case last November. On May 13, he declared a holding of 1.784 billion shares, or 8.87% of CTBC Financial's issued shares, in accordance with the "Hidden Shareholder Clause" (藏鏡人條款), which requires more transparency from major shareholders. This makes him the largest shareholder. 

The clause was introduced by the Financial Supervisory Commission (FSC, 金管會) due to the low shareholding percentages of major shareholders in financial holding companies, which sometimes resulted in market faction "sniping," as experienced by CTBC Financial and Taishin Financial Holding Co. (台新金). 

During corporate alarms and management defense battles, the full extent of major shareholders' holdings often remains obscure, becoming a tool for market manipulation. The amendments to Articles 43-1 and 183 of the "Securities and Exchange Act" (證交法), which lowered the reporting and disclosure threshold from 10% to 5%, have increased the transparency of major shareholders' holdings.

Koo resigned in 2006, spent two years in Japan, and then returned to Taiwan to become chairman of the CTBC Charity Foundation, where he devoted himself to public welfare. While studying in Japan, he was a pitcher and vice-captain of the baseball team. A sports enthusiast, he has been active in the baseball community. 

He is the principal investor in the CTBC Brothers (中信兄弟) team, was elected chairman of the Chinese Taipei Baseball Association (中華棒協), and went on to serve as president of the Baseball Federation of Asia (亞洲棒球總會) and executive vice president of the World Baseball Softball Confederation (世界棒壘球聯盟), leading Taiwan's baseball scene to shine on the global stage.


Investment Trust and Securities Become New Profit Engines
Koo reportedly has no immediate plans to manage CTBC Financial directly. For now, he will engage in various economic and interest groups like the "Third Wednesday Club" (三三會), serving as a board member to ease into his new role and gauge the environment.

The Koo family, which hails from Lukang, has been a pivotal player in Taiwan's recent history. Jeffrey Koo Sr. (辜濂松) acted as an ambassador-at-large during times of diplomatic difficulty, using corporate power to advance Taiwan's industry and international presence. Koo carries forward his father's legacy, upholding the principle of contributing to society.

From now on, Koo will rightfully lead CTBC Financial in achieving new milestones on the international stage, enhancing sustainability. If the era founded by Jeffrey Koo Sr. is considered 1.0 and the era of professional managers is 2.0, what new directions will the "new" CTBC Financial 3.0 era under Koo take?

According to a financial analyst, CTBC Financial is in a strong growth phase, having posted a post-tax profit of NT$31.2 billion in the first five months of this year, demonstrating substantial momentum. Nevertheless, the biggest challenge for Koo's team will come in 2026, with the advent of IFRS17 and ICS, known as the insurance industry's most formidable hurdles.

Meanwhile, CTBC Financial's profit engines are steadily expanding from banking and insurance to include investment management and securities, thereby completing its portfolio.

Over the past five years, CTBC Investments has capitalized on the ETF boom, climbing from the 20th to the 6th largest asset manager in Taiwan. It has also announced its goal to break into the top three by 2026. Concurrently, the securities division is pooling group resources to take advantage of the global stock market surge and increased trading volumes.

During this year's shareholders meeting, CTBC Financial President James Chen (陳佳文) conveyed an optimistic outlook, noting that if the economic conditions remain within anticipated control, profits in the second half of the year will hit record highs. Furthermore, the company plans to leverage the active stock market to optimize capital benefits.

It is worth noting that Koo has previously been very interested in mergers and acquisitions. Presently, both King's Town Bank (京城銀行) and Shin Kong Financial (新光金) are open to such prospects, and Koo is said to be quite interested. While Chen did not provide details, he acknowledged that CTBC Financial had been invited to assess Citibank's consumer banking business but had pulled out due to a low offer. "We will consider any good bank or complementary business," he stated.

Koo, who has been deeply engaged in sports philanthropy for many years, will now have to demonstrate his strategic acumen in handling opportunities, challenges, and public scrutiny upon his return to the financial sector.
 

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