FEIB - Annual Report 2013 | FinancialReports.eu

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2013 Annual Report

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Annual Report
Sincerity
2013
Diligence
Thrift
Prudence
Innovation
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2013 年英文年報目錄 2013 Annual Report Contents

04 壹營運績效 Consolidated Financial Highlights

06 貳董事長嘉言 Chairperson’s Message

16 參本行簡介 Corporate Pro� le

16 一、基本資料 General Corporate Data

16 二、銀行簡介 Introduction

20 三、本行沿革 Milestones

24 四、本行組織系統簡圖 FEIB Organization Chart

26 肆公司治理 Corporate Governance

26 一、公司治理守則 Corporate Governance Principles 29 二、董監事成員 Board of Directors and Supervisors 33 三、經營團隊 Management Team 36 四、政策委員會 Policy Committees

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38 伍經營概況 Business Overview

38 一、關鍵績效成果 Key Performance Results
38 二、核心事業 Core Businesses
42 三、本年度經營計畫 Business Plans for 2014
50 陸財務狀況 Financial Information
50 一、合併簡明資產負債表 Cousolidated Simpli� ed Balance Sheet
52 二、合併簡明損益表 Cousolidated Simpli� ed Income Statement
53 三、合併資本適足性 Cousolidated Capital Adequacy
56 四、轉投資公司概況及未來計畫 Reinvestment Policies and Plans
60 柒風險管理 Risk Management
60 一、風險管理組織架構及政策 Risk Management Structure and Policy
62 二、各項風險管理策略 Risk Management Strategy
64 捌股東資訊 Shareholder Information
64 一、股利及股份 Shares and Dividends
65 二、信用評等 Ratings
66 玖企業社會責任 Corporate Social Responsibility
70 壹拾集團綜效 Group Synergy
74 壹拾壹其他資訊 Other Information
80 壹拾貳合併財務報表 Consolidated Financial Report

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營運績效
Consolidated Financial Highlights
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重要財務項目Key Financial Items (新臺幣/NT$)	重要財務項目Key Financial Items (新臺幣/NT$)	重要財務項目Key Financial Items (新臺幣/NT$)
YEAR	2012	2013
Total Assets(總資產)	465,583M	492,189M
BVPS(每股帳面價值)	$11.79	$12.26
ESP(每股盈餘)	$1.09	$1.30

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6% 4% 19%
492 , 189M
465,583M 12 . 26
11 . 79
1 . 30
1 . 09
2012 2013 2012 2013 2012 2013
總資產 T otal Assets 每股帳面價值 BVPS 每股盈餘 EPS
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重要財務比率 Key Financial Ratios(%)

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YEAR 2012 2013
ROE( 股東權益報酬率 ) 10.02 11.05
ROA( 資產收益率 ) 0.56 0.64
NPL Ratio( 逾放比 ) 0.46 0.37
Coverage Ratio( 呆帳覆蓋率 ) 272 392
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10% 14% -20% 44%
392
272
11 . 05 0 . 64
10 . 02 0 . 56 0 . 46
0 . 37
2012 2013 2012 2013 2012 2013 2012 2013
股東權益報酬率 ROE 資產收益率 ROA 逾放比 NPL Ratio 呆帳覆蓋率
Coverage Ratio
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營運績效 Consolidated Financial Highlights

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市佔率第一之業務
(Top 1 market Share Businesses )
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60%
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62%
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65%
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70%
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�� FEIB
OTHERS 40%
60%
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OTHERS 38%
62%
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35%
OTHERS
65%
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OTHERS 30%
70%
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OTHERS
74%
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Best Potential Award of Wealth Management

Best Con� dence Award of Wealth Management

Best Bank Service Image Award

貳、董事長嘉言

Our Vision

Become right-sized and specialized � nancial company in the greater China area.

董事長侯金英 Chairperson Ms. Ching-Ing Hou

董事長嘉言 Chairperson’s Message

回顧 2013 年，全球經濟邁入緩慢復甦的歷程，美國預算僵局紓解及失業率降低經濟動能日趨轉強，日本安倍三箭政策刺激景氣回升，中國大陸調整結構放緩經濟成長，歐元區財務困境亦逐步改善；反觀我國對外貿動能減弱及國內需求低迷，經濟成長率不斷向下修正。展望 2014 年，全球景氣預測將優於 2013 年，我國經濟成長動能亦溫和加速，兩岸金融待服貿協議通過後將迎向開放新紀元，締造銀行業新獲利契機。

本行 2013 年整體經營績效，在全體同仁齊心兢業努力之下，展現優質獲利領先同業。2013 年稅後淨利 30.61 億元，較 2012 年度積極成長 20.01%，每股盈餘 (EPS) 1.30 元，較 2012 年度亦成長 19.27%，總資產報酬率 (ROA) 0.64%，股東權益報酬率 (ROE) 11.05%，連續四年均超過 10%，長期展現穩定成長之營運績效；逾期放款比率 0.37%，備抵呆帳覆蓋率 391.62%，均優於同業符合高優質銀行之標準。

In retrospective of year 2013, while the world economy showed signs of slow recoveries on resolving feud over budget, lower unemployment and stronger economic momentum incurred in the US, Abe’s Three Arrows spurring recovery in Japan, slow growth in China as a result of economic restructuring, as well as Eurozone gradually climbing out of recession, in Taiwan continuous downward adjustments of GDP growth were caused by the economic slowdown in trade and domestic consumption. Looking into 2014, more optimistic outlook of global recovery than 2013 with moderate growth of Taiwan economy, Taiwan’s banking industry is expected to embrace a new era with tremendous pro� table opportunities after the signing of the Service Trade Pact for the � nancial sector.

In 2013, thanks to joint efforts of all colleagues, Far Eastern International Bank (FEIB) managed to deliver an outstanding performance ahead of its peers. The fiscal year net profit was NT$ 3.061 billion with a signi� cant year-over-year growth of 20.01% and earnings per share (EPS) was NT$ 1.30 with an increase of 19.27%. The total return on assets (ROA) was 0.64%. The return on equity (ROE) was 11.05%, exceeding over 10% in four consecutive years which demonstrates steady performance. In addition, the asset quality of FEIB has surpassed industry standards with the provision for bad debt coverage ratio at 391.62% and NPL ratio at 0.37%.

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Our Mission Statement

Provide � nancial solutions to both individual and institutional customers within greater China. Create maximum value for customers, shareholders, and employees.

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�� Vice Chairman Mr. Douglas Tong Hsu

董事長嘉言 Chairperson’s Message

本行透過雙文化經營團隊導入最佳典範實務，持續推出優質創新的利基商品屢獲肯定。在財富管理方面獲頒卓越雜誌「最佳銀行服務形象獎」及「最佳財富管理信任獎」，並新設台北 101 分行結合遠智證券，提供私人銀行高端理財服務；在信用卡方面，開辦 NFC 手機信用卡、inControl 網路防盜刷、大紅利平台「i 兌換」APP 之 e 化與 M 化服務；在消金方面，消費分期、汽機車貸款之庶民經濟商品市佔持續第一；在法人金融方面，透過兩岸三地國際金融團隊，提供資本市場及結構型融資之企業理財商品，完成多筆指標性專案深獲業界矚目，海外與跨境獲利佔比已達三成。在金融市場方面推出可轉債資產交換及外匯保證金網路交易平台，鞏固利基商品優勢地位。

本行長期致力於推動各項公益活動，善盡企業社會責任。贊助伊甸基金會開發「幼兒發展檢測 APP」，獲衛生福利部頒發「健康促進雲端加值應用評選優質獎」；贊助太陽劇團「OVO 蟲林森巴」，推廣國際級表演藝術；與台大地理環境資源系及林務局合作以「台灣自然地景保育」為主題，推出 2014 年「台灣山海經」月曆，傳達環境保護之理念；持續培育人才成效卓越，連續十一年獲勞委會職訓局補助肯定。

The Bank’s bi-cultural management team with best practices continued to launch innovative and niche products. The Wealth Management Department was awarded the “Best Bank Service Image Award” and “Best Wealth Management Con� dence Award” from the Excellence Magazine. Additionally, the newly set up branch which combined Far Eastern International Securities Company Ltd. and FEIB at Taipei 101, aims to provide private banking services to high net worth clients. In terms of credit card business, NFC mobile payment, inControl anti-fraud MasterCard and i-bonus exchange app/platform were launched to offer e-banking and mobile-banking services. In the consumer banking business, installment, and automobile & motorcycle loans continued its lead position in market share. The international � nancial teams across Taiwan, Hong Kong and China under corporate banking not only provided capital market and structural � nance products, but also completed many landmark projects that accounts for 30% of the Bank’s overall pro� t attributed by overseas and cross-border businesses. Furthermore, the internet platform of convertible bond asset swap and FX margin trading were also developed in order to strengthen its niche position of � nancial market.

The Bank has long been committed to promoting various philanthropic activities and fulfilling the corporate social responsibilities (CSR). FEIB continued to fund Eden Welfare Foundation’s App development of “Children’s First Mile” which received “Health Promotion Cloud Value-Added Application Excellence Award” from the Ministry of Health and Welfare, sponsored the world-class performance of “OVO” by Cirque du Soleil, and published jointly with Department of Geography, National Taiwan University and the Forestry Bureau the aesthetic 2014 calendar titled “Taiwan Classic of Rivers and

Our

Competitive Strengths

Streamlined corporate structure with dedicated SBUs
Steady growth of assets, high m arket share in strategic � nancial products
Highly independent and well-de veloped risk management mechanism
Bi-cultural professional manage ment team
Leverage “Virtual” FHC platfor m for group
synergy

�� President Mr. Eli Hong

董事長嘉言 Chairperson’s Message

展望未來，本行將延續優質成長動能，持續推動「穩增長、固利基、優資產、開新局」策略。四大核心事業群均衡發展，以總資產成長至 6,000 億元為目標；持續鞏固利基產品優勢地位，發展庶民經濟商品；提高資本適足率，改善資金成本結構。運用 Big Data 與資料倉儲發掘行銷商機，聚焦經營高資產客群。實施接班人計畫，優化經營體質；開創 e 化與 M 化藍海商機，積極發展行動支付、第三方支付服務、金融網路化商品；同時為掌握兩岸金融開放契機，積極發展人民幣商品，尋求相互參股及策略聯盟伙伴，並因應服貿協議通過成立大陸據點，以積極佈局大陸市場。希冀透過領先的創新策略，有效推升成長的動能，強化市場競爭力，為客戶、股東及員工創造最大價值！

Mountains” with the theme of “Taiwan natural landscape reserve” to promote eco-friendly concept. In 11 consecutive years, we have been receiving grants from Training Center Bureau of Employment and Vocational Training Council of Labor Affairs in recognition of the Bank’s efforts in continuous talent cultivation.

In future, FEIB will continue its growth momentum to further develop its four pillar strategies: “steady growth, niche market, portfolio management, and new initiatives”. Aimed to grow total asset to its target of NT$600 billion, the Bank will also strive to maintain leadership positions of its niche products, develop affordable products for the general public, increase capital adequacy ratio, and improve capital cost structure. Through the application of Big Data and Data Warehouse, FEIB is committed to explore marketing opportunities for high net worth clients. We will implement Succession Plan to cultivate management talents, strengthen operations, and initiate niche market with “Blue Ocean Strategy” in e-banking and mobile banking by developing mobile payment, third-party payment, and on-line � nancial instruments. Furthermore, to seize opportunities from the opening of cross-Strait � nancial sector, the Bank is actively developing RMB products, seeking joint-venture and strategic partners, opening new branches in China after the passing of Service Trade Pact to enter the Greater China market. With leading innovative strategies, the Bank is determined to effectively push for growth, strengthen market competitiveness, and create maximum value for our customers, shareholders, and employees.

未來經營方針

2014 年業務推展，重點計畫如下 :

一、預期營業目標

本行 2014 年度重要營業目標如下：

（一）總資產：5,159 億元

（二）存款總額：4,236 億元

（三）放款總額：3,390 億元

二、經營方針與重要經營政策

（一）個人金融業務：

財富管理業務持續深耕併購慶豐銀行所擴增的分行通路，新設 101 分行，並結合遠智證券，專注經營高資產客群，積極發展 FE Direct、 Mobile Banking、第三方支付金流服務、全國首創的基金「觸觸發」功能等 e 化與 M 化創新服務。中小企業服務部業務持續擴編與培育業務團隊，增加服務據點，提供中小企業融資與理財之多元需求。台灣存託憑證 (TDR) 存託業務維持市佔率第一，積極推展新種信託商品及擴展手續費收入。

（二）消金及信用卡業務：

消費金融方面

持續擴展通路多元性與效益，強調整體性服務，一次滿足客戶在資金與理財規劃需求，輔以優化風險管理機制，兼顧資產規模成長與良好品質；面對市場競爭及法令調整，提升服務流程效率及品質，以穩固利基產品及市場領先地位；積極開發新產品、新通路、持續發展 e 化及 M 化商業模式，開創新商機。

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101 分行提供高端理財服務

Taipei 101 Branch Offers High-end Private Banking Services

遠東商銀擁有接軌國際金融集團業務的豐富經驗，包括 2010 年受讓 AIG 友邦信用卡業務、2011 年投資購買 ING 集團旗下安智證券，更名為遠智證券等。去年成立的 101 分行，為結合遠智證券的服務，提供投資金額 100 萬美元以上之高端客戶理財服務。其所架構的投資平台可直接與全球 37 個國家、50 多個交易所下單，堪稱目前國內投資涵蓋區域最廣。

FEIB has extensive experiences in working with international financial groups, which include acquiring AIG’s credit card business in 2010 and acquiring ING securities in 2011 to rename as Far Eastern International Securities. The newly established Taipei 101 Branch combined with Far Eastern International Securities provides premier private banking services to high-end customers with more than US$1 million worth of assets. Its investment platform is directly connected with 37 nations and 50 plus exchange houses around the world, covering the widest area of investments among local banks.

董事長嘉言 Chairperson’s Message

Operating Goals Operating Outlook for 2014 is summarized as follows:

1. Operating Targets:

Operating Targets for 2014 are summarized as follows:

(1)Total asset: NT$515.9 billion
(2)Total deposit: NT$423.6 billion
(3)Total loan: NT$339 billion

2. Operating Highlights:

(1) Individual Banking Business

The Wealth Management business continues to cultivate customers from the acquired Chinfon Bank, as well as the newly set up Taipei 101 Branch that combined with Far Eastern International Securities Company Ltd. to focus on high net worth customers. FEIB has been aggressively developing FE Direct, Mobile banking, third-party payment service, and Taiwan’s � rst online “Smart buy & sell” function for mutual fund investments that offer clients the most innovative e-banking and m-banking services. The Bank’s SME Service Department is also expanding service locations to meet SME customers’ various needs. The Bank not only maintains its number one position in Taiwan’s TDR market, but also proactively promotes new trust products to generate service fees.

(2) Consumer Banking and Credit Card Business

A. Consumer Banking Business

FEIB continues to expand the diversity and ef� ciency of its branch channels, focus on comprehensive services, and satisfy customers’ financing and wealth management needs; elevated asset scale and quality with enhanced risk management. Facing market competition and in compliance with regulation adjustments, the Bank aims to improve service efficiency and quality so as to develop niche products and maintain market leadership. FEIB also dedicates to developing new products, new channels, continuously developing e-commerce and M-commerce business models for new opportunities.

2. 信用卡方面

整合多元化之集團企業服務，以發揮跨業商品綜效。運用跨業集點優勢結合集團企業相關通路，強化 HAPPY GO 信用卡的形象；深耕遠銀 HAPPY GO 大紅利的價值，多元應用 HAPPY GO 點數，強化信用卡使用忠誠度。連結台塑聯名卡、HAPPY GO eTag 聯名卡，擴大交通類的消費族群；推出各項 e 化與 M 化創新方案，持續經營既有客戶，更藉由精進風險管理技術及 Database Management 分群經營客群，提升客戶用卡便利及高獲利產品競爭力以增加收入。

（三）法人金融業務

聚焦目標客群，掌握產業價值鏈之整體成長態勢，持續開發新客戶及新市場；深耕優質客戶，掌握客戶營運規劃資訊，尋找業務機會。建立風險性資產收益門檻，優化資產規模及組合。多元產品行銷，推展 e-commerce，強化客戶往來深度，以建立穩定的資金來源及存款結構。深化 Corporate Finance 業務，將機會財轉化為基本財、長久財；開辦財務顧問新種業務，提高附加價值及差異化服務。掌握人民幣業務，以多元化布局，開發大中華區商機。

（四）金融市場業務

提供客戶高度專業化之金融商品與服務，並專注於利基產品，鞏固可轉債資產交換、外匯保證金交易核心商品領導地位；發展 Capital Market 商品，加強深耕 TMU 及 ACH 業務，增加 Non-bank 收益來源；建構穩健財務結構，強化資產負債管理；嚴控風險，優化資產品質，獲利與風險管理兼顧，充分發揮高度競爭優勢之金融交易商品。積極研發創新服務，藉由外匯保證金及可轉債資產交換網路交易平台領先市場，深耕現有客戶關係擴大新客群。

董事長

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謹啟

董事長嘉言 Chairperson’s Message

B. Credit Card Business

FEIB continues to integrate the Group’s diversified enterprise resources for synergy of cross-industry products. Taking advantage of the bonus point program through “HAPPY GO” across various business sectors, FEIB is able to establish unique image and fortify loyalty in its “HAPPY GO INSIDE” credit cards. Cooperating with Formosa Group to launch Formosa co-branded card and Far Eastern Toll Collection to launch eTag co-branded card, the Bank expands its customer base in the transportation sector. The implementations of various innovative e-commerce and M-commerce plans shall serve existing customers. Furthermore, with enhanced risk management and Database Management for segmentation of customer groups, cardholder convenience is improved and high-pro� t products become more competitive to increase revenues for the Bank.

(3) Corporate Banking Business

FEIB continues to focus on target customers, seize overall growth momentum of the industrial value chain to develop new customers and new markets. Cultivate in depth the quality clients and understand their operational plans to seek business opportunities. Establish risk asset ceiling to optimize asset scale and composition. The Bank adopts multiproducts marketing, promotes e-commerce, strengthens customer relations, and builds up steady funding and deposit structure. Deepen Corporate Finance business, transfer opportunity wealth into basic and long-term wealth, initiate new financial consulting business, and engage in value-added and differentiating services. The Bank endeavors to develop RMB businesses with diversi� ed deployment to seek opportunities in the Greater China region.

(4) Financial Markets Business

FEIB provides highly professional financial products and services to customers, focuses on its niche products, and consolidates the leading positions of core products such as convertible bond asset swaps and FX margin trading. Additionally, the Bank develops Capital Market products, strengthens TMU and ACH businesses, and increases Non-bank revenues. The Bank also has a solid � nancial structure with excellent asset and liability management. FEIB enhances its asset quality by managing both profitability and risk management, thus, developing highly competitive � nancial transaction products. The Bank is also actively creating innovative services and cultivating existing customer relations to expand new client group through leading online platform of FX margin trading and convertible bond asset swaps.

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Chairperson

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參、本行簡介
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一、基本資料

Dec 31,2013

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�� 1992 年 01 月 11 日
�� 1998 � 11 � 27 �
�� ( �� )( �� 10 � ) 23,621,182
�� 2,481
�� 56
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�� BBB-
�� A (twn)
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二、銀行簡介

本行由實業家徐有庠先生創辦，徐有庠先生一生創立諸多事業，包括遠東新世紀、遠東百貨、亞洲水泥等知名企業，對國家經濟發展貢獻斐然。

1989 年，政府修正銀行法，開放民間設立銀行。徐有庠先生響應政府金融事業現代化、自由化、國際化之政策，於同年 1 月 19 日成立本行籌備小組，秉持「誠、勤、樸、慎」的實業精神與服務理念，積極運籌規劃。5 月 14 日發起人會議召開，議定資本額為新臺幣 100 億元，並於 10 月向財政部提出申請。

1991 年 8 月 1 日，本行獲准設立。於募足公開股款後，12 月 9 日召開創立會，會中通過公司章程，並選出 9 位董事及 3 位監察人。次年元月 11 日，經濟部通過本行之設立登記，並發予公司執照；4 月 9 日再獲財政部發給營業執照。隨即於 4 月 11 日，總行營業部、儲蓄部及台北逸仙分行正式對外營業。

本行簡介 Corporate Pro� le

(1)General Corporate Data

Dec 31,2013

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General Corporate Data
Date of Establishment January 11, 1992
Date of Listing on Taiwan Stock Exchange November 27, 1998
Paid-in Capital (Thousands)
23,621,182
(Par Value NT$10)
Number of Employees 2,481
Operating Units 56
Auditor Deloitte & Touche
Fitch Ratings Limited
Foreign Currency Long-term Rating IDR BBB-
National Long-term Rating A (twn)
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(2)Introduction

The Far Eastern International Bank (FEIB) was established by entrepreneur Mr. Y. Z. Hsu, Founder of many renowned enterprises including Far Eastern New Century Corporation, Far Eastern Department Stores, Asia Cement Corporation, etc. who had contributed much to the nation’s economic developments.

In 1989, to comply with the Government’s amendment of the Banking Act to establish private banks and policy to liberalize, modernize and globalize Taiwan’s � nancial sector, Far Eastern Group Founder Y. Z. Hsu formed a bank organizing task force with founding motto and service guidelines of “Sincerity, Diligence, Thrift and Prudence”, the Promoters’ Meeting was held on May 14, 1990 and then application was made to the Ministry of Finance in October for approval to establish bank with capital of NT$10 billion.

On August 1, 1991, the Ministry of Finance approved the establishment of FEIB. After conducting public offer shares, the Founding Meeting was held on December 9 which passed the articles of corporation and elected 9 Directors and 3 Supervisors for the Board. On January 11, 1992, the Ministry of Economic Affairs approved FEIB’s registration and issued the company license, thereafter on April 9 the Ministry of Finance issued the operating license. Soon on April 11, 1992, the Business Department, Savings Department and Taipei Yisen Branch of FEIB began operations.

開業之初，本行取得一般銀行及儲蓄銀行業務等開辦許可；之後陸續獲准開設信託部與國外部，辦理信託、投資、資產管理、理財諮詢與國外匯兌等業務。經營項目不斷擴充，得以為客戶提供嶄新且多元化的金融服務。同期間並選擇北中南具發展潛力地區，設立分行，建置全台服務通路網。

1995 年 11 月本行股票於櫃檯買賣中心掛牌，1998 年 11 月正式掛牌上市，並接受國際知名信評公司評等，歷年所獲評等等級皆符合主管機關投資等級之評等規定。此外為支應持續擴大的外幣資產，亦考量資金募集多元化與國際化之必要，本行於 2003 年 7 月獲財政部核准發行海外無擔保轉換金融債券，隨即發行零利率之海外無擔保轉換金融債券 1 億 1 仟萬美元。

本行面對業務成長與快速變化的市場環境，組織歷經多次變革。1999 年本行率先本國同業，確立事業群分立的組織，由行政管理群、企業金融群及消費金融群等三部分立開始，至 2006 年整合為法人金融、金融市場、個人金融、消金及信用卡等四大事業群，並加入行政支援群、風險管理處、資訊管理處等三大總行管理單位。接著又於法人金融與個人金融事業群設立電子金融專責部門，提供交易無遠弗屆且資訊即時、密集的網路銀行服務，逐步建立專業分工的金融服務團隊。事業群在各自運作之下，商品與服務得以持續創新，專業水平得以精實發展，業務動能亦不斷提升，多項業務名列國內領導品牌之一。

於追求業務成長與專業服務的同時，為兼顧作業的嚴謹與效率，本行於 2008 年成立作業及資訊服務中心，為前台金融服務提供高效的作業支援體系，不僅成本因作業集中化而降低，更設立各項產能與效益指標，持續精進相關流程。

近年來本行接軌多項國際級金融集團業務，於 2008 年完成與德意志銀行結盟成立德銀遠東投信（股）公司；2009 年受讓友邦國際（AIG）信用卡（股）公司之信用卡業務及應收帳款資產； 2011 年投資購買 ING 集團在台成立安智證券（股）公司，同年完成交割後更名為遠智證券。通路擴張由實體分行與數位通路雙向並進，2010 年初推出 FE Direct 網銀帳戶，同年 4 月正式承受慶豐銀行 19 家國內營業據點；同年 5 月個人金融事業群成立「中小企業服務部」，落實大分行計畫，以深耕中小企業客群之財富管理與融資業務。2011 年推出行動銀行 iPhone 版與 Android 版，逐步架構 e 化與 M 化的服務平台，並達兼顧通路效益與精緻服務品質的最適規模。本行與時俱進發展至今，共設有 55 處國內分行（含營業部）及香港分行，踏實發揮社會資本供需的金融功能，讓資本更有效率流通、交易，為經濟與市場注入活力。

本行簡介 Corporate Pro� le

In the early start, FEIB was authorized to operate general banking and saving businesses, then the trust and international banking department were inaugurated to offer trust, investment, asset management, � nance consulting and foreign exchange services. With continuous operating expansion, the Bank is able to provide clients with new and diversi� ed � nancial services. At the same time, new branches from north to south of Taiwan were set up at the selected areas with growth potential to build up an islandwide network of service channel.

In November 1995, FEIB went public by listing on the Over-the-counter trading of securities in Taiwan. In November 1998, the Bank was listed on the Taiwan Stock Exchange. FEIB’s investment grade ratings were assessed by world renowned ratings companies and the Bank has been considered a stable � nancial institution of investment grade. To cope with its enlarging foreign exchange asset and the need for diversi� ed and international portfolio, FEIB was approved by the Ministry of Finance to issue in July 2003 US$110 million worth of Unsecured Convertible Bonds overseas.

Responding to the growing businesses and quickly changing market, FEIB underwent several restructurings. In 1999, it was the � rst bank in Taiwan to set up three major independent Business Groups - Administration, Consumer Banking and Corporate Banking. Till 2006, FEIB integrated its business units into four Banking Groups – Corporate Banking, Financial Markets, Individual Banking, and Consumer Banking & Credit Card, and added three management units – Administration & Support Group, Risk Management and IT Management. Then e-Banking Business Units were formed under Corporate Banking and Individual Banking Groups speci� cally responsible for offering borderless, real-time and 24 hour online banking services. Operating separately and independently, the Bank’s respective business groups continue to bring innovative products and services, enhance their expertise, and elevate their ef� ciency as a leading brand in many business � elds.

While seeking business growth and professional services, in order to enhance operating ef� ciency FEIB established in 2008 “Operations & Technology (O&T) Service Center” as the high-ef� ciency support to the Bank’s front desk � nancial services, which not only saved costs with centralized operations, but also streamlined processes by setting up various ef� ciency and productivity indexes.

Recently, FEIB has engaged in many � nancial services cooperating with world-class � nancial institutions. In 2008 FEIB formed alliance with Deutsche Bank AG to establish Deutsche Far Eastern Asset Management Company Limited, in 2009 acquired AIG’s credit card and accounts receivable business, and in 2011 acquired 100% ING Securities Company Limited from ING Insurance International B.V. which was renamed in the same year as Far Eastern International Securities Company Ltd. after completion of the transaction.

To expand both physical branches and virtual channels, FEIB launched FE Direct internet banking service in early 2010, completed the acquisition of Chin-Fon Bank with 19 domestic operating units in April, established in May 2010 the “Small- and Medium-sized Enterprise Banking Dept.” to implement Big Branch Project and cultivate wealth management and small business finance business of this target segment. The Bank launched fully integrated mobile banking App (Android + iPhone) in 2011 to form e-banking and M-banking service platform so as to achieve optimal scale of channel ef� ciency and bestquality service. With 55 domestic branches (Business Dept. included) plus Hong Kong Branch, FEIB is con� dent to better meet customers’ needs, create more ef� cient capital circulation, currency movement and transactions, and therefore inject mobility into the nation’s economy and � nancial market.

