FEIB - AGM Information 2018 | FinancialReports.eu

Handbook for 2018 Annual Shareholders' Meeting

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Date：June 20, 2018 Place：Auditorium of the Taipei Hero House No.20, Changsha Street, Section 1, Taipei, Taiwan

Handbook for 2018Annual Shareholders’ Meeting

Contents	Contents
Report Items (Non-Voting Items) ................................................................ 5
1.	2017 Business Report .......................................................................... 5
2.	2017 Financial Statements ................................................................... 5
3.	Audit Committee’s Review Report for 2017 Business Report and
	Financial Statements .............................................................................. 5
4.	2017 Summary of Employees’ Compensation and Directors’
	Remuneration ......................................................................................... 5
5.	Amendments to “Codes of Ethical Conduct of Far Eastern
	International Bank” ............................................................................... 5
Approval Items (Voting Items) .................................................................... 6
1.	2017 Business Report and Financial Statements ................................. 6
2.	Proposal of 2017 Earnings Distribution .................................................. 7
Proposed Resolutions and Directors Election (Voting Items) ................. 8
1.	Amendments to “Articles of Incorporation of Far Eastern International
	Bank” ...................................................................................................... 8
2.	Proposal of Issuing New Shares – to Capitalize Shareholder
	Dividends .............................................................................................. 9
3.	Proposal of Private Placement - to Issue Common Shares, Preferred
	Shares, Convertible Bonds or a Combination of above Securities to
	Specific Parties ..................................................................................... 10
4.	Election of Directors (Including Independent Directors) ........................ 12
5.	Waiver of Non-Competition Binding to Directors ................................... 13
Questions and Motions (Voting Items) ...................................................... 13
Attachments ................................................................................................. 14
I	2017 Business Report ........................................................................ 14
II	Independent Auditors’ Report & 2017 Financial Statements ............... 20

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III	Audit Committee’s Review Report for 2017 Business Report and
	Financial Statements .......................................................................... 46
IV	2017 Summary of Employees’ Compensation and Directors’
	Remuneration ....................................................................................... 47
V	Amendments to “Codes of Ethical Conduct of Far Eastern
	International Bank” .............................................................................. 48
VI	Amendments to “Articles of Incorporation of Far Eastern
	International Bank” ............................................................................... 49
VII	List of Director Candidates ................................................................... 57
VIII	Current Shareholding of Directors and Independent Directors ............. 61
IX	Impact of Stock Dividends Distribution on Operating Results,
	Earnings per Share and Shareholders’ Return on Investment ............. 62
General Information ..................................................................................... 63
I	Articles of Incorporation of Far Eastern International Bank .................. 63
II	Rules Governing Conduct of Shareholders’ Meeting of Far
	Eastern International Bank ................................................................... 73
III	Guidelines for Electing Directors of Far Eastern International Bank ..... 77

Handbook for 2018Annual Shareholders’ Meeting

Far Eastern International Bank (FEIB)

2018 Annual Shareholders’ Meeting (Translation)

Date: Wednesday, June 20, 2018

Time: 9:00 a.m., Taipei time

Place: Auditorium of Taipei Hero House, No. 20, Changsha Street, Section 1, Taipei, Taiwan

Meeting Agenda

Meeting begins

Chairperson takes the position

Chairperson makes remarks

Report Items (Non-Voting Items)

2017 Business Report
2017 Financial Statements
Audit Committee’s Review Report for 2017 Business Report and Financial Statements
2017 Summary of Employees’ Compensation and Directors’ Remuneration
Amendments to “Codes of Ethical Conduct of Far Eastern International Bank”

Approval Items (Voting Items)

2017 Business Report and Financial Statements
Proposal of 2017 Earnings Distribution

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Proposed Resolutions and Directors Election (Voting Items)

Amendments to “Articles of Incorporation of Far Eastern International Bank”
Proposal of Issuing New Shares - to Capitalize Shareholder Dividends
Proposal of Private Placement - to Issue Common Shares, Preferred Shares, Convertible Bonds or a Combination of above Securities to Specific Parties
Election of Directors (Including Independent Directors)
Waiver of Non-Competition Binding to Directors

Questions and Motions (Voting Items)

Meeting adjourned

The English version is the translation of the Chinese version and the Chinese version shall prevail, if any discrepancy.

Handbook for 2018Annual Shareholders’ Meeting

Report Items (Non-Voting Items)

1. 2017 Business Report

The 2017 business report is detailed in Attachment I.

2. 2017 Financial Statements

The 2017 financial statements and the independent auditors’ report by Deloitte & Touche are detailed in Attachment II. (The 2017 financial statements are available for access at http://mops.twse.com.tw)

3. Audit Committee’s Review Report for 2017 Business Report and Financial Statements

The Audit Committee’s review report is detailed in Attachment III.

4. 2017 Summary of Employees’ Compensation and Directors’ Remuneration

The 2017 summary of employees’ compensation and directors’ remuneration is detailed in Attachment IV.

5. Amendments to “Codes of Ethical Conduct of Far Eastern International Bank”

The summary table of “Codes of Ethical Conduct of Far Eastern International Bank” before and after amendments is detailed in Attachment V.

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Approval Items (Voting Items)

1. 2017 Business Report and Financial Statements

The Board of Directors recommends shareholders vote FOR 2017 business report and financial statements.

Explanatory Notes:

i. The Audit Committee has reviewed the business report and the audited financial statements (by Shih-Tsung Wu, CPA, and Chen-Hsiu Yang, CPA, of Deloitte & Touche) of the Bank for the year ended 2017 and found them acceptable.
ii. The 2017 business report, the independent auditors’ report & 2017 financial statements, and Audit Committee’s review report are detailed in Attachment I, II, and III.
iii. Please vote FOR.

Resolutions:

Handbook for 2018Annual Shareholders’ Meeting

2. Proposal of 2017 Earnings Distribution

The Board of Directors recommends shareholders vote FOR 2017 earnings distribution.

Explanatory Notes:

i. The Bank’s 2017 earnings distribution is as follows: (Unit: NT$)

The Bank’s 2017 earnings distribution is as follows:	(Unit: NT$)
Unappropriated earnings - beginning Adjustment on retained earnings for remeasurement of defined benefit plans Adjustment on retained earnings for investment under equity method Adjusted unappropriated earnings Net income Legal reserve Reverse of special reserve Distributable earnings Earnings distribution: Shareholder dividends Unappropriated earnings - ending	791,606,068 46,337,000 (414,613)
	837,528,455 2,853,883,694 (856,165,108) 214,291,960
	3,049,539,001 2,259,879,312
	789,659,689

ii. Shareholder dividends are allocated as follows: (Unit: NT$)

Cash dividends Stock dividends Total	Per share 0.439 0.271 0.710	Total amount
		1,397,305,662 862,573,650
		2,259,879,312

2017 net income will be distributed with priority. The cash dividends to each and every shareholder shall be paid in a whole amount of New Taiwan Dollars and any fraction of one New Taiwan Dollar shall be discarded. The total unpaid odd amount will be included in “other revenues” of the Bank.

iii. Dividends will be distributed on the ex-dividend (ex-right) date which is to be determined by the Board of Directors after 2018 annual shareholders’ meeting. Dividends per share as referred above is calculated based on the number of shares outstanding on December 31, 2017. The Board of Directors is authorized to adjust cash and stock dividends payout ratio within the total dividends amount, if the actual number of shares outstanding on the ex-dividend (ex-right) date differs from the estimated number of shares.

iv. Please vote FOR.

Resolutions:

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Proposed Resolutions and Directors Election (Voting Items)

1. Amendment to “Articles of Incorporation of Far Eastern International Bank”

The Board of Directors recommends shareholders vote FOR the amendments to the Bank’s Articles of Incorporation.

Explanatory Notes:

i In preparing for future capital market transaction needs, article 4-1 of the Bank’s Articles of Incorporation is amended for the rights, obligations, and other important terms and conditions of preferred shares.
ii To specify dividends policy of the Bank, article 25-1 of the Bank’s Articles of Incorporation is amended.

iii A summary table of articles before and after amendments is detailed in Attachment VI. iv Please vote FOR.

Resolutions:

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2. Proposal of Issuing New Shares - to Capitalize Shareholder Dividends

The Board of Directors recommends shareholders vote FOR capitalization of 2017 stock dividends.

Explanatory Notes:

i. Capitalization purpose and funding sources: In order to support business needs, enhance operational capital and improve capital structure, capitalization of NT$862,573,650 shareholder dividends from 2017 earnings distribution is proposed by issuing 86,257,365 new shares at par of NT$10 per share.
ii. Allotment method: The 86,257,365 new shares are distributed in accordance with the shareholding record in the shareholder’s registrar on the dividend ex-right date, that is, 27.1 shares per thousand shares. For odd share, two or more shareholders may, within the specified period of time, consolidate each of their respective odd shares into a round number of shares for one person’s shareholding only. For any odd shares that are not consolidated before the deadline, or are still remaining after consolidation, cash will be distributed based on the par value of the shares (rounded up to dollars). The total accumulated odd shares will be subscribed at par by specific parties arranged by the Chairman. The rights and obligations of new shares are the same as those of existing shares.
iii. The distributable dividends shares as referred above are estimated based on the number of shares outstanding on December 31, 2017. The Board of Directors is authorized to adjust stock dividends payout ratio within the total dividends amount if the actual number of shares outstanding on the ex-right date differs from the estimated number of shares.
iv. The ex-right date of stock dividends (same as the effective date of issuing new shares) will be determined by the Board of Directors after 2018 annual shareholders’ meeting.
v. Please vote FOR.

Resolutions:

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3. Proposal of Private Placement - to issue Common Shares, Preferred Shares, Convertible Bonds or a Combination of above Securities to Specific Parties

The Board of Directors recommends shareholders vote FOR issuing of common shares, preferred shares, convertible bonds or a combination of above securities to specific parties for a total amount of not exceeding NT$10 billion or equivalent in foreign currencies.

Explanatory Notes:

i. The Bank’s Board of Directors was authorized in annual shareholders’ meeting on June 15, 2017 to proceed private placement for a total amount of not exceeding NT$10 billion or equivalent in foreign currencies. This proposal herein is to request extension of last shareholders’ meeting approval for another year.
ii. The purpose of private placement is to seek alliance opportunities with domestic or foreign strategic investors, to strengthen the Bank’s financial structure and capital adequacy ratio, and to facilitate the Bank’s long-term development. The preferred shares, if any, are to be issued according to Article 4-1 of the Bank’s Articles of Incorporation.
iii. According to Article 43-6 of the “Securities and Exchange Act”, the disclosure of private placement shall include:
(i) The basis and justification of the pricing:
1. The issuing price of common shares shall be no less than 80% of the reference price, which is the higher of the following two basis prices:
  - (1) The simple averaged closing price of 1, 3 or 5 business days prior to the pricing date, minus dividends, plus price adjusted for capital reduction.
  - (2) The simple averaged closing price of 30 business days prior to the pricing date, minus dividends, plus price adjusted for capital reduction.
2. The issuing price of preferred shares and convertible bonds shall be no less than 80% of the theoretical price, which is the price determined by an applicable pricing model considering all the terms in the issuing.
3. The pricing date and actual issuing price, as reference above, will be determined subject to market conditions and terms, and discussion with specific parties. If the issuing price is below the par value of common shares and results in cumulative losses to the Bank, the Bank may, subject to operation status then, decapitalize capital base, reverse retained earnings or capital surplus to make up the losses.
4. The pricing of private placement, as determined by following government regulation, the reference price or theoretical price as above, and considering the 3-year lock-up period per requirement of the Securities and Exchange Act, is deemed reasonable.
(ii) The selection, purpose, essentiality and benefits of allying with the specific parties:
1. The selection and purpose: The selection is based on the qualification criteria specified in Article 43-6 of the “Securities and Exchange Act” to invite those strategic investors who are able to assist the Bank expanding sales channels, growing market shares, improving service quality, and reducing operation costs.

Handbook for 2018Annual Shareholders’ Meeting

  2. Essentiality: In responding to the global trend of financial supervision, the investment from the specific parties is deemed essential in improving the Bank’s capital adequacy and risk-taking capacity under Basel III, and supporting the Bank’s long-term development.

  3. Benefits: The Bank’s competitiveness and profitability will be enhanced via system support and management participation of the specific parties.

(iii) The essentiality justification of private placement:
1. The justification of not public offering: In considering speed and cost of transaction execution, public offering is not recommended. Plus, public offering is less feasible in attracting strategic investors for long-term business cooperation relationship, which nonetheless will be more secured by the 3-year lock-up period per regulation of private placement.
2. The amount of private placement: Within the limit of NT$10 billion or equivalent in foreign currencies, the amount of private placement could be raised by one or two tranches, within the period of 1 year from the shareholders’ meeting date, subject to market conditions and transaction progress with the specific parties.
3. Capital usage plan and anticipated benefits: The capital amount raised through one or two tranches of transaction will be used for expanding the Bank’s business scale and for pursuing strategic alliance opportunities domestically or in overseas. The anticipated benefits will include strengthening of the Bank’s competitiveness, profitability, capital adequacy, and shareholders’ equity.
iv. The Board of Directors is authorized to determine key terms of private placement, including number of new shares, pricing, terms and conditions, specific parties’ selection, capitalraising effective date, capital usage plan, anticipated benefits, and all other related matters. The Board of Directors is also authorized to revise the issuance plan due to changes of regulations, market conditions, or upon instructions of government authorities.
v. Please vote FOR.

Resolutions:

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4. Election of Directors (Including Independent Directors)

The Board of Directors recommends shareholders vote FOR candidates of the 10[th] term directors (including independent directors).

Explanatory Notes:

i. The tenure of the 9th term directors elected at 2015 annual shareholders’ meeting will expire on June 20, 2018. The Board of Directors has resolved the 10th term directors to be elected at 2018 annual shareholders’ meeting.
ii. According to Article 15 and Article 16 of the Bank’s “Articles of Incorporation”, 11 directors (including 3 independent directors) shall be elected for 3-year terms, commencing from June 20, 2018.
iii. The directors shall be elected from candidates who are nominated by the Board of Directors or by any shareholders with shareholding of 1% or more. Shareholders may nominate candidates from April 13, 2018 to April 23, 2018. During the above mentioned time period, Far Eastern New Century Corp. nominated 8 director candidates and 3 independent director candidates, and the Board of Directors has resolved all the candidates meeting director’s qualification criteria in the 16th Board meeting of the 9th term on May 7, 2018. The list of director candidates is as in Attachment VII.
iv. Please vote FOR.

