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CTBC HOLDING Call Transcript 2016

Nov 14, 2016

52221_rns_2016-11-14_62ca81dd-c4b4-496d-bf8c-0eded44c1650.pdf

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CTBC Holding Analyst Meeting Financial Review of 3Q16 November 14[th] , 2016 Investor Relations

DISCLAIMER

THE FINANCIAL INFORMATION IN THESE MATERIALS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30[th] , 2016 ARE PRELIMINARY. CTBC HOLDING EXPECTS TO FILE ITS UNAUDITED FINANCIAL STATEMENTS, WHICH ARE SUBJECT TO REVIEW BY ITS AUDITORS, WITH THE ROC SECURITIES AND FUTURES BUREAU ON OR ABOUT NOVEMBER 29[th] , 2016.

These materials are not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.

2

CTBC Holding’s financial highlight in 3Q16

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Healthy revenue growth with ROE at 10.98%
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  • CTBC Holding profit after tax grew 16.7% QoQ

  • Stable revenue growth YoY (excl. life) attributed to core business growth in lending and widened NIM & spread

  • Life insurance profit accelerated QoQ and YoY

  • ROE was 10.98% & ROA was 0.66% as of Sep 2016

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Contained operating expense and efficiency ratio
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  • Operating expense growth (excl. life) was moderate qoq and yoy excl. ESOP; cost-to-income ratio was 58.5% in 9M16 excl. ESOP

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Benign asset quality and high coverage ratio
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  • NPL was 0.72% as of Sep 30, 2016

  • Coverage ratio was 188.4% as of Sep 30, 2016

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Strong capitalization and low double leverage ratio
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  • CTBC Holding’s CAR was 130.5% and double leverage ratio was 117.2% as of Sep 30, 2016

  • CTBC Bank’s CAR was 13.4% and tier 1 ratio was 11.5% as of Sep 30, 2016

  • Taiwan Life’s RBC ratio was 292% as of Sep 30, 2016

  • CTBC Holding’s numbers are presented on a consolidated basis. 1. 3Q16 numbers are preliminary

3

© CTBC Financial Holding

CTBC Holding’s profitability

Excl. one-off

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Consolidated net profit
NT$ mm
QoQ +16.7% YoY -6.5%
24,946
23,329
10,452
9,026
7,723
6,565 [ 7,738 ]
3Q15 4Q15 1 1Q16 2Q16 3Q16 2 9M15 9M16 2
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EPS
NT$
Retroactively adjusted EPS Reported EPS
2.39
2.10
1.24 1.38 1.34 1.51 1.29
1.61 1.68
2.58
2.10
1.61 [ 1.65 ]
1.50 1.51
1.29
2011 2012 2013 2014 1 20151 9M15 9M16 2
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CTBC Holding’s numbers are presented on a consolidate basis.

.

  1. 2014 include the one-off bargain purchase gain of NT$14.8 bn and 4Q15/ 2015 include the one-off HQ disposal gain of NT$7.2 bn 2. 3Q16/9M16 number is preliminary © CTBC Financial Holding

4

CTBC Holding’s ROE & ROA

Excl. one-off

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ROE ROA
% %
CTBC Holding TW FHCs avg.
CTBC Holding TW FHCs avg.
ROC GAAP IFRS ROC GAAP IFRS
11.67% 11.14% 0.81% 0.68%
18.69%
1.30%
13.97% 1.03%
0.95%
12.76% 13.02% 0.95%
0.86%
11.93%
10.98%
0.66%
2011 2012 2013 2014 1 20151 9M162 2011 2012 2013 2014 1 2015 1 9M162
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CTBC Holding’s numbers are presented on a consolidate basis.

  1. 2014 includes the one-off bargain purchase gain of NT$14.8 bn and 2015 includes the one-off HQ disposal gain of NT$7.2 bn 2. 9M16 number is preliminary

5

© CTBC Financial Holding

CTBC Holding’s net profit breakdown by entity

CTBC Holding’s net profit breakdown NT$ mm

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QoQ -11.3% QoQ +197% QoQ +16.7%
3Q16 [1 ] 3Q16 [1 ]
3,052 (34) 140 (185) 9,026 % %
Breakdown Breakdown
6,052
Bank 67% Taiwan 41%
Life 34% Overseas [4] 59%
Others [2 ] 0%
3Q16Bank 1 Life Securities SubsidiariesOther 2 Holding 3 CTBC Holding3Q16 1
YoY -18.3% YoY +96.9% YoY -6.5%
9M16 [1 ] 9M16 [1 ]
% %
5 770 (473) 23,329 Breakdown Breakdown
5,426
17,601
Bank 75% Taiwan 48%
Life 23% Overseas [4] 52%
Others [2 ] 1%
9M16Bank 1 Life Securities SubsidiariesOther 2 Holding 3 CTBC Holding9M16 1
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CTBC Holding’s numbers are presented on a consolidated basis.

  1. 3Q16/9M16 numbers are preliminary

  2. Other subsidiaries include CTBC Venture Capital, Asset Management, Taiwan Lottery, Securities and Investments

  3. Holding (on a non-consolidated basis) is an adjustment item for compiling consolidated statement.

  4. Overseas include OBU, overseas branches and subsidiaries © CTBC Financial Holding

6

CTBC Holding’s net profit movements

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CTBC Holding’s net profit movements
NT$ mm , %
CTBC Holding excl. Insurance Insurance
QoQ +7.2% QoQ +67.4% QoQ +9.3% QoQ +133.6% QoQ +14.4% QoQ +16.7%
+1,601 -594 -1,247 +1,570 -1,564
10,590
9,257 9,026
2Q16 Profit Operating Provision Expense Insurance net 3Q16 Profit Tax 3Q16 Net Profit
before tax Revenue profit before tax before tax 1 after tax 1
YoY +4.1% YoY +527.7% YoY +6.2% YoY +75.6% YoY -4.2% YoY -6.5%
+2,733 -4,045
-2,414 +2,316 -5,085
29,646 28,415
23,329
9M15 Profit Operating Provision Expense Insurance net 9M16 Profit Tax 9M16 Net Profit
before tax Revenue profit before tax before tax 1 after tax 1
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CTBC Holding’s numbers are presented on a consolidated basis. 1 3Q16/9M16 number is preliminary