三、本行沿革

1990 ◆ 召開發起人會議，正式成立籌備處，議定資本額為新台幣 100 億元，並向財政部提出設立許可申請。
1990 ◆ 召開發起人會議，議定資本額為新臺幣 100 億元，並向財政部提出設立許可申請。
1991 ◆ 財政部核准本行設立。
1992 ◆ 總行營業部、儲蓄部及台北逸仙分行正式對外營業。
1995 ◆ 本行股票於櫃檯買賣中心正式掛牌。
1996 ◆ 總經理張學林榮退，由洪信德先生接任。
1997 ◆ 開啟與伊甸基金會的長期夥伴關係。
1998 ◆ 11 月 27 日本行股票正式掛牌上市。
國內第一家協助企業發行台灣存託憑證的保管銀行。
1999 ◆ 率先新銀行開辦海外存託憑證保管銀行業務。
獲財政部許可設立香港代表人辦事處。
轉投資設立遠銀人身保險代理人股份有限公司及遠銀租賃股份有限公司。
2000 ◆ 創辦人徐有庠先生辭世，由徐旭東先生繼任董事長。
遠銀 New Century 信用卡上市，整合運用集團資源與優惠。
獲中華民國全國商業總會評鑑為「2000 年企業職業訓練績優單位」。
2001 ◆ 國內非金控商業銀行中，第一家獲財政部核准發行金融債券。
與 1999 年全美排名第一之上市資產管理公司美國大聯合作，成立子公司遠東大聯資產管理公司。

2002 ◆ 信用卡發卡量破百萬張，循環餘額破百億元。

2003 ◆ 發行美金 1 億元之海外無擔保轉換金融債券 (ECB) ，為國內非金控之商業銀行中第 1 家。
2004 ◆ 開辦 FX Margin Trading 業務，配合匯率市場開放 24 小時交易。
消金貸款餘額突破 1,000 億元規模。
轉投資之遠銀資產管理公司成立。
2005 ◆ 發行 ETC ( 高速公路電子收費 ) 聯名卡
2006 ◆ 推出遠銀 HGI 信用卡 (HAPPY GO INSIDE) 與遠東台塑聯名卡。
資訊處與信用卡部通過 ISO27001 安控認證，為全國第一家獲此項認證的銀行。

本行簡介 Corporate Pro� le

(3)Milestones

1990 ◆ Held the Promoters’ Meeting, and applied to the Ministry of Finance for approval to establish bank with capital of NT$10 billion.
1991 ◆ The Ministry of Finance approved the establishment of FEIB.
1992 ◆ Business Department, Savings Department and Taipei Yishen Branch of FEIB began operations.
1995 ◆ Stock listed on the Over-the-counter trading of securities in Taiwan.
1996 ◆ President Howard L. Chang retired. Mr. Eli Hong assumed presidency.
1997 ◆ Started long-term partnership with Eden Foundation.
1998 ◆ Stock listed on the Taiwan Stock Exchange on November 27.
Became the � rst bank in Taiwan to assist corporations for issuance of Global Depositary Receipts (GDRs) as a trust bank.
1999 ◆ Became Taiwan’s � rst private bank to launch GDR trust banking business.
Set up representative of� ce in Hong Kong.
Established Far Eastern Life Insurance Agency Co., Ltd. and Far Eastern International Leasing Corp.
2000 ◆ Former Chairman Y. Z. Hsu passed away, succeeded by Mr. Douglas Tong Hsu.
Launched FEIB New Century Credit Card to integrate FEG resources.
Awarded the title of “Outstanding Vocational Training Enterprise” by The General Chamber of Commerce in 2000.”
2001 ◆ Taiwan’s � rst non-� nancial-holding commercial bank to issue debentures.
Opened Far Eastern Alliance Asset Management Co., Ltd. with Alliance Capital Management, ranked in 1999 the largest listed asset management company in the U.S.
2002 ◆ Credit card issuance exceeded 1 million cards; total credit card revolving balance surpassed NT$10 billion.
2003 ◆ Taiwan’s � rst non-� nancial-holding bank to issue US$100 million worth of Euro Convertible Bonds (ECBs).
2004 ◆ Began Foreign Exchange (FX) Margin Trading business with 24-hour transactions.
Consumer banking loan outstanding exceeded NT$100 billion at year end.
Set up Far Eastern Asset Management Co., Ltd.
2005 ◆ Launched ETC (Electronic Toll Collection) Card.
2006 ◆ Launched HAPPY GO INSIDE (HGI) credit card and the Far Eastern & Formosa co-branded credit .
FEIB became Taiwan’s � rst bank to receive ISO27001 certi� cation.

2007 ◆ 香港分行正式開業，並取得香港金融局核發的「全功能業務」分行執照。

獲行政院勞委會職訓局評等為「金級」企業單位。
2008 ◆ 徐旭東先生請辭董事長並任副董事長，董事長由侯金英女士接任。
與德意志銀行集團結盟，成立德銀遠東證券投資信託股份有限公司。
2009 ◆ 購買友邦國際 (AIG) 信用卡 ( 股 ) 公司之信用卡業務及應收帳款資產。
經由公開標售程序，取得慶豐銀行 19 家國內營業據點。
與南山人壽合作推出「遠東商銀南山認同卡」。
2010 ◆ 推出「FE Direct」純網銀帳戶服務。
正式概括承受慶豐銀行 19 家國內營業據點。
個人金融事業群成立「中小企業服務部」，深耕中小企業客群之財富管理與融資業務。
獲經濟部與行政院勞工委員會頒發「創造就業貢獻獎」。
2011 ◆ 開辦人民幣業務。
榮獲今週刊第 5 屆財管銀行評鑑「卓越成長獎」
投資購買 ING 集團旗下在台所成立的安智證券股份有限公司 100% 股權。
贊助美國 MBL 球員於台灣進行明星賽。
。
◆ 行動銀行上線 (Android+iPhone)
2012 ◆ 提升全行客服中心系統。
信用卡帳單新增 QR Code 功能，方便客戶使用智慧型手機繳款。
推出 eTag 存款帳戶及信用卡自動儲值服務。
宣佈將與萬事達卡國際組織於台灣首推「inControl」創新支付，提供更便利及安全的信用卡支付服務。

本行簡介 Corporate Pro� le

2007 ◆ Of� cially inaugurated Hong Kong Branch.
Rated as a “Golden Grade” enterprise by the Bureau of Employment and Vocational Training.
2008 ◆ Mr. Douglas Tong Hsu resigned from Chairmanship, succeeded by Ms. Ching-Ing Hou.
Partnership with Deutsche Bank AG to establish Deutsche Far Eastern Asset Management Company Limited in Taiwan focused on retail and institutional asset management.
2009 ◆ Acquired AIG’s credit card and accounts receivable businesses.
Acquired Chin-Fon Commercial Bank’s 19 domestic operating units.
Launched “Far Eastern Nan Shan Co-branded card” with Nan Shan Life Insurance Company, Ltd.
2010 ◆ Launched “FE Direct” internet banking account.
Completed the conversion of 19 domestic operating units from Chin-Fon bank.
Established “Small and Medium-sized Enterprise Banking Unit” to cultivate this target market segment.
Received the “Employment Contribution Award” from the Council of Labor Affairs.
2011 ◆ Initiated RMB businesses.
Received “Outstanding Growth Award” of the 5th Wealth Management Bank Review by Business Today Magazine.
Acquired 100% stake in ING Securities Company Limited from ING Insurance International B.V.
Sponsored U. S. MLB to play the all-star game in Taiwan.
Launched fully integrated mobile banking App (Android+iPhone).
2012 ◆ Enhanced the Bank’s Customer Satisfaction Representative system.
Implemented the QR Code billing application for cardholders’ payment via smart phones.
Launched eTag deposit accounts and auto payment by credit cards.
Announced Taiwan’s innovative “inControl” service, a secured payment solution, partnered with MasterCard.

四、本行組織系統簡圖

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股東大會
資產負債管理委員會
授信審議委員會
董事長
人事評議委員會監察人董事會薪資報酬委員會
常務董事會
投資審議委員會
信託財產評審委員會
總經理
資訊業務指導委員會
執行副總經理
風險管理委員會副總經理總稽核
消作
金業
及及
信資
用訊
卡服
事務
業中
群心
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本行簡介 Corporate Pro� le

(4)FEIB Organization Chart

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Shareholders’ Meeting
Assets and Liabilities
Management Committee
Credit Committee
Chairman
Personnel Committee Supervisors Board of Directors Remuneration Committee
Investment Committee Board of Managing Directors
Trust Assets Committee
President
IT Steering Committee
Chief Executive Vice President
Risk Management Committee Executive Vice Presidents Chief Auditor
Co
n
su Group Group
m
e
r B
a
Auditing Dept.
Credit Card Group gnkin Administration & Su
& pp
Individual Banking Group Financial Mmarkets Group Corporate Banking Group ort Operations & Technology Risk Management Dept.
Head Office Branch (DomesticBranch) Trust Dept. Wealth Mgmt. Dept. Credit Card Dept. Consumer Banking Dept. Investment Dept. Financial Markets Dept. Overseas Branch Offshore Banking Branch International Banking Dept. Corporate Banking Dept. Legal Dept. Human Resources Dept. Planning Dept. Secretarial Dept. Financial Control Dept. Operations Service Dept. IT Dept.
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肆、公司治理
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一、公司治理守則

本行依銀行業公司治理實務守則，落實公司治理制度，透過健全的管理制度與監控機制，達成營運目標，進而提升競爭力，確保股東、員工及其他利益相關者的權益，為其創造最大價值並善盡社會責任。茲將本行遵循的公司治理原則條述如下：

建置有效的公司治理架構
遵循法令並健全內部管理
保障股東權益
強化董事會職能
發揮監察人功能
尊重利益相關者權益
提升資訊透明度

本行遵循遵守法令主管制度，建立完備的內部控制制度，並按部就班執行；董事會下設稽核處，以獨立超然的精神執行內部稽核任務，定期向董事、監察人報告；本行依法召開股東會，透過公開資訊觀測站公告重要訊息，與利害關係人及關係企業的業務往來均依規定辦理，以確保股東權益。

董事會成員均具備執行職務能力且符合法定資格條件，定期召開董事會，負責銀行經營策略與重大決策，監督管理階層以對股東負責，此外設置各類功能性政策委員會，協助推行各項重大政策，並選定專業獨立的勤業眾信會計師事務所，定期查核財務狀況及內部控制實施。

此外，依法定選任程序，選任符合法定資格條件的監察人，獨立行使監察權，有效監督業務執行，降低經營風險；同時具備完善妥適的處理機制與溝通管道，尊重與維護員工、消費者及其它利益相關者的合法權益；設有發言人與代理發言人、建置專屬網站、召開法人說明會及揭露公司治理相關資訊，以提高對外資訊的透明度。

公司治理 Corporate Governance

(1) Corporate Governance Principles

To pursue corporate governance excellence, FEIB is dedicated to achieving its operating goals through a sound management system and an effective auditing mechanism to strengthen the bank’s competitive advantage in the market and ensure all the bene� ts available to shareholders, employees and other related parties. Our mission is to create maximum shareholder value and be a good corporate citizen. The Bank’s corporate governance principles are:

Establish an effective corporate governance structure
Comply with relevant laws and regulations and enhance internal management
Protect shareholders’ rights and interests
Strengthen the power of the Board of Directors
Ensure the viability of the Supervisors’ function
Respect the rights of related parties
Enhance information transparency

Far Eastern International Bank, strictly abided by supervising laws, has established and effectively implemented a thorough internal control system, and set up an Audit Department under the Board of Directors to execute independently the internal auditing mission and report regularly to the Bank’s Board Members and Supervisors. Furthermore, FEIB holds regular shareholders’ meetings, publicly posts important bank messages on Taiwan’s public information watch station, and handles businesses among interested parties and group af� liated companies totally conforming to regulations to ensure shareholders’ equity.

FEIB board members are all equipped with professional knowhow and conform with legal quali� cations. They convoke regular board meetings to decide on the operating strategies and important policies, supervise the Bank’s management and protect shareholders’ interests. Also various functional committees are set up to assist in the promotion of each major policy. The Bank has selected Deloitte & Touche to conduct regular independent audits and check and report on the Bank’s � nancial situation and internal controls.

Supervisors are also appointed in accordance with rules and regulations to effectively and independently supervise the execution of bank operations and to lower its risk. FEIB respects and safeguards the legal rights of employees, consumers, and other interested parties. The Bank has appointed a spokesperson and acting spokesperson, set up an exclusive website, organized investors’ forums and disclosed corporate governance related information to enhance the transparency of bank information.

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董監事成員 Board of Directors and Supervisors

前排由左至右 (Seated From Left to Right)、董事洪信德 Director Mr. Eli Hong、副董事長徐旭東 Vice Chairman Mr. Douglas Tong Hsu、董事長侯金英 Chairperson Ms. Ching-Ing Hou、執行董事王孝一 Executive Director Mr. Shaw Y. Wang、監察人戴立寧 Supervisor Mr. Linin Day

後排由左至右 (Standing From Left to Right)、董事周添財 Director Mr. Thomas Chou、獨立董事兼常務董事張忠本 Independent Director, Managing Director Mr. Ben C. B. Chang、執行董事鍾聰明 Executive Director Mr. Tsung-Ming Chung、獨立董事沈平 Independent Director Mr. Bing Shen、常駐監察人鄭澄宇 Resident Supervisor Mr. Humphrey Cheng、監察人許士軍 Supervisor Dr. Shi-Chun Hsu、董事俞明德 Director Dr. Min-The Yu

公司治理 Corporate Governance

二、董監事成員 Board of Directors and Supervisors

May 15, 2014

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職稱姓名主要經（學）歷目前兼任本行及其他公司之職務
Title Name Major Educa� onal (Professional) Background Other Current Posi� ons
董事長侯金英美國范德堡大學經濟學碩士南台科技大學董事
台灣大學經濟系及研究所畢業
政治大學銀行學系主任及教授、財稅系教授
台灣金融研訓院董事長
遠東新世紀股份有限公司監察人
Chairperson Ms. Ching-
Ing Hou Master’s degree in Economics, Vanderbilt University, Director, Southern Taiwan University of Science and
U.S.A. Technology
BA & Master’s degree in Economics, Na� onal Taiwan
University
Former Professor, Dept. of Money and Banking,
Na� onal Chengchi University
Chairperson, Taiwan Academy of Banking and Finance
Supervisor, Far Eastern New Century Corpora� on
副董事長徐旭東美國聖母大學碩士及學士遠東新世紀股份有限公司董事長
遠東新世紀股份有限公司董事長亞洲水泥股份有限公司董事長
裕民航運股份有限公司董事長
遠東百貨股份有限公司董事長
東聯化學股份有限公司董事長
遠傳電信股份有限公司董事長
宏遠興業股份有限公司董事
Chairman, Far Eastern New Century Corporation
Vice Chairman Mr. MA & BA, University of Notre Dame, U. S. A. Chairman, Asia Cement Corp.
Douglas Chairman, Far Eastern New Century Corporation Chairman, U-Ming Marine Transport Corp.
Tong Hsu Chairman, Far Eastern Department Stores Ltd.
Chairman, Orient Union Chemical Corp.
Chairman, Far EasTone Telecommunications Co., Ltd.
Director, Everest Textile Ltd.
執行董事王孝一中興大學工商管理系畢業遠東新世紀股份有限公司公益事業執行長
遠東新世紀股份有限公司董事、首席資深副總經遠東新世紀股份有限公司董事
理遠銀資產管理股份有限公司董事
元智大學董事
亞洲水泥股份有限公司監察人
Execu� ve Mr. Shaw Y. BA, Dept. of Business Administration, National Chung Foundation Executive Director of Far Eastern New
Director Wang Hsing University Century Corporation
Director & First Senior Executive Vice President, Far Director, Far Eastern New Century Corporation
Eastern New Century Corporation Director, Far Eastern Asset Management Corp
Director, Yuan Ze University
Resident Supervisor, Asia Cement Corp.
執行董事鍾聰明政治大學企業管理碩士順達科技股份有限公司董事長
勤業會計師事務所會計師台灣大哥大股份有限公司獨立董事
致茂電子股份有限公司獨立董事
東貝光電科技股份有限公司董事
建國工程股份有限公司監察人
Execu� ve Mr. Tsung- MBA, Na� onal Chengchi University Chairman, DynaPack Corp.
Director Ming CPA, Deloi� e & Touche Independent Director, Taiwan Mobile Co., Ltd.
Chung Independent Director, Chroma Ate Inc.
Director, Unity Opto Technology Co., Ltd.
Supervisor, Chien Kuo Construc� on Co., Ltd.
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職稱姓名主要經（學）歷目前兼任本行及其他公司之職務
Title Name Major Educa� onal (Professional) Background Other Current Posi� ons
董事洪信德中興大學經濟系畢業遠東國際商業銀行總經理
美商花旗銀行副總裁遠銀資產管理股份有限公司董事
台北區中小企銀副總經理德銀遠東證券投資信託股份有限公司董事
遠傳電信股份有限公司監察人
Director Mr. Eli BA, Dept. of Economics, Na� onal Chung Hsing University President, Far Eastern International Bank
Hong Former Vice President, Ci� bank, N.A., Taipei Branch Director, Far Eastern Asset Management Corp.
Former Execu� ve Vice President, Interna� onal Bank of Director, Deutsche Far Eastern Asset Management
Taipei Company Limited
Supervisor, Far EasTone Telecommunications Co., Ltd.
董事周添財政治大學銀行學系畢業遠東國際商業銀行執行副總經理
美國大陸銀行副總裁遠銀人身及財產保險代理人股份有限公司董事長
荷蘭銀行東北亞區信貸經理、台灣區副總裁兼高遠銀資產管理股份有限公司董事
雄分行經理遠智證券股份有限公司董事
大中票券金融股份有限公司董事
鼎鼎聯合行銷股份有限公司董事
元太外匯經紀股份有限公司董事
Director Mr. BA, Dept. of Banking, National Chengchi University Chief Execu� ve Vice President, Far Eastern
Thomas Former Vice President, Taipei Branch, Continental Bank Interna� onal Bank
Chou Former Regional Credit Control Officer For North East Chairman, Far Eastern Life and Property Insurance
Asia, ABN AMRO Bank Agency Co.
Former Vice President & Kaohsiung Branch Manager, Director, Far Eastern Asset Management Corp.
ABN AMRO Bank, Taiwan Director, Far Eastern Interna� onal Securi� es Company
Ltd.
Director, Da Chung Bills Finance Corps.
Director, Ding Ding Integrated Marke� ng Service Co.
Director, Yuan Tai Foreign Exchange Agency Co., Ltd.
董事俞明德美國俄亥俄州立大學經濟博士交通大學財務金融研究所教授
中央大學財務金融學系主任智微科技股份有限公司獨立董事
亞洲開發銀行顧問
靜宜大學校長
台灣大學財務金融學系教授
Director Dr. Min-Teh Ph.D., Ohio State University, U.S.A. Professor, Graduate School of Finance, Na� onal Chiao
Yu Former Dept. Chairman of Finance, National Central Tung University
University Independent Director, JMicron Technology Corpora� on
Former Advisor, Asian Development Bank
Former President, Providence University
Former Professor, Dept. of Finance, National Taiwan
University
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公司治理 Corporate Governance

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職稱姓名主要經（學）歷目前兼任本行及其他公司之職務
Title Name Major Educa� onal (Professional) Background Other Current Posi� ons
獨立董事兼常張忠本政治大學統計研究所畢業和碩聯合科技股份有限公司獨立董事
務董事政治大學兼任講師瑞鼎科技股份有限公司獨立董事
輔仁大學兼任講師辛耘企業股份有限公司獨立董事
和通投資控股有限公司執行董事聚鼎科技股份有限公司董事
和通國際股份有限公司總經理拓墣科技股份有限公司董事
中華開發工業銀行副總經理順達科技股份有限公司監察人
Independent Mr. Ben C. Master’s degree in Sta� s� cs, Na� onal Chengchi Independent Director, Pegatron Corp.
Director, B. Chang University Independent Director, Kinsus Interconnect Technology
Managing Former Lecturer, Na� onal Chengchi University Corp.
Director Former Lecturer, Fu Jen Catholic University Independent Director of Scientech Corpora� on
Former Execu� ve Director, Hotung Investment Holdings Director, Polytronics Technology Corp.
Limited Director, Topology Research Inc.
Former General Manager, Hotung Interna� onal Co., Ltd. Supervisor, Dynapack Corp.
Former Execu� ve Vice President, China Development
Industrial Bank
獨立董事沈平美國哈佛大學商學院企管碩士遠東新世紀股份有限公司獨立董事
摩根士丹利公司副總經理兼執行董事中鼎工程股份有限公司監察人兼董事會稽核委員
中華開發工業銀行副總經理會召集人
開發國際投資股份有限公司總經理英屬蓋曼群島商達創科技股份有限公司獨立董事
兼董事會審核委員會主席
The Taiwan Fund, Inc. 獨立董事
Independent Mr. Bing MBA, Harvard Business School, U.S.A. Independent Director of Far Eastern New Century
Director Shen Former Vice President and Execu� ve Director, Morgan Corpora� on
Stanley Supervisor and Chairman of the Audit Commi� ee of
Former Execu� ve Vice President, China Development CTCI Corpora� on
Industrial Bank Independent Non-execu� ve Director and Chairman of
Former President of CDIB & Partners Investment the Audit Commi� ee, Delta Networks (Cayman) Inc.
Holding Independent Director, The Taiwan Fund, Inc.
常駐監察人鄭澄宇台灣大學國際企業研究所碩士遠東新世紀股份有限公司總經理
遠東新世紀股份有限公司副總經理德銀遠東證券投資信託股份有限公司董事長
東聯化學股份有限公司董事
遠銀資產管理股份有限公司監察人
鼎鼎聯合行銷股份有限公司董事
Resident Mr. EMBA, Graduate Ins� tute of Interna� onal Business, President, Far Eastern New Century Corpora� on
Supervisor Humphrey Na� onal Taiwan University Chairman, Deutsche Far Eastern Asset Management
Cheng Former Execu� ve Vice President, Far Eastern New Company Limited
Century Corpora� on Director, Oriental Union Chemical Corpora� on
Supervisor, Far Eastern Asset Management Corp.
Director, Ding Ding Integrated Marke� ng Service Co.
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經營團隊 Management Team

前排由左至右 (Seated From Left to Right)

總稽核黃志偉 Chief Auditor Mr. Chih-Wei Huang、執行副總經理周添財 Chief Executive Vice President Mr. Thomas Chou、總經理洪信德 President Mr. Eli Hong、副總經理楊瑞芬 Executive Vice President Ms. Joanna Yang

後排由左至右 (Standing From Left to Right)

副總經理黃璟章 Executive Vice President Mr. G. C. Huang、副總經理廖呂斌 Executive Vice President Mr. Ben LiaoRu、副總經理林建忠 Executive Vice President Mr. Jiann-Jong Lin、副總經理李銘博 Executive Vice President Mr. Alan Lee、副總經理劉龍光 Executive Vice President Mr. Lonnie Liu

公司治理 Corporate Governance

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職稱姓名主要經（學）歷目前兼任本行及其他公司之職務
Title Name Major Educa� onal (Professional) Background Other Current Posi� ons
監察人許士軍美國密西根大學企業管理博士元智大學教授
臺灣大學首任管理學院院長聯華電子股份有限公司獨立董事
高雄銀行董事長昱晶能源股份有限公司獨立董事
智原科技股份有限公司董事
Supervisor Dr. Shi- Ph.D., University of Michigan, U.S.A. Chair Professor of Management, Yuan Ze University.
Chun Hsu Founding Dean, College of Management, Na� onal Independent Director, United Microelectronics Corp.
Taiwan University Independent Director, Gintech Energy Corp.
Former Chairman, Bank of Kaohsiung Director, Faraday Technology Corp.
監察人戴立寧美國哈佛大學法學碩士元智大學董事
財政部常務次長環能海運股份有限公司監察人
華僑銀行董事長伍豐科技股份有限公司董事
Supervisor Mr. Linin Master’s degree in Law, Harvard University, U.S.A. Director, Yuan Ze University
Day Former Vice Minister, Ministry of Finance, R.O.C. Supervisor, Global Energy Mari� me Co., Ltd.
Former Chairman, Bank of Overseas Chinese Director, Firich Enterprises Co., Ltd.
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三、經營團隊 Management Team

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職稱姓名主要經 ( 學 ) 歷目前兼任其他公司之職務
Title Name Major Educa� onal (Professional) Background Other Current Posi� ons
總經理洪信德中興大學經濟系畢業遠銀資產管理股份有限公司董事
美商花旗銀行副總裁德銀遠東證券投資信託股份有限公司董事
台北區中小企業銀行副總經理遠傳電信股份有限公司監察人
President Mr. Eli BA, Dept. of Economics, Na� onal Chung Hsing Director, Far Eastern Asset Management Corp.
Hong University Director, Deutsche Far Eastern Asset Management
Former Vice President, Ci� bank, N.A., Taipei Branch Company Limited
Former Execu� ve Vice President, Interna� onal Bank Supervisor, Far EasTone Telecommunica� ons Ltd.
of Taipei
執行副總經理周添財政治大學銀行系畢業遠銀人身及財產保險代理人股份有限公司董事長
美國大陸銀行副總裁遠銀資產管理股份有限公司董事
荷蘭銀行東北亞區信貸經理、台灣區副總裁兼高雄遠智證券股份有限公司董事
分行經理大中票券金融股份有限公司董事
鼎鼎聯合行銷股份有限公司董事
元太外匯經紀股份有限公司董事
Chief Execu� ve Mr. BA, Dept. of Banking, National Chengchi University Chairman, Far Eastern Life and Property Insurance
Vice President Thomas Former Vice President, Taipei Branch, Continental Bank Agency Co.
Chou Former Regional Credit Control Officer For North East Director, Far Eastern Asset Management Corp.
Asia, ABN AMRO Bank Director, Far Eastern International Securities Company
Former Vice President & Kaohsiung Branch Manager, Ltd.
ABN AMRO Bank, Taiwan Director, Dah Chung Bills Finance Corps.
Director, Ding Ding Integrated Marketing Service Co.
Director, Yuan Tai Foreign Exchange Agency Co., Ltd.
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職稱姓名主要經 ( 學 ) 歷目前兼任其他公司之職務
Title Name Major Educa� onal (Professional) Background Other Current Posi� ons
副總經理兼法林建忠美國路易斯安那州立大學財務管理碩士遠銀財產保險代理人股份有限公司董事
人金融事業群美商花旗銀行副理
主管美商第一聯美銀行助理副總裁
台北區中小企業銀行經理、財務處處長
Execu� ve Vice Mr. Jiann- M.S., Louisiana State University, U.S.A. Director, Far Eastern Property Insurance Agency Co.
President, Jong Lin Former Assistant Manager of Ci� bank, N.A., Taipei
Head of Branch
Corporate Former AVP of First Interstate Bank of California,
Banking Group Taipei Branch
Former Senior VP & Head of Finance Dept.,
Interna� onal Bank of Taipei
副總經理兼金廖呂斌美國國際管理學院國際管理碩士無
融市場事業群中國輸出入銀行副科長
主管道明銀行台北分行副總經理
比利時聯合銀行台北分行副總經理
Execu� ve Vice Mr. Ben MIM, Thunderbird, American Graduate School of None
President, Liao-Ru Interna� onal Management, U.S.A.
Head of Former Assistant Division Chief, Export-Import Bank
Financial of the Republic of China
Markets Group Former VP, Toronto Dominion Bank, Taipei Branch
Former EVP, Kredietbank N.V., Taipei Branch
副總經理兼消李銘博政治大學企業管理碩士遠銀人身及財產保險代理人股份有限公司董事
金及信用卡事美商花旗銀行助理副總裁
業群主管香港上海匯豐銀行副總裁
南山人壽副總經理
Execu� ve Vice Mr. Alan MBA, Na� onal Chengchi. University Director, Far Eastern Life and Property Insurance
President, Lee Former AVP, Ci� bank, N.A., Taipei Branch Agency Co.
Head of Former VP, The Hongkong and Shanghai Banking
Consumer Corpora� on
Banking and Former EVP, Nan Shan Life Insurance Company, Ltd.
Credit Card
Group
副總經理兼個楊瑞芬美國西北大學整合行銷傳播碩士遠銀人身及財產保險代理人股份有限公司董事
人金融事業群美商花旗銀行經理遠智證券股份有限公司董事
主管中國信託商業銀行資深協理
香港上海匯豐銀行資深副總裁
Execu� ve Vice Ms. Master’s degree, Integrated Marke� ng Communica� ons, Director, Far Eastern Life and Property Insurance
President, Joanna Northwestern University, U.S. A. Agency Co.
Head of Yang Former Manager, Ci� bank, N.A., Taipei Branch Director, Far Eastern Interna� onal Securi� es Company
Individual Former Deputy Execu� ve Vice President, Chinatrust Ltd.
Banking Group Commercial Bank
Former Senior Vice President, The Hongkong and
Shanghai Banking Corpora� on
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公司治理 Corporate Governance

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職稱姓名主要經 ( 學 ) 歷目前兼任其他公司之職務
Title Name Major Educa� onal (Professional) Background Other Current Posi� ons
總稽核黃志偉美國北德州立大學資訊管理碩士無
中央銀行副科長
台新銀行經理
台新金控協理
匯豐銀行資深副總裁
Chief Auditor Mr. Chih- Master of Information Management, North Texas None
wei University, U. S. A.
Huang Former Deputy Section Chief, Central Bank
Former Manager, Taishn Bank
Former Assistant Vice President, Taishin Financial
Holdings
Former Senior Vice President, HSBC
副總經理兼作劉龍光美國紐約大學資訊管理碩士無
業及資訊服務美國信孚銀行專案經理
中心主管、作美國紐約銀行經理
業服務處單位 KPMG 顧問公司亞太區經理
主管南山人壽副總經理
Execu� ve Vice Mr. Lonnie Master’s degree in Informa� on Systems, New York None
President Liu University, U.S.A.
, Head of Former Project Manager, Bankers Trust
O&T Group Former Manager, New York Bank
and Head of Former Manager, KPMG Consul� ng, Asia Paci� c
Opera� on Former Execu� ve Vice President, Nan Shan Life
Service Dept. Insurance Company, Ltd.
副總經理黃璟章台灣大學商學系畢業遠銀資產管理股份有限公司董事長
美商花旗銀行副理
慶豐銀行專委兼副理
Execu� ve Vice Mr. G. C. BA, Dept. of Business, Na� onal Taiwan University Chairman, Far Eastern Asset Management Corp
President Huang Former Assistant Manager, Ci� Bank
Former Assistant Manager, Chin-Fon Bank
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四、政策委員會

( 一 ) 資產負債管理委員會

本行為強化資產負債管理，健全資產負債結構，特設置資產負債管理委員會，負責擬定本行資產負債政策及流動性風險管理方針，並研討利率政策，作成結論呈董事會核定後辦理。

( 二 ) 授信審議委員會

本行為拓展業務，提升授信品質及增進工作效能，特設置授信審議委員會，負責審議全行超過授權經理核定範圍之授信案件，作成結論呈總經理、常務董事會或董事會核定後辦理。

( 三 ) 人事評議委員會

本行為建立職員管理之升遷獎懲制度，拔擢優秀人才，增進工作效率，特設置人事評議委員會，負責審議全行人力資源規劃、人事規章、升遷、獎懲情事，作成結論呈總經理、常務董事會或董事會核定後辦理。

( 四 ) 投資審議委員會

本行為訂定投資決策，掌握投資效益，特設置投資審議委員會，定期開會，審議短期有價證券投資策略交由金融市場部執行；並負責審理各項中長期專案投資計劃，作成結論提董事會核定後辦理。

( 五 ) 信託財產評審委員會

本行為拓展信託業務，特設置信託財產評審委員會，於每季營業終了後一個月內召開會議，審查每一信託戶之信託財產並作成記錄，由全體出席委員簽署並送總經理及董事長核可後呈報董事會核備。

( 六 ) 資訊業務指導委員會

本行為建構全方位金融服務需求，特設置資訊業務指導委員會，負責研判資訊系統發展趨勢，審議全行資訊系統架構建置，並配合業務發展，提議、監督資訊業務系統開發，作成結論呈董事會核定後辦理。

( 七 ) 風險管理委員會

本行為建立獨立有效之風險管理機制，提升風險管理品質，特設置風險管理委員會，負責風險管理政策之擬定，風險管理執行成效、曝險狀況、風險決策之審議與監督，做成結論呈報董事會核備。

( 八 ) 薪資報酬委員會

本行為強化公司治理與健全公司董事、監察人及經理人薪資報酬制度，特依「股票上市或於證券商營業處所買賣公司薪資報酬委員會設置及行使權辦法」設立薪資報酬委員會，協助訂定並定期檢討董事監察人及經理人有關薪資報酬之政策、制度、標準與結構，並向董事會提出建議。

公司治理 Corporate Governance

(4) Policy Committees

A. Asset and Liabilities Management Committee

To strengthen its assets and liabilities management and structure, FEIB established the Assets and Liabilities Management Committee to draft the Bank’s assets and liabilities policy and � oating risk management guidelines, and study interest rate policy to present proposals to the Board of Directors for approval and execution.

