B.O.K — Interim / Quarterly Report 2020

Sep 9, 2020

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Financial Review of 2020 Q2

2020.09.09

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Disclaimer

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• ➢ This presentation is provided by Bank of Kaohsiung Co., Ltd. (‘BOK’).The information contained within is not reviewed by any accountant or any independent third party. Users should read this material in conjunction with all other public financial and operational information filed to the competent authorities by BOK. While we endeavor to provide accurate, complete and consistent information herein, BOK makes no guarantee or warranties to the accuracy or correctness of all the information contained. After this presentation is released to the public, we undertake no obligation to update any relevant data to reflect any change hereafter.

• ➢ Users should also notice that this presentation may contain forward-looking statements. Statements that are not historical facts, including statements relating to the implementation of strategic initiatives, future business development and economic performance are forward-looking statements. By their nature, forward-looking statements involve uncertainties, risks, assumptions and other factors that could cause actual developments and results to differ materially from our statement in this presentation. These factors include, but not limited to, regulatory developments, competitive conditions, technological developments, general economic conditions and management changes.

• ➢ The information, statements or opinions in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. BOK and its affiliates representatives, no matter for their negligence or any other reasons, should not be liable for any loss or damages arising from the use of or interpretation by others of information contained within this presentation or any matter related to this document.

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Summary

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➢ Operations Review of 2020 Q2

➢ Financial Performance of 2020 Q2

➢ Prospects

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Operations Review of 2020 Q2

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Operations Review of 2020 Q2

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Operations Review of 2020 Q2	Operations Review of 2020 Q2	Operations Review of 2020 Q2	Operations Review of 2020 Q2	Operations Review of 2020 Q2	Operations Review of 2020 Q2
(in NT 100mn)
Items		2020.1~6		2019.1~6	Increase amount
Net income before tax and provisions		6.40		7.33	(0.93)
ProvisionsNote		1.80		3.33	(1.53)
Net income before tax		4.60		4.00	0.60
Income tax		(0.66)		(0.35)	0.31
Net income		3.94		3.65	0.29
EPS after-tax(in NT dollar)		0.36		0.34	0.02
Note:「Provisions」for bad debt expense、commitment、guarantee liablilty and reversal of impairment loss on assets.
Items	2020/06/30		2019/06/30		Increase amount
Deposits	2,256		2,184		72
LoansNote	1,758		1,770		(12)
Note: Excluding collections.

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Financial Performance of 2020 Q2

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Assets and Liabilities

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(in NT 100mn)
Assets Liabilities
2,715
2,707
2,680
2,664
2,552 2,556
2,536
2,513
2018/12/31 2019/6/30 2019/12/31 2020/6/30
2020/6/30 to
Date
2020/6/30 2019/12/31 2019/6/30 2018/12/31 2018/12/31
Items variation
Assets 2,715 2,707 2,664 2,680 1.31%
Liabilities 2,556 2,552 2,513 2,536 0.79%
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		Date Items	2020/6/30	2019/12/31	2019/6/30	2018/12/31	2020/6/30 to 2018/12/31 variation
	Shareholders' Equity		158.91	154.30	150.79	144.45	10.01%
	Common Stock		108.09	108.09	108.09	104.03	3.90%
	BVPS (in NT$)		14.70	14.27	13.95	13.88	5.91%

Note: In 2019, surplus and capital reserves were transferred to capital increase of NT$406 million.

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Assets Breakdown(2020.6.30)

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(in NT 100mn; %)
Other
Cash and cash
Assets
Premises and equivalents Due from
11
equipment 32 Central Bank
1%
29 1%
and other
1%
116
4%
Financial
Assets
And
investment
786
Discounts
29%
and loans-net
1,741
64%
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Liabilities and Shareholders’ Equity Breakdown(2020.6.30)

(in NT 100mn; %) Shareholders’ Equity

Liabilities

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Other items
In equity
Due to 4
Other
Central Bank
liabilities 3%
and other
Financial 8 banks Legal
debentures 0% 93 Reserve
75 4% 34
Financial
3% liabilities 21%
81
3%
Capital
Reserve
13
Accounts 8%
Payable
Deposits 43
and
2%
remittances
2,256 Common
Stock
88%
108
68%
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Income Growth

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(in NT 100mn)

	2.61 3.06 3.72 2.68 (0.21) (0.60) (1.22) (0.58) 2.40 2.46 2.50 2.10 2019Q3 2019Q4 2020Q1 2020Q2 Net Income before tax Provisions Pre-tax income	2.61 3.06 3.72 2.68 (0.21) (0.60) (1.22) (0.58) 2.40 2.46 2.50 2.10 2019Q3 2019Q4 2020Q1 2020Q2 Net Income before tax Provisions Pre-tax income	2.61 3.06 3.72 2.68 (0.21) (0.60) (1.22) (0.58) 2.40 2.46 2.50 2.10 2019Q3 2019Q4 2020Q1 2020Q2 Net Income before tax Provisions Pre-tax income	2.61 3.06 3.72 2.68 (0.21) (0.60) (1.22) (0.58) 2.40 2.46 2.50 2.10 2019Q3 2019Q4 2020Q1 2020Q2 Net Income before tax Provisions Pre-tax income	2.61 3.06 3.72 2.68 (0.21) (0.60) (1.22) (0.58) 2.40 2.46 2.50 2.10 2019Q3 2019Q4 2020Q1 2020Q2 Net Income before tax Provisions Pre-tax income
	Quarterly Items	2020Q2	2020Q1	2019Q4	2019Q3
	Net Income before tax and provisions	2.68	3.72	3.06	2.61
	Provisions	(0.58)	(1.22)	(0.60)	(0.21)
	Pre-tax Income	2.10	2.50	2.46	2.40

Note: 2020 Q2 is affected by the CBC's interest rate cut and COVID-19, resulting in a decrease Net Income.