7

© CTBC Financial Holding

CTBC Holding’s strong capitalization

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CTBC Holding’s CAR
%
156.6% 156.4%
147.2%
142.4%
130.5%
118.2%
2011 2012 2013 2014 2015 Sep 16 1
Taiwan Life RBC [3 ]
%
500-550% Pro-forma [4 ]
400-450%
300-350% 320%
292%
200-250%
CFHC’s numbers are presented on a consolidated basis. 1
2011 2012 2013 2014 2015 Sep 16
1. 2011 numbers are preliminary.
2. 2011 industry BIS ratio is as of Sep. 11
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CTBC Bank’s CAR ratio
%
Basel II Basel III [2 ]
14.0% 14.3% 13.5% 13.4%
13.0%
11.8%
1
2011 2012 2013 2014 2015 Sep 16
CTBC Bank’s Tier I ratio
%
Basel II Basel III [2 ]
11.4% 11.9% 11.5%
11.0%
10.5%
9.7%
2011 2012 2013 2014 2015 Sep 16 1
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  • CTBC Holding’s numbers are presented on a consolidated basis. 1. Sep16 number is preliminary

  • CTBC Bank adopted Basel III since 2013

© CTBC Financial Holding

8

  1. 2011-2014 RBC ratio is based on entity previously known as CTBC Life. Taiwan Life and CTBC Life was merged in 2015 with Taiwan Life as surviving entity 4. Pro-forma is CTBC Life & Taiwan Life combined

CTBC Holding’s revenue breakdown (excl. Life)

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CTBC Holding’s revenue breakdown (excl. one-off [1] )
NT$ mm, %
QoQ +4.5% QoQ -1.0% QoQ +21.9% QoQ +93.6% QoQ -3.9% NII
YoY +10.7% YoY -6.3% YoY +31.6% YoY -15.5% YoY -103.0%
12,240
48%
11,515 11,714 51% Fee
11,437
11,145
3Q15
9,262
4Q15
8,471 Derivatives
8,348 7,938 1Q16 & FX
7,858
2Q16
3Q16 2 40% 36% Trading
3,430 3,283 LT
2,533 9% 11% investment
2,077
3% 3% & Others
1,465 -1% -2%
756
159 324 412 9M15 9M16 2
(164) (204) (212)
(448) (701) Revenue (NT$ mm) %
(1,406)
Net Interest Fee Income Derivatives & FX Trading Gains LT investment & 9M15: 66,342 9M16 [2] : 69,075 +4.1%
Income Others
2Q16: 22,282 3Q16 [2] : 23,882 +7.2%
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CTBC Holding’s numbers are presented on a consolidated basis. 1. One-off is in 4Q 2015 for HQ disposal gain of NT$7,157 mm © CTBC Financial Holding 2. 3Q16 & 9M16 number is preliminary.

9

CTBC Bank’s lending portfolio breakdown

Loan breakdown[1 ] (incl. Credit card revolving balance) NT$ bn, %

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QoQ -0.2% QoQ -0.3% QoQ +5.0% QoQ +0.4% QoQ +3.0% QoQ -9.5%
YoY -4.8% YoY +6.8% YoY +21.7% YoY +2.1% YoY +4.0% YoY -22.6%
Corporate
NTD Loan
24%
27%
3Q15 FCY Loan
4Q15
954 1,002 999 1Q16 Mortgage
935 919 2Q16
46%
3Q16 2 46%
Unsecured
Consumer
541 527 540 516 515 482 506 Credit CardRevolving
450 460
416 23%
20%
Others
5% 5%
1% 1%
1% 1%
104 106 105 106 106 Sep 15 Sep 16 2
14 14 14 14 15 22 22 20 18 17
Total Lending [3] portfolio (NT$ bn) %
Corporate NTD FCY Loan Mortgages Unsecured Credit Card Others
Loan Consumer Revolving Sep 15: 2,046 Sep16 [2] : 2,162 +5.7%
Jun 16: 2,153 Sep 16 [2] : 2,162 +0.4%
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These numbers are presented on CTBC Bank consolidated basis.

  1. Loan breakdown is presented on performing loan basis, excluding non-accrual loans.

  2. 3Q16 and Sep16 numbers are preliminary.

10

  1. Total lending portfolio includes performing loans, non-accrual loans and credit card revolving balance. © CTBC Financial Holding

CTBC Bank’s FCY loan breakdown

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FCY loan breakdown 1 FCY loan growth
% NT$ bn, %
Sep 15 Sep 16 2
DBU
1.7% YoY YoY YoY YoY
+13.5% -2.5% -12.1% -6.2%
OBU
10.8%
625
Overseas
Tokyo Star 551
Branches
Bank
25.0%
51.4%
256 250
Overseas 122
108
Subsidiaries
62.6%
18 17
1 Total: NT$999bn 1
Overseas Overseas OBU DBU
Subsidiaries Branches
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These numbers are presented on CTBC Bank’s consolidated basis.

  1. Loan breakdown is presented on performing loan basis, including non-accrual loans.

  2. Sep 2016 number is preliminary

11

© CTBC Financial Holding

CTBC Bank’s deposit mix

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NTD Deposit FCY Deposit
NT$ bn, % NT$ bn, %
As of Sep
2016, total
Time Savings YoY +0.2% Time Savings RMB deposits YoY +7.5%
was RMB
1,400 1,400
17.2 bn
1,200 1,200
44.4%
45.7%
1,000 1,000
800 800
600 600
400 55.6% 400
54.3%
200 200
0 0
Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 1 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 1
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These numbers are presented on CTBC Bank’s consolidated basis.

  1. Sep16 number is preliminary

12

© CTBC Financial Holding

CTBC Bank’s LDR

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Overall LDR [1 ]
NT$ bn, %
Overall LDR
81.10% 78.72%
77.20% 76.68% 78.12%
Loan & Credit card receivables 2
Deposits 3
2,805
2,707 2,734 2,752
2,722
2,090 2,096 2,150 2,208 2,208
Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 4
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NTD LDR[1 ] NT$ bn, %

NTD Loan & credit card receivable NTD Deposit NTD LDR

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85.70% 83.40%
82.19% 83.14%
79.10%
1,444 1,417 1,422 1,393 1,447
1,142 1,165 1,182 1,194 1,207
Sep 15 Dec 15 Mar 16 Jun 16 Sep 164
FCY LDR
NT$ bn, %
FCY Loan FCY Deposit FCY LDR
75.04% 76.28% 73.73%
72.76%
70.76%
1,263 1,317 1,329 1,330 1,358
948 932 967 1,014 1,001
Sep 15 Dec 15 Mar 16 Jun 16 Sep 164
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These numbers are presented on CTBC Bank consolidated basis.

  1. Credit card account receivables are included in the calculation of CTBC Bank’s LDR 2. Loans include both performing and non-accrual loans

  2. Deposit is adjusted to exclude structured deposits and remittances © CTBC Financial Holding 4. Sep 16 number is preliminary

13

CTBC Bank’s NIM and spreads

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Quarterly NIM & Interest earning assets Overall, NTD & FX spread vs. Industry
NT$ bn, % %
NIM Overall spread NTD spread
1.47% FCY spread Industry average
1.42% 1.42% 1.43% 1.44%
Avg. interest earning assets
2.28% 2.28% 2.28% 2.32%
2.25%
1.90% 1.91% 1.91% 1.92% 1.95%
3,090 3,171 3,212 3,246 3,285
1.62%
1.60% 1.59% 1.60% 1.60%
1.46%
1.44% 1.40%
1.37%
1
3Q15 4Q15 1Q16 2Q16 3Q16 1 3Q15 4Q15 1Q16 2Q16 3Q16 1
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These numbers are presented on CTBC Bank consolidated basis.