B. Credit Committee

To expand business, improve credit quality and working ef� ciency, FEIB has established the Credit Committee to handle and review credit cases with amounts exceeding a manager’s authorization. Conclusions reached by this Committee are presented to the Bank’s President, Board of Managing Directors or Board of Directors for approval and execution.

C. Personnel Committee

To set up a proper staff feedback and incentive system, identify and promote outstanding talent, enhance working ef� ciency and improve communication and leadership skills, FEIB established the Personnel Committee. The Committee is responsible for the review of the Bank’s human resource planning, personnel regulations, promotions, rewards and reprimands, and making proposals to the Bank’s President, Board of Managing Directors or Board of Directors for approval and execution.

D. Investment Committee

FEIB formed the Investment Committee to formulate investment policy and target superior riskadjusted returns with regular meetings. The Committee also reviews the investment policy of shortterm bills to be executed by the Financial Markets Department and reviews diverse mid- and longterm investment projects for proposal to the Board of Directors for review, potential approval and execution.

E. Trust Assets Committee

To expand the trust assets business, FEIB established the Trust Assets Committee. With one Vice President serving as its Committee Chief, this Committee holds meetings in the last month of each quarter to review trust assets of each client and to prepare status reports signed by all attending committee members to be presented to the Bank President and Chairman for approval and final reporting to the Board of Directors.

F. IT Steering Committee

To meet the Bank’s need for diversified and multi-faceted financial services, FEIB formed an IT Steering Committee to study IT system development trends and review and improve the Bank’s IT operating system. To meet FEIB’s business development needs, the Committee makes IT proposals, supervises IT system development, and presents conclusions and recommendations to the Board of Directors for approval and execution.

G. Risk Management Committee

To establish an independent and efficient risk management mechanism and improve risk management, FEIB formed the Risk Management Committee to take the responsibility of drafting risk management policies, monitoring/reviewing risk management, risk exposures, risk policy, and reporting conclusions to the Board of Directors.

H. Remuneration Committee

According to 「Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter」 ,we established the Salary Committee to assist the Board of Directors to achieve further transparency for revising the remuneration policies, and advise the Board of Directors.

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伍、經營概況
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一、關鍵績效成果

( 一 ) 預算執行情形

本行 2013 年總資產 4,921 億元，預算達成率 103%，存款餘額 ( 含同業存款 )3,990 億元，預算達成率 101%，放款餘額 2,968 億元，預算達成率 99%。

( 二 ) 財務獲利能力分析

2013 年度營業淨收益 92.05 億元，較 2012 年度增加 12.61%。其中淨利息收入 48.85 億元，較 2012 年度增加 18.67%，淨手續費收入 24.61 億元，較 2012 度增加 23.40，及其他淨收益 18.59 億元，較 2012 年度減少 9.92%。

2013 年度稅後淨利 30.61 億元，較 2012 年度增加 20.01%，每股盈餘 1.30 元，較 2012 年度增加 19.27%。

二、核心事業

( 一 ) 個人金融業務

個人金融業務主要為客戶提供最佳的資產管理服務，並提供優質且即時的 e / M 化金融交易平台。

1. 財富管理業務

截至 2013 年度信託資產餘額為 557 億元，較 2012 年度成長 11.18%；信託類業務淨手續費收入成長 35.36%；財富管理收入成長 18%。

2. 中小企業服務部

2013 年度放款餘額較 2012 年度成長 97%。

( 二 ) 消金及信用卡業務

1. 消費金融業務

本行持續致力深耕與擴大消費金融服務，積極發展 e/M 化即時便利的服務並精進作業流程，2013 年消費金融授信餘額較 2012 年度成長 9%。其中房貸餘額為 1,348 億元，較 2012 年度成長 5%；信貸餘額為 148 億元，較 2012 年度成長 7%，車貸業務位居同業領先地位，餘額為 270 億元，較 2012 度成長 43%。

2. 信用卡業務

2013 年度流通卡數達 141.7 萬卡，簽帳金額為 639 億元，較 2012 年度成長 6%。

( 三 ) 法人金融業務

法人金融業務係以企業客戶需求為導向，提供財務整合性解決方案，以滿足兩岸三地不同產業客戶之融資、資金管理、避險等需求。主要業務包括存款、放款、外匯業務 ( 匯兌、進、出口 )、應收帳款、電子金融、供應鏈融資、財務避險及結構性產品等金融服務。整體而言，年淨利息收入成長 21%；手續費收入大幅成長 59%；整體營業利益達成長 13%。

經營概況 Business Overview

(1)Key Performance Results

A.Target Achievement

FEIB’s total assets stood at NT$492.1 billion, achieved 103% of target; deposits amounted to NT$399 billion, achieved 101% of target; and loan outstanding amounted to NT$296.8 billion, achieved 99% of target.

B.Analysis of Pro� tability

FEIB’s net operating income in 2013 grew 12.61% (YoY) to NT$9.205 billion; net interest income increased 18.67% (YoY) to NT$4.885 billion; net fee income stood at NT$2.461 billion, jumped 23.40% than that of 2012; other net pro� t was NT$1.859 billion, dropped 9.92% than 2012.

The Bank’s net income after tax was NT$3.061 billion, up 20.01% than that of 2012; and earnings per share was NT$1.30, grew 19.27% (YoY).

(2)Core Businesses

A.Individual Banking

Individual Banking aims to provide customers with the best asset management service, and also offers quality and real-time e/M transaction platforms.

1.Wealth Management

Trust assets were NT$55.7 billion in 2013, grew 11.18% comparing to that of 2012. Trust business revenue grew 35.36% (YoY). Wealth management income grew 18% (YoY).

2.Small- and Medium-sized Enterprise Dept.

Loan outstanding for 2013 surged 97% than that of 2012.

B.Consumer Banking and Credit Card

1.Consumer Banking

Committed to cultivating and expanding consumer banking services, proactively developing e/M real-time convenient services, and improving process ef� ciency, FEIB’s consumer loan outstanding in 2013 grew 9% (YoY), among which mortgage outstanding was NT$134.8 billion with 5% (YoY); personal loan outstanding was NT$14.8 billion with 7% (YoY); car loan outstanding was NT$27 billion with Top 1 market share surged 43% than that of 2012.

2.Credit Card

Credit cards in circulation stood at 1.417 million and spending volume totaled NT$63.9 billion with an increase of 6% (YoY).

C.Corporate Banking

FEIB offers customer-oriented & integrated � nancial solutions to satisfy different customers’ needs for � nancing, fund management and hedge in the Greater China region. Major businesses include deposits, loans, foreign exchange (remittance, import & export), factoring, e-banking, supply chain � nancing, hedging, and structured � nancial products. As a whole, net interest income grew 21%(YoY) ,fee income surged 59%(YoY) and overall operational revenue grew 13% (YoY).

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榮獲最佳銀行服務形象獎 Granted Best Bank Service Image Award

遠東商銀榮獲「卓越雜誌」2013 台灣卓越最佳銀行服務暨財富管理評比「最佳銀行服務形象獎」及「最佳財富管理信任獎」兩大獎，台灣經濟研究院院長洪德生、台灣大學經濟系教授林建甫親赴遠東商銀頒發獎項。

FEIB’s wealth management business received the 2013 “Best Bank Service Image Award” and “Best Wealth Management Confidence Award” from Excellence Magazine. Dr. David S. Hong, President of Taiwan Institute of Economic Research, and Professor Chienfu Jeff Lin of economics, National Taiwan University presented the awards at the Far Eastern International Bank.

授信業務：2013 年法人金融追求優資產之授信政策，年底授信餘額達 1,273 億元，較 2012 年度微幅下降 1%。
存款業務：2013 年底存款餘額較 2012 年度微幅成長 0.25%。
交易型業務：2013 年底應收帳款業務較 2012 年度成長 6%。
( 四 ) 金融市場業務

金融市場事業群業務核心在於銀行資產負債管理、金融商品之交易與服務提供、有價證券投資、信用衍生品承作、金融同業授信暨前項業務之管理，其中可轉換公司債資產交換 / 選擇權及外匯保證金業務持續創造佳績執同業之牛耳，秉持創造利潤、嚴控風險、恪遵法規，優化資產品質之基礎上，繼續業務之拓展，相關工作重點如下：

產品創新，提供客戶多元化商品與服務。
鞏固核心商品品牌與領導地位，精緻深耕現有客源。
建構穩健財務結構，強化資產負債管理。
推動業務 e 化、強化經營資訊分析管理，提升經營效率。
培育優秀金融人才，擴大經營規模與業務穩健成長。
掌握兩岸大中華商機，提供最佳金融服務平台。

2013 年買賣股票及受益憑證利益及評價，成長 18.01%；以遠匯、換匯、選擇權及換匯換利為主之衍生性金融商品承作量成長率逾 100%。承作可轉換公司債業務、買入債券餘額及資產交換全年利益及評價，成長 6.35%。

經營概況 Business Overview

1.Credit Line Business: Outstanding was NT$127.3 billion, slightly dropped 1% (YoY).
2.Deposit Business: Deposits for 2013 were up slightly with 0.25% growth (YoY).
3.Factoring Business: The Bank’s factoring business for 2013 grew 6% (YoY).
D. Financi al Markets

The core values of financial markets include managing financial assets and liabilities, as well as � nancial instruments such as investments in bonds & securities and hedge with derivatives. Among which the Bank’s convertible asset swaps and FX margin trading continuing to lead in the industry, the Bank creates pro� t and growth conforming to laws and regulations via strengthening risk control and improving asset quality.

Highlights as follows:

1.Product innovation, provide clients with diversi� ed products and services.
2.Consolidate brand value and leading position of the Bank’s core � nancial products and cultivate indepth the existing customer base.
3.Fortify comprehensive � nancial structure and strengthen the management of assets and liabilities.
4.Promote e-banking, enhance data analysis and management to improve operating ef� ciency.
5.Cultivate outstanding talents to expand operating scale and pursue steady growth.
6.Provide best financial service platform to seize the business opportunities in the Greater China market.

The revenues and valuations from stock trading and bene� ciary certi� cate grew 18.01% (YoY). The transaction volume of derivatives grew over 100% (YoY). The revenues and valuations of convertible bond business, buying bonds, asset swaps grew 6.35% (YoY).

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法金獲前瞻創新優等獎殊榮 Corporate Banking Awarded Innovation Merit Prize

遠東商銀致力為企業客戶提供專業且精緻的金融服務，近年積極創新轉型朝 Corporate Finance 之路邁進，其中領先國內同業的標竿案例「中租控股新加坡下市回台上市案」，得到遠東精神獎前瞻創新類優等獎的殊榮。該案為客戶圓滿完成轉上市之目標，為公司則締造單一個案整體收益約新台幣 1 億元之記錄，並導入後續商機，建立全面性的業務往來關係，成為客戶、股東與銀行三贏的最佳範例。

FEIB dedicates to proving professional and exquisite � nancial services for its corporate banking customers and has focused on innovation and restructuring toward Corporate Finance business. The leading landmark case of “Chailease Holding Co. Delisted from the Singapore Stock Exchange and Listed in the Taiwan Stock Exchange” received the Innovation Merit Prize of the Far Eastern Spirit Award. After accomplishing the delisting and re-listing for the client, this single case registered nearly NT$100 million pro� t with subsequent business opportunities to follow and established a comprehensive business relationship, as a best example of win-win situation among client, shareholders and the bank.

三、本年度經營計劃

( 一 ) 個人金融業務

新產品開發
(1) 開辦國內首次海外企業台籍員工福儲信託業務，以創造銀行信託新收益。
(2) 開創金融商品團購服務功能 ( 基金商品 & 人民幣 )。
(3) 全國首創的基金「觸觸發」功能上線，為市場唯一能為客戶依價格自動管理停利停損。
(4) 承作人民幣存款業務，提供客戶多元外幣理財服務。
(5) 中小企業放款產品多元化，擴大產品服務，以符合客戶需求。以不動產抵押貸款，及信保基金保證貸款為基礎，進而增加股票融資、進出口融資、衍生性金融商品等，並導入企業理財產品。

2. 增加金融服務通路

(1) 新增「台北 101 分行」，擴大台北市金融服務網絡，增加私人銀行金融服務。
(2) 新增 15 家分行成為外匯指定銀行，提升既有營業單位外匯業務服務範疇，促進外匯業務量成長。
(3) 行動銀行增加外匯換換及基金交易功能，增加 e 通路服務範疇。

3. 提升服務品質

(1) 每季對本行營業單位交易客戶進行服務滿意度調查，瞭解客戶滿意度及建議，以提升服務品質及維護客戶權益。
(2) 舉辦財富管理 VIP 客戶活動，並設計不同客戶族群之專屬服務，提昇本行財富管理品牌價值。
(3) 使用集保基金下單自動化資訊傳輸服務，為台灣第一家國內外基金同時自動化下單業者。
客戶分層經營
(1) 提供本行優質房貸戶之財富管理資金運用方案。
(2) 推廣「美利佳人」、「美澳雙利」、「美利再現」及「非常利 High」等定存商品專案，開創新客戶，深耕既有客群。
(3) 深耕電子通路客戶，增加客戶 e 通路互動服務品質。
(4) 以團銷方式推廣財富管理業務，整合本行資源共同行銷。針對績優大型公司員工，集中資源服務理財型客戶。
(5) 重新分析分行潛力客戶，指派新理專深耕財富管理業務。

經營概況 Business Overview

(3)Business Plans for 2014

A. Individual Banking

a.Development of New Products
1.Launched Taiwan’s � rst stock trust business for Taiwanese employees working overseas to generate revenues from this new business.
2.Initiated group-buying of � nancial products (Mutual Funds and RMB)
3.Launched Taiwan’s � rst fund “Smart Buy & Sell” online service, which is the only pro� t & loss management function in the market.
4.Initiated RMB savings, provide customers with diversi� ed foreign currency products.
5.Diversified loan products for SME customers, and expand product service to meet customer needs. To introduce stock-� nancing, trade-� nancing, derivatives, and other enterprise � nancing products on the basis real estate loan with credit life insurance and credit guarantee fund loan.
b.Increase Service Channels
1.Opened “Taipei 101 Branch” to expand financial service network in the metropolitan Taipei area, and focus on private banking services.
2.Elevated existing FX businesses through 15 new FX branches.
3.Offered FX services on mobile devices.
c.Improve Service Quality
1.To conduct quarterly service satisfaction survey to elevate service quality.
2.To organize wealth management events for VIP customers to elevate overall WM brand image.
3.Taiwan’s � rst Bank to use TDCC order system for domestic and offshore funds for better order transmission.
d.Management of Customer Segmentation
1.To promote wealth management for the Bank’s prime mortgage customers.
2.Launched certi� cate of deposit products with high interests to attract new customers and cultivate existing customers.
3.To cultivate customers through e-channels and enhance interactive e-channel service quality.
4.To promote wealth management business through Group Selling, and integrate resources for joint marketing. To focus on employees of major large corporations, and centralize resources to serve the Bank’s wealth management customers.
5.To reanalyze each branch’s potential customers, and assign new � nancial advisors to cultivate wealth management business.

( 二 ) 消金及信用卡業務

消金業務
(1) 追求積極的穩健成長，兼顧資產規模與品質，有效管控成本，擴大財富管理客群，藉由交叉銷售，提升整體產能與非風險收入，增進整體營業獲利。
(2) 房貸：資產規模穩定成長，提升高資產與高利差客群佔比，優化資產結構、提高利差。
(3) 信貸：運用風險管理系統區隔客群，提供差異化之產品及價格，發揮授信作業標準化功能，提升作業效率與資產品質管理機制，同步擴大資產規模與獲利。
(4) 分期付款：集中資源鞏固重點通路，並擴大中小型補教通路金流佔比；多元申貸模式並提供 e 化、M 化進件流程；持續開發新通路，強化通路風險管理，審慎因應法令及客訴議題，優化資產保障收益。
(5) 汽機車貸：維持資產規模與提升品質，優化作業流程，建立競爭者進入障礙，開發新合作通路，維持策盟車貸業界領導地位。
信用卡業務
發卡面：繼續拓展發卡業務，結合遠通電收、鼎鼎行銷聯合打造唯一有HAPPY GO的「 eTag聯名卡」，擴及交通類之消費族群；持續發揮集團綜效，與遠東飯店合作，推出以FEG Life Style頂級優惠的「遠東HAPPY GO頂級卡」；持續推廣以女性客群為主軸的「C’est Moi我的卡」；並強化「遠東台塑聯名卡」加油便利性，及擴展其他非油品消費的使用率；遠銀與壽險業領導品牌及鼎鼎行銷共同合作，在符合個人資料保護法之規定下，經營資料庫行銷，發展多元募卡通路，持續經營「南山人壽認同卡」，提供持卡保戶獨特的保費優惠與促銷活動。
簽帳面：主要經營策略為穩定成長，鞏固利基。在刷卡簽帳之業務經營上，以「 HAPPY GO」點數，結合遠東關係企業相關通路，提升遠銀HAPPY GO大紅利的價值與兌換便利性，深耕信用卡客戶忠誠度。

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創新 e/M 雙平台服務 Innovative e/M Dual Platform Services

遠東 HAPPY GO 信用卡推出「i 兌換」大紅利平台 App，方便卡友藉由智慧手機因時因地接收即時優惠訊息，隨時兌換，使點數盡其用，充分發揮集點效益。網路銀行亦持續創新，推出全台首創的基金雙方觸價下單【觸觸發】理財功能，協助無暇緊盯淨值變化的基金投資人，貫徹執行停損停利。遠東 e/M 雙平台服務使客戶享有即時、便利與高效率的金融服務，不論理財或消費都愈來愈 smart，愈來愈 easy。

FEIB HAPPY GO credit cards launched “iBonus Redemption” App to facilitate cardholders’ accessing real-time benefit messages on their smart phones, making redemptions of their reward points any time to their maximum effect. Continuous innovation in the Internet banking, the Bank introduced Taiwan’s � rst two-way “Smart sell & buy” order to help busy investors to executive stop loss and stop pro� t orders for their mutual funds investments. The Far Eastern e/ m dual platform offers clients the real-time, most convenient and highly ef� cient � nancial services, making their wealth management and consumption more and more smart, and much more easier.

經營概況 Business Overview

B.Consumer Banking and Credit Card Businesses
a.Consumer Banking
Proactively seek steady growth while maintaining asset scale and quality, effectively control costs, expand wealth management customer base, elevate overall revenues and non-risk incomes through cross-sell to increase overall operating pro� ts.
1.Mortgage Loan: Achieve steady growth of asset scale, elevate product penetration of high asset and high interest margin clients, strengthen asset structure, and heighten interest spread.
2.Personal Loan: Employ risk management system for customer segmentation, provide differentiated products and prices, standardize credit operations, elevate operating ef� ciency and asset management mechanism, and simultaneously expand asset scale and pro� t earnings.
3.Installments: Utilize major channels for growth, especially enlarge cooperation with SME educational institutes; employ multiple loan application, and provide e & M application process; continue to develop new channels, strengthen risk management, comply with laws and regulations, optimize asset, and secure pro� t.
4.Car and Motorcycle Loan: Maintain asset scale and elevate quality, optimize operating process, establish entry barrier from competitors, develop new cooperation channels, and sustain leading position in strategic alliance of car loan industry.

b.Credit Card Business

1.Card Issuance: Continue to expand card issuance, combine Far Eastern Toll Collection and Ding Ding Integrated Marketing Service (DDIM) to launch the one and only HAPPY GO and “eTag Co-brand Card” to serve consumers in the transportation category. To enhance Group synergy, FEIB works with Shangri-La’s Far Eastern Plaza Hotel to launch “FEIB HAPPY GO Delux Card” to offer FEG Life Style premium bene� ts, keep promoting the female-oriented “C’est Moi My Card”; also strengthen the convenience of “Far Eastern Formosa Co-brand Card” at Formosa gas stations, and expand other usages of non-gasoline consumptions. Conforming to the Information Protection Act, FEIB jointly promote products with leading life insurance companies and DDIM to operate database marketing, develop diversi� ed credit card channels, and continue to operate “Nan Shan Life Insurance Co-brand Card” with exclusive premium discounts and promotions to Nan Shan Life Insurance clients.
2.Spending Volume: Main operating strategy is to achieve steady growth and consolidate niche market. Based on bonus points collection via “HAPPY GO”, combined with Group related channels to elevate the value and convenience of FEIB HAPPY GO iBonus and cultivate loyalty of the Bank’s credit cardholders.

( 三 ) 法人金融業務

執行目標市場，掌握產業上、中、下游整體成長態勢，持續開發新客戶及新市場；深耕優質客戶，掌握客戶營運規劃資訊，把握業務機會。
建立風險性資產收益門檻，優化資產規模及組合。
多產品行銷，推展 e-commerce，強化客戶往來深度，以建立穩定的資金來源及存款結構。
深化 Corporate Finance 業務，開辦財務顧問新種業務，提高附加價值及差異化服務。
培育優質人力，提昇競爭優勢。
掌握人民幣業務，以多元化佈局，開發大中華區商機。

( 四 ) 金融市場業務

金融交易業務：

適度承擔風險，為銀行創造利潤。外匯交易期能掌握匯率波動以波段行情操作獲利。債券市場因受美國 QE 退場的影響，公債殖利率於歷史低點往上彈升，投資以保守應對，謹慎操作。股市交易擬強化總經及產業基本面分析能力，以掌握投資趨勢。靈活資金配置及交易技巧，以提高獲利機會。

金融行銷：

加強 TMU 服務客戶廣度與深度，一方面擴大客戶基礎，另一方面開發多樣性金融商品以滿足客戶需求，提高獲利。外匯保證金交易與可轉債拆解業務均為本行重要利基產品，市佔率領先同業。為加強服務客戶，增加本行競爭力，計畫開辦「網際網路交易」以擴展業務範圍，提升獲利。

金融同業存款授信業務：
(1) 配合總行資金有效運用，適時調節存款結構暨穩定存款規模。
(2) 掌握景氣復甦，積極擴大放款規模，增加收益。
(3) 精耕既有客戶，強化服務品質，增加多元化商機。
信用市場業務：
(1) 審慎篩選信用連結標的公司及交易對手。
(2) 著重單純、基本的交易類型，避免承作過於複雜、組合式的產品。
(3) 順應開放投資大陸地區法人發行之有價證券，開發相關新商機。

經營概況 Business Overview

C.Corporate Banking Business

a.Focus on the target market, seize growth momentum of upper, middle and lower stream of the industry, continue to develop new customers and new market; maintain good clients, grasp operational plans of customers and business opportunities.
b.Set up limits for risk assets, and optimize asset scale and portfolio.
c.Execute multi-product marketing, promote e-commerce, enhance customer relation so as to establish steady capital source and savings structure.
d.Deepen Corporate Finance businesses, initiate new financial consulting business, increases value-added and differentiated services.
e.Cultivate HR talents and improve competitiveness.
f.Engage in the RMB businesses and develop opportunities in the Greater China region.

D.Financial Markets Business

a.Financial Transactions:

Create pro� t for the Bank upon appropriate risk. The bond market was under the impact of QE pullback in the U. S., and government bond yield rebounded from historical low, investors should act prudently. Trading of stocks should be made with strong analytical ability of the macro economy and fundamentals of the industry so as to grasp investment trend. Maintain � exible portfolio and transaction technique to heighten pro� t.

b.Treasury Marketing Unit (TMU):

Broaden TMU service, to not only expand customer base, but develop diversified � nancial products to satisfy customer needs and improve pro� ts. FX margin trading and convertible bond asset swap are both important niche products for the Bank with leading market share. To strengthen services and increase competitiveness, FEIB plans to open “On-line Trading” to expand business scope and elevate pro� t.

c.Financial Institute Deposits and Loans:
1.Adjusting funds and deposit structure timely for effective usage.
2.Taking advantage of recovery to expand loan scale and increase pro� t.
3.Cultivate existing clients, strengthen service quality, and increase diversi� ed business opportunities.
d.Credit Derivatives
1.Carefully select target companies and counterparties.
2.Focus on simple and basic products, and avoid undertaking too complicated structured products.
3.Develop new investment opportunities in bonds and securities issued in China.