Resolutions:

Handbook for 2018Annual Shareholders’ Meeting

5. Waiver of Non-Competition Binding to Directors

The Board of Directors recommends shareholders vote FOR waiver of non-competition binding to Directors.

Explanatory Notes:

i. According to Paragraph I of Article 209 of the “Company Act”, a director who does anything for himself or on behalf of another person that is within the scope of the company’s business, shall explain the essential contents of such an act and seek approval in the shareholders’ meeting.
ii. In considering the newly elected directors may act as directors or managers of companies of business similar to the Bank, waiver of non-competition binding to those directors is suggested to appoint those directors for their professionalism contribution to the Bank.
iii. Please vote FOR.

Resolutions:

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Attachment I

2017 Business Report

Reflecting on 2017, the world economy has recovered, driving real economic momentum and financial market developments. In Taiwan, thanks to the rising external demand and moderate growth in exports, the transaction of stock market has been high and reached 10,000 market index, all contributed to stimulate domestic consumption effectively, registering GDP growth at 2.86%, the highest within the last 5 years. Looking into 2018, the world economy is expected to grow continuously, maintaining Taiwan’s export momentum, coupled with the government’s promoting “Forward-Looking Infrastructure Development Program,” GDP growth is expected to reach 2.42%. Along with the rapid developments of Fintech, the governmental institutions shall encourage business innovation and strengthen supervision, thus the banking industry will expedite transformation and initiate new profit engine.

In 2017, Far Eastern International Bank (FEIB) maintained steady performance; however, under the impact of foreign exchange loss, the fiscal year net profit was NT$2.854 billion. Earnings per share (EPS) was NT$0.90. The total return on assets (ROA) was 0.50%, and the return on equity (ROE) was 6.82%. Meanwhile, the bad debt ratio remained at 0.29%, and loan loss coverage ratio rose to 1.37%, surpassing industry standards in terms of asset quality.

FEIB has maintained its long-term steady operational strategies and demonstrated highquality growth momentum in its core businesses. In the category of digital banking, the Bank launched “FE Mobile Payment Integrated Service” to incorporate Alipay and friDay wallet in order to create integrated mPOS (Mobile Point of Sales). Together with online banking and branch network upgrade, we are expanding the application of digital transactions and enabling customer off-counter rate to reach 86%. As to the credit card business, with the flagship “Far Eastern Happy Credit Card,” the accumulated issuance of 410,000 new cards, and revolving balance via the Group’s channels grew 15%. In consumer banking business, consumption loans grew 6%, and market share of automobile loans continued its leading position. In wealth management, we established the latest high-end smart branch, and won for three consecutive years in the “Best Wealth Management Award” by the Excellence Magazine. In corporate banking business, FEIB completed Taiwan’s first ASEAN market syndicated loan, and accomplished 19 international syndicated loans which surpassed NT$70 billion within 5 years as the lead bank. In financial market, the Bank successfully transformed the mobile and online FX guarantee trading, and strengthened its market lead position.

To fulfill corporate social responsibilities (CSR), FEIB has been committed to promoting various philanthropic activities, and frequently received award recognitions. Additionally, “cash back program” was partnered with Eden Social Welfare Foundation, the donations amounted to

Handbook for 2018Annual Shareholders’ Meeting

more than NT$80 million. The Bank also helped the challenged adults by employing them as well as purchased 3,000 boxes of moon cakes made by them to care for the under-privileged. The Bank published the 2018 calendar with the theme of “Forest of Knowledge, Ocean of Learning” to introduce Taiwan’s contemporary libraries, and contributed books to 31 senior high schools and vocational schools to promote the habit of reading. In the cultural aspect, we sponsored FEIB Day of Parisian Nostalgia: the National Museum of History's Sanyu Collection and Musée d'Orsay: The Aesthetic Worlds of the 19th Century, as well as the world-class artistic performance of Cirque du Soleil in Taiwan. In the human resource development, the Bank has received subsidies for 15 consecutive years from the Workforce Development Agency, the Ministry of Labor for its continued efforts in talent development. FEIB also received certification three times from TTQS (Talent Quality-Management System) to recognize its dedication in sustainable talent development.

Looking into 2018, FEIB will continue to maintain its high-quality growth momentum, reiterate innovation, transformation, and restructure to strengthen core competence. Major action plans include combining social media banking, launch credit card mobile payment, and expedite the deployment of digitization. Increase investment in the affiliated leasing company and open new offices in Singapore and Vietnam to expand and explore overseas business opportunities. The number of credit cards in force exceeds one million to elevate further brand recognition. Connect wealth management and small & medium-sized financial businesses to transform the branch business model. Strengthen legal compliance, risk management, and internal control, in accordance with regulated supervisory environment to lower business risk. Embrace the challenges and opportunities in the face of digital era and the competitions from peer’s rapid transformation. While seeking steady profit growth, the Bank’s staffs also demonstrate agility and innovative capability to initiate new profit engine, and create win-win for its shareholders, customers, employees and the society.

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Operating Results for 2017 and Business Outlook for 2018 are summarized as follows:

Operating Results for 2017

Business Plan and Operating Results

Changes in Operations Overview

(Unconsolidated, in NT$000,000)

Year
	2017	2016	Change Rate
Item


Deposit and Remittance	472,621	452,905	4.35%


Corporate Loan	146,282	160,985	-9.13%


Consumer Loan	209,659	200,011	4.82%


Total Loan	355,941	360,995	-1.40%


Revolving Credit Card Balance	10,575	10,246	3.21%


Securities Purchased	148,652	124,226	19.66%


Stock Investment in Equity	2,759	2,568	7.42%


Total Trust Assets	59,980	58,174	3.10%

2. Business Overview

(1) Target Achievement

In 2017, FEIB’s total assets stood at NT$574.8 billion, achieved 97% of target; total deposits and loans amounted to NT$472.6 billion and NT$355.9 billion, which achieved 99% and 95% of target, respectively.

(2) Analysis of Profitability

FEIB’s net operating income in 2017 was down 3% (YoY) to NT$10.2 billion, net interests were NT$5.383 billion, dropped 7% (YoY), and total net revenues other than interest were NT$4.818 billion, grew 2% (YoY).

Income after tax was NT$2.854 billion, down 12% (YoY), and net earnings per share were NT$0.90, down 12% (YoY).

Handbook for 2018Annual Shareholders’ Meeting

3. Ratings

The Bank’s investment grade ratings were assessed by Fitch Ratings Limited which announced on October 31, 2017 as follows: National Rating Long-term A (twn), National Rating Short-term F1 (twn), Foreign Currency Rating Long-term BBB-, and Foreign Currency Rating Short-term F3, FEIB is considered a stable financial institution of investment grade.

4. Research and Development

To expedite the promotion of digital transformation, FEIB has been working with the Far Eastern Group to start up “FE Mobile Payment Integrated Service”, develop integrated mPOS, and thus seize mobile payment business opportunities. Also adopt innovative FinTech, revise mobile banking APP, launch brand new website, offer innovative services such as mobile online application of credit cards, cross-bank cardless cash withdrawal, and enterprise e-customer service remote support system. In addition, the Bank leads in acquiring information security patent of online application “Dual Track” identity check and “Hidden Code Token Encryption Service” to pursue the business development of digital customer group.

Structural Changes
(1) To integrate resources and streamline business management, Far Eastern Life Insurance Agency Co., Ltd. and Far Eastern Property Insurance Agency Co., Ltd. were merged into FEIB in February 2017 to establish the Insurance Agency Business Group.
(2) To comply with the “ Guidelines Governing Anti-Money Laundering and Countering Terrorism Financing＂ by the Financial Supervisory Commission (“FSC＂), the Bank＇ s Legal Compliance Department established on April 1, 2017 the Anti-Money Laundering Unit to implement the execution of anti-money laundering and countering terrorism financing.
Impact of External Competitions, Legal and Overall Operating Environment

In line with the rapid development of global FinTech and increasingly stringent financial supervision by FSC, the banking industry is facing challenges and opportunities to call for transformation. FEIB, through promoting overall digital transformation, has initiated process reengineering to elevate operating efficiency and create new business model. To cope with continuous diminishing domestic interest margin, the Bank has enlarged the ratio of international loans, and increased the scale of high interest spread personal mortgage. Taking advantage of the booming electronic payment market, FEIB aims to develop mobile payment serviced and elevate the market share of financial transactions. To cope with the Government’s promotion of Green Finance Initiative, the Bank strengthened green banking loan business, and total loans amounted to NT$17.4 billion in 2017. To echo with the international focus on anti-money laundering and anti-financing terrorism, FEIB established “Money Laundering Control Task Force” as the independent and responsible unit to implement the execution of money laundering control and combat against financing terrorism.

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Operating Plans for 2018

1. Operating Goals

Major Operating Goals for 2018 are summarized as follows:

(1) Total asset: NT$619.1 billion
(2) Total deposit: NT$508.1 billion
(3) Total loan: NT$378.1 billion
Operating Principles and Major Strategies
(1) Individual Banking Business:

Cultivate LOHAS wealth management brand image, build up new generation wealth management services, and create new profit engine. Adopt upgrade Fintech wealth management system and pursue in depth KYC (Know Your Customer) A+ VIP project to aim at high-end customers. Introduce AI smart banking to elevate the efficiency of diversified portfolio, combine Group’s special premiums to offer exclusive benefits, and thus become the best wealth management partner for individual, family members, and small- & medium-sized enterprises. Continue to explore branch channels, adjust branch locations, and combine neighboring resources, build specially featured branch, expand asset under management, and consolidate business base.

(2) Consumer Banking and Credit Cards Business:

A. Consumer Banking Business

Adopt Fintech, continue to optimize E&M function, integrate physical and virtual channels, expand channel scale, elevate ratio of digital channels, lower cost, and improve operating efficiency. Continue to apply Data mining, create customer needs, and provide diversified plus customized services. Comply with laws and regulations, strengthen risk management, optimize asset quality and consolidate niche products, and maintain market leadership.

B. Credit Cards

Integrate the Group’s retail channels, expand benefits offered by Far Eastern Happy Credit Card, and promote small-amount payment via Happycash card to focus on convenience for the cardholders. Join forces with large mobile payment and third-party payment operators to seize the emerging payment opportunities. Launch the first interactive mobile e-billing to improve digitized service. Apply Big Data, deepen the cultivation of target customer, and explore new profit engine.

Handbook for 2018Annual Shareholders’ Meeting

(3) Corporate Banking Business:

Proactively deploy the overseas market and establish Singapore and Vietnam Offices to acquire local syndicated loan businesses in the ASEAN market. Increase investment in Yuanrong International Leasing Co., Ltd. in Shanghai to explore mainland China market, and expand overseas asset scale and profit ratio. Develop trading financial business, explore deposit customer base, optimize deposit structure, and maintain steady interest rate spread. Implement proactive risk management and strictly control asset quality. Promote 2G internet platform and B2B2C business, duplicate enterprise financial experience, lead in domestic and international syndicated loans, provide structured financing and customized financial products, and create more high value-added profits

(4) Financial Markets Business:

Consolidate the leading position in the foreign exchange margin trading market, cultivate existing customer relations, and apply multiple channels including social media and internet to continue to develop new customers. Expand investment and trading position, elevate self-design capability of financial products, and create new source of profit. Sell a variety of financial products, provide diversified asset allocation, flexible trading strategy, so as to improve customer penetration rate. Reposition TMU target customers, extend large corporate account and individual wealth management customers, and develop new customer source. Improve the Bank’s deposit structure, increase individual and small- & medium-sized enterprises deposits, to improve the liquidity and profitability of asset and liability management.

(5) Digital Banking Business:

Develop solid Fintech, aim at grasping feasible operation technology, concrete application scene, and solution of customer’s pain point/breakpoint to promote various digital banking services. Expand to apply “FE Mobile Payment Integrated Service,” continue to establish mobile payment infrastructure, and complete mobile application lifestyle. Integrate O2O online/offline channels, and create Omni Channel smart services. Restructure bank product function and combine social finance to create new brand of digital bank. Continue to research and develop Fintech patents, and build quality smart banking experience.

(6) Insurance Agency Business:

Cooperate with consumer and corporate banking groups, carefully select insurance companies as partners, introduce bank insurance products meeting the needs of internal and external customers, and provide comprehensive risk management, asset allocation, and wealth inheritance services. In terms of Group synergy, provide the most optimal life and property insurance products to Group affiliates, customers and staffs, promote Far EasTone Telecom mobile device insurance, and Oriental Securities insurance business. Adopt the development of digital Fintech, and develop online insurance listing business opportunities.