  1. 3Q16 number is preliminary

14

© CTBC Financial Holding

CTBC Holding’s fee breakdown (excl. life)

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CTBC Holding’s fee income breakdown
NT$ mm, %
QoQ +0.6% QoQ -0.6% QoQ +2.1% QoQ -24.9% QoQ +24.4% QoQ +19.4%
YoY -14.4% YoY +4.8% YoY +8.2% YoY +14.6% YoY +5.9% YoY -17.9%
Wealth
mgmt
4,118
42%
3,947 3Q15 46%
Credit Cards
3,541 3,534 4Q15
3,512
1Q16 Retail
Business
2Q16
15%
13%
3Q16 2 Corporate
6%
5% Business
2,027 12% 15%
Overseas
Subsidiaries
7%
7%
1,336 1,263 1,448
1,223 1,227 1,256 1,189 1,088 1,068 16% 14% Lottery
984
943 847
880
680 778 592 710 9M15 9M16 2
500 515 500 529 541 626 476
Total Fees (NT$ mm) %
Wealth Mgmt Credit Cards Retail Business Corporate Overseas Lottery 9M15: 26,748 9M16 [2] : 25,058 -6.3%
Business 1 Subsidiaries
2Q16: 7,938 3Q16 [2] : 7,858 -1.0%
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CTBC Holding’s numbers are presented on a consolidated basis.

  1. Corporate business excludes overseas subsidiaries

  2. 3Q16 & 9M16 numbers are preliminary. . © CTBC Financial Holding

15

© CTBC Financial Holding

CTBC Holding’s Wealth Management fee

Wealth mgmt. fee breakdown NT$ mm

Wealth mgmt. fee breakdown %

Wealth mgmt. fee breakdown
NT$ mm		 Wealth mgmt. fee breakdown
NT$ mm		 Wealth mgmt. fee breakdown
NT$ mm		 Wealth mgmt. fee breakdown
NT$ mm		 Wealth mgmt. fee breakdown
%		 Wealth mgmt. fee breakdown
%
2,599
2,876
1,230
1,116
72
72
45
53
Structured & Others
Custodian & Trust
Mutual Fund
Bancassurance
4,118
3,947		 2,712
2,419
2,274
735
945
1,073
65
70
68
~~29~~
78
119
1Q16
2Q16
3Q16
3,512
3,534
1
3,541		 1
66%
70%
77%
69%
64%
31%
27%
21%
27%
30%
2%
~~2%~~
2%
2%
2%
2%
3%
3Q15
4Q15
1Q16
2Q16
3Q16
Structured & Others
Custodian & Trust
Mutual Fund
Bancassurance
1
65
735
2,712
3Q15
4Q15

CTBC Holding’s numbers are presented on a consolidated basis.

  1. 3Q16 number is preliminary

16

© CTBC Financial Holding

CTBC Holding’s cost to income ratio (excl. Iife & one-off)

CTBC Holding’s Cost-to-Income ratio[1] and Revenue & Non-Interest Expense NT$ mm, %

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CIR
66.1%
58.7% 60.2% 61.4%
52.0%
Revenue Non-Interest Expense
23,882
22,911
21,928 22,282
20,227
14,662
13,370 13,455 13,415
11,403
3Q15 4Q15 2 1Q16 2Q16 3Q16 3
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CTBC Holding’s numbers are presented on a consolidated basis.

  1. Cost-to-Income ratio is derived by dividing Total Non-interest Expense by Pre-provision Operating Revenue

  2. 4Q15 revenue & CIR excludes HQ disposal gain

17

© CTBC Financial Holding 3. 3Q16 number is preliminary.

CTBC Bank’s asset quality remained benign

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NPL Ratio [ 1] NPL Coverage Ratio
% NT$ bn, %
CTBC Reserve NPL coverage ratio
Total NPL
185.3% 188.4%
0.78% 0.78% 0.80% 0.73% 0.72%
168.4% 168.8% 168.1%
Corporate 2 Retail Subsidiaries
NT$812mn for
1.5% on China-
related
28.3 28.8 29.1
26.8 27.0
2.22%
2.10%
1.97%
1.68% 1.68%
0.33% 0.41% 0.48% 0.47% 0.46%
0.12% 0.12% 0.12% 0.11% 0.13% Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 3
Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 3
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These numbers are presented on CTBC Bank consolidated basis. 1. NPL refers to loans over 90 days overdue © CTBC Financial Holding 2. Excludes overseas subsidiaries

18

  1. Sep 16 number is preliminary

CTBC Bank’s credit cost trend

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Provisioning Ratios & Provision Costs
NT$ mm, %
Headline Normalized
0.46%
0.26% 0.27%
0.16%
0.10%
0.10% Includes reserve for TSB
due to strengthened
regulatory requirement
and TRF
1.5% GP
for
China-
related
2,423
812
1,465
871
537 513
3Q15 4Q15 1Q16 2Q16 3Q16 1
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These numbers are presented on CTBC Bank consolidated basis. 1. 3Q16 number is preliminary

19

© CTBC Financial Holding

Life - Total Premium (TP) breakdown

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Total Premium (TP) 1 Total Premium (TP) mix 1
NT$ mm, % %
% Taiwan Life Industry
Total Premium
QoQ +8.3% -0.2%
YoY +27.9% +8.0%
Total Premium
62,973
44%
58,614 58,159 49% 47%
55% 52% RP
51,002
45,790
51% 53% 56% FYP
45% 48%
3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16
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  1. 2015 are pro-forma numbers which includes CTBC Life and Taiwan Life

20

© CTBC Financial Holding

Life - First Year Premium (FYP) overview

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First Year Premium (FYP) 1 Renewal Premium (RP) 1
NT$ mm, % NT$ mm, %
% Taiwan Life Industry % Taiwan Life Industry
QoQ +13.9% -4.9% QoQ +1.9% +3.3%
YoY +38.5% +9.8% YoY +17.6% +6.8%
First Year Premium Renewal Premium
28,650
35,262
30,955 27,711
29,964
27,204
26,693
24,308
20,757
25,033
3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16
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Data resource: Life insurance association and Taiwan Insurance Institution