5. 可轉債資產交換業務：

針對不同客群，持續擴展 Asset Swap 業務，並加強推廣法人與金融同業之賣出資產交換業務，提供客戶更多樣化之可轉債選擇權標的，進而增進市場競爭力。提升選擇權客戶關係，積極推廣至外資法人客戶，持續提昇可轉債選擇權之市佔率。大力推動可轉債選擇權網路下單業務，吸引不同客群並以優惠報價及優質服務滿足客戶需求。

6. 外匯保證金交易業務：

外匯保證金交易為本行重要利基產品，市佔率領先同業。為加強服務客戶，增加本行競爭力，已開辦「網際網路交易」以擴展業務範圍，提升獲利。

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佈局跨兩岸三地之企金服務平台

Deployment of Cross-Strait Corporate Finance Service Platform

遠東商銀有計劃佈局跨兩岸三地之企金平台，所組成的跨境服務菁英團隊頻繁出入當今世界第二大經濟體，走訪茁壯中的大陸企業、深耕中的台商企業及眾多逐鹿大中華區市場的國際企業，以充分掌握企金服務商機及企業財務需求，海外獲利逐年成長。去年 8 月主辦中國三江化工集團壹億美元聯貸案、10 月主辦桑德國際聯貸案，接連兩件大陸企業聯貸案也預告下一個獲利成長的新動能。

FEIB has deployed a strategic cross-Strait corporate � nance platform, and formed a cross-border elite service team to travel frequently in and out of the world’s second largest economy, visit the growing Chinese enterprises, and cultivate Taiwanese as well as international corporations operating in the Greater China market to fully understand their corporate � nance opportunities and � nancial needs and thus achieved increasing pro� ts overseas. In August 2013, as Lead Manager to the US$100 million syndicated loan China Sanjiang Fine Chemical Company Ltd., and then the syndication loan agreement with Sound Global (HK) Ltd. in October 2013, the two major syndicated loan cases with Chinese enterprises also mark the next growth momentum for the Bank.

經營概況 Business Overview

e. Convertible bond Asset Swap:

Catering to different customer segments, continue to expand Asset Swap business so as to enhance market competitiveness. Elevate customer relations in options, actively promote options to foreign investors, continue to heighten market share of convertible bond options, engage in online business of convertible bond options to attract different customer, and satisfy customer needs with competitive price and excellent service.

f. FX Margin Trading:

FX Margin Trading is the Bank’s important niche product with leading market share. To strengthen customer service, enhance competitiveness, FEIB has already launched “Internet Trading” to expand business and elevate pro� ts.

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財富管理獲顉最佳潛力獎

Wealth Management Received Best Potential Award

遠東商銀獲頒第七屆「財富管理銀行評鑑」最佳潛力獎，該獎由 < 今周刊 > 主辦，世新大學財務金融研究所負責評比。此次評比著重財富管理的未來發展，其中一個構面強調理財為客戶帶來幸福感，而以樂活理財為經營理念的遠東商銀財富管理因契合此一趨勢，贏得財經學者與專業媒體的一致肯定。

FEIB received “Best Potential Award” of the 7th Wealth Management Bank Review organized by the Business Today magazine and evaluated by the Graduate School of Finance, Shih Hsin University. Focusing on future development of wealth management, this evaluation stressed the sense of happiness brought to the customers through wealth management. The Bank’s LOHAS personal � nance ideology was well received by both economic scholars and press media.

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陸、財務狀況
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一、合併簡明資產負債表 Consolidated Simpli� ed Balance Sheet

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新臺幣仟元 (NT$ thousand)
年度 Year
2012 2013
項目 Items
現金及約當現金、存放央行及拆借銀行同業
88,415,159 93,224,900
Cash, Cash Equivalents, Due from Central Bank and Due from Banks
透過損益按公允價值衡量之金融資產
16,110,835 18,795,444
Financial Assets at Fair Value Through Pro� t or Loss
備供出售金融資產
11,865,864 21,735,693
Available-for-Sale Financial Assets
避險之衍生金融資產
180,242 111,034
Derivative Financial Assets for Hedging
附賣回票券及債券投資
23,741,992 23,006,325
Securities Purchased under Resale Agreements
應收款項 - 淨額
20,781,182 20,672,272
Net Receivables
貼現及放款 - 淨額
280,219,426 292,517,032
Net Loans and Discounts
持有至到期日金融資產
2,224,301 3,105,972
Hold-to-Maturity Financial Assets
採用權益法之投資 - 淨額
2,368,548 2,365,826
Net Investments in Equity
其他金融資產 - 淨額
13,773,339 11,226,390
Net Other Financial Assets
不動產及設備 - 淨額
2,879,693 2,814,164
Net Properties and Equipment
無形資產 - 淨額
1,868,048 1,830,904
Net Intangible Assets
遞延所得稅資產 - 淨額
928,575 576,972
Net Deferred Tax Assets
其他資產
226,072 206,250
Other Assets
資產總額
465,583,276 492,189,178
Total Assets
央行及銀行同業存款
11,674,958 13,782,129
Due to Central Bank and Other Banks
透過損益按公允價值衡量之金融負債
3,745,032 7,288,065
Financial Liabilities at Fair Value Through Pro� t or Loss
避險之衍生金融負債
12,819 12,631
Derivative Financial Liabilities for Hedging
附買回票券及債券負債 -
1,299,471
Bonds Sold under Repurchase Agreements
應付款項
5,560,371 13,502,992
Payables
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財務狀況 Financial Information

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新臺幣仟元 (NT$ thousand)
年度 Year
2012 2013
項目 Items
當期所得稅負債
113,131 10,870
Current Tax Liabilities
存款及匯款
391,933,266 398,305,940
Deposits Accepted and Remittances Payable
應付債券
23,072,123 27,103,885
Bank Debentures
其他金融負債
1,908,070 761,020
Other Financial Liabilities
負債準備
697,845 754,125
Provisions
其他負債
432,374 414,966
Other Liabilities
分配前
439,149,989 463,236,094
負債總額 Before Distribution
Total Liabilities 分配後 ( 註 ) -
439,665,709
After Distribution
歸屬於母公司業主之權益
26,433,287 28,953,084
Equity Attributable to Owners of The Bank
股本
22,422,596 23,621,182
Share Capital
資本公積
22,348 34,923
Capital Surplus
分配前
4,153,012 5,595,176
保留盈餘 Before Distribution
Retained Earnings 分配後 ( 註 ) -
2,531,858
After Distribution
其他權益
(164,669) (298,197)
Other Equity
分配前
26,433,287 28,953,084
權益總額 Before Distribution
Total Equity 分配後 ( 註 ) -
25,917,567
After Distribution
無保留意見無保留意見
會計師查核意見
’ Unquali� ed Unquali� ed
Independent Auditors Report
Opinion Opinion
會計師姓名
陳俊宏、楊承修陳俊宏、楊承修
Names of Auditors
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註：分配後數字，依據次年度股東會決議之情形填列。

*Total Liabilities, Retained Earnings and Total Equity after distribution will be con� rmed at general shareholders' meeting.

二、合併簡明損益表 Consolidated Simpli� ed Statements of Income

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單位：新臺幣仟元 (NT$ thousand)
年度 Year
2012 2013
項目 Items
利息收入
9,644,265 11,263,921
Interest Income
利息費用
5,499,120 6,379,554
Interest Cost
利息淨收益
4,145,145 4,884,367
Net Interest Income
利息以外淨收益
4,362,762 4,603,262
Noninterest Income and Gains, Net
淨收益
8,507,907 9,487,629
Net Pro� t
呆帳費用及保證責任準備提存 ( 迴轉利益 )
Provision (Reversal of Provision) for Possible Losses and Guarantee (257,746) (68,604)
Obligations Reserve
營業費用
5,850,696 5,993,126
Operating Expense
繼續營業單位稅前淨利
2,914,957 3,563,107
Pre-Tax Income from Continued Operations
所得稅 ( 費用 ) 利益
(364,192) (501,837)
Income Tax (Expense) Bene� t
繼續營業單位本期淨利
2,550,765 3,061,270
After-Tax Income from Continued Operations
停業單位損益After-Tax Income from Discontinued Operations - -
本期淨利
2,550,765 3,061,270
Net Income
本期其他綜合損益 ( 稅後淨額 )
(188,134) (132,848)
Other Comprehensive Income (Loss) for The Year, Net of Tax
本期綜合損益總額
2,362,631 2,928,422
Total Comprehensive Income
淨利歸屬於母公司業主
2,550,765 3,061,270
Net Income Attributable to Owners of The Bank
淨利歸屬於非控制權益Net Income Attributable to Non-Controlling Interests - -
綜合損益總額淨利歸屬於母公司業主
2,362,631 2,928,422
Total Comprehensive Income Attributable to Owners of The Bank
綜合損益總額歸屬於非控制權益Total Comprehensive Income Attributable to Non-controlling Interests - -
每股盈餘
1.09 1.30
EPS (NT$)
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財務狀況 Financial Information

三、合併資本適足性 Consolidated Capital Adequacy

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單位：新臺幣仟元 (NT$ thousand)
年度 Year
2013
分析項目 Analysis Items
普通股權益
26,238,006
Common Equity Tier I
自有資本非普通股權益之其他第一類資本Additional Tier 1 Capital -
Net Capital 第二類資本
13,676,786
Tier II Capital
自有資本
39,914,792
Net Capital
標準法
291,547,743
Standardized Approach
信用風險內部評等法
Credit Risk Internal Rating Based Approach
資產證券化
Asset Securitization
基本指標法
加權風險性 12,714,700
Basic Indicator Approach
資產額
Total Risk- 作業風險標準法 / 選擇性標準法
Operating Risk Standardized Approach/Alternative Standardized Approach
Weighted
Assets 進階衡量法
Advanced Measurement Approach
標準法
10,309,788
市場風險 Standardized Approach
Market Risk 內部模型法
Internal Models Approach
加權風險性資產總額 Total Risk-Weighted Assets 314,572,231
資本適足率
12.69%
Capital Adequacy Ratio
第一類資本佔風險性資產之比率
8.34%
Ratio of Tier I Capital to Risk Assets
普通股權益占風險性資產之比率
8.34%
Ratio of Common Equity to Risk Assets
槓桿比率
4.68%
Leverage Ratio
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單位：新臺幣仟元 (NT$ thousand)

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年度 Year
2012
分析項目 Analysis Items
普通股 22,422,596
Common Shares
永續非累積特別股
Non-Cumulative Perpetual Preferred Stocks
無到期日非累積次順位債券
Non-Cumulative Subordinated Debts without Maturity Dates
預收股本
Advanced Receipts for Capital Stocks
資本公積 ( 固定資產增值公積除外 ) 31,650
Capital Surplus (apart from Fixed Asset Appreciation Surplus)
法定盈餘公積 1,742,672
Legal Reserves
特別盈餘公積 4,554
第一類資本 Special Reserves
Tier I Capital 累積盈虧 2,564,542
Retained Earnings
少數股權
Minority Interests
股東權益其他項目 -241,549
Other Shareholders’ Equity
減：商譽
自有資本 Minus: Goodwill
Net Capital 減：出售不良債權未攤銷損失
Minus: Non-Amortization of Non-Performing Loan (NPL) Disposal Loss
減：資本扣除項目 812,113
Minus: Capital Allowance
第一類資本合計 25,712,352
Total Tier I Capital
永續累積特別股
Perpetual Cumulative Preferred Stocks
無到期日累積次順位債券
Cumulative Subordinated Debt without Maturity Date
固定資產增值公積
Fixed Asset Appreciation Surplus
累積盈虧
第二類資本 Retained Earnings
Tier II Capital 備供出售金融資產未實現利益之 45% 34,596
45% of Unrealized Gain on Financial Assets in Available-for-Sale
可轉換債券
Convertible Bonds
營業準備及備抵呆帳 1,267,784
Operating Reserve and Loan Loss Provisions
長期次順位債券 11,260,000
Long-Term Subordinated Debts
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單位：新臺幣仟元 (NT$ thousand)

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年度 Year
2012
分析項目 Analysis Items
非永續特別股
Non-Perpetual Preferred Stocks
永續非累積特別股及無到期日非累積次順位債券合計超出第一類資本總額
15% 者
Aggregate Non-Cumulative Perpetual Preferred Stocks and Non-
Cumulative Subordinated Debts without Maturity Date Exceeding 15% of
Total Tier I Capital
減：資本扣除項目 812,114
Minus: Capital Allowance
第二類資本合計 11,750,266
Total Tier II Capital
短期次順位債券
Short-Term Subordinated Debts
第三類資本非永續特別股
Tier III Capital Non-Perpetual Preferred Stocks
第三類資本合計
Total Tier III Capital
自有資本 37,462,618
Net Capital
標準法 272,198,189
Standardized Approach
信用風險內部評等法
Credit Risk Internal Rating Based Approach
資產證券化
Securitization
基本指標法 11,876,975
加權風險性資 Basic Indicator Approach
產額
作業風險標準法 / 選擇性標準法
Total Risk-
Operating Risk Standardized Approach/Alternative Standardized Approach
Weighted
Assets 進階衡量法
Advanced Measurement Approach
標準法 10,578,788
市場風險 Standardized Approach
Market Risk 內部模型法
Internal Model Approach
加權風險性資產總額 294,653,952
Total Risk-Weighted Assets
資本適足率 12.71%
Capital Adequacy Ratio
第一類資本佔風險性資產之比率 8.72%
Ratio of Tier I Capital to Risk Assets
第二類資本佔風險性資產之比率 3.99%
Ratio of Tier II Capital to Risk Assets
第三類資本佔風險性資產之比率 -
Ratio of Tier III Capital to Risk Assets
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四、轉投資公司概況及未來計畫

（一）遠銀資產

1. 獲利原因：

本公司獲利之原因主要為處分不良債權，另外，長期投資項下之遠龍不銹鋼公司當年度亦為獲利，故全年度為獲利。

2. 未來計劃：

(1) 與資產管理公司合作，向其購入新的 NPL 或合作購入不動產；
(2) 與會計師事務所或律師事務所合作，洽詢可能合作商機；
(3) 藉由各項管道於市場上購入新的法拍不動產，並加以處分，以增加收益。

（二）遠銀人身、遠銀財產保險代理人股份有限公司

1. 獲利原因：

遠銀保代精選市場優質保險公司為合作對象，加強對銀行各事業群客戶的保險需求，提供最適切風險控管的保險商品以強化銀行保險的功能。針對財富管理客戶提供具市場競爭性的銀行保險商品，並以房屋貸款壽險保障房屋貸款客戶的人身風險，並顧及企業金融法人壞帳風險控管的應收帳款保障保險。因而持續每年得以達成並超越原訂年度稅前盈餘目標，為遠東商銀轉投資獲利績效。

2. 未來計劃：

保險銷售市場通路「銀行保險」佔比已過半。遠銀保代除了持續執行以客戶保障需求為引進保險商品的策略外，提升銀行同仁對銀行保險商品的熟悉度，加深客戶對銀行保險商品的持有數，並以專業保險顧問協助銷售，加強售後服務品質與深耕客戶關係；積極擴展與其他可行通路間異業策略聯盟，增加多元行銷契機以達強本培源的目標。藉由集團員工優惠專案、集團關企團體保險，持續開發集團內部客戶，進一步發揮集團綜效，成為遠東集團內的專業保險服務團隊；並提供符合遠東集團內外、個人、法人之全方位風險控管之保險方案。

財務狀況 Financial Information

(4) Reinvestment Policies and Plans

A.Far Eastern Asset Management Corp.

1.Reasons for Pro� t:

Far Eastern Asset Management disposed of non-performing loans, in addition, its longterm investment Yuan Lung Stainless Steel Corporation also gained profit, therefore reported pro� t for the year.

2. Future Plans:

(1)Join forces with other asset management companies, purchase their NPL or coacquire real estates.
(2)Seek cooperation with accounting firms or law firms to consult possible business opportunities.
(3)Continue to purchase through various market channels new court auction real estates, and dispose of these assets to increase revenues.

B.Far Eastern Life and Property Insurance Agency Co., Ltd.

1. Reasons for Pro� t:

Far Eastern Life and Property Insurance Agency carefully selects and works with good insurance companies to meet the insurance needs of the Bank’s different business units, offers insurance products with the best risk control to strengthen its bancassurance. FEIB provides price-competitive bancassurance products to its wealth management customers, adopts credit life insurance against the risk of its mortgage clients, and applies trade credit insurance to control the risk control of corporate � nance bad debt. Thus, the Bank continues to exceed pre-tax earning target every year.

2. Future Plans:

“Bancassurance” already accounts for more than 50% of FEIB’s insurance sales channel. Aside from continuing to introduce new insurance products in compliance with customer needs, educating the Bank staffs to be more familiar with the bank insurance products, and deepens clients’ holdings of the bank insurance products, the Bank will also employ professional consultants to assist in insurance sales, strengthen after-sales quality and fortify customer relations. It will focus on forming cross-industry strategic alliances with other distributing channels to increase multiple sales opportunities and expand businesses. Through providing special discounts to Group employees and groupinsurance packages among affiliated companies, the Bank will further develop clients within the Far Eastern Group to achieve synergy and become the Group’s insurance expert to offer comprehensive insurance policies to ful� ll customers’ needs.

（三）遠智證券

1. 年虧損主要原因：

本公司 2013 年度虧損 NTD 10,783 仟元，主係下半年景氣雖逐漸復甦，但投資人因擔憂 QE 縮減，態度觀望未積極進場，影響公司整體收入，收益數為 NTD 183,921 仟元與 2012 年度相較無太大差異，相關營運成本及營業費用與 2012 年相較雖減少 NTD 14,167 仟元，因前述因素，2013 年度仍呈現虧，較前期虧損減少 NTD 9,993 仟元。

2. 改善計畫 :

2014 年除延續 2013 年所擬定之改善計畫外，自 2013 年第 3 季起將陸續調整相關執行策略，其重點說明如下：

(1) 以客戶整體資產及投資組合最佳化為目的，並衡觀總體經濟市場之發展逐步擴大商品線。
(2) 考量獎酬成本控制及業務人員激勵效果，重新調整業務人員獎勵及考核辦法。
(3) 簡化業務單位組織層級，取消業務分組及分組主管職位，扁平化管理層級以降低固定成本。
(4) 積極調整改善內部作業流程，朝有效支援業務發展為改善目標。

（四）關係企業相關資料

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遠東國際商業銀行
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遠銀人身保險代理人遠銀財產保險代理人遠銀資產管理遠智證券
股份有限公司股份有限公司股份有限公司股份有限公司
本行持股本行持股本行持股本行持股
100.00％ 100.00％ 100.00％ 100.00％
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註：本行各關係企業間並未相互持股

財務狀況 Financial Information

C.Far Eastern International Securities Company Ltd.

1.Reasons for Loss:

The Company registered NT$10.783 million loss in 2013. Even with gradual recovery in the second half of the year, investors became hesitant due to concerns on QE cuts which affected overall revenues. While revenue stood at NT$183.921 million, about the same as that of 2012, relative operating costs and expenses also decreased by NTD14.167 million, However the Company still reported loss of NT$10.783 million in 2013, yet already much improved NT$9.993 million less than that of the previous year.

2.Improvement Plans:

During 2014, the Company will continue to pursue the improvement plan set up in 2013. Since 3Q 2013, Far Eastern International Securities Company has been adjusting and executing the following major strategies:

(1)To achieve optimal overall assets and portfolio for the clients, and gradually expand product line in accordance with macro economic market developments.
(2)To readjust the reward and review methods for sales staffs after evaluating reward cost control and incentive effectiveness.
(3)To simplify organization of the sales unit, cancel sales groups divisions and the positions of division heads, streamline management level, and thus lower � xed income.
(4)To adjust and improve inner operation process toward effective support system as the improvement goal.

D.Af� liated Companies

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Far Eastern International Bank
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Far Eastern Life Far Eastern Property Far Eastern Asset Far Eastern
Insurance Agency Co., Insurance Agency Co., Management Corp. International Securities
Ltd. Ltd. Company Ltd.
FEIB Ownership FEIB Ownership FEIB Ownership FEIB Ownership
100.00％ 100.00％ 100.00％ 100.00％
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Note: There is no cross holding among FEIB af� liated companies.

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柒、風險管理
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一、風險管理組織架構及政策

( 一 ) 政策
塑造本行注重風險管理之專業組織文化，並運用內外部風險管理規範之質化 ( 如各項作業辦法等 )、量化指標 ( 如資產品質比率等 )，作為本行營運策略參考。
設置獨立之風險控管專責單位，有效監控及落實風險管理制度。
有效辨識、衡量、監督與控制各項既有及潛在風險於本行可承受範圍內，並兼顧風險與合理利潤，達到盈餘目標。
( 二 ) 組織架構

1. 董事會：

董事會為本行風險管理之最高決策單位，負責核定全行風險管理政策，建立全風險管理文化，對整體風險管理擔負最終責任。

2. 風險管理委員會：

由總經理為風險管理委員會召集人，並指定相關主管擔任委員，定期開會，掌理及審議全行風險管理執行狀況、評估資本適足性與風險承擔情形。

3. 風險管理處：

下設法金組、消金組及中小企業組，分別對法人金融與金融市場、消金及信用卡等事業群及中小企業金融之風險管理採直接管理。各事業群有關授信準則、程序、辦法、新產品開發、人員授權等，均先經由風險管理處審查，再行呈核，使本銀行風險管理具集中控制效果。

風險管理處法金組分為審查組、應收帳款徵審組、金融市場中台組、授管組、覆審追蹤組等五個單位，分別負責授信案件事前審核、貸放後管理、交易部位之每日市價評估與限額控管、授信規範之擬訂與控管及督導法金授信覆審追蹤作業。
風險管理處消金組分為消金授管、信用卡授管、債權管理、資訊 / 服務等四個單位，分別負責制定消金與信用卡產品授信政策、資產品質管理、徵審與貸後管理、交易管理、中途授信管理、逾期放款回收、債權管理、消債案件處理及資料倉儲運用與風險分析。
風險管理處中小企業組分為中小企業授管、債權管理、資訊 / 服務等三單位，分別負責制定中小企業產品授信政策、資產品質管理、徵審、逾期放款回收、債權管理、消債案件處理及資料倉儲運用與風險分析。

4. 稽核處：

定期查核全行風險管理有關業務，包括風險管理架構、風險管理運作程序等相關作業之實際執行狀況，並適時提供改進建議。

風險管理 Risk Management

(1) Risk Management Structure and Policy

A. Policy

1.To foster a risk management-oriented culture, the Bank has employed a qualitative index of internal and external risk management regulations (such as diverse operating procedures) and quantitative index (such as ratio of asset quality) as a reference for operating strategy.
2.FEIB has set up an independent risk control unit to effectively supervise and implement the Bank's risk management system.
3.To effectively recognize, evaluate, monitor and control all existing and potential risks within acceptable limits to achieve target revenues.

B. Organization Structure

1.Board of Directors

The Board of Directors steers FEIB’s risk management, and is responsible for reviewing the whole Bank’s risk management policies, reinforcing a risk management culture and taking ultimate responsibility for overall risk management.

2.Risk Management Committee

The Bank President presides over the Risk Management Committee, appoints relevant bank heads as Committee Members and calls regular meetings to execute and review the Bank’s capital adequacy, risk bearing capacity and entire risk management system.

3.Risk Management Department

Under the Management Risk Department, the Corporate Banking, Consumer Banking and Small- and Medium-sized Enterprise Teams directly manage risk with regard to Corporate Banking, Financial Markets, Consumer Banking, Credit Card as well as Small- and Medium-sized Enterprise Business Groups. The Risk Management Department reviews and gives quantitative and qualitative feedback on each business group’s lending guidelines, processes, product development, and authorization criteria, etc. before consideration for approval in an effort to centralize control and improve quality.

(a)The Corporate Banking Team under Risk Management Department is further divided into 5 Sections including: Risk Review, AR Factoring, Financial Market Middle Office, Credit Control, and Second Review & Trace which handle respectively the pre-evaluation of lending cases, after loan management, daily assessment of each position’s market value and limit control, the drawing of lending guidelines and risk control, and monitor Corporate Banking’s second review and trace operations.
(b)The Consumer Banking Team under Risk Management Department is further divided into 4 Sections including: Consumer Banking Credit Control, Credit Card Control, Debt Management, and Information/Service which handle respectively drawing of the lending policies of consumer banking and credit card products, management of asset quality, evaluation and after-loan management, transaction management, mid-way lending management, overdue loan recovery, debt write-off, data storage & processing, and risk analysis.
(C)The Small- and Medium-sized Enterprise Team under Risk Management Team is further divided into 3 Sections including: Small- & Medium-sized Enterprise Lending Control, Debt Management, and Information/Service which handle respectively the drawing of lending policies to small- and medium-sized enterprises, asset quality management, evaluation, overdue loan recovery, debt management, debt write-off cases, data storage & processing, and risk analysis.

4.Auditing Department

Regularly check the Bank’s risk management related businesses including the execution of risk management structure and risk management operating processes, and then provide constructive suggestions for improvement.

二、各項風險管理策略

( 一 ) 信用風險

1. 法人金融業務

訂定穩健及明確之法人金融徵授信及貸後管理程序，掌控資產品質。控管授信行業別之適當比重、集團企業授信風險之集中管理，並定期或視必要性依據經濟走勢、產業趨勢及本行經營政策調整上述行業或集團比重。

2. 消金及信用卡業務

訂定明確之授信規範及貸放程序，達成消金授信資產品質穩定及穩健獲利之營運目標。管理資產結構確保各資產組合適當配置，追蹤放款品質，檢討經濟景氣、經營環境變化，動態調整授信政策。

3. 中小企業金融業務

訂定明確中小企業徵授信規範、作業程序及貸後管理機制，達成授信資產品質優化及規模成長目標。規範授信產品類別、進行資產結構管理，確保債權擔保性及資產組合適當性。定期檢視經濟景氣變化，動態調整授信政策及策略目標。

( 二 ) 作業風險

以有效且具獨立運作之內部稽核，檢視作業風險管理狀況，除就應改善事項設立追蹤機制外，並適時呈報查核結果予董事會。為加強內部控制藉以防止弊端之發生，建立各單位「自行查核」制度，並由稽核處定期至各單位辦理「一般查核」與「專案查核」；同時本行設有「遵守法令主管」制度，督導全行確實遵循法令。

依日常營業活動及管理流程可能發生之各項風險，綜合評估其發生頻率及影響嚴重性，採取將部份或全部之作業風險利用保險、委外等措施，移轉或沖抵事件發生之損失與衝擊。落實 KYC ( 認識客戶，Know Your Customer) 及防制洗錢、內部控制制度、法規遵循、員工道德規範與教育訓練等措施，以降低風險發生之機率。本行建置符合國際標準規範 (ISO27001) 的資訊安全控管規範，包含制定本行資訊安全政策、相關資訊安全之實施程序、監督風險與資訊安全稽核能力、宣導資安教育訓練。

( 三 ) 市場風險

依本行「金融市場自營交易業務授權準則」針對不同業務設有交易員、交易室部位限額及停損限額，每日由專人於日中及日終進行檢視，損失達限額即應立即結清部位，避免市場風險，並每日按市價評估交易性部位損益。新產品、業務及系統推展或運作前，適當評估市場風險並考量其對本行之影響。

依金融產品訂定交易室部位總額及個別交易員部位限額以控制市場風險於合理範圍。交易性部位採即時或依每日市價評估為原則，並應每日評估一次，若為銀行本身業務需要辦理之避險交易，至少每月評估二次，且由風險管理處獨立評估，執行部位控管及停損限制。

風險管理 Risk Management

(2) Risk Management Strategy

A. Credit Risk

1.Corporate Banking

To engage in stipulating stable and precise corporate banking lending and after-loan management processes, control asset quality; maintain an adequate ratio of lending industries, centralize management of corporate lending risk, and regularly adjust when necessary the above-said industry or corporate ratios in accordance with economic performance, industry trend, and the Bank’s operating policy to diversify and reduce risk.

2.Consumer Banking and Credit Card Business

To De� ne precise lending guidelines and processes so as to achieve the steady and organic growth target; manage asset structure to ensure the proper allocation of portfolios, trace lending quality, review economic recovery, monitor changes of operating environment, and proactively adjust lending policies.

3.Small- and Medium-sized Enterprise Banking Business

To stipulate clearly the lending guidelines, operation process and after-loan management mechanism to smalland medium-sized enterprise clients to improve lending asset quality and achieve growth in scale; regulate lending product categories, implement asset structure management, ensure debt guarantee and proper portfolios; regularly monitor the changes in economic scenario, and proactively adjust lending polices and strategic objective.

B. Operational Risk

With effective and independent internal auditing, the Bank examines execution of its operational risk management. Aside from setting up follow-up mechanism for areas that require improvement, it also presents verification checking results in a timely manner to the Board of Directors. To strengthen the Bank’s internal controls and prevent defaults, each bank business unit has established its own “self-auditing” system and the Auditing Dept. shall implement “general auditing” and “special auditing.” The Bank also employs a “Compliance Of� cer” system to ensure that the Bank strictly abides by all regulations.

FEIB evaluates the frequency and seriousness of operational risks with regard to its daily operations and management process, and strives to transfer or write-off the loss and impact by way of insurance, outsourcing, and etc. With measures such as the implement of KYC (Know Your Customer), anti-laundry, internal control system, regulations, employee morale buildup and educational trainings, the Bank aims to lower the possibility of risk occurrence. The Bank has also set up information safety control guidelines conforming to the requirements of “ISO27001 Information Security Management System” including IT safety policies, process, supervision, audit and educational training to mitigate information risk.