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Attachment II

Independent Auditors’ Report & 2017 Financial Statements

( English Translation of a Report Originally Issued in Chinese)

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FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

ASSETS Cash and cash equivalents Due from the central bank and other banks Financial assets at fair value through profit or loss Securities purchased under resale agreements Receivables, net Current tax assets Discounts and loans, net Available-for-sale financial assets Held-to-maturity financial assets Investment accounted for using equity method Debt investments with no active market Other financial assets, net Property and equipment, net Intangible assets, net Deferred tax assets Other assets, net TOTAL		2017 Amount % $ 8,693,621 2 22,351,083 4 30,208,333 5 11,071,393 2 22,750,869 4 7,372 - 351,056,762 61 109,631,578 19 2,135,246 - 1,774,066 - 6,677,076 1 3,667,760 1 2,889,392 1 1,725,085 - 584,502 - 200,142 - $ 575,424,280 100		2016
				Amount % $ 7,361,878 1 32,744,760 6 33,830,105 6 6,396,656 1 22,847,242 4 4,117 - 355,963,672 63 79,594,706 14 2,630,635 1 1,702,220 - 8,170,732 2 4,670,815 1 2,889,674 1 1,750,568 - 635,104 - 222,399 - $ 561,415,283 100

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FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY LIABILITIES Due to the central bank and other banks Financial liabilities at fair value through profit or loss Securities sold under repurchase agreements Payables Current tax liabilities Deposits and remittances Bank debentures Other financial liabilities Provisions Other liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE BANK Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Total other equity Total equity TOTAL		2017 Amount % $ 6,960,774 1 4,319,121 1 12,921,364 2 6,488,285 1 254,446 - 472,392,183 82 20,216,664 4 7,416,775 2 1,127,116 - 540,880 - 532,637,608 93 31,829,286 5 456,426 - 6,544,643 1 250,703 - 3,691,412 1 10,486,758 2 (8,653 ) - 22,855 - 14,202 - 42,786,672 7 $ 575,424,280 100		2016
				Amount % $ 7,432,194 1 7,954,542 2 13,711,223 3 5,799,874 1 405,097 - 452,720,460 81 24,309,357 4 6,385,369 1 1,240,278 - 506,012 - 520,464,406 93 31,113,672 5 456,426 - 5,571,477 1 121,028 - 3,916,835 1 9,609,340 2 115,916 - (344,477) - (228,561) - 40,950,877 7 $ 561,415,283 100

Handbook for 2018Annual Shareholders’ Meeting

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

INTEREST REVENUES INTEREST EXPENSES NET INTERESTS NET REVENUES OTHER THAN INTEREST Net service fee income Net gains on financial assets and liabilities at fair value through profit or loss Net realized gains on available-for-sale financial assets Net foreign exchange gains (loss) Shares of profit from associates Impairment loss on assets Others Total net revenues other than interest CONSOLIDATED NET REVENUES PROVISION FOR POSSIBLE LOSSES OPERATING EXPENSES Employee benefits expense Depreciation and amortization Other general and administrative expenses Total operating expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET INCOME FOR THE YEAR		2017	% 97 45 52 30 17 1 (3 ) 1 - 2 48 100 7 36 3 23 62 31 4 27		Percentage Increase 2016 (Decrease) Amount % % $ 9,629,219 90 4 3,844,797 36 21 5,784,422 54 (7 ) 3,196,617 30 (1 ) 1,247,844 11 39 119,716 1 (28 ) 46,982 - (724 ) 85,454 1 21 (20,528 ) - 17 286,948 3 (13 ) 4,963,033 46 1 10,747,455 100 (3 ) 452,001 4 62 3,793,101 36 - 226,448 2 10 2,460,003 23 (3 ) 6,479,552 61 (1 ) 3,815,902 35 (14 ) 572,016 5 (28 ) 3,243,886 30 (12 )
		Amount $ 10,057,931 4,653,057 5,404,874 3,152,327 1,732,217 86,718 (293,168 ) 103,337 (17,009 ) 250,960 5,015,382 10,420,256 731,847 3,790,879 248,142 2,381,744 6,420,765 3,267,644 413,761 2,853,883

(Continued)

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FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive loss of associates Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Share of other comprehensive gain (loss) of associates Income tax relating to items that may be reclassified subsequently to profit or loss Other comprehensive income (loss) for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET INCOME ATTRIBUTABLE TO: Owners of the Bank TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Bank EARNINGS PER SHARE Basic Diluted		2017	% 1 - - 1 (1 ) 3 - - 2 3 30 27 30		Percentage Increase 2016 (Decrease) Amount % % $ (137,752 ) (1 ) 141 (671 ) - 38 23,418 - (141 ) (115,005) (1) 140 (25,207 ) - (411) (76,297 ) (1 ) 569 (11,952 ) - 180 - - - (113,456) (1) 314 (228,461) (2) 226 $ 3,015,425 28 4 $ 3,243,886 30 (12 ) $ 3,015,425 28 4 $1.02 $0.98
		Amount $ 55,828 (414 ) (9,491) 45,923 (128,795 ) 357,804 9,528 4,226 242,763 288,686 $ 3,142,569 $ 2,853,883 $ 3,142,569 $0.90 $0.86

(Concluded)

Handbook for 2018Annual Shareholders’ Meeting

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2016 Appropriation of the 2015 earnings Legal reserve Reversal of special reserve Cash dividends - NT$0.400 dollars per share Stock dividends - NT$0.200 dollars per share Net income for the year ended December 31, 2016 Other comprehensive loss for the year ended December 31, 2016 Total comprehensive income (loss) for the year ended December 31, 2016 Employees' bonus - stock BALANCE AT DECEMBER 31, 2016 Appropriation of the 2016 earnings Legal reserve Special reserve Cash dividends - NT$0.420 dollars per share Stock dividends - NT$0.230 dollars per share Net income for the year ended December 31, 2017 Other comprehensive income (loss) for the year ended December 31, 2017 Total comprehensive income (loss) for the year ended December 31, 2017 BALANCE AT DECEMBER 31, 2017			Equity Attributable
		Ordinary Shares $ 30,332,430 - - - 606,649 606,649 - - - 174,593 31,113,672 - - - 715,614 715,614 - - - $ 31,829,286	Capital Surplus $ 459,918 - - - - - - - - (3,492) 456,426 - - - - - - - - $ 456,426

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FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

to Owners of the Bank

Owners of the Bank	Owners of the Bank
Retained Earnings		Unappropriated Earnings $ 3,601,013 (1,080,304 ) 87,191 (1,213,297 ) (606,649) (2,813,059) 3,243,886 (115,005) 3,128,881 - 3,916,835 (973,166 ) (129,675 ) (1,306,774 ) (715,614) (3,125,229) 2,853,883 45,923 2,899,806 $ 3,691,412	Other Equity Exchange Unrealized Differences on Gain (Loss) on Translating Available-for- Foreign sale Financial Operations Assets $ 141,123 $ (256,228) - - - - - - - - - - - - (25,207) (88,249) (25,207) (88,249) - - 115,916 (344,477) - - - - - - - - - - - - (124,569) 367,332 (124,569) 367,332 $ (8,653) $ 22,855	Total Equity $ 38,977,648 - - (1,213,297 ) - (1,213,297) 3,243,886 (228,461) 3,015,425 171,101 40,950,877 - - (1,306,774 ) - (1,306,774) 2,853,883 288,686 3,142,569 $ 42,786,672
			Exchange Differences on Translating Foreign Operations $ 141,123 - - - - - - (25,207) (25,207) - 115,916 - - - - - - (124,569) (124,569) $ (8,653)
Legal Reserve $ 4,491,173 1,080,304 - - - 1,080,304 - - - - 5,571,477 973,166 - - - 973,166 - - - $ 6,544,643	Special Reserve $ 208,219 - (87,191 ) - - (87,191) - - - - 121,028 - 129,675 - - 129,675 - - - $ 250,703

Handbook for 2018Annual Shareholders’ Meeting

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation Amortization Provision for possible losses Net valuation gain on financial assets and liabilities at fair value through profit or loss Interest expenses Interest revenues Dividend revenues Shares of profit from associates Unrealized net loss (gain) on foreign currency exchange Gain on disposal investment properties Other adjustments Changes in operating assets and liabilities Decrease (increase) in due from the central bank and other banks Decrease in financial assets at fair value through profit or loss Increase in receivables Decrease (increase) in discounts and loans Increase in available-for-sale financial assets Decrease in held-to-maturity financial assets Decrease (increase) in debt investments with no active market Increase (decrease) in due to the central bank and other banks Decrease in financial liabilities at fair value through profit or loss Increase in payables Increase in deposits and remittances Cash generated from (used in) operations Interest received Dividends received Interest paid Income tax paid Net cash generated from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets carried at cost Proceeds from disposal of financial assets carried at cost Acquisition of investments accounted for using equity method Acquisition of property and equipment Proceeds from disposal of property and equipment Decrease in other financial assets Decrease in other assets Dividends received from associates Net cash generated from (used in) investing activities	2017 $ 3,267,644 220,196 27,946 1,215,343 (160,180 ) 4,653,057 (10,057,931 ) (63,321 ) (103,337 ) 395,728 (1,490 ) (100,995 ) 7,092,056 3,781,946 (1,776,592 ) 551,765 (30,236,113 ) 306,249 919,160 137,136 (3,635,415 ) 456,277 25,778,208 2,667,337 9,933,372 63,321 (4,338,543 ) (486,615) 7,838,872 (24,950 ) 51,496 (28,980 ) (224,462 ) 45 49,971 19,794 69,585 (87,501)	2016 $ 3,815,902 198,246 28,202 1,300,165 (566,152 ) 3,844,797 (9,629,219 ) (63,195 ) (85,454 ) (59,875 ) - 768 (3,531,591 ) 6,408,184 (2,273,540 ) (22,683,826 ) (52,201,509 ) 488,896 (966,219 ) (5,762,695 ) (1,633,706 ) 2,040,052 1,425,551 (79,906,218 ) 9,633,034 63,195 (3,864,971 ) (566,153) (74,641,113) - - - (247,089 ) 325 1,652,873 11,093 28,648 1,445,850

(Continued)

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FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

2017
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of bank debentures
$ -
Redemption of bank debentures
(4,000,000 )
Increase (decrease) in securities sold under repurchase agreements
(434,630 )
Increase in other financial liabilities
1,204,602
Increase (decrease) in other liabilities
30,605
Cash dividends

(1,306,774)

Net cash generated from (used in) financing activities

(4,506,197)

EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS

53,011

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
3,298,185
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR

28,339,153

CASH AND CASH EQUIVALENTS, END OF THE YEAR
$ 31,637,338

2016
$ 4,000,000

(200 )

9,968,068

3,354,406

(393,772 )

(1,213,297)

15,715,205

(25,606)

(57,505,664 )

85,844,817
$ 28,339,153

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets is as follows:

Cash and cash equivalents in consolidated balance sheets Due from the Central Bank and other banks that meet the IAS 7 definition of “cash and cash equivalents” Securities purchased under resale agreements that meet the IAS 7 definition of “cash and cash equivalents” Cash and cash equivalents in consolidated statements of cash flows		December 31	December 31
		2017 $ 8,693,621 11,872,324 11,071,393 $ 31,637,338	2016 $ 7,361,878 14,580,619 6,396,656 $ 28,339,153

(Concluded)

Handbook for 2018Annual Shareholders’ Meeting

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Handbook for 2018Annual Shareholders’ Meeting

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FAR EASTERN INTERNATIONAL BANK LTD.

BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

ASSETS Cash and cash equivalents Due from the central bank and other banks Financial assets at fair value through profit or loss Securities purchased under resale agreements Receivables, net Current tax assets Discounts and loans, net Available-for-sale financial assets Held-to-maturity financial assets Investment accounted for using equity method Debt investments with no active market Other financial assets, net Property and equipment, net Intangible assets, net Deferred tax assets Other assets, net TOTAL		2017 Amount % $ 8,531,125 2 22,351,083 4 30,208,333 5 11,071,393 2 21,534,556 4 7,263 - 351,056,762 61 109,631,578 19 2,135,246 - 2,758,906 - 6,677,076 1 3,495,795 1 2,882,032 1 1,725,085 - 546,064 - 190,336 - $ 574,802,633 100		2016 (Audited after Restated)
				Amount % $ 7,277,784 1 32,744,760 6 33,830,105 6 6,396,656 1 21,124,237 4 3,936 - 355,963,672 64 79,594,706 14 2,630,635 1 2,568,315 - 8,170,732 1 4,590,385 1 2,883,105 1 1,750,568 - 631,415 - 214,718 - $ 560,375,729 100

Handbook for 2018Annual Shareholders’ Meeting

FAR EASTERN INTERNATIONAL BANK LTD.

BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY LIABILITIES Due to the central bank and other banks Financial liabilities at fair value through profit or loss Securities sold under repurchase agreements Payables Current tax liabilities Deposits and remittances Bank debentures Other financial liabilities Provisions Other liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE BANK Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Total other equity Total equity TOTAL		2017 Amount % $ 6,960,774 1 4,319,121 1 12,921,364 3 6,420,726 1 250,254 - 472,621,114 82 20,216,664 4 6,657,217 1 1,127,116 - 521,611 - 532,015,961 93 31,829,286 5 456,426 - 6,544,643 1 250,703 - 3,691,412 1 10,486,758 2 (8,653 ) - 22,855 - 14,202 - 42,786,672 7 $ 574,802,633 100		2016 (Audited after Restated)
				Amount % $ 7,432,194 1 7,954,542 2 13,711,223 3 5,719,222 1 401,086 - 452,904,998 81 24,309,357 4 5,265,429 1 1,240,278 - 486,523 - 519,424,852 93 31,113,672 5 456,426 - 5,571,477 1 121,028 - 3,916,835 1 9,609,340 2 115,916 - (344,477) - (228,561) - 40,950,877 7 $ 560,375,729 100

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FAR EASTERN INTERNATIONAL BANK LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

INTEREST REVENUES INTEREST EXPENSES NET INTERESTS NET REVENUES OTHER THAN INTEREST Net service fee income Net gains on financial assets and liabilities at fair value through profit or loss Net realized gains on available-for-sale financial assets Net foreign exchange gains (loss) Shares of profit from subsidiaries and associates Impairment loss on assets Others Total net revenues other than interest CONSOLIDATED NET REVENUES PROVISION FOR POSSIBLE LOSSES OPERATING EXPENSES Employee benefits expense Depreciation and amortization Other general and administrative expenses Total operating expenses		2017	% 98 45 53 28 17 1 (3 ) 2 - 2 47 100 7 36 2 23 61		Percentage Increase 2016 (Audited after Restated) (Decrease) Amount % % $ 9,612,481 91 4 3,833,195 36 21 5,779,286 55 (7 ) 2,974,296 28 (3 ) 1,247,270 12 39 119,716 1 (28 ) 48,698 1 (709 ) 152,061 1 45 (20,528 ) - 17 218,124 2 (9 ) 4,739,637 45 2 10,518,923 100 (3 ) 449,158 4 62 3,628,676 35 - 223,175 2 10 2,407,888 23 (4 ) 6,259,739 60 (1 )
		Amount $ 10,015,147 4,632,022 5,383,125 2,893,276 1,732,217 86,718 (296,415 ) 220,435 (17,009 ) 198,523 4,817,745 10,200,870 729,425 3,622,151 244,536 2,321,429 6,188,116