  1. 2015 are pro-forma numbers which includes CTBC Life and Taiwan Life

21

© CTBC Financial Holding

Life - FYP breakdown by channels and products

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9M16 FYP breakdown by channels 9M16 FYP breakdown by products
% %
Investment
-Linked,
Interest Traditional
Others, 2.3% Others,
0.3% sensitive 0.5% Life-
annuity, Others,
1.1% 15.2%
Tied
Agent, Bank-CTBC,
18.3% 30.5%
Brokers,
10.9%
Traditional
Life-
Tele-
Interest
marketing
0.9% sensitive,
81.0%
Bank-
External,
39.1%
----- End of picture text -----

22

© CTBC Financial Holding

Life - First Year Premium Equivalent (FYPE) overview

First Year Premium Equivalent (FYPE) 1 NT$ mm, %

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----- Start of picture text -----

% Taiwan Life Industry
QoQ +28.7% -10.8%
YoY +40.1% +39.2%
FYPE
11,584
9,004
7,818
6,233
5,736
3Q15 4Q15 1Q16 2Q16 3Q16
----- End of picture text -----

9M16 FYPE breakdown by channels %

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----- Start of picture text -----

Others,
0.3%
Tied Agent,
24.0%
Bank-CTBC,
30.3%
Brokers,
8.9%
Bank-
Tel-
External,
marketing,
33.5%
3.0%
----- End of picture text -----

9M16 FYPE breakdown by products %

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----- Start of picture text -----

Investment Others,
-Linked, 1.5%
1.1%
Traditional
Life-
Interest Traditional
sensitive, Life-
46.9% Others,
50.1%
Interest
sensitive
annuity,
0.4%
----- End of picture text -----

  1. 2015 are pro-forma numbers which includes CTBC Life and Taiwan Life

23

© CTBC Financial Holding

Life - Investment portfolio breakdown

9M16 total investment portfolio breakdown NT$bn,%

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956.9 1,008.0 1,063.4 1,115.6 Total Investment Asset
2.3%
3.3% 3.3% 2.7%
3.0% Mutual fund
2.3% 4.0% 4.4% 5.2%
2.1% 2.1% 2.0%
4.9%
4.7% 4.5% 4.1%
9.2% 8.0% 7.7% 7.2% Real Estate
Policy loan
Mortgage
50.8%
53.3%
57.6% 58.9%
Equities
Overseas fixed income
20.1% Domestic fixed income
18.1%
1 16.3% 15.4%
7.4% 6.4% 4.2% 4.5% Deposit and cash equivalents
Dec 15 Mar 16 Jun 16 Sep 16
----- End of picture text -----

  1. 2015 is pro-forma number which includes CTBC Life and Taiwan Life

24

© CTBC Financial Holding

CTBC Holding

Financial Review of 3Q16

Appendix

Nov 14[th] , 2016 Investor Relations

DISCLAIMER

THE FINANCIAL INFORMATION IN THESE MATERIALS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30[th] , 2016 ARE PRELIMINARY. CTBC HOLDING EXPECTS TO FILE ITS UNAUDITED FINANCIAL STATEMENTS, WHICH ARE SUBJECT TO REVIEW BY ITS AUDITORS, WITH THE ROC SECURITIES AND FUTURES BUREAU ON OR ABOUT NOVEMBER 29[th] , 2016.

These materials are not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.

26

CTBC Holding’s Summary Ratios

Yearly Results Yearly Results Yearly Results Quarterly results Quarterly results Quarterly results YTD Results
2013 2014 2015 3Q15 4Q15 1Q16 2Q16 3Q161 9M161
Per Share Data (Reported)
EPS (after-tax) (NT$) 1.50 2.58 2.10 0.47 0.62 0.36 0.43 0.50 1.29
DPS (NT$) 0.75 1.62 1.61 - - - - - -
BVPS (NT$) 13.10 15.03 15.39 14.47 15.39 15.87 15.61 16.02 16.02
Common shares outstanding
(million share)		 14,713 15,257 18,028 16,466 18,028 18,028 18,028 18,028 18,028
DuPont Analysis
ROAA (after-tax)
(%,annualized YTD earnings)		 0.95% 1.30% 0.86% 0.79% 0.97% 0.57% 0.66% 0.75% 0.66%
ROAE (after-tax)
(%,annualized YTD earnings)		 11.93% 18.69% 13.97% 13.23% 16.21% 9.32% 10.91% 12.66% 10.98%
Leverage & Solvency Ratios
Double Leverage Ratio (%) 96.5% 105.3% 112.8% 109.6% 112.8% 112.5% 117.6% 117.2% 117.2%
Avg. Equity / Avg. Assets (%) 8.01% 6.29% 5.98% 6.01% 5.98% 6.09% 6.03% 5.94% 5.94%
CAR - FHC (%) 147.2% 156.4% 142.4% 150.9% 142.4% 138.7% 127.3% 130.5% 130.5%
CAR - Bank (%) 11.82% 13.46% 12.98% 12.89% 12.98% 13.15% 13.03% 13.37% 13.37%
Tier 1 Ratio - Bank (%) 9.66% 10.60% 11.02% 10.93% 11.02% 11.05% 11.05% 11.46% 11.46%
CET1 Ratio - Bank (%) 9.01% 9.14% 9.61% 9.10% 9.61% 9.65% 9.70% 10.08% 10.08%
  1. 3Q16 and 9M16 numbers are preliminary.

27

CTBC Bank’s Summary Ratios (Consolidated)

Yearly Results Yearly Results Yearly Results Quarterly Results Quarterly Results Quarterly Results Quarterly Results Quarterly Results YoY Results
2013 2014 2015 3Q15 4Q151 1Q16 2Q16 3Q162 9M162
Bank Growth Ratios 2.95%
35.16%
12.58%
7.63%
12.31%
24.45%
1.23%
82.39%
-0.06%		 6.36%
2.22%
1.45%
1.66%
4.55%
1.25%
50.70%
-17.92%
-13.82%
-1.35%
22.37% 112.17%
-67.70%
44.54%
-11.33%		 11.31%
4.20%
-10.29%
NII growth
Fee growth
Net profit growth
Bank Performance Ratios
Loan growth 13.38%
43.26%
10.35%
13.51%
39.94%
12.87%
77.93%
78.77%
76.68%		 5.66%
0.30%
2.73%
2.12%
0.41%
7.12%
0.95%
0.66%
-1.03%
2.99%
77.20%
76.68%
78.12%
81.10%
78.72%		 5.66%
3.58%
78.72%
Deposit growth
Loan-to-Deposit Ratio
NIM 1.53%
1.50%
1.41%
46.6%
43.7%
46.6%
40.4%
31.8%
37.5%
59.1%
51.5%
55.7%		 1.42%
1.42%
1.43%
1.44%
1.47%
52.8%
37.8%
51.0%
53.2%
52.4%
35.0%
37.0%
40.4%
35.6%
33.2%
53.5%
44.1%
60.0%
58.6%
60.2%		 1.45%
52.2%
36.4%
59.6%
NII / Operating income
Fee / Operating income
Cost-to-income ratio
Asset Quality Ratios
NPLs / Total Loans 0.38%
0.96%
0.78%		 0.78%
0.78%
0.80%
0.73%
0.72%		 0.72%
Reserve / Total Loans3 1.47%
1.58%
1.42%		 1.42%
1.40%
1.44%
1.41%
1.43%		 1.43%
Reserve / NPLs 344.52% 153.66% 168.80%
0.49%
0.18%
0.08%		 168.40% 168.80% 168.15% 185.30% 188.36%
0.26%
0.10%
0.46%
0.16%
0.27%		 188.36%
0.30%
Provision/Avg. Loans &
Revolv. Bal.