C. Market Risk

The Bank controls trading risk held by every trading unit around various � nancial instruments and even whole trading room risk by setting up certain positions from speci� c clerk, stop-loss limits for all positions to different � nancial instruments and products to control market risk within a reasonable range. Special staff and teams check twice daily at noontime and end of day to review results, immediately squaring positions when reaching limits, and evaluating each day’s gains or losses of un-squared positions. Before launching, promoting or operating new product, business or system, adequate evaluation of market risk should be performed to check its affect on the Bank.

In accordance with trading positions volumes of � nancial products and individual clerk’s trading limit to control market risk within reasonable range. Trading positions will go through real time evaluations with reference to their daily market values, and should be evaluated once daily. As to hedge businesses deemed necessary by the Bank itself, should be evaluated at least twice per month and monitored independently by the Risk Management Department to execute position control and stop-loss limit.

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[Shareholder Information ]
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一、股份及股利 Shares and Dividends

( 一 ) 股本來源 Sources of Capital

May 15, 2014

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核定股本
股份 Authorized Capital 備註
種類
Types of Shares 流通在外股份未發行股份合計 Note
Outstanding Shares Non-issued Shares Total
普通股 2,727,118,264 股 1,772,881,736 股 4,500,000,000 股上市股票
Common Shares shares shares shares Listed on the Taiwan Stock Exchange (TSE)
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( 二 ) 股東結構 Shareholder Structure

單位：股 Unit: per share May 15, 2014

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股東結構
外國機構及
Shareholder 政府機構金融機構其他法人
個人外人合計
Structure GovernmentInstitutions InstitutionsFinancial Other Legal Persons Individuals Foreign Institutions Total
and Foreigners
數量 Quantity
人數
4 26 202 68,326 154 68,712
Number of People
持有股數 ( 股 )
18,155,307 61,947,778 1,420,215,612 957,724,894 269,074,673 2,727,118,264
Number of Shares
持股比例 (%) 0.66 2.27 52.08 35.12 9.87 100.00
Percentage
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( 三 ) 股權分散情形 Shares Diversi� castion

每股面額十元 Par Value NT$10 May 15, 2014

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持股分級股東人數（人）持有股數（股）持股比例（%）
Number of Share Range Number of Shareholders Number of Shares Percentage
1 至 999 股 shares 26,677 7,628,058 0.28
1,000 至 5,000 股 shares 20,470 47,449,989 1.74
5,001 至 10,000 股 shares 7,347 54,181,679 1.99
10,001 至 15,000 股 shares 5,417 68,251,986 2.50
15,001 至 20,000 股 shares 1,803 32,567,346 1.19
20,001 至 30,000 股 shares 2,167 53,820,561 1.97
30,001 至 50,000 股 shares 1,671 66,078,995 2.42
50,001 至 100,000 股 shares 1,471 106,038,368 3.89
100,001 至 200,000 股 shares 843 117,268,462 4.30
200,001 至 400,000 股 shares 416 116,941,070 4.29
400,001 至 600,000 股 shares 163 81,054,841 2.97
600,001 至 800,000 股 shares 55 38,394,034 1.41
800,001 至 1,000,000 股 shares 42 38,091,482 1.40
1,000,001 股以上 shares plus 170 1,899,351,393 69.65
合計 Total 68,712 2,727,118,264 100.00
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股東資訊 Shareholder Information

( 四 ) 主要股東名單 Major Shareholders

單位：股 Unit: shares May 15, 2014

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股份
Shares 持有股數（股）持股比例（%）
主要股東名稱 Number of Shares Percentage
Major Shaeholders
裕元投資股份有限公司
137,206,683 5.03
Yu Yuan Investment Co., Ltd.
裕利投資股份有限公司
121,516,290 4.46
Yue-li Investment Company
亞洲投資股份有限公司
111,576,837 4.09
Asia Investment Corp.
德勤投資股份有限公司
111,563,413 4.09
Der Ching Investment Corp.
裕通投資股份有限公司
107,800,242 3.95
Yue-Tung Investment Corp.
遠鼎投資股份有限公司
98,577,104 3.61
Yuan Ding Investment Corp.
開元國際投資股份有限公司
88,929,067 3.26
Kai Yuan International Investment Corp.
鼎元國際投資股份有限公司
73,250,389 2.69
Ding Yuan International Investment Corp.
遠東新世紀股份有限公司
72,458,863 2.66
Far Eastern New Century Corporation
亞洲水泥股份有限公司
65,120,828 2.39
Asia Cement Corporation
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註：係列明股權比例佔前十名之股東。 Note: Listed above are the Bank’s top ten major shareholders.

二、信用評等 Ratings

在信用評等方面，經惠譽國際信評公司 (Fitch Ratings) 評等，本行評等為國內評等分別為長期評等 A(twn)、短期評等 F1(twn)，國際外幣評等之長期評等 BBB-、短期評等 F3，長期評等展望為穩定 (Stable)，屬投資等級穩健之金融機構。

The Bank’s investment grade ratings were assessed by Fitch Ratings Limited to read as follows: National Rating Long-term A (twn), National Rating Short-term F1 (twn), Foreign Currency Rating Long-term BBB-, Foreign Currency Rating Short-term F3, and Foreign Currency Rating Outlook Stable. FEIB is considered a stable � nancial institution of investment grade.

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評等項目 (Ratings) 2009/3/13 2010/9/27 2011/10/14 2012/10/09 2013/10/11
短期 Short-term F3 F3 F3 F3 F3
國際評等
Foreign Currency 長期 Long-term BBB- BBB- BBB- BBB- BBB-
Rating
展望 Outlook Negative Stable Stable Stable Negative
國內評等短期 Short-term F1(twn) F1(twn) F1(twn) F1(twn) F1(twn)
National Rating 長期 Long-term A (twn) A(twn) A (twn) A (twn) A (twn)
支援評等 Support Rating 4 4 4 4 4
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玖、企業社會責任
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[ Corporate Social Responsibility ]
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本行自成立以來，除致力於提供客戶完善的金融相關服務，更不忘實踐企業公民之社會責任，長年投身各項公益活動，近幾年更大力推廣人文美學，期盼台灣社會不僅享有財富的豐饒，亦能領會藝術所帶來的心靈之美。以下為 2013 年本行主辦或參與的公益與人文美學活動。

一、關懷社會公益

本行為伊甸社會福利基金會之長期公益夥伴，雙方自 1997 年聯名發行伊甸愛心卡、愛心存摺並開辦關懷遲緩兒公益希望存款，多年來除了活動專案贊助，本行更有計劃透過伊甸愛心卡刷卡金回饋，持續穩定捐款伊甸，至 2013 年底累計捐款金額突破 3,695 萬元；加計愛心卡、愛心存摺平台之大眾小額捐款金額則突破 6,100 萬元。此外本行贊助伊甸基金會所開發之「幼兒發展檢測」App，提供新生兒父母免費下載，藉由詳實的記錄與手機上的檢測，及早發現孩子的遲緩狀況，以掌握 6 歲前之黃金發展期，及早進行療育。該 App 於 2013 年 4 月推出，至年底用戶數突破三萬人次，並獲衛生福利部國民健康署肯定，頒發健康促進雲端加值應用評選優質獎。
贊助「2013 新北歡樂耶誕城」活動，邀請本行客戶及眷屬參與各主題活動。

二、提昇生活品質

本行與遠東集團關係企業共同贊助新北市政府耶誕歡樂城活動，於 2013 年 12 月假新北市府廣場舉辦耶誕點燈、音樂會與園遊會等，散播溫馨、感恩的佳節氣氛。
本行第十屆信用卡 & 財富管理高爾夫邀請賽於 2013 年 6 月假大溪高爾夫俱樂部舉辦，延續往年以球會友的傳統，帶給遠銀客戶及好友們一個樂趣與驚喜交織的美好夏日。
本行持續以行動支持台灣棒球運動，繼 2013 年 3 月合作世界棒球經典賽首輪賽，提供卡友購票優惠，與全國球迷共同集氣將中華隊推進東京八強賽。2013 年 11 月更舉辦中日經典棒球對抗賽，展現活力動能，召喚球迷重回球場為台灣棒球加油。
本行 2013 年年底推出跨年煙火派對活動，邀請信用卡年度高額消費戶於跨年當晚假台北遠東國際大飯店享用精緻套餐與欣賞 2012 璀燦煙火，歡樂迎接新年到來。

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持續投資人力發展

Continues Investments in Talent Developments

遠東商銀建構以職能導向的訓練體系，強化高階主管的策略規劃力，提升中階主管的創新領導力，培育初階主管的管理力，同時根植基層同仁的執行力，並持續儲備主管培訓計劃，也因投入員工培訓有成，連續 11 年獲勞動部補助肯定。

FEIB has designed competence-oriented trainings to strengthen senior management’s strategic planning capability, elevate midlevel managers’ innovative leadership, cultivate junior officers’ management ability, enhance grass roots staffs’ execution, and continues to engage in cultivating reserve managers. The Bank’s consistent efforts in talent cultivation have been recognized with subsidies for 11 years in a row by the Minister of Labor.

企業社會責任 Corporate Social Responsibility

FEIB has been a good corporate citizen since its establishment in 1992. Besides offering comprehensive � nancial services, the Bank is committed to exceeding its corporate social responsibilities. The Bank has long dedicated itself to sponsoring various social events and promoting arts in particular during recent years with the hope not only to enrich Taiwan’s society, but also to understand the appreciation of the artistry beauty. The Bank’s sponsorships for social welfare and aesthetic art events in 2013 are as follows:

(I) Caring for Social Welfare

1.The Bank has long partnered with the Eden Social Welfare Foundation to jointly issue the Eden Honor Card and Caring Deposit Book and opened Hope Deposit accounts to help children with development challenges since 1997. In addition to sponsoring charitable events over the years, through cash back program of cardholders’ expenditure, donations have been made steadily to the Eden Social Welfare Foundation. Accumulated funds collected amounted to more than NT$36.95 million at the end of 2013, combined with small amount donations from Honor Card and Caring Deposit Book, accumulated funds exceeded NT$61 million. Furthermore, FEIB also sponsored “Early Detection of Children’s Delayed Developments” App developed by the Eden Social Welfare Foundation allowing free download for parents of newborn babies to have early detection of any delayed development of toddlers through detailed record and simple test on mobile phones and therefore enabling them to start intervention early before children reaching 6 years of age. This App was launched in April 2013, until end of the year users exceeded 30,000 and this App received award from the Health Promotion Administration, Ministry of Health and Welfare as an excellent cloud value-added application.
Sponsored “2013 New Taipei Merry Christmas City” celebration and invited the Bank’s customers and families of the staffs to attend various theme activities.

(II) Enriching Lively Events

1.In December 2013, the Bank joined with the Far Eastern Group to co-sponsor “2013 New Taipei Merry Christmas City” at New Taipei City Hall with festive features such as Christmas lighting, concerts, garden parties etc. to mark the holiday season.
2.The 10th “FEIB Credit Card and Wealth Management Golf Tournament” was held in June 2013 at Ta Shee Golf & Country Club, as a traditional sports gathering to bring a fun summer day for the Bank’s customers and friends.
3.FEIB continued to support Taiwan’s baseball games. After sponsoring the U. S. Major League Baseball (MLB) players and MLB All Star Games in Taiwan, the Bank also sponsored in March 2013 the � rst round matchup of 2013 World Baseball Classic (WBC) series, offered discount tickets for its cardholders. With the collaboration of devoted fans, Taiwan National Baseball Team advanced among the top 8 teams to participate in the second round of WBC matchup in Tokyo. In November 2013, the Bank sponsored the energetic Taiwan Japan Baseball Challenges, recalled baseball fans to return to the � eld and cheer for Taiwan’s baseball games.
4.At the end of 2013, FEIB launched the count down � reworks party to invite high-spending credit card holders to enjoy exquisite banquet dinners at Shangri-La’s Far Eastern Plaza Hotel, Taipei to watch the Taipei 101’s New Year Fireworks Show and welcome arrival of the Happy New Year.

三、致力環境保護

為降低紙張使用，持續提倡電子帳單，並推出 ATM 無紙化，2013 年第四季上線。
本行打造節能減碳之綠色職場環境，於 2012 年啟動「e 極棒！」分行作業流程 e 化改造專案，已完成之項目包括客戶支票存款不足之通知、ATM 交易紀錄、ATM 系統流量及服務運作等監控機制等。「e 極棒」專案至 2013 年底所創造之有形節省效益為 15,345,330 元。此成果將無限延伸為往後之例行性效益，有效降低分行作業成本並達到節能減碳之目的。

四、推廣藝文美學

本行於 2007 年發行之「921 重建校園之美」月曆，開啟本行月曆的人文美學風格。遠東集團成立 60 周年時，評選集團一甲子以來的 60 個影響力，本行月曆亦名列其中之一項影響力，代表遠東集團與遠東商銀善盡傳達生活美學的企業責任。2014 年月曆「台灣山海經」以台灣大學地理環境資源學系與行政院農委會林務局所共同推動的「台灣自然地景保育」為題材，持續藉由月曆，為客戶的居家生活增添知識的趣味與保育的觀念。

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贊助伊甸「幼兒發展檢測 App」獲獎 Awarded for Funding Eden’s “Children’s Development Test App”

遠東商銀贊助伊甸基金會開發「幼兒發展檢測 App」，提供新生兒及六歲以下幼父母免費下載，以早期發現幼兒成長遲緩現象，把握發育的黃金治療期。該 App 自去年四月推出以來，用戶數突破三萬人次，並榮獲衛生福利部國民健康署頒發「健康促進雲端加值應用評選優質獎」。

FEIB sponsored Eden Welfare Foundation’s developing of “Children’s Development Test App” to provide free download for parents of new borne babies and children under 6 years of age. Since being launched in April 2013, until end of the year users exceeded 30,000 and this App received award from the Health Promotion Administration, Ministry of Health and Welfare as an “ ” Excellent cloud value-added application for health promotion .

本行推廣國際級表演藝術不餘遺力，與遠傳電信、遠東百貨、太平洋 SOGO 百貨等遠東集團關係企業共同贊助太陽劇團「OVO 蟲林森巴」台北演出，除提供客戶購票優惠與發行紀念贈品，更邀請表演團體學子觀摩世界級的演出。

企業社會責任 Corporate Social Responsibility

(III) Dedicated to Environmental Protection

1.To cut down the usage of paper, FEIB continues to promote e-billings and launched in 4Q 2013 the paperless ATM.
2.To create eco-friendly green working environment, FEIB initiated “echiban!” branch process reform project since 2012. Already completed cases include e-notice of insuf� cient checking account balance, ATM transactions records, monitoring mechanism of ATM system � ows and service operations, etc. Till end 2013, the “echiban” project has created tangible savings amounting to NT$15,345,330 which can be further extended into routine bene� ts to effectively cut down bank branch’s operating costs while achieving energy saving and low carbon emission.

(IV) Promoting Aesthetic Arts

“The Beauty of Reconstructed Campus after September 21st Earthquake” calendar published by FEIB in 2007 initiated the aesthetic style of the Bank’s calendar design. During the Far Eastern Group’s 60th anniversary celebration, a special edition was published to introduce the 60 major in� uential factors/images, the Bank calendar was chosen to represent FEG’s and the Bank’s commitment to promoting arts. The 2014 FEIB wall calendar titled “Taiwan Classic of Mountain and Sea” with the theme of “Preserving Taiwan’s natural landscape” was jointly promoted by the Department of Geography, National Taiwan University, and the Forestry Bureau, Council of Agriculture, Executive Yuan.
FEIB has been committed to promoting world-class performances and co-sponsored with the Group’s Far EasTone Telecommunications, Far Eastern Department Stores, and Pacific SOGO Department Stores Cirque du Soleil’s big top production of “OVO” in Taipei. Aside from providing customers with discount on ticket purchase and issuing souvenirs, the Bank also invited students of performing arts to enjoy this world-renowned performance.

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一路力挺台灣棒球 Consistently Supporting Taiwan’s Baseball Games

遠東商銀一路為台灣棒球加油，連續四年行銷結合國際棒球賽事在台舉行。其中 2013 世界棒球經典賽臺中首輪賽，力挺中華隊前進東京八強賽，與國人共同見證台灣棒球風雲再起。年底再行銷結合中日經典棒球對抗賽，逐步建立力挺國球且國際化之企業形象。

FEIB has always been supporting Taiwan’s baseball and has sponsored international games in Taipei for four consecutive years. In the � rst round matchup of the 2013 World Baseball Classic (WBC) held in Taichung, the Bank and fans witnessed Taiwan National Baseball Team to advance among the top 8 teams for the second round of WBC matchup in Tokyo. At yearend, FEIB sponsored again games of the Taiwan Japan Baseball Challenges to establish the Bank’s global corporate image of supporting this national sport.

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壹拾、集團綜效
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遠東銀行由實業家徐有庠先生創辦，為遠東集團金融服務事業版圖之知名企業，遠東企業集團由紡織業崛起，經歷 60 餘年持續投資拓展，遂行產業垂直與水平整合，目前集團經營領域涵蓋石化能源、聚酯化纖、水泥建材、百貨零售、海陸運輸、金融服務、通訊網路、營造建築、觀光旅館、社會公益等 10 大領域，事業體系橫跨製造業、服務業與高科技產業，2013 年資產總額超過 697 億美元，並與全球知名廠商策略聯盟，營運觸角遍及全世界，近年來持續深耕台灣，佈局大陸，營業額突破 222 億美元，目前共有 9 家上市企業，為台灣國際化及創新企業的標竿。

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不斷為顧客、為股東創造新的價值，是遠東集團始終堅持的目標，致力經營旗下每一個事業體，都成為該產業第一流的公司，秉持一貫的經營宗旨，遠東集團分佈在台灣、大陸、加拿大、香港、新加坡、馬來西亞、泰國、越南、日本等十餘個國家及地區，為數 5 萬 7 千餘名訓練嚴謹、熱忱敬業的高素質員工，結合先進的科技知識、技術、設備與管理，產銷高品質的能源、化纖原料、紡織衣飾、水泥建材等商品，並提供百貨零

售、金融、運輸、通訊、醫療、教育等全方位、多元化的服務。

在追求卓越的同時，遠東集團致力於提升員工福利與環境保護，以促進人與環境的和諧與平衡。遠東集團所有經營活動皆以保護環境品質及有效運用地球資源為中心，不但提供員工完整的訓練，良好的工作環境，並鼓勵終身學習以吸收新知，提升技能；配合研發創新，以不傷害環境的生產模式，製造最佳的產品，提供貼心的服務。

從企業經營的角度來看，外部環境的變化我們或許無法改變，但我們可以調整自己，對環境作出「應變」。回顧 60 餘年前，遠東集團橫跨海峽來到台灣建立事業，爾後數十年的發展，歷經二次石油危機、亞洲金融風暴、網路泡沫、911 恐怖攻擊、SARS 危機及金融海嘯，遠東關係企業無不回歸基本面，秉持「誠勤樸慎」及「創新」的立業精神，結合員工、顧客及供應商突破難關，轉「危」為「機」。擁有豐富的集團關係企業資源，一直是本行在激烈競爭的金融環境中較同業享有之優勢，本行除持續朝關係企業資源整合的既定目標努力，亦積極開發其他新種產品，如推出遠東 New Century 信用卡、 Happy Go Inside 信用卡，整合集團的服務和資源，滿足顧客最大的需求，為國內集團資源整合的績優典範。

遠東集團結合食、衣、住、行、育、樂等生活所需，是國內唯一橫跨各項消費領域的企業集團，其中金融服務事業包含遠東商銀、亞東證券、遠銀租賃、亞東投顧、德銀遠東投信、遠銀資產管理、遠銀保代、遠智證券等公司。本行擁有如此多元及豐富的集團資源，未來更將發揮遠東集團橫跨兩岸之廣大客戶基礎優勢，掌握趨勢、創造契機，開拓兩岸三地金融業務契機，成為大中華區首屈一指的專業銀行。

集團綜效 Group Synergy

Established by the Group Founder Mr. Y. Z. Hsu, Far Eastern International Bank (FEIB) is the � agship company of Far Eastern Group’s financial services. Starting from textiles and after more than 60 years of vertical and horizontal integration and expansion, FEG has developed into a leading diversi� ed business conglomerate. With total assets exceeding US$69.7 billion in 2013, the Group’s global operations cover ten major industries including polyester fibers, petrochemicals, cement and construction, retail, transportation, financial services, telecommunications & internet, hotel and philanthropies. FEG has also formed strategic alliances and joint ventures with many worldrenowned corporations and organizations. Based in Taiwan and extending well into mainland China, the Group with 9 listed companies has generated revenues surpassing US$22.2 billion in 2013 and served as top performer in terms of globalization and innovation.

Far Eastern Group has always been committed to creating new value for its customers and shareholders. The Group’s af� liated companies are in lead of their respective � elds. With the majority of operations located in Taiwan, China, Canada, Hong Kong, Singapore, Malaysia, Thailand, Vietnam, Japan the Group’s 57,000 well-trained and dedicated staffs, coupled with advanced technology, state-of-the-art facilities and management, manufacture and sell high-quality products ranging from power, chemical � bers, textiles/apparel, cement and construction, and offer comprehensive, diversi� ed services in the � elds of retail, � nance, transportation, telecom, medical care, and higher education, etc.

While seeking excellence, FEG also focuses on improving employee benefits and environmental protection to draw the balance between people and the planet earth. All the Group’s operations aim to make effective use of global resources. Staffs benefit from extensive training programs and enjoy a good working environment. Additionally, lifelong learning is encouraged for them to absorb new knowledge and enhance skills. With continuous R&D and innovation, the Group manufactures excellent products and delivers value-added services in an environment-friendly way.

From operation perspective, FEIB may not be able to change external environment but the Bank can certainly respond and adapt to changes. More than 60 years ago, FEG moved from mainland China to Taiwan and established its businesses. During the following decades of economic developments, the Group had encountered two oil crises, the Asian financial crisis, Internet bubble, September 11th terrorist attacks, the outbreak of SARS, and financial tsunami. The Group has always been committed to its founding motto of “Sincerity, Diligence, Thrift, Prudence and Innovation” to join forces with its staff, customers and suppliers to overcome adversity and transform challenges into opportunities. FEIB’s competitive edge has long been its abundant resources under the Group as compared to other � nancial institutions facing intense competition. The Bank has been actively developing services and products such as Far Eastern New Century Card and Happy Go Inside Card to fully integrate the Group’s services and resources to satisfy our clients’ comprehensive needs that exemplify as a role model of a conglomerate in Taiwan.

FEG is Taiwan’s only conglomerate that spans all walks in life, such as food, apparel, housing, transportation, education and recreation. The Group’s financial business comprises Far Eastern International Bank, Oriental Securities, Far Eastern International Leasing, Oriental Securities Investment Advisory, Deutsche Far Eastern Asset Management, Far Eastern Insurance Agency and Far Eastern International Securities, etc. Taking advantage of the Group’s diverse and abundant resources and ample cross-strait customer base, FEIB aims to seize business opportunities and explore � nancial businesses in Taiwan, Hong Kong and China to become an outstanding bank in the Greater China region.

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(OUCC)
(OPTC)
(OPSC)
(ALFE)
(CPC)
(OPYC)
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遠東集團事業關聯圖 Business Structure of Far Eastern Group

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水泥建材事業
Cement & Bldg. Materials
亞洲水泥 (ACC)
亞洲中國 ACC (China)
亞泥新加坡 (ACC(S))
九龍英泥 (KCC)
遠龍不銹鋼 (YLSS)
亞東預拌 (YRC)
江西亞東水泥 (JYDC)
亞東石化 (OPTC)
四川亞東 (SYDC)
湖北亞東 (HYDC)
揚州亞東 (YYDC)
黃岡亞東 (HGYDC)
海陸運輸事業
S/L Transportation Bus.
裕民航運 (U-Ming)
富民運輸 (FMTC)
富達運輸 (FDTC)
裕民新加坡 U-Ming (Singapore)
裕民香港 U-Ming (Hong Kong)
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百貨零售事業
Retail and
Department Store Bus.
遠東百貨 (FEDS)
亞東百貨 (YTDSL)
太平洋崇光百貨 (PSDSC)
遠百企業 (A Mart)
太平洋中國控股 (BVI)(PCH(BVI))
遠東都會 (FECS)
鼎鼎聯合行銷 (DDIM)
遠東巨城購物中心 (FEBC)
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聚酯化纖事業
Polyester & Synth.
Fiber Bus.
遠東新世紀 (FENC)
宏遠興業 (EVT)
遠紡工業 ( 上海 )(FEIS)
遠東先進纖維 (FEFC)
遠東服裝 ( 蘇州 )(FEAS)
遠紡工業 ( 無錫 )(FEIW)
遠紡織染 ( 蘇州 )(FEDZ)
遠紡工業 ( 蘇州 )(FEIZ)
中比啤酒 ( 蘇州 )(SBBZ)
亞東工業 ( 蘇州 )(OTIZ)
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集團綜效 Group Synergy

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金融服務事業
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遠東國際商業銀行(FEIB)

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(Shangri-La’s FEPH, Tainan)
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安源通訊 (Qware)
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註：遠東集團目前轄下經營領域涵蓋十大產業。 Note: The Far Eastern Group now operates in 10 different industry sectors

壹拾壹、其他資訊

2013 年度大事記要

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1
月
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★贊助 2013 世界棒球經典賽台中首輪賽，力挺中華隊前進東京八強賽，並推出預購門票、購票優惠及門票抽獎等行銷活動。

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2
月
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★開辦國內銀行 DBU 人民幣業務，同時新增預約人民幣換匯業務。

★發行 1.5 億美元海外可轉換金融債券（ECB）。

★新增「企業網路銀行線上開發信用狀」申請服務，以數位簽章放行取代實體用印，免除紙本傳真作業。

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4
月
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★獲中華民國國際演講協會 (Toastmasters International) 頒發「總會長獎」(District Governor Award)，為台灣區唯一獲獎銀行，肯定本行對於國際演講協會宗旨的認同與推動。

★使用集保基金下單自動化資訊傳輸服務，為台灣首家國內外基金同時自動化下單且基金公司上線家數最多之銀行。

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6
月
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★假台北市國軍英雄館召開 2013 年股東常會。

★假桃園大溪球場舉辦「第十屆遠東商銀信用卡＆財富管理高爾夫邀請賽」，邀請 VIP 客戶參與。

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7
月
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★結合遠傳電信共推「遠東 HAPPY GO NFC 手機信用卡」試辦服務。

★榮獲今週刊第七屆財富管理銀行評鑑「最佳潛力獎」。

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8
月
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★推出「遠銀 i 兌換」App，客戶透過此手機 App 隨時獲得 HAPPY GO 兌點情報並立即兌換。

★發展跨境企金平台，主辦與中國三江化工集團旗下佳都國際有限公司總授信額度美金 1 億元之兩年期聯貸案。

★與台灣地區萬事達卡組織合推台灣首創 inControl 虛擬卡號網路防盜刷服務。

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9
月
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★推出全國首創「觸觸發」基金觸價下單服務，提供客戶申購及贖回雙向基金觸價下單之新功能。

★因應國道於 2013 年底全面轉換實施計程電子收費方式，推出唯一具 HAPPY GO 集點功能的 eTag 聯名卡。

★假台北遠東飯店召開 2013 年第 1 次股東臨時會，通過新臺幣 50 億元之現金增資案。

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10
月
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★領先同業推出「FETP 外匯保證金網際網路交易平台」，方便客戶使用網路下單交易。

★於 101 大樓設立台北 101 分行，提供私人銀行級的高端理財服務。

★與桑德國際有限公司完成總授信額度美金 1 億 1 仟萬之五年期聯貸簽約案，佈局跨兩岸三地之企金平台再躍進。

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11
月
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★行銷結合 2013 中日經典棒球對抗賽共 3 場，回饋卡友獨家優先購票，再享卡友全程購票優惠，強化本行力挺國球之國際企業形象。

★與遠傳電信、遠東百貨等遠東集團關係企業共同協辦太陽劇團「OVO 蟲林森巴」台北演出。

★與遠東百貨、遠傳電信等遠東集團關係企業第二度贊助新北市政府耶誕歡樂城活動。

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12
月
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★以台大地理環境資源系與農委會林務局所推動之「台灣自然地景保育」為主題，推出 2014 年月曆「台灣山海經」。

★贊助伊甸基金會開發之「幼兒發展檢測 App」獲衛生福利部國民健康署頒發健康促進雲端加值應用評選優質獎。該 App 於 5 月推出，提供 6 歲幼兒之父母免費下載。

★「中租控股新加坡下市回台上市案」因開創企業金融成功模式，獲遠東集團「遠東精神獎」前瞻創性類優等獎。

其他資訊 Other Information

Other Information

Signi� cant FEIB Events in 2012

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★ Sponsored the � rst round match of 2013 World Baseball Classic in Taichung, supported Taiwan National Baseball Team to
Jan
advance among the top 8 teams, offered promotions on ticket discount and free ticket draw.
Feb ★ Launched Domestic Banking Unit (DBU) RMB business, and added pre-set currency swap of RMB.
★ Issued US$150 million worth of Euro Convertible Bonds (ECB) overseas.
Mar ★ Launched the application for “Issuing Letters of Credit via Internet Banking”, adopted digital signatures to replace physical
stamps and waived faxing papers.
★ Taiwan’s only bank to receive the “District Governor Award” by Toastmasters International Club in recognition of FEIB’s support
Apr
of this international association’s promoting speech in English.
★ Employed automatic data transmission service of mutual funds transaction, FEIB is Taiwan’s � rst bank to launch simultaneously
May the auto transactions of domestic and overseas mutual funds, and offered highest numbers of mutual funds online.
★ The Bank’s 2013 Shareholders’ Meeting was held in Taipei.
Jun ★ The 10th “FEIB Credit Card and Wealth Management Golf Tournament” was held at Ta Shee Golf & Country Club for the
Bank’s VIP customers to attend.
★ Combined with Far EasTone Telecommunications to launch the “FEIB HAPPY GO NFC credit card” mobile payment trial service.
July
★ FEIB received “Best Potential Award” of the 7th Wealth Management Bank Review made by the Business Today magazine.
★ Launched “FEIB iBonus Redemption” App, customers may check any time on this handset App to inquire about HAPPY GO
Aug reward points and make instant redemption.
★ To develop platform of cross-border corporate banking, FEIB served as lead manager in the US$100 million syndicated loan for
the duration of two years with China Sanjiang Fine Chemical Company Ltd.
★ Partnering with MasterCard Taiwan to launch Taiwan’s � rst innovative “inControl” virtual card number online service as a secured
payment solution.
★ Launched Taiwan’s � rst innovative “Market-if-Touched” ( 觸觸發 ) order for the new service of purchasing and redeeming
Sep
mutual fund investments.
★ To comply with the distance-based toll charging system started at end 2013, FEIB launched the eTag credit card, the only co-
brand card to be integrated with the HAPPY GO cross industry points earning system.
★ Held the 2013 � rst Extraordinary Shareholders’ Meeting at Shangri-La’s Far Eastern Plaza Hotel, Taipei, and approved issuance
of common stocks for cash in the amount of NT$5 billion.
★ Lead in launching “FETP Foreign Exchange Margin Trading Online Platform” to facilitate customers to place online orders.
Oct
★ Opened Taipei 101 Branch to provide high-end private banking services.
★ FEIB successfully led a $110 million � ve-year syndication loan agreement with Sound Global (HK) Ltd., another big achievement
of the Bank’s deployment in the cross-border corporate � nance business.
★ Marketing bond with three games of Taiwan Japan Baseball Challenges, allowing FEIB cardholders to purchase tickets with
Nov exclusive priority and discount, strengthening the Bank’s international enterprise image to support the nation’s baseball games.
★Co-sponsored with the Group’s Far EasTone Telecommunications, Far Eastern Department Stores, etc. the performance of “OVO”
by Cirque du Soleil in Taipei.
★ Co-sponsored for the second time with the Group’s Far Eastern Department Stores and Far EasTone Telecommunications “New
Taipei Merry Christmas City” event organized by New Taipei City Government.
★ Published 2014 “Taiwan Classic Mountain and Sea” calendar with the theme of “preserving Taiwan’s natural landscape”
promoted by the Department of Geography, National Taiwan University, and Forestry Bureau, Council of Agriculture, Executive
Dec Yuan.
★ Funded Eden Welfare Foundation’s App development of “Children’s First Mile” which received “Health Promotion Cloud Value-
Added Application Excellence Award” from the Ministry of Health and Welfare. This App was launched in May to provide free
download for parents with children under six years of age.
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★ The leading landmark case of “Chailease Holding Co. Delisted from the Singapore Stock Exchange and Listed in the Taiwan Stock Exchange” received the Innovation Merit Prize of the Far Eastern Spirit Award.