(Continued)

Handbook for 2018Annual Shareholders’ Meeting

FAR EASTERN INTERNATIONAL BANK LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET INCOME FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive loss of subsidiaries and associates Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Share of other comprehensive gain (loss) of subsidiaries and associates Other comprehensive income (loss) for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic Diluted		2017	% 32 4 28 1 - - 1 (1 ) 3 - 2 3 31		Percentage Increase 2016 (Audited after Restated) (Decrease) Amount % % $ 3,810,026 36 (14 ) 566,140 5 (24 ) 3,243,886 31 (12 ) (137,752 ) (1 ) 141 (671 ) - 38 23,418 - (141 ) (115,005) (1) 140 (458 ) - (27,458) (76,297 ) (1 ) 569 (36,701 ) - 130 (113,456) (1 ) 314 (228,461) (2 ) 226 $ 3,015,425 29 4 $1.02 $0.98
		Amount $ 3,283,329 429,446 2,853,883 55,828 (414) (9,491) 45,923 (126,216 ) 357,804 11,175 242,763 288,686 $ 3,142,569 $0.90 $0.86			Amount $ 3,810,026 566,140 3,243,886 (137,752 ) (671 ) 23,418 (115,005) (458 ) (76,297 ) (36,701 ) (113,456) (228,461) $ 3,015,425 $1.02 $0.98

(Concluded)

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FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2016 Appropriation of the 2015 earnings Legal reserve Reversal of special reserve Cash dividends - NT$0.400 dollars per share Stock dividends - NT$0.200 dollars per share Net income for the year ended December 31, 2016 Other comprehensive loss for the year ended December 31, 2016 Total comprehensive income (loss) for the year ended December 31, 2016 Employees' bonus - stock BALANCE AT DECEMBER 31, 2016 Appropriation of the 2016 earnings Legal reserve Special reserve Cash dividends - NT$0.420 dollars per share Stock dividends - NT$0.230 dollars per share Net income for the year ended December 31, 2017 Other comprehensive income (loss) for the year ended December 31, 2017 Total comprehensive income (loss) for the year ended December 31, 2017 BALANCE AT DECEMBER 31, 2017			Equity Attributable
		Ordinary Shares $ 30,332,430 - - - 606,649 606,649 - - - 174,593 31,113,672 - - - 715,614 715,614 - - - $ 31,829,286	Capital Surplus $ 459,918 - - - - - - - - (3,492) 456,426 - - - - - - - - $ 456,426

Handbook for 2018Annual Shareholders’ Meeting

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

to Owners of the Bank

Owners of the Bank	Owners of the Bank
Retained Earnings		Unappropriated Earnings $ 3,601,013 (1,080,304 ) 87,191 (1,213,297 ) (606,649) (2,813,059) 3,243,886 (115,005) 3,128,881 - 3,916,835 (973,166 ) (129,675 ) (1,306,774 ) (715,614) (3,125,229) 2,853,883 45,923 2,899,806 $ 3,691,412	Other Equity Exchange Unrealized Differences on Gain (Loss) on Translating Available-for- Foreign sale Financial Operations Assets $ 141,123 $ (256,228) - - - - - - - - - - - - (25,207) (88,249) (25,207) (88,249) - - 115,916 (344,477) - - - - - - - - - - - - (124,569) 367,332 (124,569) 367,332 $ (8,653) $ 22,855	Total Equity $ 38,977,648 - - (1,213,297 ) - (1,213,297) 3,243,886 (228,461) 3,015,425 171,101 40,950,877 - - (1,306,774 ) - (1,306,774) 2,853,883 288,686 3,142,569 $ 42,786,672
			Exchange Differences on Translating Foreign Operations $ 141,123 - - - - - - (25,207) (25,207) - 115,916 - - - - - - (124,569) (124,569) $ (8,653)
Legal Reserve $ 4,491,173 1,080,304 - - - 1,080,304 - - - - 5,571,477 973,166 - - - 973,166 - - - $ 6,544,643	Special Reserve $ 208,219 - (87,191 ) - - (87,191) - - - - 121,028 - 129,675 - - 129,675 - - - $ 250,703

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FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation Amortization Provision for possible losses Net valuation gain on financial assets and liabilities at fair value through profit or loss Interest expenses Interest revenues Dividend revenues Unrealized net loss (gain) on foreign currency exchange Shares of profit from subsidiaries and associates Gain on disposal investment properties Other adjustments Changes in operating assets and liabilities Decrease (increase) in due from the central bank and other banks Decrease in financial assets at fair value through profit or loss Increase in receivables Decrease (increase) in discounts and loans Increase in available-for-sale financial assets Decrease in held-to-maturity financial assets Decrease (increase) in debt investments with no active market Increase (decrease) in due to the central bank and other banks Decrease in financial liabilities at fair value through profit or loss Increase in payables Increase in deposits and remittances Cash generated from (used in) operations Interest received Dividends received Interest paid Income tax paid Net cash generated from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets carried at cost Proceeds from disposal of financial assets carried at cost Acquisition of investments accounted for using equity method Acquisition of property and equipment Proceeds from disposal of property and equipment Decrease in other financial assets Decrease in other assets Dividends received from subsidiaries and associates Net cash generated from (used in) investing activities	2017 $ 3,283,329 218,094 26,442 1,212,921 (160,180) 4,632,022 (10,015,147) (63,321) 395,746 (220,435) (1,490) (91,924) 7,092,056 3,781,946 (2,280,507) 551,765 (30,236,113) 306,249 919,160 137,136 (3,635,415) 469,910 25,822,601 2,144,845 9,890,215 63,321 (4,318,048) (481,138) 7,299,195 (24,950) 51,496 (28,980) (221,460) 45 141,506 23,423 69,585 10,665	2016 (Audited after Restated) $ 3,810,026 196,507 26,668 1,297,322 (565,578) 3,833,195 (9,612,481) (63,195) (59,675) (152,062) - (17,626) (3,531,591) 6,407,526 (1,778,815) (22,683,826) (52,201,509) 488,896 (966,219) (5,762,695) (1,633,706) 1,883,780 1,477,604 (79,607,454) 9,617,182 63,195 (3,861,177) (432,463)
		(74,220,717)
		- - - (245,086) 32 1,669,139 11,689 28,648 1,464,422

(Continued)

Handbook for 2018Annual Shareholders’ Meeting

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issuance of bank debentures Redemption of bank debentures Increase (decrease) in securities sold under repurchase agreements Increase in other financial liabilities Increase (decrease) in other liabilities Cash dividends Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS, END OF THE YEAR	2017 $ - (4,000,000 ) (434,630 ) 1,564,984 35,088 (1,306,774 ) (4,141,332 ) 51,255 3,219,783 28,255,059 $ 31,474,842	2016 (Audited after Restated) $ 4,000,000 (200 ) 9,968,068 2,924,284 (399,113 ) (1,213,297 )
		15,279,742 (990 )
		(57,477,543 ) 85,732,602 $ 28,255,059

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets is as follows:

Cash and cash equivalents in individual balance sheets Due from the Central Bank and other banks that meet the IAS 7 definition of “cash and cash equivalents” Securities purchased under resale agreements that meet the IAS 7 definition of “cash and cash equivalents” Cash and cash equivalents in consolidated statements of cash flows		December 31	December 31
		2017 $ 8,531,125 11,872,324 11,071,393 $ 31,474,842	2016 $ 7,277,784 14,580,619 6,396,656 $ 28,255,059

(Concluded)

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Attachment III

Audit Committee’s Review Report for 2017 Business Report and Financial Statements

To: 2018 Annual Shareholders’ Meeting of Far Eastern International Bank

March 21, 2018

The Board of Directors has submitted business report, audited financial statements (by Shih-Tsung Wu, CPA, and Chen-Hsiu Yang, CPA, of Deloitte & Touche) and earnings distribution proposal of the Bank for the year ended Dec.31 2017 for the Committee’s review.

After reviewing, the Committee has found the above mentioned reports acceptable, and hence issued the review report herewith in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

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_________ Bing Shen

Audit Committee Convener Far Eastern International Bank

Handbook for 2018Annual Shareholders’ Meeting

Attachment IV

2017 Summary of Employees’ Compensation and Directors’ Remuneration

According to the Bank’s “Articles of Incorporation”, the Bank could allocate 3.5%-4.5% of income before tax, employees’ compensation and directors’ remuneration (IBTCR) as employees’ compensation and no greater than 1.5% of IBTCR as directors’ remuneration. Should the Bank have accumulated losses which were recognized by the shareholders’ meeting, the Bank should retain earnings to cover the losses prior to the allocation for employees’ compensation and directors’ remuneration.
The income before tax, employees’ compensation and directors’ remuneration in 2017 is NT$ 3,451,730,103. Based on the board resolution on March 21, 2018, the Bank allocates NT$126,300,000 (about 3.66% of IBTCR) as employees’ compensation, and NT$42,100,000 (about 1.22% of IBTCR) as directors’ remuneration, which will all be paid in cash. The allocated amount of employees’ compensation and directors’ remuneration are consistent with the estimated amount disclosed in the financial statements of 2017.

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Attachment V

Amendments to “Codes of Ethical Conduct of Far Eastern International Bank”

In order to strengthen corporate governance, the Bank’s “Codes of Ethical Conduct” are amended according to amendments of Article 7-1 of “Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries” issued by Financial Supervisory Commission on March 22, 2017. The Board of Directors has approved the amendments in the 13[th] Board meeting of the 9[th] term on August 9, 2017, and a summary table of the Bank’s “Codes of Ethical Conduct” before and after amendments is herein detailed as below:

Section	Proposed changes	Current Articles
Article 10	Reporting	Encouraging reporting on any illegal behavior or
		violation of the Code

	When a director discovers that the Company is in
	danger of sustaining material loss or damage, the
	director should promptly take appropriate actions
	and immediately notify the Audit Committee or
	independent director members of the Audit
	Committee, and report to the board of directors,
	and supervise the Company to report to the
	competent authority.

	When the Applicable parties suspect or find any	When the Applicable parties suspect or find any
	fact of violation of laws and regulations or the	fact of violation of laws and regulations or the
	Code, they shall actively report such fact to the	Code, they shall actively report such fact to the
	Audit Committee, managers, chief auditor, head	Audit Committee, managers, chief auditor, head
	office chief compliance officer, or other	office chief compliance officer, or other
	appropriate personnel and provide the Company	appropriate personnel and provide the Company
	with sufficient information for proper follow-up by	with sufficient information for proper follow-up by
	the Company.	the Company.

	All of reports shall be kept confidential and	All of reports shall be kept confidential and
	investigated by independent channels by the	investigated by independent channels by the
	Company to protect informants.	Company to protect informants.

Handbook for 2018Annual Shareholders’ Meeting

Attachment VI

Amendments to “Articles of Incorporation of Far Eastern International Bank”

Section	Proposed changes	Proposed changes	Current Articles	Current Articles	Current Articles	Current Articles	Reasons
Article 4-1	The rights, obligations, and other		The Bank has issued Series A				In response to change in
	important terms and conditions	of the	Registered Preferred Stock.The				the capital market in the
	Bank’s preferred stockare listed as		rights, obligations, and other				future, Preferred Stock will
	follows:		important terms and conditions are				be set by general rules.
			listed as follows:				“The Series A registered”
							in the original article of
							incorporation shall be
							deleted.

	1. Should there be net income after		1. Should there be net income after				Modifying the rule of the
	the closing of annual accounts, the			the closing of annual accounts, the			dividends distribution for
	Bank shall make up the loss of the			Bank shall make up the loss of the			the Preferred stock.
	previous years. There should be			previous years. There should be
	retained a legal reserve of thirty			retained a legal reserve of thirty
	percent(30%), then special			percent(30%), then special
	reserve shall be retained in			reserve shall be retainedor
	compliance with the law.			reversedin compliance with the law.
	After that, the remaining surplus			After that, the remaining surplus
	should first be paid for the			together with the unallocated
	dividends of the current year on			surplus of the last yearshould first
	the Preferred Stock.			be paid for the dividends of the
				current year on the		Series A
				Preferred Stock.

	2. The dividends rate of Preferred		2. The		Series A Preferred Stock are		The dividends rate of
	Stock shall be capped at 8% per			non-cumulative preferred shares,			Preferred Stock shall be
	annum. The distributable			and thedividends rate of Preferred			set in general rule, delete
	dividends shall be calculated			Stock shall be capped at 8% per			the wording about “the
	based on the actual selling price,			annum. The distributable			Series A” and “non-
	and be distributed annually by			dividends shall be calculated			cumulative”.
	cash. After the books of accounts			based on the actual selling price,
	are recognized in the yearly			and be distributed annually by
	Shareholders’ Meeting, the Board			cash. After the books of accounts

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Proposed changes	Current Articles	Current Articles	Current Articles	Current Articles	Reasons
of Directors shall separately setan	are recognized in the yearly
effective date for paying such	Shareholders’ Meeting, the Board
dividends.	of Directors shall separately setan
In the year of issuance and	effective date for paying such
redemption, the distribution of the	dividends.
payable dividends shall be	In the year of issuance and
calculated based on the actual	redemption, the distribution of the
number of days the Preferred	payable dividends shall be
Stock remained outstanding in that	calculated based on the actual
year.	number of days the		Series A
	Preferred Stock remained
	outstanding in that year.