  1. CTBC Insurance Brokers merged into CTBC Bank in Nov. 2015 2. 3Q16 and 9M16 numbers are preliminary.

  2. Effective 4Q11, calculation excluding government loan by regulatory definition.

28

Balance Sheet of CTBC Holding and its major subsidiaries as of Se tember 30 2016[1 ] p ,

NT$ million CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)		 CTBC Bank
(consolidated)
Taiwan Life
CTBC
Securities
CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others2&
Adjustment
Items
CTBC Holding
(consolidated)
Assets:
Cash and due from banks
357,140		 42,079 1,268 3,538 109 469 225 (17,651) 387,176
Securities, net 855,347 925,397 14,106 1,044 3,292 - 3,198 41 1,802,425
Loans, net 2,118,286 68,358 - - - - - - 2,186,643
A/R, net
LT investments, net
Land, premises and
equipments, net		 110,290 17,381 3,091 7,012 22 486 413 (959) 137,736
2,306 15,347 - - - - 338,213 (338,162) 17,704
50,776 15,443 169 11 6 153 85 25 66,670
Others 109,093 132,297 3,863 2,363 1,854 98 422 587 250,577
Total assets 3,603,237 1,216,303 22,498 13,967 5,282 1,206 342,556 (356,118) 4,848,930
Liabilities:
Deposits 2,805,653 - - - - - - (19,205) 2,786,448
Other liabilities 547,260 1,143,245 15,191 8,578 34 189 53,718 5,340 1,773,555
Total liabilities 3,352,913 1,143,245 15,191 8,578 34 189 53,718 (13,866) 4,560,003
Minority interests 84 - - - - - - 6 90
Total stockholders' equity 250,240 73,057 7,307 5,389 5,248 1,016 288,838 (342,258) 288,838
Total liabilities and
stockholders' equity		 3,603,237 1,216,303 22,498 13,967 5,282 1,206 342,556 (356,118) 4,848,930

  1. These numbers are preliminary.

  2. Others include Securities Investment Trust Co.

29

P&L of CTBC Holding and its subsidiaries for the year ended September 30, 2016[1]

NT$ million CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)		 CTBC Bank
(consolidated)2
Taiwan Life
CTBC
Securities CTBC AMC
CTBC
Capital
Taiwan
Lottery
CTBC Holding
(non-
consolidated)
Others3&
Adjustment
Items
CTBC Holding
~~(~~consolidated)
Operating income
Net interest income
Fee income		 35,351 26,237 73 390 - 1 (348) 1 61,706
24,624 (10,931) 341 - - 1,235 - (1,143) 14,127
Insurance business income, net
of reserves, claims, payments, etc.4		 - (14,112) - - - - - 303 (13,809)
LT investment income
Net trading income/(loss)
Derivatives & FX
Others5		 69 156 - - - - 24,117 (24,113) 230
921 7,056 406 18 372 - 56 - 8,829
7,881 (5,219) 107 (92) (1) - (2) (1) 2,674
(1,122) 5,767 29 68 45 4 9 (224) 4,576
Total operating income 67,725 8,955 956 384 416 1,240 23,833 (25,177) 78,333
Operating costs
Business tax		 (38,011) (3,368) (609) (273) (64) (777) (714) 1,349 (42,467)
(2,357) (152) (71) (2) - - - (4) (2,585)
Total operating costs (40,368) (3,520) (680) (275) (64) (777) (714) 1,346 (45,052)
Credit Loss Provisions, net (4,758) (55) - (53) - - - - (4,866)
Profit Before Income Tax 22,598 5,381 276 57 352 463 23,119 (23,831) 28,415
Net Profit After Income Tax
6		 17,601 5,426 5 48 366 381 23,329 (23,827) 23,329

  1. These numbers are preliminary.

  2. CTBC Insurance Brokers merged into CTBC Bank in Nov. 2015.

  3. Others include Securities Investment Trust Co.

  4. Includes premium income, insurance claims & payment, insurance reserve, reinsurance expense, underwriting expense and other expense

  5. Includes CTBC Life’s foreign exchange reserve

  6. Net profit after Income Tax is excluding Minority Interest Income.

30

CTBC Holding’s Balance Sheet (Consolidated)

NT$ million 2013
2014
2015
Sep 15
Dec 15
Mar 16
Jun 16
Sep 161
QoQ(%) YoY(%)
Yearly Results
Quarterly Results
Assets:
Cash and due from banks
Securities, net
Loans, net
A/R, net
LT investments, net
Land, premises and
equipments, net
Others
Total assets		 240,287
407,940
516,280
433,716
516,280
532,055
423,749
387,176
-8.6%
-10.7%
572,930 1,003,415 1,480,631
1,125,251 1,480,631 1,511,260
1,638,720
1,802,425
10.0%
60.2%
1,284,855 1,838,176 2,080,162
2,028,596 2,080,162 2,135,191
2,179,824
2,186,643
0.3%
7.8%
174,019
191,218
170,296
163,252
170,296
151,407
175,377
137,736
-21.5%
-15.6%
2,077
2,073
16,321
2,557
16,321
16,416
17,268
17,704
2.5% 592.3%
38,348
43,379
64,495
49,831
64,495
64,027
64,638
66,670
3.1%
33.8%
112,205
168,479
268,042
221,889
268,042
249,412
255,763
250,577
-2.0%
12.9%
2,424,720 3,654,680 4,596,227
4,025,091 4,596,227 4,659,768
4,755,339
4,848,930
2.0%
20.5%
Liabilities:
Deposits
Other liabilities
Total liabilities
Minorityinterests		 1,725,349 2,410,680 2,699,802
2,693,046 2,699,802 2,728,517
2,707,157
2,786,448
2.9%
3.5%
506,525 1,014,561 1,618,830
1,093,629 1,618,830 1,645,116
1,766,658
1,773,555
0.4%
62.2%
2,231,874 3,425,241 4,318,633
3,786,675 4,318,633 4,373,633
4,473,815
4,560,003
1.9%
20.4%
77
87
87
83
87
89
91
90
-1.3%
8.1%
Total stockholders' equity 192,770
229,353
277,507
238,333
277,507
286,046
281,433
288,838
2.6%
21.2%
Total liabilities and
stockholders' equity		 2,424,720 3,654,680 4,596,227
4,025,091 4,596,227 4,659,768
4,755,339
4,848,930
2.0%
20.5%
  1. Sep 16 number is preliminary.