本行各營業單位地址及電話表

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單位名稱地址電話
總行 106 台北市大安區敦化南路二段 207 號 27 樓 (02) 2378-6868
營業部 106 台北市大安區敦化南路二段 207 號 1 樓 (02) 2378-6868
國外部 103 台北市大同區重慶北路一段 30 號 2 樓 (02) 2550-8811
信託部 100 台北市中正區襄陽路 1 號 5 樓 (02) 2312-3636
信用卡部 220 新北市板橋區文化路二段 182 巷 3 弄 33 號 (02) 8073-1166
台北襄陽分行 100 台北市中正區襄陽路 1 號 (02) 2381-4567
台北南門分行 100 台北市中正區羅斯福路一段 40 號 (02) 2392-6955
台北忠孝分行 100 台北市中正區忠孝東路一段 112 號 (02) 2327-8898
台北東門分行 100 台北市中正區信義路二段 135 號 (02) 2356-7711
台北重慶分行 103 台北市大同區重慶北路一段 30 號 (02) 2550-6600
台北松江分行 104 台北市中山區松江路 59 號 (02) 2505-5533
台北松山分行 105 台北市松山區南京東路五段 171 號 (02) 8787-6668
台北逸仙分行 110 台北市信義區基隆路一段 200 之 3 號 (02) 2722-9558
台北永吉分行 110 台北市信義區中坡北路 7 號 (02) 8785-5788
台北中山分行 104 台北市中山區民生東路一段 70 號 (02) 2523-8899
台北古亭分行 100 台北市中正區羅斯福路三段 50 號 (02) 2369-5600
台北信義分行 110 台北市信義區光復南路 505 號 (02) 2720-7755
台北南京東路分行 104 台北市中山區南京東路三段 101 號 (02) 7702-9766
台北大稻埕分行 103 台北市大同區延平北路二段 86 號 (02) 2558-6186
台北 101 分行 110 台北市信義路五段 7 號台北 101 大樓 51-1 (02) 8101-0168
板橋南雅分行 220 新北市板橋區南雅南路二段 172 號 (02) 8966-3339
板橋文化分行 220 新北市板橋區文化路二段 1 號 (02) 2255-6499
板橋中正分行 220 新北市板橋區中正路 226、228 號 (02) 2272-6088
蘆洲分行 247 新北市蘆洲區三民路 38 號 1 樓 (02) 7730-6978
新店分行 231 新北市新店區北新路三段 98 號 (02) 2910-6060
永和分行 234 新北市永和區福和路 222 號 (02) 2232-6500
中和分行 235 新北市中和區中正路 748 號 (02) 8226-9000
雙和分行 234 新北市永和區中和路 535 號 1、2 樓 (02) 7717-6668
三重分行 241 新北市三重區福德北路 46 號 (02) 8973-1133
台北新莊分行 242 新北市新莊區復興路一段 209 號 (02) 8991-3366
新莊富國分行 242 新北市新莊區富國路 6 號 (02) 2901-6868
林口分行 333 桃園縣龜山鄉復興一路 227 號 (03) 397-3888
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其他資訊 Other Information

Operation Locations

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Operating Unit Address Telephone Number
Head Of� ce 27F, No. 207, Dunhua S. Rd., Sec. 2, Da-an Dist., Taipei City 106,Taiwan (02) 2378-6868
Business Department 1F, No. 207, Dunhua S. Rd., Sec. 2, Da-an Dist., Taipei City 106, Taiwan (02) 2378-6868
International Banking Department 2F, No. 30, Chongqing N. Rd., Sec. 1, Datong Dist., Taipei City 103, Taiwan (02) 2550-8811
Trust Department 5F, No. 1, Shiangyang Rd., Zhongjheng Dist., Taipei City 100, Taiwan (02) 2312-3636
No. 33, Ally. 3, Lane 182, Wenhua Rd., Sec. 2, Banqiao City, New Taipei City
Credit Card Department (02) 8073-1166
220, Taiwan
Taipei Shiangyang Branch No. 1, Shiangyang Rd., Zhongjheng Dist., Taipei City 100, Taiwan (02) 2381-4567
Taipei Nanmen Branch No. 40, Roosevelt Rd., Sec. 1, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2392-6955
Taipei Junghsiau Branch No. 112, Junghsiau E. Rd., Sec. 1, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2327-8898
Taipei Tungmen Branch No. 135, Sinyi Rd., Sec. 2, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2356-7711
Taipei Chungching Branch No. 30, Chungching N. Rd., Sec. 1, Datong Dist., Taipei City 103, Taiwan (02) 2550-6600
Taipei Sungjiang Branch No. 59, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan (02) 2505-5533
Taipei Sungshan Branch No. 171, Nanjing E. Rd., Sec. 5, Sungshan Dist., Taipei City 105, Taiwan (02) 8787-6668
Taipei Yisen Branch No. 200-3, Keelung Rd., Sec. 1, Sinyi Dist., Taipei City 110, Taiwan (02) 2722-9558
Taipei Yungi Branch No. 7, Jhongpo N. Rd., Sinyi Dist., Taipei City 110, Taiwan (02) 8785-5788
Taipei Zhongshan Branch No. 70, Minsheng E. Rd., Sec. 1, Zhongshan Dist., Taipei City 104, Taiwan (02) 2523-8899
Taipei Guting Branch No. 50, Roosevelt Rd., Sec. 3, Zhongjheng Dist., Taipei City 100, Taiwan (02) 2369-5600
Taipei ShingYi Branch No. 505, Guangfu S. Rd., Shinyi Dist., Taipei City 106, Taiwan (02) 2720-7755
Taipei Nanjing East Road Branch No. 101, Nanjing E. Rd., Sec. 3, Zhongshan Dist., Taipei City 104, Taiwan (02) 7702-9766
Taipei Dadaocheng Branch No. 86, Yenping North Road, Sec. 2, Tatung Dist. , Taipei City 103, Taiwan (02) 2558-6186
Taipei 101 Branch 51F-1, Taipei 101 Building, No. 7, Hsin Yi Rd., Sec. 5, Taipei 110, Taiwan (02) 8101-0168
Banqiao Nanya Branch No. 172, Nanya S. Rd., Sec. 2, Banqiao Dist., New Taipei City 220, Taiwan (02) 8966-3339
Banqiao Wenhua Branch No. 1, Wenhua Rd., Sec. 2, Banqiao Dist., New Taipei City 220, Taiwan (02) 2255-6499
No. 226 &228, Zhongjheng Rd., Sec. 2, Banqiao Dist., New Taipei City 220,
Banqiao Zhongjeng Branch (02) 2272-6088
Taiwan
Luzhou Branch No. 1, Sanming Rd., Luzhou Dist. New Taipei City 247, Taiwan (02) 7730-6978
Sindian Branch No. 98, Beixin Rd., Sec. 3, Sindian Dist., New Taipei City 231, Taiwan (02) 2910-6060
Yunghe Branch No. 222, Fuhe Rd., Yonghe Dist., New Taipei City 234, Taiwan (02) 2232-6500
Zhunghe Branch No. 748, Zhongjheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (02) 8226-9000
Shuanghe Branch 1F & 2F, No. 535, Zhonghe Rd., Yonghe Dist., New Taipei City 234, Taiwan (02) 7717-6668
Sanchung Branch No. 46, Fude N. Rd., Sanchung Dist., New Taipei City 241, Taiwan (02) 8973-1133
Taipei Shinjuang Branch No. 209, Fusing Rd., Sec. 1, Shinjuang Dist., New Taipei City 242, Taiwan (02) 8991-3366
Shingjuang Fuguo Branch No. 6, Fuguo Rd., Shingjuang Dist., New Taipei City 242, Taiwan (02) 2901-6868
Lin Ko Branch No. 227, Fushing 1st Rd., Gueishan Township, Taoyuan County 333, Taiwan (03) 397-3888
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單位名稱地址電話
桃園分行 330 桃園縣桃園市南華街 78 號 (03) 339-6339
桃園大興分行 330 桃園縣桃園市大興西路二段 6 號 (03) 301-8966
中壢分行 320 桃園縣中壢市延平路 372 號 (03) 427-9696
新竹巨城分行 300 新竹市中央路 243 號 (03) 533-8168
新竹科園分行 300 新竹市科學園區園區二路 11 號 3 樓 (03) 579-8833
新竹經國分行 300 新竹市經國路二段 100 號 (03) 533-3131
竹北分行 302 新竹縣竹北市光明六路 39-41 號 (03) 553-6699
台中自由分行 400 台中市中區自由路二段 131 號 (04) 2225-2008
台中公益分行 403 台中市西區公益路 367 號 (04) 2328-8666
台中文心分行 406 台中市北屯區文心路四段 698 號 (04) 2230-6689
台中大雅分行 404 台中市北區文心路四段 180 號 (04) 2297-3266
大里分行 412 台中市大里區益民路二段 121 號 (04) 2482-3899
彰化分行 500 彰化縣彰化市民生路 233 號 (04) 728-9188
南投分行 540 南投縣南投市三和二路 11 號 (049) 222-3311
嘉義分行 600 嘉義市文化路 272 號 (05) 278-5911
台南分行 701 台南市東區東門路二段 2 號 (06) 208-9898
永康分行 710 台南市永康區中正北路 37 號 (06) 253-0400
崇德分行 710 台南市東區崇道路 87 號 (06) 290-7290
高雄中正分行 800 高雄市新興區中正四路 49 號 (07) 251-8199
高雄文化中心分行 802 高雄市苓雅區四維二路 96 號 (07) 715-5678
高雄五福分行 803 高雄市鹽埕區大勇路 106 號 (07) 533-3820
高雄苓雅分行 802 高雄市苓雅區青年一路 191 號 (07) 336-9066
鳳山分行 830 高雄市鳳山區青年路二段 201 號 (07) 777-8600
台北農安簡易型分行 104 台北市中山區農安街 12 之 1 號 (02) 2592-2255
台北金湖簡易型分行 114 台北市內湖區民權東路六段 495 號 (02) 2630-5788
三重重陽簡易型分行 241 新北市三重區重陽路四段 39 號 1、2 樓 (02) 8983-8366
桃園大有簡易型分行 330 桃園縣桃園市大有路 480、482 號 (03) 346-9688
香港分行香港中環皇后大道中 8 號 20 樓 (852) 2167-8183
板橋中本分行 220 新北市板橋區新站路 18 號 (02)7729-0616
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註 : 板橋中本分行預計 2014 年第 3 季開幕

其他資訊 Other Information

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Operating Unit Address Telephone Number
Taoyuan Branch No. 78, Nanhua St., Taoyuan City, Taoyuan County 330, Taiwan (03) 339-6339
Taoyuan Tashin Branch No. 6, Tashin W. Rd., Sec. 2, Taoyuan City, Taoyuan County 330, Taiwan (03) 301-8966
Jhongli Branch No. 372, Yanping Rd., Jhongli City, Taoyuan County 320, Taiwan (03) 427-9696
Hsinchu BigCity Branch No. 243, Jhong Yang Road, Hsinchu City 300, Taiwan (03) 533-8168
Hsinchu Science Based Industrial 3F, No. 11, Yuanchiu 2nd Rd., Hsinchu City 300, Taiwan (03) 579-8833
Park Branch
Hsinchu Jinguo Branch No. 100, Jinguo Rd., Sec. 2, Hsinchu City 300, Taiwan (03) 533-3131
Jubei Branch No. 39-41, Guangming 6th Rd., Jubei City, Hsinchu County 302, Taiwan (03) 553-6699
Taichung Tzyou Branch No. 131, Tzyou Rd.,Sec. 2, Central Dist., Taichung City 400, Taiwan (04) 2225-2008
Taichung Gungyi Branch No. 367, Gongyi Rd., West Dist., Taichung City 403, Taiwan (04) 2328-8666
Taichung Wenshin Branch No. 698, Wenshin Rd., Sec. 4, Beitun Dist., Taichung City 406, Taiwan (04) 2230-6689
Taichung Taya Branch No. 180, Wunsin Rd., Sec. 4, North Dist., Taichung City 404, Taiwan (04) 2297-3266
Tali Branch No. 121, Yimin Rd., Sec. 2, Dali Dist., Taichung City 412, Taiwan (04) 2482-3899
Changhua Branch No. 233, Minsheng Rd., Changhua City, Changhua County 500, Taiwan (04) 728-9188
Nantou Branch No. 11, Sanhe 2nd Rd., Nantou City, Nantou County 540, Taiwan (049) 222-3311
Chiayi Branch No. 272, Wunhua Rd., Chiayi City 600, Taiwan (05) 278-5911
Tainan Branch No. 2, Dongmen Rd., Sec. 2, East Dist., Tainan City 701, Taiwan (06) 208-9898
Yung Kang Branch No. 37, Jhongshan N. Rd., Yungkang Dist., Tainan City 710, Taiwan (06) 253-0400
Jhongte Branch No. 87, Jhongdao Rd., East Dist., Tainan City 701, Taiwan (06) 290-7290
Kaohsiung Jungjeng Branch No. 49, Zhongzheng 4th Rd., Xinxing Dist., Kaohsiung City 800, Taiwan (07) 251-8199
Kaohsiung Cultural Center Branch No. 96, Sihwei 2nd Rd., Lingya Dist., Kaohsiung City 802, Taiwan (07) 715-5678
Kaohsiung Wufu Branch No. 106, Dayong Rd., Yancheng Dist., Kaohsiung City 803, Taiwan (07) 533-3820
Kaohsiung Lingya Branch No. 191, Cingnian 1st Rd., Lingya Dist., Kaohsiung City 802, Taiwan (07) 336-9066
Fengshan Branch No. 201, Cingnian Rd., Sec. 2, Fengshan Dist., Kaohsiung City 830, Taiwan (07) 777-8600
Taipei Nun-An Branch No. 12-1, Nun-An St., Jhongshan Dist., Taipei City 104, Taiwan (02) 2592-2255
Taipei Jinhu Branch No. 495, Minchuan E. Rd., Sec. 6, Neihu Dist., Taipei City 114, Taiwan (02) 2630-5788
1F & 2F, No. 39, Chungyang Rd., Sec. 4, Sanchung Dist. New Taipei City 241,
Sanchung Chungyang Branch (02) 8983-8366
Taiwan
Taoyuan Tayu Branch No. 480-482, Tayu Rd., Taoyuan City, Taoyuan County 330, Taiwan (03) 346-9688
Hong Kong Branch 20/F, No. 8, Queen’s Road, Central, Hong Kong ( 852) 2167-8183
Banqiao Chonben Branch No. 18, Xinzan Rd., Banqiao Dist., New Taipei City 220, Taiwan (02)7729-0616
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*Banqiao Chonben Branch is expected to open in Q3, 2014.

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Far Eastern International Bank Ltd.

We have audited the accompanying consolidated balance sheets of Far Eastern International Bank Ltd. (the “Bank”) and its subsidiaries as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2013 and 2012. These consolidated financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements of Financial Institutions by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Bank and its subsidiaries as of December 31, 2013, December 31, 2012 and January 1, 2012, and their consolidated financial performance and their consolidated cash flows for the years ended December 31, 2013 and 2012, in conformity with the Regulations Governing the Preparation of Financial Reports by Public Banks and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed by the Financial Supervisory Commission of the Republic of China.

We have also audited the parent company only financial statements of Far Eastern International Bank Ltd. as of and for the years ended December 31, 2013 and 2012 on which we have issued an unqualified report.

March 4, 2014

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CASH AND CASH EQUIVALENTS (Note 6) DUE FROM THE CENTRAL BANK AND OTHER BANKS (Notes 7, 40 and 41) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Notes 4, 5, 8, 40 and 46) DERIVATIVE FINANCIAL ASSETS FOR HEDGING (Notes 4, 9, 24 and 46) SECURITIES PURCHASED UNDER RESALE AGREEMENTS (Notes 4, 10 and 40) RECEIVABLES, NET (Notes 4, 5, 11, 12 and 46) DISCOUNTS AND LOANS, NET (Notes 4, 5, 12, 40 and 46) AVAILABLE-FOR-SALE FINANCIAL ASSETS (Notes 4, 13, 29, 41 and 46) HELD-TO-MATURITY FINANCIAL ASSETS (Notes 4, 5, 14 and 46) INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD (Notes 4, 15 and 29) DEBT INVESTMENTS WITH NO ACTIVE MARKET (Notes 4, 16 and 46) OTHER FINANCIAL ASSETS, NET (Notes 4, 12, 17 and 46) PROPERTY AND EQUIPMENT, NET (Notes 4 and 18) INTANGIBLE ASSETS, NET (Notes 4, 5 and 19) DEFERRED TAX ASSETS (Notes 4, 5 and 38) OTHER ASSETS, NET (Notes 4 and 20) TOTAL LIABILITIES AND EQUITY LIABILITIES Due to the Central Bank and other banks (Note 21) Financial liabilities at fair value through profit or loss (Notes 4, 5, 8, 24, 40 and 46) Derivative financial liabilities for hedging (Notes 4, 9, 24 and 46) Payables (Notes 22 and 27) Current tax liabilities (Notes 4 and 38) Deposits and remittances (Notes 23, 40 and 46) Bank debentures (Notes 4, 8, 9, 24 and 26) Other financial liabilities (Notes 8, 13, 25, 40 and 46) Provisions (Notes 4, 5, 12, 26 and 27) Other liabilities (Note 28) Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE BANK (Notes 4, 13, 15, 29 and 45) Share capital 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		December 31, 2013		December 31, 2012		January 1, 2012
		Amount % $ 4,397,645 1 88,827,255 18 18,795,444 4 111,034 - 23,006,325 5 20,672,272 4 292,517,032 59 21,735,693 4 3,105,972 1 2,365,826 - 8,477,868 2 2,748,522 1 2,814,164 1 1,830,904 - 576,972 - 206,250 - $ 492,189,178 100 $ 13,782,129 3 7,288,065 1 12,631 - 13,502,992 3 10,870 - 398,305,940 81 27,103,885 6 2,060,491 - 754,125 - 414,966 - 463,236,094 94 23,621,182 5 34,923 - 2,511,684 - 179,722 - 2,903,770 1 5,595,176 1 16,264 - (314,461) - (298,197) - 28,953,084 6 $ 492,189,178 100		Amount % $ 5,596,551 1 82,818,608 18 16,110,835 3 180,242 - 23,741,992 5 20,781,182 4 280,219,426 60 11,865,864 3 2,224,301 1 2,368,548 1 10,713,828 2 3,059,511 1 2,879,693 1 1,868,048 - 928,575 - 226,072 - $ 465,583,276 100 $ 11,674,958 3 3,745,032 1 12,819 - 5,560,371 1 113,131 - 391,933,266 84 23,072,123 5 1,908,070 - 697,845 - 432,374 - 439,149,989 94 22,422,596 5 22,348 - 1,742,672 - 4,554 - 2,405,786 1 4,153,012 1 9,131 - (173,800) - (164,669) - 26,433,287 6 $ 465,583,276 100		Amount % $ 6,002,314 1 86,739,190 20 13,806,866 3 252,233 - 850,505 - 21,950,813 5 269,460,381 61 14,945,412 3 3,927,905 1 2,472,387 1 9,293,780 2 2,634,750 1 2,943,673 1 1,905,193 1 1,115,762 - 552,761 - $ 438,853,925 100 $ 11,785,731 3 4,384,840 1 13,093 - 4,495,320 1 124,723 - 369,998,562 84 20,230,280 5 2,211,286 - 690,680 - 427,437 - 414,361,952 94 21,185,604 5 19,706 - 1,030,702 - 4,554 - 2,228,393 1 3,263,649 1 12,762 - 10,252 - 23,014 - 24,491,973 6 $ 438,853,925 100

The accompanying notes are an integral part of the consolidated financial statements.

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Per Share Amounts)

INTEREST INCOME (Notes 4, 30 and 40) INTEREST COST (Notes 30 and 40) NET INTEREST INCOME NONINTEREST INCOME AND GAINS, NET Net service fee income (Notes 4 and 31) Net gain on financial assets and liabilities at fair value through profit or loss (Notes 4, 8, 9, 32, 40 and 46) Net gain on available-for-sale financial assets (Notes 4, 29 and 33) Net foreign exchange gain (Note 4) Net gain on reversal of provision for asset impairment loss (Notes 4, 16, 17 and 40) Share of profit (loss) of associates (Notes 4 and 15) Gain on nonperforming receivables acquired Others (Notes 16, 34 and 40) Total noninterest income and gains, net NET PROFIT REVERSAL OF PROVISION FOR POSSIBLE LOSSES AND GUARANTEE OBLIGATIONS RESERVE (Notes 4 and 12) OPERATING EXPENSES Employee benefits expense (Notes 4, 27, 29 and 35)		For the Year Ended December 31 2013 2012 Amount % Amount % $ 11,263,921 118 $ 9,644,265 113 6,379,554 67 5,499,120 64 4,884,367 51 4,145,145 49 2,896,139 30 2,571,922 30 1,097,798 12 1,070,616 13 47,402 - 303,111 4 199,908 2 21,830 - 780 - 44,803 - 61,148 1 (89,375) (1) 242,560 3 289,342 3 57,527 1 150,513 2 4,603,262 49 4,362,762 51 9,487,629 100 8,507,907 100 68,604 - 257,746 3 3,544,628 37 3,415,377 40	For the Year Ended December 31 2013 2012 Amount % Amount % $ 11,263,921 118 $ 9,644,265 113 6,379,554 67 5,499,120 64 4,884,367 51 4,145,145 49 2,896,139 30 2,571,922 30 1,097,798 12 1,070,616 13 47,402 - 303,111 4 199,908 2 21,830 - 780 - 44,803 - 61,148 1 (89,375) (1) 242,560 3 289,342 3 57,527 1 150,513 2 4,603,262 49 4,362,762 51 9,487,629 100 8,507,907 100 68,604 - 257,746 3 3,544,628 37 3,415,377 40	Percentage Increase (Decrease)
		2013 Amount % $ 11,263,921 118 6,379,554 67 4,884,367 51 2,896,139 30 1,097,798 12 47,402 - 199,908 2 780 - 61,148 1 242,560 3 57,527 1 4,603,262 49 9,487,629 100 68,604 - 3,544,628 37
				% 17 16 18 13 3 (84) 816 (98) 168 (16) (62) 6 12 (73) 4 (Continued)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Per Share Amounts)

For the Year Ended December 31 2013 2012 Amount % Amount % $ 230,519 3 $ 253,351 3 2,217,979 23 2,181,968 26 5,993,126 63 5,850,696 69 3,563,107 37 2,914,957 34 501,837 5 364,192 4 3,061,270 32 2,550,765 30 7,133 - (3,631) - (125,353) (1) (172,637) (2) (14,628) - (11,866) - (132,848) (1) (188,134) (2) $ 2,928,422 31 $ 2,362,631 28 $ 3,061,270 32 $ 2,550,765 30 $ - - $ - - $ 2,928,422 31 $ 2,362,631 28 $ - - $ - - $1.30 $1.09 $1.20 $1.08	For the Year Ended December 31 2013 2012 Amount % Amount % $ 230,519 3 $ 253,351 3 2,217,979 23 2,181,968 26 5,993,126 63 5,850,696 69 3,563,107 37 2,914,957 34 501,837 5 364,192 4 3,061,270 32 2,550,765 30 7,133 - (3,631) - (125,353) (1) (172,637) (2) (14,628) - (11,866) - (132,848) (1) (188,134) (2) $ 2,928,422 31 $ 2,362,631 28 $ 3,061,270 32 $ 2,550,765 30 $ - - $ - - $ 2,928,422 31 $ 2,362,631 28 $ - - $ - - $1.30 $1.09 $1.20 $1.08	Percentage Increase (Decrease)
2013 Amount % $ 230,519 3 2,217,979 23 5,993,126 63 3,563,107 37 501,837 5 3,061,270 32 7,133 - (125,353) (1) (14,628) - (132,848) (1) $ 2,928,422 31 $ 3,061,270 32 $ - - $ 2,928,422 31 $ - - $1.30 $1.20
		% (9) 2 2 22 38 20 296 (27) 23 (29) 24 20 - 24 -
$	$

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

							Total Equity	$ 24,491,973		-	(529,640)	-	(529,640)	2,550,765	(188,134)	2,362,631	108,323	26,433,287	1,368		-	-	(515,720)	-	(515,720)	3,061,270	(132,848)	2,928,422	105,727	$ 28,953,084
	Other Equity	Exchange Unrealized	Differences Gain (Loss) on	on Translating Available-for-sale	Foreign Financial Assets	Operations (Notes 4, 13,	(Note 4) 15 and 29)	$ 12,762 $ 10,252		- -	- -	- -	- -	- -	(3,631) (184,052)	(3,631) (184,052)	- -	9,131 (173,800)	- -		- -	- -	- -	- -	- -	- -	7,133 (140,661)	7,133 (140,661)	- -	$ 16,264 $ (314,461)
Equity Attributable to Owners of the Bank					Retained Earnings	Unappropriated	Special Reserve Earnings	$ 4,554 $ 2,228,393		- (711,970)	- (529,640)	- (1,131,311)	- (2,372,921)	- 2,550,765	- (451)	- 2,550,314	- -	4,554 2,405,786	1,368 -		- (769,012)	173,800 (173,800)	- (515,720)	- (1,105,434)	173,800 (2,563,966)	- 3,061,270	- 680	- 3,061,950	- -	$ 179,722 $ 2,903,770
							Legal Reserve	$ 1,030,702		711,970	-	-	711,970	-	-	-	-	1,742,672	-		769,012	-	-	-	769,012	-	-	-	-	$ 2,511,684
						Capital Surplus	(Notes 29 and 45)	$ 19,706		-	-	-	-	-	-	-	2,642	22,348	-		-	-	-	-	-	-	-	-	12,575	$ 34,923
						Share Capital	(Notes 29 and 45)	$ 21,185,604		-	-	1,131,311	1,131,311	-	-	-	105,681	22,422,596	-		-	-	-	1,105,434	1,105,434	-	-	-	93,152	$ 23,621,182
								BALANCE, JANUARY 1, 2012	Appropriation of the 2011 earnings	Legal reserve	Cash dividends - NT$ 0.250 per share	Stock dividends - NT$ 0.534 per share		Net income for the year ended December 31, 2012	Other comprehensive loss for the year ended December 31, 2012	Total comprehensive income (loss) for the year ended December 31, 2012	Employees' bonus - stock	BALANCE, DECEMBER 31, 2012	Share of special reserve of an associate	Appropriation of the 2012 earnings	Legal reserve	Special reserve	Cash dividends - NT$ 0.230 per share	Stock dividends - NT$ 0.493 per share		Net income for the year ended December 31, 2013	Other comprehensive income (loss) for the year ended December 31, 2013	Total comprehensive income (loss) for the year ended December 31, 2013	Employees' bonus - stock	BALANCE, DECEMBER 31, 2013	The accompanying notes are an integral part of the consolidated financial statements.