3. The Bank has sole discretion on	3. The Bank has sole discretion on				Delete the wording about
the distribution of preferred share	the distribution of preferred share				“Series A” and differentiate
dividends. If after annual audited	dividends. If after annual audited				between ” cumulative” and
accounts are prepared, there is no	accounts are prepared, there is no				“non-cumulative” preferred
earnings and no distributing	earnings and no distributing				stocks.
dividends of common stock or	dividends of common stocksor
insufficient earnings for distributing	insufficient earnings for distributing
dividends of Preferred Stock, or if	dividends of	Series APreferred
such kind distribution will cause	Stock, or if such kind distribution
the Bank’s capital adequacy ratio	will cause the Bank’s capital
to fall below the minimum	adequacy ratio to fall below the
requirement stipulated by the	minimum requirement stipulated
Regulations Governing the Capital	by the Regulations Governing the
Adequacy and Capital Category of	Capital Adequacy and Capital
Banks or the competent	Category of Banks or the
authorities, the cancellation of	competent authorities, the
distributing Preferred Stock	cancellation of distributing			Series
dividends by resolution of the	APreferred Stock dividends by
Bank will not be deemed as an	resolution of the Bank will not be
event of default. If the Preferred	deemed as an event of default.
Stock issued is specified as non-
cumulative, the undistributed
dividends or shortfalls in dividends
distributed shall not be cumulative
and shall cease to accrue and be
payable, therefore no deferred

Handbook for 2018Annual Shareholders’ Meeting

Proposed changes	Proposed changes	Current Articles	Current Articles	Current Articles	Current Articles	Reasons
payment will be paid in
subsequent years where there are
earnings.

4. The remaining assets of the Bank		4. The remaining assets of the Bank				Delete the wording about
	shall be distributed to the holders		shall be distributed to the holders			“Series A”, set the rank of
	of the Preferred Stock in		of the	Series APreferred Stock in		the different types of
	preference to the holders of the		preference to the holders of the			preferred stock and the
	Common Stock provided.The		Common Stock provided. If the			repayment of preferred
	different types of preferred stock of		competent authority puts the Bank			stocks shall be capped at
	the Bank shall rank pari passu		under receivership, appoints			their respective issue
	without any preference among		administrators to take over the			amount.
	themselves and their repayment		Bank, or orders the Bank to
	shall be capped at their respective		suspend its business for special
	issue amount.If the competent		liquidation or to commence
	authority puts the Bank under		liquidation, the holder(s) of the
	receivership, appoints		Series APreferred Stock shall
	administrators to take over the		have the same priority as the
	Bank, or orders the Bank to		holders of common shares in
	suspend its business for special		terms of distribution of the Bank’s
	liquidation or to commence		residual assets.
	liquidation, the holder(s) of the
	Preferred Stock shall have the
	same priority as the holders of
	common shares in terms of
	distribution of the Bank’s residual
	assets.

5. The holders of the Preferred Stock		5. The holders of the			Series A	Delete the wording about
	shall have no voting and election	Preferred Stock shall have no				“Series A” and set the
	rights in the Shareholders’	voting and election rights in the				voting rights of the
	Meeting, but they shall have the	Shareholders’ Meeting;but they				preferred stock in Preferred
	right to be elected to be directors.	shall have the right to be elected				shareholders meeting and
	Holders of outstanding Preferred	to be directors.				in shareholders’ meeting.
	Stock have mandatory voting
	rights with respect to agendas that
	would affect Preferred Stock in
	Shareholders’meetings and in
	Preferred Shareholders’meetings.

==> picture [122 x 27] intentionally omitted <==

Proposed changes	Proposed changes	Proposed changes	Proposed changes	Current Articles	Current Articles	Current Articles	Current Articles	Current Articles	Current Articles	Reasons
6. Except the right of receive the				6. Except the right of receive the						Delete the wording about
	dividends as provided in Sub-			dividends as provided in Sub-						“Series A” and differentiate
	paragraph 2 of this Paragraph, the			paragraph 2 of this Paragraph, the						between ”profit-
	holders of the Preferred Stock, if			holders of the		Series APreferred				participating” and ”non-
	holding non-participating preferred			Stock shall have no right to the						profit-participating”
	stock,shall have no right to the			distribution of the cash or capital						preferred stocks.
	distribution of the cash or capital			set aside from the surplus and
	set aside from the surplus and			capital surplus, available to the
	capital surplus, available to the			holders of the Common Stock.
	holders of the Common Stock.

7. In case of the issuing of new stock				7. In case of the issuing of new stock						Delete the wording about
by the Bank due to capital				by the Bank due to capital						“Series A”.
increase, the holders of the				increase, the holders of the					Series
Preferred Stock shall have the				APreferred Stock shall have the
same pre-emptive right to				same pre-emptive right to
purchase the new stock like the				purchase the new stock like the
holders of the Common Stock.				holders of the Common Stock.

8.Preferred Stock issued by the				8.Commencing from the second day						Delete the wording about
	Bank, the Board of Director is				of the third anniversary from the					“Series A” and set the
	authorized to set the convertible				issue date of the Series A					convertible period of the
	period in the specific issuance				Preferred Stock, except during the					Preferred Stock is
	terms. If holding Convertible				time when the transfer of shares is					authorized by the Board of
	Preferred Stock, may be converted				suspended in accordance with the					Director and the rule of the
	at least one year after the date of				law,the holders of the			Series A		dividend distribution at the
	issuance terms.The holders of the				Preferred Stock		shall have the			year of conversion. The
	Preferred Stock	may, pursuant to			right, at any time, toconvert the					content of the ninth
	the issuance terms,		apply for		Series APreferred Stock, in full or					paragraph are merged into
	convertingthe Preferred Stock, in				in part, into shares of Common					the eighth paragraph.
	full or in part, into shares of				Stock of the Bank at the
	Common Stock of the Bank at the				conversion rate of one-to-one.The
	conversion rate of one-to-one.				rights and obligations of the
	Upon conversion, the converted				Common Stock so converted shall
	stock shall have the same rights				be the same as those of the other
	and obligations as common stock.				original Common Stock.
	Dividends for Preferred Stock at
	the year of conversion shall be
	calculated based on the ratio

Handbook for 2018Annual Shareholders’ Meeting

	Proposed changes	Current Articles	Current Articles	Reasons
	between the actual issuance days
	and total days of the conversion
	year, should any shares of Preferred
	Stock be converted into shares of
	the Common Stock before the
	standard date of dividends
	distribution, the holders shall not
	have the right to the dividends
	distribution of Preferred Stock in the
	current and following years, but
	such shareholder may participate
	in the distribution of profit and capital
	reserve to holders of common stock.

9.If the Bank issues non-perpetual		9.Should any shares of the Series A		The content of the ninth
	Preferred Stock, the issuance		Preferred Stock be converted into	paragraph are merged into
	period cannot be shorter than 5		shares of the Common Stock	the eighth paragraph.
	years. Holders of Preferred Stock		before the standard date of	The Bank shall issue non-
	have no right to request		distribution of dividends, the	perpetual Preferred Stock
	redemption of such shares by the		holders shall not have the right to	and set the redemption of
	Bank. Upon expiry date of the		the distribution of the dividends of	the terms, period, and the
	issuance period or from the day		Preferred Stock in the current and	way.
	following the fifth anniversary of		following years.
	the issuance date, the Bank may,
	pursuant to the issuance price and
	relevant issuance terms, redeem
	such shares in cash, compulsorily
	convert such shares into newly
	issued shares(at 1:1 ratio), or
	redeem such shares in other
	manners permissible by law. If at
	the time the Bank is unable to
	redeem all or a part of the
	Preferred Stock (due to force
	majeure or otherwise), the rights
	and obligations of the outstanding
	Preferred Stock will remain
	unchanged until full redemption by
	the Bank.

==> picture [122 x 27] intentionally omitted <==

Section	Proposed changes	Proposed changes	Proposed changes	Current Articles	Current Articles	Current Articles	Reasons
	10.If the Bank issues perpetual			10.The Series A Preferred Stock			Delete the wording about
		Preferred Stock, holders of			shall be perpetual without maturity		“Series A”, and modify the
		perpetual Preferred Stock have			date. Commencing from the		wording about the Bank
		no right to request redemption of			second day of the fifth anniversary		issues perpetual Preferred
		such shares by the Bank. The			of the issue date, subject to the		Stock, set the redemption
		Bank may, subject to the			competent authority’s approval, if		terms, period, and the way.
		competent authority's approval,			its ratio of the Bank’s regulatory
		entirely or partially redeem the			capital to its risk weighted assets
		issued Preferred Stock at the			after redemption, as calculated by
		actual issue price. The Bank may			the Bank, will at least meet the
		set redemption date at a date no			relevant minimum ratios as set out
		earlier than the day following the			in the Regulations Governing the
		fifth anniversary of the issuance			Capital Adequacy and Capital
		date. The rights and obligations			Category of Banks, the Bank may,
		of the remaining and outstanding			at any time, redeem, at the actual
		Preferred Stock as described in			issuing price, the whole or a part
		the preceding paragraphs will			of the Series A Preferred Stock in
		remain unchanged.			circulation.

	The Board of the Directors shall be			The Board of the Directors shall be			The reason for the
	authorized to prescribe the issuance			authorized to prescribe the issuance			amendment is the same as
	date and the specific terms of the			date and the specific terms of the			the 1stparagraph.
	Preferred Stock at the actual issue			Series APreferred Stock at the
	date according to the conditions of			actual issue date according to the
	the current capital marketand			conditions of the current capital
	investors’expectation,in accordance			market, in accordance with the
	with the Bank’s Articles of			Bank’s Articles of Incorporation and
	Incorporation and applicable laws			applicable laws and regulations.
	and regulations.
Article 25-1	In case of net income after			In case of net income after			In order to disclose the
	settlement of accounts for each fiscal			settlement of accounts for each fiscal			dividends policy of the
	year, the Bank shall recover all the			year, the Bank shall recover all the			Bank precisely, modify the
	losses incurred in the previous			losses incurred in the previous			wording.
	years, if any, before setting aside a			years, if any, before setting aside a			The content of the third
	legal reserve of thirty percent (30%)			legal reserve of thirty per cent (30%)			paragraph are merged into
	of the net profit and appropriating,			of the net profit and appropriating,			the first paragraph.
	according to law and regulations, a			according to law and regulations, a
	special		reserveshall be retained,	special		surplusshall be retainedor
	and shall first be distributed to the			reversed.The remaining amount

Handbook for 2018Annual Shareholders’ Meeting

Section	Proposed changes	Proposed changes	Current Articles	Reasons
	dividends of Preferred Stock. The		together with the accumulated
	remaining amount together with the		retained profits of the last year shall
	accumulated retained profits of the		first be distributed to the dividends of
	last year	and the reversals of special	Preferred Stock. After having had
	reserves are available for distribution		certain portion set aside based on
	as dividends for Common Stock. The		the condition of operation, the board
	dividends for Common Stock shall		of directors shall prepare the surplus
	be distributed at least thirty per cent		earning distribution to submit to its
	(30%) of the remaining amount. The		shareholders for their decisions.
	Board of Directors shall prepare the
	earnings distribution in accordance
	with the existing circumstances at
	the time, taking into account the
	future development plan of the Bank.
	Any allocation of cash dividend shall,
	in principle, be no less than 10% of
	the total dividends to be distributed
	that year.
	Before the above-mentioned legal		Before the above-mentioned legal
	reserve reaches the amount of total		reserve reaches the amount of total
	paid-in capital, the maximum		paid-in capital, the maximum
	appropriation of cash dividends shall		appropriation of cash dividends shall
	not exceed fifteen percent (15%) of		not exceed fifteen percent (15%) of
	the total paid-in capital.		the total paid-in capital.

			Allocation of profits as prescribed
			under Paragraph 1 above shall be
			proposed by the Board of Directors
			in accordance with the existing
			circumstances at the time, taking into
			account the future development plan
			of the Bank. Any allocation of cash
			dividend shall, in principle, be no
			less than 10% of the total stock
			interest and stock dividends to be
			distributed that year.
Article 28	These Articles of Incorporation were		These Articles of Incorporation were	The 27thamendment is
	established on May 14, 1990 and		established on May 14, 1990 and	added in Paragraph a.
	shall be effective as of the date on		shall be effective as of the date on

==> picture [122 x 27] intentionally omitted <==

Proposed changes	Proposed changes	Current Articles
which they are approved by the		which they are approved by the
competent authority.		competent authority.
˙		˙
Omitted		Omitted
˙		˙

※	The Twenty-second amendment	※The Twenty-second amendment
	was made on June 26, 2012 by	was made on June 26, 2012 by
	the Shareholders’Meeting.	the Shareholders’Meeting.

※	The Twenty-third amendment	※The Twenty-third amendment
	was made on June 19, 2013 by	was made on June 19, 2013 by
	the Shareholders’Meeting.	the Shareholders’Meeting.

※	The Twenty-fourth amendment	※The Twenty-fourth amendment
	was made on June 24, 2014 by	was made on June 24, 2014 by
	the Shareholders’Meeting.	the Shareholders’Meeting.

※	The Twenty- fifth amendment	※The Twenty- fifth amendment
	was made on June 16, 2015 by	was made on June 16, 2015 by
	the Shareholders’Meeting.	the Shareholders’Meeting.

※	The Twenty- sixth amendment	※The Twenty- sixth amendment
	was made on June 15, 2016 by	was made on June 15, 2016 by
	the Shareholders’Meeting.	the Shareholders’Meeting.

※	The Twenty-seventh amendment
	was made on June 20, 2018 by
	the Shareholders’Meeting.

The amendment of Articles of		The amendment of Articles of
Incorporation shall take effect on		Incorporation shall take effect on
approval by the shareholders’		approval by the shareholders’
meeting.		meeting.

Handbook for 2018Annual Shareholders’ Meeting

Attachment VII

List of Director Candidates

		Educational	Professional
Title	Name			Current Positions	Shareholding	Legal Entity	Others
		Background	Background			Rt
						epresen
Director	Ms.	Master’s degree	Former Professor,	Chairperson,	9,700,697	Yue Ding	None
	Ching-Ing	in Economics,	Dept. of Money and	Far Eastern International		Industry Co.,
	Hou	Vanderbilt	Banking ,National	Bank.		Ltd.
		University,	Chengchi University.
		U.S.A.		Director,
			Former Chairperson,	Southern Taiwan
		BA & Master’s	Taiwan Academy of	University of Science and
		degree in	Banking	Technology.
		Economics,	and Finance
		National Taiwan
		University.	Supervisor,
			Far Eastern New Century
			Corporation
Director	Mr.	Honorary	Chairman,	Chairman,	6,051,816	None	None
	Douglas	doctorate in	Far Eastern New Century	Far Eastern New Century
	Tong Hsu	Management,	Corporation.	Corporation.
		National Chiao Tung
		University.		Chairman,
				Asia Cement Corp.
		Master degree
		in University of		Chairman,
		Notre Dame, U. S.		Far Eastern Department
		A.		Stores Ltd.