31

CTBC Holding’s P&L (Consolidated)

NT$ million
Operating Income
Net interest income
Fee income
Insurance business income, net of
reserves, claims & payments, etc.2
Long term investment income
Trading income (loss) - equity, MTM
Trading income (loss) - FI , MTM
Derivatives & FX
Other income (loss)3
OperatingRevenue
Non interest expenses
Operating expenses
Business tax
Total non-interest expenses
Credit lossprovisions,net
Netprofit before income tax
Net profit after income tax4		 3Q15
4Q15
1Q16
2Q16
3Q161
QoQ %
9M15
9M161
YoY %
14,316
18,384
19,719
20,432
21,556
5.5%
40,768
61,706
51.4%
6,273
6,017
5,997
4,387
3,743
-14.7%
19,534
14,127
-27.7%
(615)
(4,520)
(3,550)
(5,184)
(5,075)
2.1%
(470)
(13,809)
-2839.4%
39
26
61
69
100
43.5%
48
230
377.4%
675
478
844
1,377
3,356
143.6%
3,158
5,578
76.6%
(1,877)
399
(259)
1,317
2,194
66.6%
2,419
3,252
34.4%
3,857
(511)
2,285
912
(523)
-157.3%
6,251
2,674
-57.2%
27
6,489
562
1,409
2,606
85.0%
(625)
4,576
832.4%
22,695
26,763
25,658
24,718
27,956
13.1%
71,083
78,333
10.2%
(10,898)
(13,771)
(13,712)
(13,721)
(15,034)
9.6%
(37,780)
(42,467)
12.4%
(944)
(922)
(896)
(842)
(847)
0.6%
(2,819)
(2,585)
-8.3%
(11,842)
(14,692)
(14,608)
(14,564)
(15,881)
9.0%
(40,599)
(45,052)
11.0%
(1,445)
(667)
(2,483)
(898)
(1,485)
65.5%
(838)
(4,866)
480.7%
9,408
11,404
8,568
9,257
10,590
14.4%
29,646
28,415
-4.2%
7,723
10,452
6,565
7,738
9,026
16.7%
24,946
23,329
-6.5%
QuarterlyResults
YTD Results

  1. 3Q16 and 9M16 number are preliminary.

  2. Includes premium income, insurance claims & payment, insurance reserve, reinsurance expense, underwriting expense and other expense

  3. Includes CTBC Life’s foreign exchange reserve

  4. Net profit after Income Tax is excluding Minority Interest Income

32

CTBC Bank’s Balance Sheet (Consolidated)

Yearly Results Quarterly Results
NT$ million 2013
2014
2015		 Sep 15
Dec 15
Mar 16
Jun 16
Sep 161		 QoQ(%)
YoY(%)
Assets:
Cash and due from banks
Securities, net
Loans, net
A/R, net
LT investments, net
Land, premises and
equipments, net
Others		 209,557
383,323
483,210
404,270
691,066
677,071
1,272,381 1,820,196 2,011,474
166,685
176,867
147,663
2,022
2,011
2,220
34,229
42,819
49,744
66,200
118,892
147,835		 415,375
483,210
497,997
388,700
357,140
739,114
677,071
661,034
729,382
855,347
2,005,504 2,011,474 2,065,883 2,109,763 2,118,286
148,435
147,663
125,957
146,549
110,290
1,821
2,220
2,291
2,268
2,306
49,159
49,744
50,024
50,312
50,776
157,151
147,835
120,634
129,236
109,093		 -8.1%
-14.0%
17.3%
15.7%
0.4%
5.6%
-24.7%
-25.7%
1.7%
26.6%
0.9%
3.3%
-15.6%
-30.6%
Total assets 2,155,344 3,235,173 3,519,218 3,516,560 3,519,218 3,523,821 3,556,211 3,603,237 1.3%
2.5%
Liabilities:
Deposits
Other liabilities		 1,731,169 2,422,627 2,734,384
277,253
615,852
551,342		 2,708,672 2,734,384 2,752,339 2,724,118 2,805,653
588,169
551,342
532,269
584,785
547,260		 3.0%
3.6%
-6.4%
-7.0%
Total liabilities
Minority interests
Total stockholders' equity		 2,008,422 3,038,480 3,285,726
71
81
81
146,851
196,613
233,411		 3,296,841 3,285,726 3,284,608 3,308,903 3,352,913
77
81
83
85
84
219,643
233,411
239,130
247,223
250,240		 1.3%
1.7%
-1.4%
8.6%
1.2%
13.9%
Total liabilities and
stockholders' equity		 2,155,344 3,235,173 3,519,218 3,516,560 3,519,218 3,523,821 3,556,211 3,603,237 1.3%
2.5%
  1. Sep 16 number is preliminary.

33

CTBC Bank’s P&L (Consolidated)

NT$ million
Operating Income
Net interest income
Fee income
Long term investment income
Trading income (loss) -equity,MTM
Trading income (loss) - FI , MTM
Derivatives & FX
Other income (loss)
Operating Revenue
Non interest expenses
Operating expenses
Business tax
Total non-interest expenses
Pre-provision profit
Credit loss provisions, net
Net profit before income tax
Net profit after income tax
3		 3Q15
4Q151
1Q16
2Q16
3Q162
QoQ(%)
9M15
9M162
YoY (%)
11,070
11,316
11,479
11,670
12,201
4.6%
31,758
35,351
11.3%
7,341
11,062
9,080
7,825
7,720
-1.3%
23,633
24,624
4.2%
41
25
19
23
27
15.5%
64
69
8.6%
91
88
69
128
346
170.7%
429
543
26.6%
(1,352)
312
(717)
451
644
42.7%
1,157
378
-67.4%
3,395
194
3,323
2,062
2,496
21.0%
5,980
7,881
31.8%
382
6,901
(755)
(209)
(158)
24.0%
(469)
(1,122)
-139.3%
20,967
29,898
22,498
21,951
23,275
6.0%
62,552
67,725
8.3%
(10,366) (12,096) (12,709) (12,084) (13,219)
9.4% (35,925) (38,011)
5.8%
(843)
(1,079)
(791)
(782)
(784)
0.2%
(2,402)
(2,357)
-1.9%
(11,209) (13,175) (13,500) (12,866) (14,002)
8.8% (38,327) (40,368)
5.3%
9,758
16,723
8,998
9,085
9,273
2.1%
24,224
27,356
12.9%
(1,349)
(513)
(2,423)
(871)
(1,465)
68.2%
(646)
(4,758)
636.9%
8,409
16,211
6,576
8,214
7,808
-4.9%
23,579
22,598
-4.2%
6,891
14,621
4,723
6,826
6,052
-11.3%
19,619
17,601
-10.3%
Quarterly Results
YTD Results

  1. CTBC Insurance Brokers merged into CTBC Bank in Nov. 2015.

  2. 3Q16 and 9M16 numbers are preliminary.