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation Amortization Reversal of provision for possible losses and guarantee obligations reserve Net valuation loss on financial assets and liabilities at fair value through profit or loss Interest cost Interest income Dividend income Shares of loss (profit) of associates Net gain on reversal of provision for asset impairment loss Recovery of written-off credits Others Changes in operating assets and liabilities Increase in due from the Central Bank and other banks Increase in financial assets at fair value through profit or loss Decrease (increase) in receivables Increase in discounts and loans Decrease (increase) in available-for-sale financial assets Decrease (increase) 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 Increase (decrease) in financial liabilities at fair value through profit or loss Increase in payables Increase in deposits and remittances Interest received Dividends received Interest paid Income tax paid Net cash generated from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of buildings and land held for sale Acquisition of property and equipment Proceeds from disposal of property and equipment Decrease (increase) in other financial assets Increase in other assets Increase in an investment accounted for using equity method Net cash used in the acquisition of subsidiaries	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 3,563,107 189,220 41,299 (68,604) 927,647 6,379,554 (11,263,921) (75,482) (61,148) (780) 1,380,855 (28,545) (1,741,893) (3,612,256) 107,630 (13,392,924) (10,047,589) (894,829) 2,236,740 2,107,171 3,108,608 8,367,347 6,372,674 11,265,053 75,482 (6,482,692) (233,167) (1,781,443) 18,140 (123,497) 80 92,578 (2,473) - -	2012 $ 2,914,957 212,395 40,956 (257,746) 254,491 5,499,120 (9,644,265) (86,040) 89,375 (44,803) 1,207,993 (181,117) (726,600) (2,558,402) (217,637) (11,108,906) 3,554,394 1,711,719 (1,370,505) (110,773) (336,061) 915,161 21,934,704 9,673,900 86,040 (5,365,610) (198,304) 15,888,436 373,213 (149,895) 709 (426,965) (61,554) (55,652) (9,819) (Continued)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Dividends received from associates Capital return from liquidation of financial assets measured at cost Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds of the issuance of Euro convertible bonds Proceeds of the issuance of bank debentures Redemption of bank debentures Increase (decrease) in other financial liabilities Increase (decrease) in other liabilities Cash dividends Net cash generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS, END OF THE YEAR	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 50,611 - 35,439 4,481,250 4,000,000 (4,000,500) 152,421 (14,151) (515,720) 4,103,300 (25,115) 2,332,181 100,225,182 $ 102,557,363	2012 $ 58,250 1,408 (270,305) - 3,000,000 (86,440) (303,216) 142,510 (529,640) 2,223,214 (2,803) 17,838,542 82,386,640 $ 100,225,182

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 in accordance with the definition of“cash and cash equivalents”in IAS 7“Statement of Cash Flows” Securities purchased under resale agreements in accordance with the definition of“cash and cash equivalents”in IAS 7“Statement of Cash Flows” Cash and cash equivalents in consolidated statements of cash flows	December 31, 2013 $ 4,397,645 75,153,393 23,006,325 $ 102,557,363	December 31, 2012 $ 5,596,551 70,886,639 23,741,992 $ 100,225,182	January 1, 2012 $ 6,002,314 75,533,821 850,505
			$ 82,386,640

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

FAR EASTERN INTERNATIONAL BANK LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Far Eastern International Bank Ltd. (the “Bank”) obtained its license on January 11, 1992 and started its business on April 11, 1992. The Bank (a) accepts deposits and extends loans and guarantees; (b) issues letters of credit, handles domestic and foreign remittances, and accepts commercial drafts; (c) invests in securities and acts as an agent for trading government bonds, corporate bonds and bank debentures; and (d) conducts relevant businesses that are authorized by the relevant authorities.

The operations of the Bank’s Trust Department include pecuniary trust, securities trust, real estate trust, creditor’s right of money or guarantee, movable property trust and ground right trust and related operations. These operations are regulated under the Banking Act and Trust Enterprise Act.

As of December 31, 2013, the Bank’s operating units included the Business Department, International Banking Department, Trust Department, Credit Card Department, Offshore Banking Unit (OBU), and 54 domestic branches, as well as an overseas branch in Hong Kong.

The functional currency of the Bank and its subsidiaries is New Taiwan dollars.

The Bank’s shares are listed on the Taiwan Stock Exchange.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Board of Directors and authorized for issue on March 4, 2014.

3. APPLICATION OF NEW AND REVISED STANDARDS, AMENDMENTS AND INTERPRETATIONS

a. New, amended and revised standards and interpretations in issue but not yet effective

The Bank and its subsidiaries applied the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) issued by the IASB and endorsed by the Financial Supervisory Commission (the “FSC”) (the 2010 IFRSs version).

On January 28, 2014, the FSC announced the framework for the adoption of updated IFRSs version in the ROC. Under this framework, starting January 1, 2015, the previous version of IFRSs endorsed by the FSC (the 2010 IFRSs version) currently applied by companies with shares listed on the Taiwan Stock Exchange or traded on the Taiwan GreTai Securities Market or Emerging Stock Market will be replaced by the 2013 IFRSs version (without IFRS 9).

As of the date that the consolidated financial statements were authorized for issue, the FSC has not endorsed the following new, amended and revised standards and interpretations issued by the IASB included in the 2013 IFRSs version or has not announced the effective dates of the following new, amended and revised standards and interpretations issued by the IASB not included in 2013 IFRSs version.

Effective Date Announced by IASB (Note 1)

New, Amended or Revised Standards and Interpretations

Included in the 2013 IFRSs Version

Improvements to IFRSs (2009) - amendment to IAS 39 January 1, 2009 and January 1, 2010, as appropriate Amendment to IAS 39 “Embedded Derivatives” Effective for annual periods ending on or after June 30, 2009 Improvements to IFRSs (2010) July 1, 2010 and January 1, 2011, as appropriate Annual Improvements to IFRSs 2009-2011 Cycle January 1, 2013 Amendment to IFRS 1 “Limited Exemption from Comparative IFRS 7 July 1, 2010 Disclosures for First-time Adopters” Amendment to IFRS 1 “Severe Hyperinflation and Removal of Fixed July 1, 2011 Dates for First-time Adopters” Amendment to IFRS 1 “Government Loans” January 1, 2013 Amendment to IFRS 7 “Disclosure - Offsetting Financial Assets and January 1, 2013 Financial Liabilities” Amendment to IFRS 7 “Disclosure - Transfer of Financial Assets” July 1, 2011 IFRS 10 “Consolidated Financial Statements” January 1, 2013 IFRS 11 “Joint Arrangements” January 1, 2013 IFRS 12 “Disclosure of Interests in Other Entities” January 1, 2013 Amendments to IFRS 10, IFRS 11 and IFRS 12 “Consolidated January 1, 2013 Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance” Amendments to IFRS 10 and IFRS 12 and IAS 27 “Investment January 1, 2014 Entities” IFRS 13 “Fair Value Measurement” January 1, 2013 Amendment to IAS 1 “Presentation of Other Comprehensive Income” July 1, 2012 Amendment to IAS 12 “Deferred Tax: Recovery of Underlying January 1, 2012 Assets” IAS 19 (Revised 2011) “Employee Benefits” January 1, 2013 IAS 27 (Revised 2011) “Separate Financial Statements” January 1, 2013 IAS 28 (Revised 2011) “Investments in Associates and Joint January 1, 2013 Ventures” Amendment to IAS 32 “Offsetting Financial Assets and Financial January 1, 2014 Liabilities” IFRIC 20 “Stripping Costs in Production Phase of a Surface Mine” January 1, 2013

Not Included in the 2013 IFRSs Version

Annual Improvements to IFRSs 2010-2012 Cycle Annual Improvements to IFRSs 2011-2013 Cycle IFRS 9 “Financial Instruments” Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of IFRS 9 and Transition Disclosures” IFRS 14 “Regulatory Deferral Accounts” Amendment to IAS 19 “Defined Benefit Plans: Employee Contributions”

July 1, 2014 (Note 2) July 1, 2014 Effective date not determined Effective date not determined

January 1, 2016 July 1, 2014

(Continued)

New, Amended or Revised Standards and Interpretations Amendment to IAS 36“Impairment ofAssets: Recoverable Amount Disclosures for Non-Financial Assets” Amendment to IAS 39“Novation ofDerivatives and Continuation of Hedge Accounting” IFRIC 21“Levies”	Effective Date Announced by IASB (Note 1)
	January 1, 2014 January 1, 2014 January 1, 2014 (Concluded)

Note 1: Unless stated otherwise, the above new, amended and revised standards and interpretations are effective for annual periods beginning on or after the respective effective dates.
Note 2: The amendment to IFRS 2 applies to share-based payment transactions for which the grant date is on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations for which the acquisition date is on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.
b. Significant impending changes in accounting policy resulted from new, amended and revised standards and interpretations in issue but not yet effective

Except for the following, the initial application of the above new, amended and revised standards and interpretations has not had any material impact on the Bank and its subsidiaries’ accounting policies:

1) IFRS 9 “Financial Instruments”

Recognition and measurement of financial assets

All recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at amortized cost or fair value. Specifically, financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. All other financial assets are measured at their fair values at the balance sheet date. However, the company may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss.

Recognition and measurement of financial liabilities

The main changes in the measurement relate to the subsequent measurement of financial liabilities designated as at fair value through profit or loss. The amount of change in the fair value of such financial liability attributable to changes in the credit risk of that liability, is presented in other comprehensive income and the remaining amount of change in the fair value of that liability is presented in profit or loss, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified to profit or loss. If the above accounting treatment would create or enlarge an accounting mismatch in profit or loss, the company presents all gains or losses on that liability in profit or loss.

Hedge accounting

The main changes in hedge accounting amended the application requirements for hedge accounting to better reflect the entity’s risk management activities. Compared with IAS 39, the main changes include: (1) enhancing types of transactions eligible for hedge accounting, specifically broadening the risk eligible for hedge accounting of non-financial items; (2) changing the way hedging derivative instruments are accounted for to reduce profit or loss volatility; and (3) replacing retrospective effectiveness assessment with the principle of economic relationship between the hedging instrument and the hedged item.

Effective date

The amendments to IFRS 9 issued by the IASB included the introduction of the new hedge accounting model and the cancellation of the original mandatory effective date of January 1, 2015. IASB will add the appropriate effective date once the standard is complete with a new impairment model and the finalization of any limited amendments to classification and measurement.

2) New and revised standards on consolidation, joint arrangement, and associates and disclosure
a) IFRS 10 “Consolidated Financial Statements”

IFRS 10 replaces IAS 27 “Consolidated and Separate Financial Statements” and SIC 12 “Consolidation - Special Purpose Entities”. The company considers whether it has control over other entities for consolidation. The company has control over an investee if and only if it has i) power over the investee; ii) exposure, or rights, to variable returns from its involvement with the investee and iii) the ability to use its power over the investee to affect the amount of its returns. Additional guidance has been included in IFRS 10 to explain when an investor has control over an investee.

b) IFRS 12 “Disclosure of Interests in Other Entities”

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the current standards.

3) IFRS 13 “Fair Value Measurement”

IFRS 13 establishes a single source of guidance for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than those required in the current standards. For example, the disclosure based on the three-level fair value hierarchy currently required for financial instruments only will be extended by IFRS 13 to cover all assets and liabilities within its scope.

4) Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”

The amendments to IAS 1 require items of other comprehensive income to be grouped into those that (1) will not be reclassified subsequently to profit or loss; and (2) will be reclassified subsequently to profit or loss when specific conditions are met. Income taxes on related items of other comprehensive income are grouped on the same basis. Previously, there were no such requirements.

5) Revision to IAS 19 “Employee Benefits”

The amendments eliminate the “corridor approach” permitted under the previous version of IAS 19 and accelerate the recognition of past service costs.

6) Amendments to IAS 36 “Impairment of Assets”

The IASB made some amendments to the disclosure requirements of recoverable amount for non-financial assets in IAS 36 “Impairment of Assets”, introducing a requirement to disclose in every reporting period the recoverable amount of an asset or each cash-generating unit. The amendment clarifies that the disclosure of such recoverable amount is required during the period when an impairment loss has been recognized or reversed. Furthermore, the discount rate used in current and previous measurements of the recoverable amount based on fair value less costs of disposal measured by a present value technique are required to disclose.

7) Annual Improvements to IFRSs: 2010-2012 Cycle

Several standards including IFRS 8 “Operating Segments”, IFRS 13 “Fair Value Measurement” and IFRS 24 “Related Party Disclosures” were amended in this annual improvement.

The amended IFRS 8 requires an entity to disclose the judgments made by management in applying the aggregation criteria to operating segments, including a description of the operating segments aggregated and the economic indicators assessed in determining whether the operating segments have ‘similar economic characteristics’. The amendment also clarifies that a reconciliation of the total of the reportable segments’ assets to the entity’s assets should only be provided if the segments’ assets are regularly provided to the chief operating decision-maker.

IFRS 13 was amended to clarify that the issuance of IFRS 13 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amounts without discounting, if the effect of not discounting is immaterial.

IAS 24 was amended to clarify that a management entity providing key management personnel services to the company is a related party of the company. Consequently, the company is required to disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services. However, disclosure of the components of such compensation is not required.

8) Annual Improvements to IFRSs: 2011-2013 Cycle

The standard IFRS 13 “Fair Value Measurement” was amended in this annual improvement.

The scope in IFRS 13 of the portfolio exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis was amended to clarify that it includes all contracts that are within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9, even if those contracts do not meet the definitions of financial assets or financial liabilities within IAS 32.

c. Material impact on consolidated financial statements resulted from new, amended and revised standards and interpretations and the Regulations Governing the Preparation of Financial Reports by Public Banks in issue but not yet effective

As of the date the consolidated financial statements were authorized for issue, the Bank and its subsidiaries were still assessing the impact of the initial application of the new, amended and revised standards and interpretations on their financial position and financial performance. Disclosures will be provided when the Bank completes the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

On May 14, 2009, the FSC announced the “Framework for the Adoption of IFRSs by Companies in the ROC.” In this framework, starting 2013, companies with shares listed on the Taiwan Stock Exchange or traded on the Taiwan GreTai Securities Market or Emerging Stock Market, and financial institutions under the supervision of FSC should prepare their consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks and the IFRS, IAS, IFRIC, and SIC endorsed by the FSC (collectively referred to as “Taiwan-IFRSs”).

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks and Taiwan-IFRSs as endorsed by the FSC.

The Bank and its subsidiaries’ consolidated financial statements for the year ended December 31, 2013 is its first IFRS consolidated financial statements. The date of transition to Taiwan-IFRSs was January 1, 2012. Refer to Note 50 for the impact of Taiwan-IFRSs conversion on the Bank and its subsidiaries’ consolidated financial statements.

Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The opening consolidated balance sheet as of the date of transition to Taiwan-IFRSs was prepared in accordance with IFRS 1 “First-time Adoption of International Financial Reporting Standards”. The applicable Taiwan-IFRSs have been applied retrospectively by the Bank and its subsidiaries except for some aspects where IFRS 1 prohibits retrospective application or grant optional exemptions to this general principle. For the exemptions that the Bank and its subsidiaries elected to use, please refer to Note 50.

Current and Noncurrent Assets and Liabilities

Accounts included in the consolidated balance sheets are not classified as current or noncurrent since the major components of the consolidated financial statements are from the banking sector, whose operating cycle cannot be reasonably identified. Nevertheless, accounts are properly categorized in accordance with their nature and sequenced by their liquidity. Please refer to Note 47 for the maturity analysis of assets and liabilities.

Basis of Consolidation

a. Principles of preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Bank and its subsidiaries.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Bank.

Intercompany transactions, balances, income and expenses between the Bank and its subsidiaries have been eliminated upon consolidation.

b Subsidiaries included in consolidated financial statements

Subsidiaries included in consolidated financial statements were as follows:

Investor Company Investee Company Nature of Businesses The Bank Far Eastern Asset Management Co., Ltd. (“FEAMC”) Purchase, evaluation, auction and management of rights of financial institution creditors Far Eastern Life Insurance Agency Co., Ltd. (“FELIA”) Insurance agent Far Eastern Property Insurance Agency Co., Ltd. (“FEPIA”) Insurance agent Far Eastern International Securities Co., Ltd. (“FEIS”) Foreign securities broker, wealth management and offshore fund consulting Far Eastern International Securities Co., Ltd. Far Eastern Insurance Brokerage Co., Ltd. (“FEI Brokerage”) Insurance brokers	% of Ownership
	December 31, 2013 December 31, 2012 January 1, 2012 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Investor Company
Investee Company
Nature of Businesses
The Bank
Far Eastern Asset Management Co., Ltd.
(“FEAMC”)
Purchase, evaluation, auction and management
of rights of financial institution creditors
Far Eastern Life Insurance Agency Co., Ltd.
(“FELIA”)
Insurance agent
Far Eastern Property Insurance Agency Co.,
Ltd. (“FEPIA”)
Insurance agent
Far Eastern International Securities Co., Ltd.
(“FEIS”)
Foreign securities broker, wealth management
and offshore fund consulting
Far Eastern International
Securities Co., Ltd.
Far Eastern Insurance Brokerage Co., Ltd.
(“FEI Brokerage”)
Insurance brokers

% of Ownership

December 31,
2013
December 31,
2012
January 1,
2012
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

Acquisition of Another Financial Institution’s Business

Acquisitions of another financial institution are accounted for using the purchase method if acquisitions comply with business combination. The consideration transferred in acquisitions of another financial institution is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Bank, liabilities incurred by the Bank to the former owners of the acquiree and the equity interests issued by the Bank in exchange for control of the acquiree.

Foreign Currency

Foreign-currency assets and liabilities are recorded in a currency other than the entity’s functional currency. Foreign-currency items in comprehensive income of domestic operating units are translated into New Taiwan dollars at prevailing exchange rates at the dates of the transactions. For overseas branches (including the OBU), foreign-currency items in comprehensive income from transactions settled in currencies other than the entity’s functional currency are translated into the entity’s functional currency at prevailing exchange rates at the dates of the transactions.

At the balance sheet date, foreign-currency monetary assets and liabilities are translated at prevailing exchange rates, and the exchange differences are recognized as gain or loss.

At the balance sheet date, foreign-currency nonmonetary assets and liabilities (such as equity instruments) that are measured at fair value are translated at prevailing exchange rates, with the exchange differences treated as follows:

a. Recognized in comprehensive income if the changes in fair value are recognized in comprehensive income;
b. Recognized as gain or loss if the changes in fair value are recognized in gain or loss.

Foreign-currency nonmonetary assets and liabilities that are measured at cost continue to be stated at the exchange rates of the trade dates.

When foreign-currency assets and liabilities are settled, exchange differences arising from the application of different exchange rates are recognized as gain or loss for the current year.

The financial statements of foreign branches (including the OBU) are translated into New Taiwan dollars at the following exchange rates:

a. Assets and liabilities - at exchange rates prevailing on the balance sheet date;
b. The beginning balance of current year’s earnings not yet remitted to the head office - the same as the ending balance of the prior years’ earnings; and

c. Income and expenses - at average exchange rates for the period.

Exchange differences arising from the translation of the financial statements of foreign branches are recognized as exchange differences on translating foreign operations.

Investment in Associates

An associate is an entity over which the Bank and its subsidiaries has significant influence and that is not a subsidiary. Significant influence is the power to participate in the financial and operating policy decisions of the investee without having control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. An investment in an associate is initially recognized at cost and adjusted thereafter to recognize the Bank and its subsidiaries’ share of the profit or loss and other comprehensive income of the associate. The Bank and its subsidiaries also recognize the changes in the Bank and its subsidiaries’ share of equity of associates.

Property and Equipment

Property and equipment are stated at cost, less subsequent accumulated depreciation and subsequent accumulated impairment loss.

Depreciation is recognized so as to write off the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis.

Any gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

Intangible Assets

Intangible assets acquired in a business combination are initially recognized at their fair value at the acquisition date. Subsequent to initial recognition, intangible assets with finite useful lives are reported at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Bank expects to dispose of the intangible asset before the end of its economic life. Intangible assets with indefinite useful lives are measured at cost less accumulated impairment loss.

Buildings and Land Held for Sale

Buildings and land held for sale are carried at cost, and their recoverable amount is assessed at the end of each reporting period. If the recoverable amount is estimated to be less than its carrying amount, an impairment loss is recognized immediately in profit or loss. A reversal of an impairment loss is recognized in profit or loss when an impairment loss subsequently is reduced.

Impairment of Tangible and Intangible Assets

At the end of each reporting period, the Bank and its subsidiaries review the carrying amounts of their tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Bank and its subsidiaries estimate the recoverable amount of the cash-generating

unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units under a reasonable and consistent basis.

Intangible assets with indefinite useful lives are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.

When the recoverable amount increases in a subsequent period, the reversal of an impairment loss is recognized immediately in profit or loss. The carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years.

Securities Purchased/Sold Under Resale/Repurchase Agreements

Securities purchased under resale agreements and securities sold under repurchase agreements are generally treated as collateralized financing transactions.

Financial Instruments

Financial assets and financial liabilities are recognized when the Bank becomes a party to the contractual provisions of the instruments.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately as expense.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

a. Measurement category

Financial assets are classified into the following specified categories: Financial assets at fair value through profit or loss, held-to-maturity investments, available-for-sale financial assets and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

1) Financial assets at fair value through profit or loss

Financial assets are classified as at fair value through profit or loss when the financial asset is either held for trading or it is designated as at fair value through profit or loss. A financial asset may be designated as at fair value through profit or loss upon initial recognition if:

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
The financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Bank and subsidiaries’ documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

The contract contains one or more embedded derivatives so that the entire hybrid (combined) contract can be designated as at fair value through profit or loss.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss, including any dividend or interest earned on the financial asset.

2) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Bank and its subsidiaries have the positive intent and ability to hold to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method less any impairment.

3) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

Available-for-sale financial assets are measured at fair value. Interest income of available-for-sale bond investments calculated using the effective interest method and dividends on available-for-sale equity investments are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of or is determined to be impaired.

Dividends on available-for-sale equity instruments are recognized in profit or loss when the Bank’s right to receive the dividends is established.

Available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment loss and are recognized in a separate line item as financial assets measured at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets are remeasured at fair value. The difference between carrying amount and fair value is recognized in other comprehensive income on financial assets. Any impairment losses are recognized in profit or loss.

4) Loans and receivables

Loans and receivables (including receivables, discounts and loans, nonaccrual loans other than discounts and loans, and debt investments with no active market) are measured at amortized cost using the effective interest method, less any impairment.

b. Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For all financial assets, objective evidence of impairment could include:

Significant financial difficulty of the issuer or counterparty; or
Breach of contract, such as a default or delinquency in interest or principal payments; or
It is becoming probable that the borrower will undergo bankruptcy or financial reorganization; or
Disappearance of an active market for that financial asset because of financial difficulties.
1) Financial assets carried at amortized cost

For discounts and loans and receivables, assets are assessed for impairment on a collective basis even if they were assessed as not impaired individually. Objective evidence of impairment for a portfolio of loans and receivables could include the Bank’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio, as well as observable changes in national or local economic conditions that correlate with default on loans and receivables.

For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. If the amount of the impairment loss decreases in a subsequent period and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

2) Available-for-sale financial assets

For available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

In respect of available-for-sale equity securities, impairment loss previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of available-for-sale debt securities, impairment loss are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

3) Financial assets measured at cost

For financial assets that are measured at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of discounts and loans, receivables and nonaccrual loans other than discounts and loans, where the carrying amount is reduced through an allowance account.

The Bank evaluates possible losses on specific loans on the basis of the borrowers’ financial situation, their ability to repay principals and interests, and the values of collaterals in accordance with “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Nonperforming/Nonaccrual Loans” (the “Regulations”). The Regulations require that loans should be categorized by collectability and specify the minimum allowance for possible losses and reserve for guarantee obligations using prescribed percentages.

When a loan or receivable is considered uncollectible, it may be written off on the approval of the Bank’s Board of Directors or Managing Directors. The subsequent collections of written-off loans are credited against provision for possible losses.

c. Derecognition of financial assets

The Bank and its subsidiaries derecognize a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers substantially all the risks and rewards of ownership of the financial asset to another party.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss.

Equity instruments

Debt and equity instruments issued by the Bank are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments are recognized at the proceeds received, net of transaction costs.

Financial liabilities

a. Subsequent measurement

Except the following situation, all the financial liabilities are measured at amortized cost using the effective interest method:

1) Financial liabilities at fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss when the financial liability is held for trading. Any gains or losses arising on remeasurement, including any dividend or interest paid on the financial liability, are recognized in profit or loss.

2) Financial guarantee contracts

Financial guarantee contracts issued by the Bank are initially measured at their fair values and, if not designated as at fair value through profit or loss, are subsequently measured at the higher of the best estimate of the obligation under the contract or the amount initially recognized less cumulative amortization recognized.

b. Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

Euro convertible bonds

Euro convertible bonds that contain both liability and conversion option derivative components are classified separately into respective items on initial recognition. The conversion option that will be settled other than by the exchange of a fixed amount of cash or other financial asset for a fixed number of the Bank’s own equity instruments is classified as a conversion option derivative. At the date of issue, both the liability and conversion option derivative components are recognized at fair value.

In subsequent periods, the liability component of the Euro Convertible Bonds is measured at amortized cost using the effective interest method. The conversion option derivative is measured at fair value and the changes in fair value are recognized in profit or loss.

Transaction costs related to the issuance of Euro Convertible Bonds are included in the carrying amount of the liability component and are amortized over the lives of Euro Convertible Bonds using the effective interest method.

Derivative financial instruments

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.

Derivatives embedded in non-derivative host contracts are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the contracts are not measured at fair value through profit or loss.

Hedge Accounting

The Bank engages non-trading derivatives primarily as a tool for hedging against risks of financial assets and liabilities due to adverse market changes in interest rates, exchange rates and credit. The Bank’s hedge accounting qualifies as a fair value hedge. The fair value hedge is mainly used to avoid the risk of adverse changes in fair value of interest-earning assets and interest-bearing liabilities due to fluctuations of interest rates or exchange rates.

Once the hedge is determined as a fair value hedge, the effect of changes in fair value of the hedged items will be offset by the gain or loss recognized from remeasuring the derivative hedging instrument at fair value. Gains and losses measured at fair value of hedging instruments are recognized in profit or loss. The carrying amount of the hedged item is adjusted through the corresponding gain or loss on the hedging instrument.