		Master’s degree		Chairman,
		in Economics,		Far EasTone
		Columbia		Telecommunications Co.,
		University.		Ltd.

				Chairman,
				U-Ming Marine Transport
				Corp.

				Chairman,
				Orient Union Chemical
				Corp.

				Director,
				Everest Textile Ltd.

				Vice Chairman,
				Far Eastern International
				Bank.
Director	Mr.	BA, Dept. of	Director & First Senior	Group Foundation	83,245,165	Far Eastern	None
	Shaw Y.	Business	Executive Vice	Executive Director,		New Century
	Wang	Administration,	President,	Far Eastern New Century		Corporation
		National Chung	Far Eastern New Century	Corporation.
		Hsing University	Corporation.
				Executive Director,
		EMBA Courses,		Far Eastern International
		National Taiwan		Bank.
		University
				Director,
				Far Eastern Asset
				Management Corp.

				Director,
				Yuan Ze University.

==> picture [122 x 27] intentionally omitted <==


		Educational	Professional
Title	Name			Current Positions	Shareholding	Legal Entity	Others
		Background	Background			Rt
						epresen

Director	Mr.	EMBA, Graduate	Vice President,	President of Corporate	83,245,165	Far Eastern	None
	Humphrey	Institute of	Far Eastern New Century	Management,		New Century
	Cheng	International	Corporation.	Far Eastern New Century		Corporation
		Business, National		Corporation.
		Taiwan University.
				Chairman,
		BA, Dept. of Law,		Deutsche Far Eastern
		National Chung		Asset Management
		Hsing University.		Company Limited.

				Director,
				Oriental Union Chemical
				Corporation.

				Director,
				Ding Ding Integrated
				Marketing Service Co.

				Director,
				Yuan Hsin Digital Payment
				Co., Ltd.

				Director,
				Far Eastern International
				Bank.

				Supervisor,
				Far Eastern Asset
				Management Corp.
Director	Mr.	MBA	Country Chief Officer,	Director,	83,245,165	Far Eastern	None
	James Wu	University	Deutsche Bank,	Far Eastern International		New Century
		of Missouri,	Taipei Branch, Taiwan	Bank.		Corporation
		U.S.A.
			Vice-Chairman,
		BA,	Citibank, Taiwan Branch
		Department of
		Law,	President,
		National Taiwan	Fubon Commercial Bank
		University
			President,
			FIL Securities Investment
			Trust Co. (Taiwan) Ltd.

			President,
			Citibank Securities
			(Taiwan) Ltd.

			President,
			Bankers Trust, Tokyo
			Branch

			Vice-President,
			Bankers Trust, New York

			President,
			Yung-Shin Securities Co.

			Assistant Vice President,
			Chase Manhattan Bank,
			Hong Kong &Taipei
			District

Handbook for 2018Annual Shareholders’ Meeting


		Educational	Professional
Title	Name			Current Positions	Shareholding	Legal Entity	Others
		Background	Background			Rt
						epresen

Director	Mr.	MBA, National	CPA,	Chairman,	74,814,783	Asia Cement	None
	Tsung-Ming	Chengchi	Deloitte & Touche.	DynaPack Corp.		Corporation
	Chung	University.
				Executive Director,

				Far Eastern International
				Bank.

				Independent Director,
				Chroma Ate Inc.

				Director,
				Unity Opto Technology
				Co., Ltd.
Director	Dr.	Ph.D., University	Founding Dean,	Director,	74,814,783	Asia Cement	None
	Shi-Chun	of Michigan,	College of Management,	Faraday Technology Corp.		Corporation
	Hsu	U.S.A.	National Taiwan
				Director,
			University.
				Far Eastern Electronic Toll

			Former Chairman,	Collection Co, Ltd.
			Bank of Kaohsiung.
				Director,

			Former Chair Professor	Far Eastern International
			of Management,	Bank.
			Yuan Ze University
				Independent Director,

				Happy Lemon International
				Limited.

				Independent Director,
				The Eslite Spectrum
				Corporation

				Kao Jen Yen Chair
				Professor,
				Feng Chia University
Director	Dr.	Ph.D., Ohio State	Former Professor,	Independent Director,	74,760,942	U-Ming	None
	Min-The Yu	University, U.S.A.	Dept. of Finance,	JMicron Technology		Marine
			National Taiwan	Corporation.		Transport
			University.			Corp
				Independent Director,

			Dean,	Gourmet Master Co. Ltd.
			College of Management,
				Director,
			National Chiao Tung
				Far Eastern International
			University
				Bank.

			Former President,
				President,
			Providence University.
				China University of

			Former Chairman,	Technology
			Department of Finance,
			National Central
			University.

			Committee members,
			Management Committee
			of the Financial
			Restructuring Fund,
			Executive Yuan

			Committee members,
			Management Committee
			of the National
			Development Fund,
			Executive Yuan

			Former Advisor,
			Asian Development Bank.

==> picture [122 x 27] intentionally omitted <==


		Educational	Professional
Title	Name			Current Positions	Shareholding	Legal Entity	Others
		Background	Background			Rt
						epresen

Independent	Mr.	MBA, Harvard	Former Vice President,	Independent Director,	0	None	None
Director	Bing Shen	Business School,	Morgan Stanley	Far Eastern International
		U.S.A.		Bank.
			Former Executive
			Director,	Independent Director,
			Morgan Stanley	Far Eastern New Century
				Corporation.
			Former Executive
			Vice President,	Independent Director,
			China Development	Elite Material Co., Ltd.
			Industrial Bank.
				Director,
			Former President	Chairman of the
			CDIB & Partners	Corporate Governance
			Investment Holding.	Committee
				CTCI Corporation.
Independent	Ms.	Master’s degree	Former Chairperson,	Independent Director,	0	None	None
Director	Susan S.	in International	Bank of Taiwan	Far Eastern International
	Chang	Economics,		Bank
		National Taiwan	Former Chairperson,
		University.	Taiwan Financial	Chairperson,
			Holdings	Jinniujin Business Co., Ltd.
		BA, Dept. of	Former Vice	Independent Director,
		Economic,	Chairperson, Financial	Lungyeng Co., Ltd.
		National Taiwan	Supervisory
		University	Commission	Independent Director,
				UBI Pharma Co., Ltd.
			Former Administrative
			Deputy Minister,	Supervisor,
			Ministry of Finance	Entie Tech-Engineering
				Co., Ltd.
			Former Director-General,
			National Treasury
			Administration,
			Ministry of Finance

			Former Vice
			Commissioner,
			Bureau of Monetary
			Affairs

			Former Deputy Chief,
			Dept. of Monetary Affairs

			Former Deputy Director,
			Economic Research
			Dept., Council for
			Economic Planning And
			Development,
			Executive Yuan
Independent	Ms.	BA, National	CPA,	Independent Director,	0	None	None
Director	Hsiao Hui	Chengchi	Deloitte Touche	Les enphants Co. Ltd.
	Wang	University Taiwan
		,	Supervisor,	Director,
			CTCI Advanced systems	TN Soong Foundation

			Inc.
				Member Of Executive

				Committee,
				Taiwan Corporate
				Governance Association

Handbook for 2018Annual Shareholders’ Meeting

Attachment VIII

Current Shareholding of Directors and Independent Directors

As on April 22, 2018

	Name of persons		Number of	Percentage of
Position		Representatives
	or companies		shares	shareholdings


Chairperson	Yu Ding Industrial Co., Ltd.	Ching-Ing Hou	9,700,697	0.30%


Vice Chairman	Douglas Tong Hsu	-	6,051,816	0.19%

Independent Director,
	Ben C.B. Chang	-	0	0
Managing Director


	Far Eastern New Century
		Shaw Y. Wang	83,245,165	2.62%
	Corp
Executive Director	.

	Asia Cement Corp.	Tsung-Ming Chung	74,814,783	2.35%

	Far Eastern New Century
		Humphrey Cheng	83,245,165	2.62%
	Corp.


	Far Eastern New Century
		James Wu	83,245,165	2.62%
	Corp
Director	.

	Asia Cement Corp.	Shi-Chun Hsu	74,814,783	2.35%

	U-Ming Marine Transport
		Min-Teh Yu	74,760,942	2.35%
	Corp.



	Bing Shen	-	0	0
Independent Director

	Susan S. Chang	-	0	0


The total shareholdings of all directors on the book closing date			248,573,403	7.81%


The minimum shareholdings of all directors required by law			76,309,286	2.40%

Note: The individual shareholdings of representatives are excluded.

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Attachment IX

Impact of Stock Dividends Distribution on Operating Results, Earnings per Share and Shareholders’ Return on Investment

Not applicable.

Handbook for 2018Annual Shareholders’ Meeting

GENERAL INFORMATION

I Articles of Incorporation of Far Eastern International Bank

Chapter I. General Provisions

Article 1

The purpose of this Bank is to support the government policy of financial internationalization and liberalization and to promote the development of domestic economy and industry. The Bank shall be named FAR EASTERN INTERNATIONAL BANK CO., LTD. and be incorporated as a Company Limited by Shares in accordance with the Bank Law and the Company Law of the Republic of China.

The English name of the Bank is to be FAR EASTERN INTERNATIONAL BANK.

Article 2

The head office of the Bank shall be located in Taipei, Taiwan, the Republic of China. Whenever deemed necessary to facilitate or promote business, the Bank may establish sub-organizations in any appropriate locations both at home and abroad.

Chapter II. Business of the Bank

Article 3

The business of the Bank shall be categorized as H101021 Commercial Banking Industry, H601011 Personal Insurance Agency and H601021 Property and Liability Insurance Agency.

Article 3-1

The scope of business of the Bank shall be as follows:

(1) To accept check deposits;
(2) To accept demand deposits;
(3) To accept time deposits;
(4) To provide short or long term loans;
(5) To accept discounted notes;
(6) To invest in government bonds, short term bills, corporate bonds and financial bonds;
(7) To engage in domestic and foreign remittance;
(8) To accept commercial bill of exchange;
(9) To issue local and foreign letters of credit;
(10) To engage in local and foreign guarantee service;
(11) To act as a collecting and paying agent;
(12) To act as agent for selling government bonds, treasury bills, corporate bonds and company stocks;
(13) To engage in credit card business;
(14) To engage in custodial and warehousing business;
(15) To engage in safe boxes leasing business;

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(16) To buy and sell foreign cash and traveler’s check;
(17) To provide guarantee service to export foreign exchange transaction, import foreign exchange transaction, general incoming and outgoing remittance, foreign exchange deposits, foreign exchange loans, and foreign exchange guaranteed payment;
(18) To provide foreign exchange collateralized account service;
(19) To engage in derivative financial products business to the approval of the central competent authority;
(20) To provide factoring service subject to the approval of the central competent authority;
(21) To issue financial bonds;
(22) To underwrite the issuance of corporate bonds;
(23) To provide the services as designated by the provisions of Trust Business Law;
(24) To engage in the securities business (to buy and sell securities as an agent);
(25) To sell gold bars, gold coins, and silver coins as an agent;
(26) To provide agent’s service related to the above-mentioned business or subject to the approval of the central competent authority;
(27)To provide personal insurance agency services;
(28) To provide property and liability insurance agency services;
(29) To engage in other related business subject to the approval of the central competent authority.

Chapter III. Shares

Article 4

The total authorized capital of the Bank is to be Thirty Five Billion New Taiwan Dollars (NT$45,000,000,000), Three billion and Five Hundred Million (4,500,000,000) common shares with a par value of Ten New Taiwan Dollars (NT$10) per share, which may be partially issued, from time to time, by the Board of Directors under authorization.

Issuance of Preferred Stock shall not exceed the amount described above.

Article 4-1

The Bank has issued Series A Registered Preferred Stock. The rights, obligations, and other important terms and conditions are listed as follows:

Should there be net income after the closing of annual accounts, the Bank shall make up the loss of the previous years. There should be retained a legal reserve of thirty per cent(30%), then special reserve shall be retained or reversed in compliance with the law. After that, the remaining surplus together with the unallocated surplus of the last year should first be paid for the dividends of the current year on the Series A Preferred Stock.
The Series A Preferred Stock are non-cumulative preferred shares, and the dividends rate of Preferred Stock shall be capped at 8% per annum. The distributable dividends shall be calculated based on the actual selling price, and be distributed annually by cash. After the books of accounts are recognized in the yearly Shareholders’ Meeting, the Board of Directors shall separately set an effective date for paying such dividends.

In the year of issuance and redemption, the distribution of the payable dividends shall be

Handbook for 2018Annual Shareholders’ Meeting

calculated based on the actual number of days the Series A Preferred Stock remained outstanding in that year.
The Bank has sole discretion on the distribution of preferred share dividends. If after annual audited accounts are prepared, there is no earnings and no distributing dividends of common stocks or insufficient earnings for distributing dividends of Series A Preferred Stock, or if such kind distribution will cause the Bank’s capital adequacy ratio to fall below the minimum requirement stipulated by the Regulations Governing the Capital Adequacy and Capital Category of Banks or the competent authorities, the cancellation of distributing Series A Preferred Stock dividends by resolution of the Bank will not be deemed as an event of default.
The remaining assets of the Bank shall be distributed to the holders of the Series A Preferred Stock in preference to the holders of the Common Stock provided. If the competent authority puts the Bank under receivership, appoints administrators to take over the Bank, or orders the Bank to suspend its business for special liquidation or to commence liquidation, the holder(s) of the Series A Preferred Stock shall have the same priority as the holders of common shares in terms of distribution of the Bank’s residual assets.
The holders of the Series A Preferred Stock shall have no voting and election rights in the Shareholders’ Meeting; but they shall have the right to be elected to be directors.
Except the right of receive the dividends as provided in Sub-paragraph 2 of this Paragraph, the holders of the Series A Preferred Stock shall have no right to the distribution of the cash or capital set aside from the surplus and capital surplus, available to the holders of the Common Stock.
In case of the issuing of new stock by the Bank due to capital increase, the holders of the Series A Preferred Stock shall have the same pre-emptive right to purchase the new stock like the holders of the Common Stock.
Commencing from the second day of the third anniversary from the issue date of the Series A Preferred Stock, except during the time when the transfer of shares is suspended in accordance with the law, the holders of the Series A Preferred Stock shall have the right, at any time, to convert the Series A Preferred Stock, in full or in part, into shares of Common Stock of the Bank at the conversion rate of one-to-one. The rights and obligations of the Common Stock so converted shall be the same as those of the other original Common Stock.
Should any shares of the Series A Preferred Stock be converted into shares of the Common Stock before the standard date of distribution of dividends, the holders shall not have the right to the distribution of the dividends of Preferred Stock in the current and following years.
The Series A Preferred Stock shall be perpetual without maturity date. Commencing from the second day of the fifth anniversary of the issue date, subject to the competent authority’s approval, if its ratio of the Bank’s regulatory capital to its risk weighted assets after redemption, as calculated by the Bank, will at least meet the relevant minimum ratios as set out in the Regulations Governing the Capital Adequacy and Capital Category of Banks, the Bank may, at any time, redeem, at the actual issuing price, the whole or a part of the Series A Preferred Stock in circulation.