  3. Net profit after Income Tax is excluding Minority Interest Income.

34

CTBC Bank’s Loan Breakdown (Consolidated)

NT$ million Yearly Results Sep 15
Dec 15
Mar 16
Jun 16
Sep 161
QoQ (%)
YoY (%)
Quarterly Results
2013
2014
2015
Corporate NTD loans
Manufacturing
Commerce & services
Government & Non-prof. Org.
Construction & real estate
Finance & insurance
Others
Sub-total
Foreign currency loans
Retail loans
Mortgages
Unsecured loans
Other loans2
Sub-total
Non-accrual account
Total loans		 127,894
141,609
137,547
35,014
52,541
48,107
133,443
125,975
156,831
41,867
43,371
54,873
31,076
33,912
36,607
78,077
80,701
92,938
447,371
478,110
526,904
370,245
871,758
918,547
360,320
363,754
449,872
95,717
102,023
105,776
11,152
16,069
22,492
467,189
481,846
578,140
4,678
15,618
14,910
1,289,482 1,847,332 2,038,501		 147,838
137,547
133,868
136,436
137,402
0.7%
-7.1%
49,279
48,107
55,188
53,492
53,703
0.4%
9.0%
162,695
156,831
161,908
122,162
121,121
-0.9%
-25.6%
51,588
54,873
56,593
60,423
58,386
-3.4%
13.2%
36,667
36,607
38,116
43,500
41,628
-4.3%
13.5%
92,451
92,938
94,484
99,~~6~~33
102,385
2.8%
10.7%
540,518
526,904
540,157
515,645
514,625
-0.2%
-4.8%
935,223
918,547
953,614 1,001,623
999,110
-0.3%
6.8%
416,181
449,872
459,641
482,136
506,294
5.0%
21.7%
104,323
105,776
104,661
106,044
106,492
0.4%
2.1%
21,616
22,492
20,408
18,487
16,731
-9.5%
-22.6%
542,121
578,140
584,711
606,668
629,517
3.8%
16.1%
14,459
14,910
15,666
14,595
4,133
-71.7%
-71.4%
2,032,321 2,038,501 2,094,147 2,138,532 2,147,384
0.4%
5.7%

  1. Sep 16 number is preliminary.

  2. Other loans include car loans under repurchase agreement, car loans and small business loans.

35

CTBC Bank’s Deposit Breakdown (Consolidated)

NT$ million
Deposits		 2013
2014
2015
Sep 15
Dec 15
Mar 16
Jun16
Sep161
QoQ(%) YoY (%)
Quarterly Results
Yearly Results
Checking & demand deposits
Saving deposits
Sub-total
Time & savings
Time deposits (incl. CD)
Time saving deposits
Sub-total
Remittances
Foreign currency deposits
Total deposits		 154,617
156,255
197,951
186,033
197,951
172,230
169,987
172,566
1.5%
-7.2%
483,059
529,451
590,649
586,829
590,649
611,010
599,384
631,177
5.3%
7.6%
637,676
685,706
788,601
772,862
788,601
783,239
769,371
803,743
4.5%
4.0%
235,292
206,263
217,214
270,296
217,214
215,363
197,624
216,183
9.4%
-20.0%
313,555
357,349
411,298
400,844
411,298
423,527
425,796
426,895
0.3%
6.5%
548,847
563,612
628,512
671,139
628,512
638,890
623,420
643,078
3.2%
-4.2%
745
1,363
749
1,645
749
834
1,632
891
-45.4%
-45.8%
543,901
1,171,946
1,316,521
1,263,025
1,316,521
1,329,375
1,329,695
1,357,941
2.1%
7.5%
1,731,169
2,422,627
2,734,384
2,708,672
2,734,384
2,752,339
2,724,118
2,805,653
3.0%
3.6%
  1. Sep 16 number is preliminary.

36

CTBC Bank’s Spread (Consolidated)

%
NTD
Lending rate
Deposit rate
NTD spread2
Foreign currency
Lending rate
Deposit rate
Foreign currencyspread2
NTD & foreign currency
Lending rate
Deposit rate
Overall spread2		 3Q15
4Q15
1Q16
2Q16
3Q161
9M15
9M161
2.25%
2.20%
2.16%
2.11%
2.07%
2.29%
2.12%
0.65%
0.61%
0.56%
0.51%
~~0~~.46%
0.66%
0.51%
1.60%
1.59%
1.60%
1.60%
1.62%
1.63%
1.61%
2.83%
2.83%
2.86%
2.77%
2.77%
2.81%
2.80%
0.57%
0.56%
0.58%
0.49%
0.45%
0.65%
0.51%
2.25%
2.28%
2.28%
2.28%
2.32%
2.16%
2.30%
2.51%
2.49%
2.48%
2.42%
2.40%
2.53%
2.43%
0.61%
0.58%
0.57%
0.50%
0.45%
0.65%
0.51%
1.90%
1.91%
1.91%
1.92%
1.95%
1.88%
1.93%
Quarterly Results
YTD Results
NIM 1.42%
1.42%
1.43%
1.44%
1.47%
1.40%
1.45%

  1. 3Q16 and 9M16 numbers are preliminary.

  2. Credit card receivables are excluded in the calculation of NTD, foreign currency, and overall loan spread, and is included in the calculation of NIM.