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Net Revenue Breakdown(2020.1~6)

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(in NT 100mn)

Net Income

Net Revenue

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Net Income
Other
from
Income
Investment,
Pre-tax exchange and 0.22
Income derivative 1%
4.60 3.81
24% 20%
Net Revenue
Net
18.97
Provisions Interest
100%
1.78 Operating Income
10% Expenses 12.86
12.59
68%
Net Fee
66%
Income
2.08
11%
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Deposits and Loans

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(in NT 100mn)
Deposits Loans
2,258 2,256
2,233
2,184
1,822
1,770 1,766 1,758
2018/12/31 2019/06/30 2019/12/31 2020/06/30
Date
2020/06/30 2019/12/31 2019/06/30 2018/12/31
Items
Deposits 2,256 2,258 2,184 2,233
Loans 1,758 1,766 1,770 1,822
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Deposit Breakdown

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By period By currency (in NT 100mn)
2019/12/31 2019/12/31
FCY
Demand Deposits
Deposits 330
1,026 15%
Time
45%
Deposits NTD
1,232
Deposits
55% 1,928
85%
-9 +7
+46
-48
2020/06/30 2020/06/30
FCY
Demand Deposits
Deposits 321
Time 1,072 14%
Deposits 48%
1,184 NTD
52% Deposits
1,935
86%
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Loan Breakdown

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By customer

By currency

(in NT 100mn)

2019/12/31

2019/12/31

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Government FCY
208 Loans
Consumers
12% 222
595
13%
34%
-8 NTD
Loans
Corporations 1,544
963 87%
54%
+1 -28
+20
2020/06/30 2020/06/30
Government FCY
Consumers 200 Loans
596 11% 194
-1
34% 11%
NTD
Loans
Corporations 1,564
962 89%
55%
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Net Interest Spread and NIM

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(in %)
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Net Interest Spread NIM
1.46
1.41
1.36
1.23
1.06
1.03
0.97 0.95
2019/09 2019/12 2020/03 2020/06
Date 2020/06 to
2020/06 2020/03 2019/12 2019/09
Items 2019/09 variation
Net Interest Spread 1.23 1.36 1.41 1.46 (0.23)
NIM 0.95 0.97 1.03 1.06 (0.11)
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	0.00 100.00 200.00 300.00 400.00 500.00	0.00 100.00 200.00 300.00 400.00 500.00	0.00 100.00 200.00 300.00 400.00 500.00	0.00 100.00 200.00 300.00 400.00 500.00	0.00 100.00 200.00 300.00 400.00 500.00	0.00 100.00 200.00 300.00 400.00 500.00	0.00 100.00 200.00 300.00 400.00 500.00
	Items	Date	2020/6/30	2020/03/31	2019/12/31	2019/09/30	2020/6/30 to 2019/09/30 variation
	Coverage Ratio		410.54	368.11	245.53	226.89	183.65
	NPL Ratio		0.28	0.31	0.48	0.52	(0.24)

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Capital Adequacy Ratio

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Date Items	2020/6/30	2020/03/31	2019/12/31	2019/09/30	2020/6/30 to 2019/09/30 variation
Total CAR	12.44	12.15	12.11	11.46	0.98
Tier1	10.50	10.21	10.04	9.24	1.26
CET1	9.30	9.01	8.99	8.92	0.38

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Credit Ratings

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Fitch Ratings Long term Short term Outlook 2018 AA-(twn) F1+(twn) Stable 2019 AA-(twn) F1+(twn) Stable 2020 AA-(twn) F1+(twn) Stable

國際評等 Long term Short term Fitch Ratings Outlook (IDR) (IDR) 2018 BBB+ F2 Stable 2019 BBB+ F1 Stable 2020 BBB+ F1 Stable

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Business Results in 2020 Q2

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Steady Performance Expand Profit.
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Increase NTD Loans Decrese FCY Loans .
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Asset Quality Optimization Capital Adequacy Ratio Improvement.
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Unaffected by COVID-19 the Credit Rating Remains Stable.
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The 3 [rd] place winner in ratio approved amount od self-organized bailout which
cooperating with the government.
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Prospects

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Prospects

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Improve the quality of loans, expand civil construction financing
and SME credit insurance cases.
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Increase foreign currency deposits, increase the proportion of
live deposits, and reduce capital costs.
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Increase the proportion of fee income and improve the
revenue structure.
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Strengthen financial investment and improve operational
performance.
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Optimize the virtual and real channels and strengthen the
digital layout.
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Strictly control the capital ratio and increase capital.
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Thanks for Listening

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