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The Board of the Directors shall be authorized to prescribe the issuance date and the specific terms of the Series A Preferred Stock at the actual issue date according to the conditions of the current capital market, in accordance with the Bank’s Articles of Incorporation and applicable laws and regulations.

Article 5

The share certificate of the Bank shall be numbered, bearing the joint signatures or seals of three Directors, and issued only after it is duly underwritten in accordance with the Law.

The shares issued by the Bank need not be witnessed by printed share certificate but shall be registered with a securities central depository institution; and at the time of issuing new shares, the Bank may print a share certificate witnessing the total shares so issued but shall arrange to safe-keep such share certificate at a securities central depository institution.

At the request of any securities central depository institution, the Bank may re-issue share certificates witnessing large number of shares in exchange for those certificates witnessing small number of shares.

The Bank may issue special shares certificates.

If the Bank wishes to merge with another company, matters relating to such merger need not be decided by the resolution of special shareholders’ meeting.

Article 6

Any matter relating to share transactions of the Bank shall be handled in accordance with ‘the Regulation Governing the Handling of Share Transactions by Publicly Traded Companies’ and other relevant laws and regulations.

Article 7

Registration of transfer of a share certificate shall be suspended within sixty (60) days prior to a regular shareholders’ meeting, or thirty (30) days prior to a special shareholders’ meeting, or five (5) days prior to the date set for distributing dividends, bonuses, or other benefits.

Chapter IV. Shareholders’ Meetings

Article 8

Meetings of shareholders of the Bank are of two kinds, namely: regular meetings of shareholders and special meetings of shareholders. Unless otherwise defined in the laws and regulations, the meetings are called by the Board of Directors according to law. A regular meeting of shareholders shall be called by the board of directors within six months after the conclusion of each business year. A special meeting of shareholders may be called by the law whenever they deem it necessary.

Article 9

Notice of a regular meeting of shareholders shall be given to each shareholder and publicly announced thirty (30) days prior to the date of meeting. Notice of a special meeting of shareholders shall be given to each shareholder and publicly announced fifteen (15) days prior to the date of meeting. The notice shall state the time, place, and the reasons for calling the meeting.

Handbook for 2018Annual Shareholders’ Meeting

Article 10

Unless otherwise provided in the Company Law, a quorum of the meeting of shareholders shall consist of shareholders holding more than half the total outstanding shares issued by the Bank, resolutions of shareholders shall be made by a majority vote of shareholders present in person.

Article 11

The powers of the meeting of shareholders shall be as follows:

(1) To prescribe and amend the Articles of Incorporation;
(2) To elect the directors;
(3) To review the books prepared by the board of directors and the Audit Committee’ reports;
(4) To review proposals governing the increase or decrease of the share capital of the Bank;
(5) To distribute profit or make up the deficit;
(6) To resolve on any other important matters or those as provided in the Company Law.

Article 12

When the shareholder is unable to attend the Shareholders’ Meeting, the entrusted deputy may attend the meeting and exercise the shareholder’s rights according to Article 177 of the Company Act. The entrusted deputy is not the shareholder only.

Unless the Company Law provides otherwise, the designation of a proxy by any shareholder shall be subject to the ‘Regulation Governing the Attendance by Proxy of Shareholders’ Meetings of Publicly Traded Companies’.

Article 13

Unless the Company Law or the Articles of Incorporation of the Bank should provide otherwise, the meetings of shareholders shall be presided over in accordance with the Rules of Proceedings for Meetings of Shareholders of the Bank.

Article 14

The resolutions at the Shareholder’s Meeting shall be documented in the Meeting minutes. The Meeting minutes shall be signed or stamped by the Chairman and the resolutions shall be exercised according to Article 183 of the Company Act.

Chapter V. Board of Directors and Managers

Article 15

The Bank shall have nine (9) to fifteen (15) Directors, all to be elected among the shareholders with capacity at a shareholders’ meeting. The directors shall include not less than three Independent Directors, and not less than one-fifth of the director seats shall be held by the Independent Directors. A candidate nomination system shall be adopted for the election of Directors. The shareholders shall elect the Directors from the list of candidates of Directors. Any matters relating to nomination shall be handled in accordance with Article 192-1 of the Company Act and the relevant laws and regulations.

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The Bank’s Audit Committee is organized by all independent directors in accordance with the provisions of the Securities Exchange Act. Members of the Audit Committee, the exercise of authorities, and other binding matters are processed in accordance with the governing law or the organizational regulations. The organic regulation of the Audit Committee is separately prescribed by the Board of Directors.

The number of total shares owned by the Directors shall be prescribed in accordance with the ‘Regulation Governing the Shareholding Percentage of Directors and Supervisors and its Verification of Publicly Traded Companies’.

Article 16

The tenure in office of the Directors shall be three (3) years. All Directors are eligible for reelection.

Article 17

Three to five Managing Directors shall be elected by and from among the Directors. The Managing Directors shall include not less than one Independent Director, and not less than one-fifth of the Managing Director seats shall be held by Independent Directors. The Chairman and Vice Chairman of the Board of Directors shall be elected by and from among the Managing Directors. Directors and Managing Directors shall form the Board of Directors and the Board of Managing Directors respectively.

The Board of Managing Directors shall carry out the functions of the Board of Directors while the Board of Directors is in recess.

One to Two Executive Directors shall be elected by and from among the Board of Directors. The Executive Directors shall attend meetings of the Board of Managing Directors but shall not vote.

Article 18

The Chairman of the Board of Directors shall externally represent the Bank and internally preside over the shareholders’ meetings, the meetings of the Board of Directors, and the meetings of the Board of Managing Directors. If, for temporary leave or other reasons, the Chairman is unable to exercise his powers, the Vice Chairman of the Board of Directors shall act on his behalf; and if the Vice Chairman likewise is unable to exercise his powers, the Chairman of the Board may designate one Managing Director to act on his behalf. In the absence of such designation, the Managing Directors or Directors shall elect one among themselves to exercise these powers.

Article 19

Regular meetings of the Board of Directors shall be convened once every three (3) months; and meetings of the Board of Managing Directors may convene from time to time.

In calling a meeting of the board of directors, a notice setting forth therein the subject(s) to be discussed at the meeting shall be given to each director no later than 7 days prior to the scheduled meeting date by means of personal delivery, fax, electronic mail, or postal delivery; however, in the case of emergency, the meeting may be convened at any time by the same means of notice as provided above.

Handbook for 2018Annual Shareholders’ Meeting

If a Director is unable to attend the meeting, he may appoint another Director to act on his behalf at the meeting in accordance with the law.

The preparation and distribution of the minutes of meeting of the Board of Directors may be effected by means of electronic transmission.

Article 20

The Power of the Board of Directors shall be as follows:

(1) To review and approve any corporate rules or regulations;
(2) To review and approve business plan;
(3) To propose as to the increase or decrease of capital;
(4) To decide as to whether to establish, to revoke, or to change any of the branches and/or representative offices of the Bank;
(5) To review important contracts;
(6) To prepare and compile budgets and settlement of accounts;
(7) To decide as to whether to buy or sell real estates;
(8) To propose as to the appropriation of profits or surplus;
(9) To review and approve big loan applications and important businesses;
(10) To Review and approve the appointment and dismissal of officers and managers of Finance, Accounting, Risk Management, Legal Compliance, and Internal Audit;
(11) To review and approve the appointment and dismissal of each department head of both the administrative and business units.
(12) To review matters assigned by the Chairman of the Board of Directors and the proposals submitted by the President;
(13) To carry out the resolutions of the shareholders’ meeting;
(14) To perform any other functions as may be prescribed by laws and regulations.

Article 21

The Board of Directors shall be authorized to resolve on the remunerations of the directors based on their contribution to the operation of the Bank and the comparable level as offered by the other companies in the same trade.

Article 22

The Bank’s management includes President, Executive Vice Presidents, Heads of Business Unit, Deputy Executive Vice Presidents, Department Heads (Managers and Officers), and Branch Managers.

The Bank shall appoint: a President to manage the overall business of the Bank in accordance with the policy adopted by the Board of Directors; and a number of managers at all levels are appointed to assist the President. Besides, the Bank shall also appoint one Chief Auditor to manage the overall auditing matters of the Bank. Appointment and dismissal of the abovementioned personnel shall be approved by a majority vote of the Directors present at a Meeting of Board of Directors.

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Chapter VI. Accounting

Article 23

The fiscal year of the Bank shall be from January 1st to December 31st, and based on the calendar years of the Republic of China. There shall be two accounting periods in a year. June 30 shall be the settling date for the 1st period and December 31 that for the second period. At the end of the fiscal year, an annual settlement of accounts shall be conducted.

Article 24

For the purpose of settling the accounts of the Bank, the Board of Directors shall prepare various documents and statements and present them to the Audit Committee for examination thirty (30) days prior the regular meeting of shareholders.

After it is submitted to and audited by the Audit Committee, it should be submitted to the regular shareholders meeting for acknowledgment.

The documents enumerated in the preceding paragraph shall be declared to the competent authorities in accordance with the Company Act, Securities and Exchange Act, Banking Act and other laws and ordinances concerned and shall be duly promulgated as required.

Article 25

If there be net income before income tax, remuneration of directors and employees’ compensation, the Bank should retain an employees' compensation of 3.5%-4.5% and a remuneration of directors no greater than 1.5%. Should there be accumulated loss, the Bank shall retain earnings to cover the loss in advance.

Employees' compensation may be distributed in the form of stocks or in cash. The amount distributable as employees' compensation and remuneration of directors shall be decided by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting.

Article 25-1

In case of net income after settlement of accounts for each fiscal year, the Bank shall recover all the losses incurred in the previous years, if any, before setting aside a legal reserve of thirty per cent (30%) of the net profit and appropriating, according to law and regulations, a special surplus shall be retained or reversed. The remaining amount together with the accumulated retained profits of the last year shall first be distributed to the dividends of Preferred Stock. After having had certain portion set aside based on the condition of operation, the board of directors shall prepare the surplus earning distribution to submit to its shareholders for their decisions.

Before the above-mentioned legal reserve reaches the amount of total paid-in capital, the maximum appropriation of cash dividends shall not exceed fifteen percent (15%) of the total paid-in capital.

Handbook for 2018Annual Shareholders’ Meeting

Allocation of profits as prescribed under Paragraph 1 above shall be proposed by the Board of Directors in accordance with the existing circumstances at the time, taking into account the future development plan of the Bank. Any allocation of cash dividend shall, in principle, be no less than 10% of the total stock interest and stock dividends to be distributed that year.

Chapter VII. Supplemental Provisions

Article 26

Rules governing the organization of the Bank, and other rules and regulations shall be separately prescribed by the Board of Directors.

Article 27

The matters not provided for in the Articles of Incorporation of the Bank shall be dealt with in accordance with the Bank Law, the Company Law, and other relevant financial laws and regulation.

Article 28

These Articles of Incorporation were established on May 14, 1990 and shall be effective as of the date on which they are approved by the competent authority.

※ The first amendment was made, on December 9, 1991, by the Promoters’ Meeting.
※ The second amendment was made, on May 21, 1993, by the Shareholders’ Meeting.
※ The third amendment was made, on May 19, 1995, by the Shareholders’ Meeting.
※ The fourth amendment was made, on May 22, 1996, by the Shareholders’ Meeting.
※ The Fifth Amendment was made on May 21, 1997, by the Shareholders’ Meeting.
※ The Sixth amendment was made on May 20, 1998, by the Shareholders’ Meeting.
※ The Seventh amendment was made on May 19, 1999, by the Shareholders’ Meeting.
※ The Eighth amendment was made on April 28, 2000, by the Shareholders’ Meeting.
※ The Ninth amendment was made on May 11, 2001, by the Shareholders’ Meeting.
※ The Tenth amendment was made on June 5, 2002, by the Shareholders’ Meeting.
※ The Eleventh amendment was made on May 29, 2003 by the Shareholders’ Meeting.
※ The Twelfth amendment was made on April 16, 2004 by the Shareholders’ Meeting.
※ The Thirteenth amendment was made on June 27, 2006 by the Shareholders’ Meeting.
※ The Fourteenth amendment was made on June 20, 2007 by the Shareholders’ Meeting.
※ The Fifteenth amendment was made on June 20, 2007 by the Shareholders’ Meeting.
※ The Sixteenth amendment was made on June 6, 2008 by the Shareholders’ Meeting.
※ The Seventeenth amendment was made on June 6, 2008 by the Shareholders’ Meeting.
※ The Eighteenth amendment was made on June 10, 2009 by the Shareholders’ Meeting.
※ The Nineteenth amendment was made on June 10, 2009 by the Shareholders’ Meeting.
※ The Twentieth amendment was made on June 21, 2010 by the Shareholders’ Meeting.
※ The Twenty-first amendment was made on June 15, 2011 by the Shareholders’ Meeting.