37

CTBC Bank’s Asset Quality (Consolidated)

(NT$mm) 2013
2014
2015
Yearly Results		 3Q15
4Q15
1Q16
2Q16
3Q161
QoQ(%)
9M15
9M161
YoY (%)
Quarterly Results
YTD Results
90-days NPLs - beginning
New NPL influx, net of recovery
& others
Write-offs & other deductions
90-days NPLs - ending
Provisions for credit loss
Provision for loan loss, net
Provision for credit card loss, net
Others,net
Totalprovisions
Total reserves		 4,715
4,964
17,659
3,255
16,567
630
(3,006)
(3,871)
(2,278)
4,964
17,659
16,011
5,867
3,268
1,037
(673)
(519)
(358)
985
289
479
6,179
3,038
1,158
17,101
27,136
27,027		 14,854 15,924 16,011 16,809 15,525
-7.6%
17,659
16,011
-9.3%
733
560
679
(1,269)
1,064
183.9%
69
474
582.2%
337
(473)
119
(15) (1,141)
7347.2%
(1,805)
(1,037)
-42.5%
15,924 16,011 16,809 15,525 15,448
-0.5%
15,924
15,448
-3.0%
1,056
527
1,160
689
1,321
91.6%
509
3,170
522.1%
(85)
(41)
(92)
(49)
(37)
24.7%
(316)
(177)
43.9%
378
27
1,354
231
181
-21.5%
452
1,766
290.3%
1,349
513
2,423
871
1,465
68.2%
646
4,758
636.9%
26,817 27,027 28,264 28,768 29,098
1.1%
26,817
29,098
8.5%
90-day NPL ratio 2013
2014
2015
Yearly Results		 3Q15
4Q15
1Q16
2Q16
3Q161
QoQ
(bp;pp)
9M15
9M161
YoY
(bp;pp)
Quarterly Results
YTD Results
Corporate NPL ratio2
Retail NPL ratio
Overseas Subsidiaries NPL ratio
Total NPL ratio		 0.46%
0.29%
0.41%
0.17%
0.13%
0.12%
1.01%
2.84%
2.10%
0.38%
0.96%
0.78%		 0.33%
0.41%
0.48%
0.47%
0.46%
-1bp
0.33%
0.46%
13bp
0.12%
0.12%
0.12%
0.11%
0.13%
2bp
0.12%
0.13%
1bp
2.22%
2.10%
1.97%
1.68%
1.68%
0bp
2.22%
1.68%
-53bp
0.78%
0.78%
0.80%
0.73%
0.72%
-1bp
0.78%
0.72%
-6bp

  1. Sep 16 and 9M16 number is preliminary.

  2. Corporate NPL ratio excludes overseas subsidiaries NPL

38

Life Insurance’s P&L

Life Insurance’s P&L
NT$mm, %
3Q15
4Q15
1Q16
2Q16
3Q16
QoQ%
Retained earned premium
29,603
34,311
56,751
56,046
61,013
8.9%
Retained claims and policyholders' benefits
(4,513)
(5,786) (10,646) (10,857)
(9,612)
11.5%
Changes in liabilities reserves
(25,727) (29,603) (49,812) (50,527)
(56,618)
-12.1%
Commission expense
(2,359)
(2,595)
(3,693)
(4,034)
(4,578)
-13.5%
Total investment
3,443
3,276
9,331
11,218
13,289
18.5%
Interest income
3,171
3,323
8,184
8,681
9,302
7.2%
Net trading income/(loss)
(5,851)
356
9,471
3,363
15,406
358.1%
FX()
6,446
(522)
(8,541)
(1,052)
(12,281) -1067.8%
FX Reserve
(327)
114
286
195
825
323.6%
Rental from Real Estate
4
5
12
117
126
7.9%
Others
-
-
(81)
(86)
(90)
-5.2%
Others
254
198
556
341
330
-3.2%
Marketing, administrative and general expenses
(481)
(744)
(1,031)
(1,000)
(1,076)
-7.7%
Net profit before Tax
218
(944)
1,457
1,188
2,748
131.4%
Net profit after Tax
250
(796)
1,341
1,033
3,052
195.6%
Quarterly Results*		 YTD Results
9M15
9M16
YoY%
88,254
173,810
96.9%
(11,095)
(31,115) -180.4%
(77,635) (156,956) -102.2%
(8,035)
(12,305)
-53.1%
12,426
33,838
172.3%
8,720
26,168
200.1%
(418)
28,240 6861.6%
4,543
(21,874)
-581.5%
(431)
1,306
403.5%
11
255 2183.4%
-
(256)
na
703
1,227
74.5%
(1,552)
(3,107) -100.2%
3,065
5,393
76.0%
2,756
5,426
96.9%

Note: 1.The numbers in Year 2015 were CTBC life only due to the reverse acquisition accounting 2.The numbers in Year 2016 are on a standalone basis

39

Life Insurance’s Premium Performance

NT$mm, % Quarterly Results Quarterly Results Quarterly Results YTD Results YTD Results
Total Premium Breakdown by Products 3Q15 4Q15 1Q16 2Q16 3Q16 QoQ% 9M15 9M16 YoY%
Traditional_Single paid 11,663 16,837 20,822 20,204 21,553 6.7% 34,498 62,578 81.4%
Traditional_Regular paid 26,390 28,055 33,240 33,274 35,986 8.1% 83,825 102,501 22.3%
Interest Sensitive Annuity 14 132 224 97 721 644.6% 41 1,042 2434.1%
Investment Linked 4,422 2,342 1,330 1,456 1,343 -7.7% 13,048 4,130 -68.4%
Health, PA and Others 3,302 3,636 2,997 3,128 3,370 7.7% 9,075 9,495 4.6%
Total Premium 45,790 51,002 58,614 58,159 62,973 8.3% 140,487 179,745 27.9%
First Year Premium Breakdown by Products 3Q15 4Q15 1Q16 2Q16 3Q16 QoQ% 9M15 9M16 YoY%
Traditional_Single paid 11,663 16,827 20,807 20,204 21,553 6.7% 34,497 62,563 81.4%
Traditional_Regular paid 4,997 5,206 7,792 9,387 11,881 26.6% 22,764 29,060 27.7%
Interest Sensitive Annuity 14 132 224 96 720 647.2% 41 1,041 2431.5%
Investment Linked 3,542 1,649 710 808 694 -14.1% 10,589 2,211 -79.1%
Health,PA and Others 541 495 431 461 414 -10.0% 1,538 1,306 -15.1%
Total First Year Premium 20,757 24,308 29,964 30,955 35,262 13.9% 69,429 96,181 38.5%
First Year Premium Breakdown by Channels 3Q15 4Q15 1Q16 2Q16 3Q16 QoQ% 9M15 9M16 YoY%
Bank_CTBC 8,506 9,498 9,943 10,559 8,848 -16.2% 27,257 29,349 7.7%
Bank_External 6,166 8,190 10,727 10,790 16,100 49.2% 23,650 37,616 59.1%
Tele-Marketing 430 382 326 292 242 -17.2% 1,412 861 -39.0%
Brokers 1,929 2,872 3,030 2,929 4,507 53.9% 5,509 10,467 90.0%
Tied Agent 3,668 3,356 5,846 6,274
 5,455 -13.0% 11,400 17,576 54.2%
Others 57 10 92 111 110 -1.3% 201 312 55.6%
Total First Year Premium 20,757 24,308 29,964 30,955 35,262 13.9% 69,429 96,181 38.5%
First Year Premium Equivalent(FYPE) 5,737 6,233 7,818 9,004 11,584 28.7% 20,269 28,407 40.1%

Note: The numbers in Year 2015 were pro-forma basis, including CTBC Life and Taiwan Life

40

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