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※ The Twenty-second amendment was made on June 26, 2012 by the Shareholders’ Meeting. ※ The Twenty-third amendment was made on June 19, 2013 by the Shareholders’ Meeting. ※ The Twenty-fourth amendment was made on June 24, 2014 by the Shareholders’ Meeting. ※ The Twenty- fifth amendment was made on June 16, 2015 by the Shareholders’ Meeting. ※ The Twenty- sixth amendment was made on June 15, 2016 by the Shareholders’ Meeting.

The amendment of Articles of Incorporation shall take effect on approval by the shareholders’ meeting.

Handbook for 2018Annual Shareholders’ Meeting

II Rules Governing Conduct of Shareholders’ Meeting of Far Eastern International Bank

Last amended on June 24, 2014

Article 1 The shareholders’ meeting of the Company shall be held according to the rules herein.

Article 2 The location for shareholders’ meeting shall be the Company’s place of business or a place convenient for attendance by shareholders (or by proxies) that is suitable to holding of this meeting. The meeting shall be held between 9:00AM and 3:00PM.

The meeting notice of the shareholders’ meeting shall state the registration time, location and other important information. The aforesaid registration time shall start at least thirty minutes before the beginning of the meeting. The registration desk shall be featured with clear instructions and competent staffs.

When convening shareholders’ meeting, the Company shall incorporate electronic vote casting as one of the alternative ways to cast the vote, and the procedure of electronic casting shall be written in the notice of shareholders’ meeting.

Shareholders who vote via electronic casting is deemed as presented in person.

With respect to extemporary motions, amendments of the original proposals, and substitute proposals raised in the shareholders’ meeting, those who vote via electronic casting shall be considered as abstain.

Shareholders (or proxies) shall attend shareholders’ meeting based on attendance cards, sign-in cards, or other certificates of attendance. Solicitors soliciting proxy forms shall also bring identification documents for verification. Shareholders (or proxies) when attending the meeting shall hand in sign-in cards. Number of shareholders in attendance shall be calculated based on the number of attending shares, which equals to the sum of number of shares shown on the signed attended forms and the number of voting shares via electronic casting.

The Company may appoint lawyers, accountants or related personnel to attend the shareholders’ meeting.

The personnel in charge of handling the affaires of the meeting shall wear identification badge or armband.

For a shareholders’ meeting convened by the board of directors, the chairman of the board of directors shall preside at the meeting. If the chairman of the board of directors is on leave or unable to exert the rights, the vice-chairman of the board of directors shall preside instead. If the position of vice-chairman is vacant or the vice-chairman is on leave or unable to exert the rights, the chairman of the board of directors shall designate a director to preside at the meeting. If no director is so designated, the chairman of the meeting shall be elected by the board of directors from among themselves. When a director serves as chairman, the director shall be one who has held that position for six months or more and who understands the financial and business conditions of the Bank. The same shall be true for a representative of a juristic person director that serves as chairman.

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For a shareholders’ meeting convened by any other person having the convening right, he/she shall act as the chairman of that meeting; if there are two or more persons having the convening right, the chairman of the meeting shall be elected from among themselves.

The complete processes of the meeting shall be recorded by voice and video recorders and all the records shall be kept by the Company for a minimum period of at least one year. If a shareholder fi les a lawsuit pursuant to Article 189 of the Company Law, the video and audio records shall be retained until the conclusion of the litigation.

Article 3 The chairperson shall announce starting of the meeting when the attending shareholders (or proxies) represent more than half of the total shares issued in public. The chairperson may announce postponement of meeting if the legal quorum is not present after the designated meeting time. Such postponement is limited to two times and the aggregated postponed time shall not exceed one hour. If quorum is still not present after two postponements but the attending shareholders (or proxies) represent more than one third of the total shares issued in public, tentative resolution/s may be passed with respect to ordinary resolution/s by a majority of those present.

After proceeding with the aforesaid tentative resolutions, the chairperson may put the tentative resolutions for re-voting over the meeting if and when the shares represented by the attending shareholders (or proxies) reached the legal quorum.

Article 4 If the shareholders’ meeting is convened by the board of directors, the agenda shall be designated by the board of directors. The meeting shall proceed in accordance with the designated agenda and shall not be amended without resolutions.

If the meeting is convened by person, other than the board of directors, having the convening right, the provision set out in the preceding paragraph shall apply mutatis mutandis.

Except with shareholders’ resolution, the chairperson shall not declare adjournment of the meeting before the first two matters set out in the agendas (including extemporary motions) are concluded. During the meeting, if the chairperson declares adjournment of the meeting in violation of the preceding rule, a new chairperson may be elected by a resolution passed by majority of the attending shareholders to continue the meeting.

When the meeting is adjourned by resolution, the shareholders shall not elect another chairperson to continue the meeting at the same location or another venue.

Article 5 The shareholders (or proxies) shall complete statement slip setting out the number of his/her attendance card, name and statement brief before speaking, and the chairperson will designate the order in which each person is to speak during the session.

No statement will be considered to have been made if the shareholder (or proxies) merely completes the statement slip without speaking at the meeting. If there are any discrepancies between the content of the statement slip and the speech made, the statement to be adopted shall be the statement confirmed.

Handbook for 2018Annual Shareholders’ Meeting

Article 6 Any proposal for the agendas shall be submitted in written form. Except for the proposals set out in the agenda, any proposal by the shareholders (or proxies) to amend, substitute or to initiate extemporary motions with respect to the original proposal shall be seconded by other shareholders (or proxies). The same rule shall apply to any proposal to amend the agenda and motion to adjourn the meeting. The shares represented by the proponents and the seconders shall reach 100,000.
Article 7 The explanation of proposal shall be limited to 5 minutes. The statement of inquiry and reply shall be limited to 3 minutes per person. The time may be extended for 3 minutes with the chairperson’s permission.

The chairperson may restrain shareholders (or proxies) from speaking if that shareholders (or proxies) speak overtime, speak beyond the allowed frequency or content of the speech is beyond the scope of the proposal. When a shareholder (or proxy) is speaking, other shareholder (or proxy) shall not interrupt without consent of the chairperson and the speaking shareholder (or proxy). Any disobedient of the preceding rule shall be prohibited by the chairperson. Article 15 of this meeting rule shall apply if the disobedient do not follow the chairperson’s instructions.

Article 8 For the same proposal, each person shall not speak more than 2 times.

When a juristic person is a shareholder, only one representative shall be appointed to attend the meeting.

If more than two representatives were appointed to attend the meeting, only one representative is allowed to speak.

Article 9 After speaking by the attending shareholder (or proxy), the chairperson may reply in person or assign relevant officer to reply.

Over the proposal discussion, the chairperson may conclude the discussion in a timely manner and where necessary announce discussion is closed.

Article 10 For proposal in which discussion has been concluded or closed, the chairperson shall submit it for voting.

No discussion or voting shall proceed for matters unrelated to the proposal.

The personnel responsible for overseeing and counting of the votes for resolutions shall be appointed by the chairperson with the consent of the shareholders (or proxies). The person responsible for vote overseeing shall be of the shareholder status.

Article 11 In regards to the resolution of proposals, unless otherwise provided for in the relevant law and regulation or Company’s articles of incorporation, resolution shall be passed by a majority of the voting rights represented by the shareholders (or proxies) attending the meeting.

The proposal for a resolution shall be deemed approved if no objection expressed by shareholders casting their votes via electronic casting, and if the chairperson inquires and receives no objection from shareholders in attendance in person.

The validity of such approval has the same effect as if the resolution has been put to vote.

Should objection of a proposal be expressed, such proposal shall be put to vote.

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All proposals may be put to vote one after the other by its sequence, or may be put to vote together and numbers of votes for each proposal are counted separately. Whichever way of the voting procedures shall be decided by the chairperson.

If there are amendments or substitute proposals for the same proposal, the sequence of which to be put to vote shall be decided by the chairperson. If one of the two proposals has been approved, the other shall be deemed rejected without requirement to put it to vote.

The results of voting and election shall be announced after the vote calculation on the spot and kept for records.

Article 12 During the meeting, the chairperson may at his/her discretion declare time for break.

Article 13 The meeting shall be adjourned if encountering an air-raid alarm during the meeting. The meeting shall resume one hour after the alarm is lifted.
Article 14 The chairperson may maintain the meeting order by instructing the security guards. The security guards shall wear the armband for identification when helping maintaining the venue order.
Article 15 The shareholders (or proxies) shall obey the instructions of the chairperson and security guards in terms of maintaining the order. The chairperson or security guards may exclude the persons disturbing the shareholders’ meeting from the meeting.
Article 16 For matters not governed by the rules specified herein, shall be governed according to Company Law, Securities Exchange Act and the other related laws and regulations.
Article 17 The regulations will be implemented with the approval of the Preparatory Commission. The amendment of the regulations will be implemented after it is resolved in the shareholders’ meeting.

Handbook for 2018Annual Shareholders’ Meeting

III Guidelines for Electing Directors of Far Eastern International Bank

Last amended on June 16, 2015

Article 1 The rules shall apply to the election of directors of the Bank.

Article 2 The election of the Bank’s directors shall be on the basis of accumulation of votes. Ballot of the eligible voter shall be assigned with code of certificate of present voter. The ballots to be prepared by Board of directors shall indicate serial number of present voter and the number of votes he represented.
Article 3 The election of the Bank’s directors and Independent directors shall be elected by candidate nomination system in accordance with Article 192-1 of Company Law and regarding the qualification. Independent directors, non-independent directors in accordance with the articles of incorporation of the bank and the board of directors shall be elected in the same election, but the ballots shall be calculated separately and respectively. For the seats of the Bank’s Directors and Supervisors, the ones winning more ballots shall be elected to fill up the seats separately as independent directors, non-independent directors and supervisors. Independent condition and other matters, “ Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies” and other related laws and regulations should be followed.
Article 4 In the beginning of the election, the chairman shall designate two canvassers and two tally clerks to carry out relevant missions. The canvassers shall be limited to shareholders of the Bank.

Article 5 The canvasser shall perform the following missions:

(1) Prior to casting of votes, open the vote box to the participants and have a seal attached onto the cover of box.
(2) Maintain good order for vote casting and prevent any negligence or irregularities in voting.
(3) Upon completion of voting, remove the seal from box cover, take out the ballots and count the number of ballots.
(4) Check to see if there are any invalid votes and have the valid votes hand over to tally clerk.
(5) Conduct supervision over the votes recorded by tally clerk and votes won by the eligible directors/supervisors.
Article 6 Where a candidate is a natural person, the voters shall expressly enter the 80 candidate’s account name and shareholder account number on the ballots if he is a shareholder, and shall expressly enter the candidate’s name and ID document number on the ballots if he is not a shareholder. Where a candidate is a government or a corporate shareholder, other than the shareholder account number, the voters may enter as well the name of the government or a corporate shareholder and name of representative. In case of several representatives, the names of representatives shall be entered.

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Article 7 A ballot is null and void if:

(1) Not in the ballot form as required under the Regulations.
(2) Bearing two or more candidates on a same ballot.
(3) Remaining blank bearing no entries from the vote.
(4) Bearing entries not satisfactory to Article 6 or bearing other irrelevant wording.
(5) Bearing vague, illegible wording.
(6) Bearing a candidate who proves nonconforming in qualifications.
Article 8 The ballot boxes shall be prepared by the Bank and shall be opened, checked and verified by ballot monitor in public before balloting process.
Article 9 After all ballots are cast into ballot box, the canvasser shall join the tally clerk in opening of ballot box.

Article 10 The canvasser shall supervise over the count of ballots of tally clerk.

Article 11 In case of any doubts about the ballots, the canvasser shall be requested to conduct a verification to see the validity of the ballots. The invalid ballots shall be segregated from the valid ones and be certified as invalid ballots by the canvasser after having counted number of ballots and the voting rights.
Article 12 According to results of the votes, the canvasser shall conduct a check on the valid ballots and invalid ballots and produce a record indicating the number of valid ballots and voting rights, the invalid ballots and the voting rights and then the chairman shall announce the names of the elected Directors and Supervisors.

Article 13 Board of Directors shall issue notice of the elected directors.

Article 14 These guidelines shall become effective upon having been approved by meeting of shareholders and the same provision shall also apply to revision thereto.

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AI assistant

FEIB — AGM Information 2018

52204_rns_2018-07-05_bb68fcd9-9590-41a8-91bd-7e4b7683c7a2.pdf

Contents

Far Eastern International Bank (FEIB)

2018 Annual Shareholders’ Meeting (Translation)

Meeting Agenda

Meeting begins

Chairperson makes remarks

Report Items (Non-Voting Items)

Approval Items (Voting Items)

Proposed Resolutions and Directors Election (Voting Items)

Questions and Motions (Voting Items)

Meeting adjourned

Report Items (Non-Voting Items)

1. 2017 Business Report

2. 2017 Financial Statements

3. Audit Committee’s Review Report for 2017 Business Report and Financial Statements

4. 2017 Summary of Employees’ Compensation and Directors’ Remuneration

5. Amendments to “Codes of Ethical Conduct of Far Eastern International Bank”

Approval Items (Voting Items)

2. Proposal of 2017 Earnings Distribution

Explanatory Notes:

Proposed Resolutions and Directors Election (Voting Items)

2. Proposal of Issuing New Shares - to Capitalize Shareholder Dividends

3. Proposal of Private Placement - to issue Common Shares, Preferred Shares, Convertible Bonds or a Combination of above Securities to Specific Parties

4. Election of Directors (Including Independent Directors)

5. Waiver of Non-Competition Binding to Directors

Attachment I

2017 Business Report

Operating Results for 2017

Changes in Operations Overview

2. Business Overview

(1) Target Achievement

3. Ratings

4. Research and Development

Operating Plans for 2018

1. Operating Goals

A. Consumer Banking Business

B. Credit Cards

Attachment II

Independent Auditors’ Report & 2017 Financial Statements

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

to Owners of the Bank

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD.

BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD.

BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

FAR EASTERN INTERNATIONAL BANK LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

to Owners of the Bank

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

Attachment III

Attachment IV

2017 Summary of Employees’ Compensation and Directors’ Remuneration

Attachment V

Amendments to “Codes of Ethical Conduct of Far Eastern International Bank”

Attachment VI

FEIB AGM Information 2018