Provisions

Provisions are recognized when the Bank and its subsidiaries have a present obligation as a result of a past event, it is probable that the Bank and its subsidiaries will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

100

Income Recognition

Interest income from discounts and loans is recorded on the accrual basis. For nonaccrual loans, interest income is recognized only when collections on these obligations are made. Under the regulations of the Banking Bureau under the Financial Supervisory Commission, the interest income on credits covered by agreements that extend their maturity is recorded as deferred income and recognized upon collection.

Service fee income is recognized as loans are provided or services have been completed.

The gain or loss on the disposal or recovery of acquired receivables is accounted for by the effective interest method. The administration revenue from managing acquired loans is recognized monthly on an accrual basis. The advance administration revenue is amortized on a straight-line method over the estimated recovery period.

Retirement Benefit Costs

The Bank’s contributions to defined contribution plans are recognized as expenses when employees have rendered service entitling them to the contributions.

For defined benefit plans, the cost of providing benefits is measured using the projected unit credit method. Actuarial gains and losses that exceed 10% of the greater of the present value of the Bank's defined benefit obligation and the fair value of plan assets as at the end of the prior year are amortized over the expected average remaining working lives of the participating employees. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognized in the consolidated balance sheets represents the present value of the defined benefit obligation as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost, and as reduced by the fair value of plan assets.

Income Tax

Income tax expense represents the sum of tax currently payable and deferred tax expense.

a. Current tax expense

An additional tax at 10% of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

b. Deferred tax expense

Deferred tax expense represents adjustments to deferred tax assets and liabilities.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Bank and its subsidiaries expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carryforwards, and unused tax credits for research and development expenditures and personnel training expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.

c. Current and deferred tax for the period

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of accounting policies, management is required to make essential judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

a. Held-to-maturity financial assets

Management has reviewed the Bank and its subsidiaries’ held-to-maturity financial assets in light of its capital maintenance and liquidity requirements and has confirmed the Bank and its subsidiaries' positive intention and ability to hold those assets to maturity.

b. Estimated impairment of discounts and loans and receivables

When there is objective evidence of impairment loss, the Bank and its subsidiaries take into consideration the estimation of future cash flows. The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. Where the actual future cash flows are less than expected, an additional impairment loss may arise.

c. Estimated impairment of operation rights

Determining whether operation rights are impaired requires an estimation of the value in use of the cash-generating units to which operation rights have been allocated. The value in use calculation requires management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, an impairment loss may arise.

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d. Fair value of financial instruments

The Bank’s management uses its judgment in selecting an appropriate valuation technique for financial instruments that do not have quoted market price in an active market. Valuation techniques commonly used by market practitioners are applied. For derivative financial instruments, assumptions were based on quoted market rates adjusted for specific features of the instruments. Other financial instruments were valued using a discounted cash flow analysis based on assumptions supported, where possible, by observable market prices or rates. The estimation of fair value of unlisted equity instruments was based on assumptions supported by unobservable market prices or rates. Note 46 provides detailed information about the key assumptions used in the determination of the fair value of financial instruments. The Bank’s management believes that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of financial instruments.

e. Income tax

The realizability of the deferred tax asset mainly depends on whether sufficient future profits or taxable temporary differences will be available. In cases where the actual future profits generated are materially different from expected, an adjustment to deferred tax assets and income tax expense may arise.

f. Recognition and measurement of defined benefit plans

Provision for employee benefits and the resulting post-employment benefits under defined benefit pension plans are calculated using the projected unit credit method. Actuarial assumptions comprise the discount rate, rate of employee turnover, and long-term average future salary increase. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability.

6. CASH AND CASH EQUIVALENTS

December 31, 2013 December 31, 2012 Cash on hand $ 2,645,252 $ 2,727,134 Deposits due from other banks 1,391,925 1,110,865 Notes and checks for clearing 312,914 1,671,862 Balance with other banks 47,554 86,690 $ 4,397,645 $ 5,596,551	January 1, 2012 $ 2,448,923 2,540,823 817,187 195,381 $ 6,002,314

7. DUE FROM THE CENTRAL BANK AND OTHER BANKS

Due from the Central Bank - certificates of deposit (Note 41) Loans to other banks New Taiwan dollar reserve deposits - Type A New Taiwan dollar reserve deposits - Type B Foreign-currency reserve deposits	December 31, 2013 $ 60,630,000 10,254,670 8,217,629 9,673,862 51,094 $ 88,827,255	December 31, 2012 $ 63,190,000 4,819,462 5,835,631 8,931,969 41,546 $ 82,818,608	January 1, 2012 $ 69,400,000 3,570,480 5,019,759 8,705,369 43,582
			$ 86,739,190

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The reserve deposits are required by law and determined at a prescribed percentage of the monthly average balances. The Type B reserve deposits can be withdrawn only when the balances are adjusted monthly. The Type A and foreign-currency reserve deposits can be withdrawn on demand but bear no interest.

As of December 31, 2013, December 31, 2012 and January 1, 2012, the due from the Central Bank and other banks that were in accordance with the definition of IAS 7 “cash and cash equivalents” in IAS 7 “Statement of Cash Flows” were short-term, highly liquid investments that were readily convertible to known amounts of cash and were subject to an insignificant risk of changes in value; these investments amounted to NT$75,153,393 thousand, NT$70,886,639 thousand and NT$75,533,821 thousand, respectively, and were included in cash and cash equivalents in the consolidated statements of cash flows.

8. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets held for trading Convertible bond asset swap contracts Government bonds Foreign-currency swap contracts Listed and OTC stocks Interest rate swap contracts Currency option contracts Cross-currency swap contracts Beneficiary certificates Forward exchange contracts Credit default swap contracts Convertible bond option contracts Others Financial assets designated as at fair value through profit or loss Convertible bonds Total financial assets at fair value through profit or loss Financial liabilities held for trading Convertible bond option contracts Foreign-currency swap contracts Conversion option derivative of Euro convertible bonds (Note 24) Currency option contracts Cross-currency swap contracts Interest rate swap contracts Forward exchange contracts Convertible bond asset swap contracts Credit default swap contracts Short sale of bonds payable Others Total financial liabilities at fair value through profit or loss	December 31, 2013 $ 2,746,609 1,617,257 882,925 332,666 309,544 268,332 198,031 149,162 84,486 73,067 72,196 21,865 6,756,140 12,039,304 $ 18,795,444 $ 5,104,453 732,643 443,859 267,657 261,269 244,551 121,926 80,818 8,121 - 22,768 $ 7,288,065	December 31, 2012 $ 1,421,828 1,334,349 304,672 130,962 351,567 187,732 184,828 107,521 59,995 145,330 163,187 39,306 4,431,277 11,679,558 $ 16,110,835 $ 2,109,083 465,775 - 184,378 140,767 203,635 32,030 541,149 27,798 - 40,417 $ 3,745,032	January 1, 2012 $ 26,918 1,722,733 460,509 36,819 358,907 49,016 4,801 57,286 51,235 32,090 317,057 32,985
			3,150,356 10,656,510
			$ 13,806,866
			$ 1,971,854 260,861 - 48,384 719,979 182,081 67,853 127,769 35,221 953,357 17,481
			$ 4,384,840

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The Bank engages in derivative transactions mainly to trade, to accommodate customers’ needs and to manage exposures due to exchange rate and interest rate fluctuations. The Bank’s financial risk management strategy is to hedge most of its exposure to market risk.

Outstanding derivative contract (nominal) amounts were as follows:

	December 31,	December 31,		January 1,
	2013	2012		2012
Foreign-currency swap contracts	$ 153,416,684	$ 103,946,913	$	47,007,582
Interest rate swap contracts	136,533,414	87,925,783		44,438,500
Currency option contracts	94,772,462	23,028,114		4,665,684
Cross-currency swap contracts	31,862,475	27,471,165		17,706,190
Convertible bond option contracts	25,498,215	30,852,021		33,499,262
Convertible bond asset swap contracts	20,136,950	26,963,297		28,113,195
Credit default swap contracts	20,062,578	18,608,724		14,496,297
Forward exchange contracts	10,438,487	7,886,180		7,583,875
Non-deliverable forward contracts	2,247,545	11,036,127		8,036,471
Commodity forward contracts	554,681	45,219		-

The net gain on financial instruments at fair value through profit or loss was as follows:

Net gain (loss) on financial instruments held for trading Net gain (loss) on financial assets designated as at fair value through profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ (485,820) 1,583,618 $ 1,097,798	2012 $ 1,241,637 (171,021) $ 1,070,616

9. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING

December 31, 2013 December 31, 2012 Derivative financial assets Fair value hedging - interest rate swap contracts $ 111,034 $ 180,242 Derivative financial liabilities Fair value hedging - interest rate swap contracts $ 12,631 $ 12,819	January 1, 2012 $ 252,233 $ 13,093

The Bank uses interest rate swap contracts to hedge against the risk of changes in fair value of domestic bank debentures arising from interest rate fluctuations. The nominal amount of interest rate swap contracts for hedging was NT$4,600,000 thousand all as of December 31, 2013, December 31, 2012 and January 1, 2012.

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The net gain (loss) on hedging financial instruments and hedged items was as follows:

Net loss on hedging financial instruments Net gain on hedged items	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 69,020 $ 69,020	2012 $ 71,717 $ 71,717

10. SECURITIES PURCHASED UNDER RESALE AGREEMENTS

Government bonds Negotiable certificates of deposit Commercial paper Treasury securities Resale date Resale price 11. RECEIVABLES, NET	December 31, 2013 $ 19,375,114 2,124,136 1,507,075 - $ 23,006,325 2014.01.02- 2014.03.26 $ 23,012,026	December 31, 2012 $ 15,166,522 4,206,422 1,008,383 3,360,665 $ 23,741,992 2013.01.02- 2013.02.19 $ 23,749,718	January 1, 2012 $ 850,505 - - -
			$ 850,505
			2012.01.02 $ 850,565

Credit card Factoring Proceeds from disposal of securities Interest Spot exchange transactions Acceptances Acquired receivables Proceeds from disposal of acquired receivables Others Less: Allowance for possible losses (Note 12)	December 31, 2013 $ 15,688,762 2,161,061 1,434,927 696,221 457,605 384,110 190,983 - 343,677 21,357,346 685,074 $ 20,672,272	December 31, 2012 $ 15,521,385 2,830,761 415,243 640,301 481,948 503,574 200,229 602,540 338,913 21,534,894 753,712 $ 20,781,182	January 1, 2012 $ 15,523,234 3,412,000 1,103,970 603,691 595,616 332,333 809,486 - 389,198
			22,769,528 818,715
			$ 21,950,813

Far Eastern Asset Management Co., Ltd. disposed of its acquired receivables in December 2012, and the related proceeds from disposal of acquired receivables and compensation for early settlement amounting to NT$602,540 thousand were collected in January 2013.

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12. DISCOUNTS AND LOANS, NET

Negotiations, discounts and overdraft Short-term loans Medium-term loans Long-term loans Nonaccrual loans Less: Allowance for possible losses	December 31, 2013 $ 159,359 48,538,897 114,720,520 132,602,309 759,427 296,780,512 4,263,480 $ 292,517,032	December 31, 2012 $ 211,493 62,306,524 92,298,012 128,002,420 982,983 283,801,432 3,582,006 $ 280,219,426	January 1, 2012 $ 176,576 67,654,241 84,002,593 122,135,928 264,778
			274,234,116 4,773,735
			$ 269,460,381

Movements of allowance for possible losses on discounts and loans and others (including receivables and other financial assets) were as follows:

For the year ended December 31, 2013 Balance, January 1, 2013 Provision (reversal of provision) for possible losses Amounts written-off Amounts recovered Effects of exchange rate changes Balance, December 31, 2013 For the year ended December 31, 2012 Balance, January 1, 2012 Provision (reversal of provision) for possible losses Amounts written-off Amounts recovered Effects of exchange rate changes Balance, December 31, 2012	Discounts and Loans $ 3,582,006 88,033 (413,844) 1,005,458 1,827 $ 4,263,480 $ 4,773,735 17,915 (1,965,455) 763,068 (7,257) $ 3,582,006	Others $ 1,180,101 (220,599) (219,480) 375,397 (689) $ 1,114,730 $ 1,245,370 (291,054) (219,069) 444,925 (71) $ 1,180,101	Total $ 4,762,107 (132,566) (633,324) 1,380,855 1,138 $ 5,378,210 $ 6,019,105 (273,139) (2,184,524) 1,207,993 (7,328) $ 4,762,107

The provision (reversal of provision) for possible losses and guarantee obligations reserve were as follows:

Provision for possible losses - discounts and loans Reversal of provision for possible losses - others Provision for possible losses - reserve for guarantee obligations	For the Year Ended	For the Year Ended	December 31
		2013 $ 88,033 (220,599) 63,962 $ (68,604)	2012 $ 17,915 (291,054) 15,393 $ (257,746)

For the years ended December 31, 2013 and 2012, the Bank had no written-off credits for which legal proceedings had not been initiated.

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The Bank’s financial assets were assessed for impairment loss on the basis of credit risk characteristics of financial assets. The results were as follows:

Discounts and loans

Assessed individually	Decembe	r 31, 2013	December	31, 2012	January 1, 2012	January 1, 2012
	Discounts and Loans $ 3,431,546	Allowance for Possible Losses $ 638,734	Discounts and Loans $ 4,581,612	Allowance for Possible Losses $ 1,449,349	Discounts and Loans $ 5,188,537	Allowance for Possible Losses $ 3,373,260
Assessed by portfolio Assessed individually	1,678,136 2,841,768	522,824 -	1,837,366 2,619,004	718,466 -	2,143,559 3,105,077	450,059 -
Assessed by portfolio	288,829,062 $ 296,780,512	3,101,922 $ 4,263,480	274,763,450 $ 283,801,432	1,414,191 $ 3,582,006	263,796,943 $ 274,234,116	950,416 $ 4,773,735

Others (including receivables, other financial assets and debt investments with no active market)

Assessed individually	Decembe	r31, 2013	December	31, 2012	January 1, 2012	January 1, 2012
	Discounts and Loans $ 651,446	Allowance for Possible Losses $ 591,524	Discounts and Loans $ 691,318	Allowance for Possible Losses $ 601,492	Discounts and Loans $ 847,568	Allowance for Possible Losses $ 664,194
Assessed by portfolio Assessed individually	2,357,854 10,058,136	577,306 -	2,774,987 12,600,812	609,478 -	3,345,018 9,204,321	556,138 -
Assessed by portfolio	16,217,289 $29,284,725	90,491 $ 1,259,321	16,367,731 $32,434,848	124,461 $ 1,335,431	16,256,145 $29,653,052	245,349 $ 1,465,681

13. AVAILABLE-FOR-SALE FINANCIAL ASSETS

Government bonds Commercial paper Foreign bank debentures Listed and OTC stocks - domestic - overseas Negotiable certificates of deposit	December 31, 2013 $ 13,619,393 5,045,261 1,243,923 1,109,537 - 717,579 $ 21,735,693	December 31, 2012 $ 10,355,436 250,043 - 807,991 - 452,394 $ 11,865,864	January 1, 2012 $ 14,044,274 - - 776,673 124,465 -
			$ 14,945,412

The terms of government bonds are summarized as follows:

	December 31,	December 31,	January 1,
	2013	2012	2012
Aggregate par value	$ 13,704,600	$ 10,154,600	$ 13,319,000
Coupon interest rates	0.88%-2.38%	0.88%-2.75%	0.88%-6.90%
Effective interest rates	0.91%-1.99%	0.91%-1.98%	0.91%-9.45%
Maturity	2014.01-2043.02	2013.01-2022.05	2012.01-2031.08

The terms of commercial paper are summarized as follows:

	December 31,	December 31,	January	1,
	2013	2012	2012
Aggregate par value	$ 5,046,500	$ 250,000	$	-
Coupon interest rates	0.65%-2.30%	0.76%-1.06%	-
Effective interest rates	0.65%-2.30%	0.74%-0.75%	-
Maturity	2014.01	2013.01	-

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The terms of foreign bank debentures are summarized as follows:

	December 31,	December	31,	January	1,
	2013	2012		2012
Aggregate par value	$ 1,242,015	$	-	$	-
Coupon interest rates	3.57%-3.71%	-		-
Effective interest rates	3.89%-4.35%	-		-
Maturity	2016.03-2017.09	-		-

The terms of negotiable certificates of deposit are summarized as follows:

	December 31,	December 31,	January	1,
	2013	2012	2012
Aggregate par value	$ 716,000	$ 451,400	$	-
Coupon interest rate	0.76%	0.87%-0.88%	-
Effective interest rate	0.76%	0.74%-0.76%	-
Maturity	2014.01	2013.01	-

Some of the available-for-sale financial assets were traded with repurchase agreements, and the carrying amounts were NT$1,303,119 thousand and NT$210,105 thousand as of December 31, 2013 and January 1, 2012, respectively. (December 31, 2012: Nil)

The assets pledged as collateral are shown in Note 41.

14. HELD-TO-MATURITY FINANCIAL ASSETS

December 31, 2013 December 31, 2012 Foreign corporate bonds $ 1,150,099 $ 989,133 Foreign bank debentures 1,057,373 797,129 Foreign certificates of deposit 898,500 437,040 Government bonds - 999 $ 3,105,972 $ 2,224,301	January 1, 2012 $ 2,374,459 1,400,397 151,450 1,599
	$ 3,927,905

The terms of foreign corporate bonds are summarized as follows:

	December 31,	December 31,	January 1,
	2013	2012	2012
Aggregate par value - USD	$ 39,000,000	$ 24,000,000	$ 59,000,000
- AUD	-	10,000,000	20,000,000
Coupon interest rates	0.37%-2.50%	0.44%-3.64%	0.51%-7.00%
Effective interest rates	1.90%-3.85%	1.70%-6.63%	0.46%-6.75%
Maturity	2014.01-2018.05	2013.01-2014.03	2012.01-2014.03

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The terms of foreign bank debentures are summarized as follows:

	December 31,	December 31,	January 1,
	2013	2012	2012
Aggregate par value - USD	$ 21,000,000	$ 21,000,000	$ 40,000,000
- AUD	15,900,000	6,000,000	6,000,000
Coupon interest rates	0.99%-4.01%	1.06%-4.20%	0.66%-6.50%
Effective interest rates	1.55%-5.57%	1.55%-5.57%	0.61%-5.91%
Maturity	2014.06-2016.05	2014.06-2015.08	2012.01-2015.03

The terms of foreign certificates of deposit are summarized as follows:

	December 31,	December 31,		January 1,
	2013	2012		2012
Aggregate par value - USD	$ 30,000,000	$ 15,000,000	$	5,000,000
Coupon interest rates	0.77%-1.84%	1.97%		1.54%
Maturity	2014.02-2015.03	2015.03		2012.08

The terms of government bonds are summarized as follows:

	December	31,	December 31,	January 1,
	2013		2012	2012
Aggregate par value - NTD	$	-	$ 1,000,000	$ 1,600,000
Coupon interest rates	-		1.88%	1.88%-6.90%
Effective interest rates	-		1.89%	1.89%-5.70%
Maturity	-		2013.03	2012.01-2013.03

15. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

a. Investments in associates:

Dah Chung Bills Finance Corp. Yuan Long Stainless Steel Corp. Deutsche Far Eastern Asset Management Co., Ltd.		December 31, 2013 Amount % of Ownership $ 1,421,984 22.06 799,971 49.00 143,871 40.00 $ 2,365,826		December 31, 2012 Amount % of Ownership $ 1,412,336 22.06 796,544 49.00 159,668 40.00 $ 2,368,548		January 1, 2012
						Amount % of Ownership $ 1,412,508 22.06 939,327 49.00 120,552 40.00 $ 2,472,387

In July 2012, Deutsche Far Eastern Asset Management Co., Ltd. (“Deutsche”) decreased its capital to offset the deficit and issued new shares for cash. The Bank acquired some of these new shares for NT$55,652 thousand at its current percentage of ownership of Deutsche.

In November 2013, Far Eastern Asset Management Co., Ltd. (FEAMC) entered into a memorandum with Asia Cement Corp. (ACC) on FEAMC’s intent to sell Yuan Long Stainless Steel Corp. to ACC. As of the date that the consolidated financial statements were authorized for issue, the terms of this sale were being negotiated.

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The summarized financial information of the Bank and its subsidiaries’ associates is as follows:

December 31, 2013 Total assets $ 55,931,939 Total liabilities $ 47,493,097 Net profit Net income (loss) Other comprehensive loss b. Share of profit (loss) of associates was as follows: Dah Chung Bills Finance Corp. Yuan Long Stainless Steel Corp. Deutsche Far Eastern Asset Management Co., Ltd. DEBT INVESTMENTS WITH NO ACTIVE MARKET December 31, 2013 Convertible bond asset swap contracts - master agreement $ 4,794,018 Credit-linked notes - master agreement 2,935,100 Floating rate notes, net 748,750 Convertible bonds, net - $ 8,477,868	December 31, 2012 January 1, 2012 $ 46,660,371 $ 51,164,235 $ 38,232,757 $ 42,544,909 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 46,660,371 $ 51,164,235 $ 38,232,757 $ 42,544,909 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 46,660,371 $ 51,164,235 $ 38,232,757 $ 42,544,909 For the Year Ended December 31
	2013 2012 $ 1,228,989 $ 510,198 $ 303,060 $ (10,592) $ (65,806) $ (56,172) For the Year Ended December 31
		2013 $ 74,756 3,975 (17,583) $ 61,148 December 31, 2012 $ 6,966,012 2,563,968 1,183,848 - $ 10,713,828	2012 $ 71,465 (143,879) (16,961) $ (89,375) January 1, 2012 $ 4,647,900 3,331,234 1,232,798 81,848 $ 9,293,780

16. DEBT INVESTMENTS WITH NO ACTIVE MARKET

As of December 31, 2013, December 31, 2012 and January 1, 2012, the accumulated impairment losses, reducing the carrying amount, on floating rate notes and convertible bonds were $149,750 thousand, $160,567 thousand and $225,638 thousand, respectively. In April 2013, a recovery of convertible bonds through redemption was recognized as a gain of $780 thousand on reversal of impairment losses. February 2012, a recovery of convertible bonds through redemption was recognized as (a) a gain of $57,306 thousand on reversal of impairment losses and (b) other income of $56,174 thousand.

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17. OTHER FINANCIAL ASSETS, NET

December 31, 2013 December 31, 2012 Nonaccrual loans other than discounts and loans $ 490,393 $ 498,012 Less: Allowance for possible losses (Note 12) 429,656 426,389 60,737 71,623 Guarantee deposits for financial instrument agreements 1,585,442 1,892,383 Refundable deposits 550,431 513,971 Deposits with original maturity more than 3 months 250,300 2,900 Interbank clearing account 200,233 404,877 Financial assets measured at cost 101,379 101,379 Others - 72,378 $ 2,748,522 $ 3,059,511 Financial assets measured at cost were as follows: December 31, 2013 December 31, 2012 Domestic unquoted common stocks ERA Communications Co., Ltd. $ 50,006 $ 50,006 Financial Information Service Co., Ltd. 45,500 45,500 An Feng Enterprise Co., Ltd. 3,000 3,000 Sunshine Asset Management Co., Ltd. 2,073 2,073 Taipei Forex Inc. 800 800 Taiwanpay Corp. - - $ 101,379 $ 101,379	January 1, 2012 $ 507,131 426,655	January 1, 2012 $ 507,131 426,655
	80,476 1,669,282 509,539 2,900 207,369 103,846 61,338
	$ 2,634,750
		January 1, 2012 $ 50,006 45,500 3,000 2,073 800 2,467 $ 103,846

The above equity investments, which had no quoted prices in active market or fair values that could be reliably measured, were measured at cost.

In February 2012, the shareholders of Taiwanpay Corp. resolved that it should be liquidated and dissolved, and its residual properties were distributed in March 2012 and June 2012. As a result, the Bank received a total amount of NT$1,408 thousand, which was treated as a reduction of investment cost, and recognized an impairment loss of NT$1,059 thousand.

18. PROPERTY AND EQUIPMENT, NET

Cost Beginning balance Additions Disposals Others Ending balance			For the Year Ended December 31, 2013	For the Year Ended December 31, 2013
		Land Buildings and Improvements $ 1,581,625 $ 1,236,633 - 3,517 - (550) - 299 1,581,625 1,239,899	Computer Equipment Transportation Equipment $ 1,354,797 $ 6,234 52,166 57 (142,190) (296) 36,453 - 1,301,226 5,995	Miscellaneous Equipment $ 1,406,170 31,075 (17,554) 7,841 1,427,532	Equipment Prepayment Total $ 22,076 $ 5,607,535 36,682 123,497 - (160,590) (43,913) 680 14,845 5,571,122 (Continued)

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Accumulated depreciation Beginning balance Depreciation Disposals Others Ending balance Net ending balance Cost Beginning balance Additions Disposals Others Ending balance Accumulated depreciation Beginning balance Depreciation Disposals Others Ending balance Net ending balance			For the Year Ended December 31, 2013	For the Year Ended December 31, 2013
		Land Buildings and Improvements $ - $ 504,648 - 25,181 - (550) - 23 - 529,302 $ 1,581,625 $ 710,597	Computer Equipment Transportation Equipment Miscellaneous Equipment $ 998,036 $ 5,841 $ 1,219,317 102,482 191 61,366 (142,140) (296) (17,751) 466 - 144 958,844 5,736 1,263,076 $ 342,382 $ 259 $ 164,456 For the Year Ended December 31, 2012		Equipment Prepayment Total $ - $ 2,727,842 - 189,220 - (160,737) - 633 - 2,756,958 $ 14,845 $ 2,814,164 (Concluded)
		Land Buildings and Improvements $ 1,581,625 $ 1,232,272 - 4,021 - - - 340 1,581,625 1,236,633 - 479,089 - 25,544 - - - 15 - 504,648 $ 1,581,625 $ 731,985	Computer Equipment Transportation Equipment $ 1,288,640 $ 7,975 57,110 56 (39,102) (1,797) 48,149 - 1,354,797 6,234 920,001 6,940 117,781 602 (39,091) (1,701) (655) - 998,036 5,841 $ 356,761 $ 393	Miscellaneous Equipment $ 1,347,926 63,919 (9,093) 3,418 1,406,170 1,159,954 68,468 (8,881) (224) 1,219,317 $ 186,853	Equipment Prepayment $ 51,219 24,789 - (53,932) 22,076 - - - - - $ 22,076	Total $ 5,509,657 149,895 (49,992) (2,025) 5,607,535 2,565,984 212,395 (49,673) (864) 2,727,842 $ 2,879,693

The above items of property and equipment were depreciated on a straight-line basis over the following estimated useful lives:

Buildings and improvements	5 to 55 years
Computer equipment	3 to 7 years
Transportation equipment	3 to 7 years
Miscellaneous equipment	2 to 20 years

19. INTANGIBLE ASSETS, NET

December 31, 2013 December 31, 2012 Operating rights $ 1,538,210 $ 1,538,210 Fair value of core deposits 428,887 428,887 1,967,097 1,967,097 Less: Accumulated amortization 136,193 99,049 $ 1,830,904 $ 1,868,048	January 1, 2012 $ 1,538,210 428,887
	1,967,097 61,904
	$ 1,905,193

In April 2010, the Bank acquired the assets and liabilities, classified as Package B of the Chinfon Bank, through a bidding process. The acquired management and operation rights of Chinfon Bank’s branches have indefinite useful life, while the fair value of core deposits is amortized over 4 to 15 years.

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20. OTHER ASSETS, NET

December 31, 2013 Buildings and land held for sale $ 27,567 Less: Accumulated impairment 4,246 23,321 Prepaid expenses 174,935 Others 7,994 $ 206,250 21. DUE TO THE CENTRAL BANK AND OTHER BANKS December 31, 2013 Call loans from banks $ 13,441,942 Due to banks 309,011 Overdraft 31,176 $ 13,782,129 22. PAYABLES December 31, 2013 Securities settlement payables $ 8,836,221 Accrued expenses 1,408,468 Accrued interest 813,674 Payables on factoring business 691,079 Payables on consigned funds 431,101 Acceptances 384,110 Checks for clearing 312,914 Others 625,425 $ 13,502,992 23. DEPOSITS AND REMITTANCES December 31, 2013 Checking deposits $ 2,584,658 Demand deposits 46,239,336 Demand savings 54,822,689 Time savings 85,924,264 Negotiable certificates of deposit 24,392,500 Time deposits 184,325,934 Remittances 16,559 $ 398,305,940	December 31, 2012 $ 48,429 6,968 41,461 183,045 1,566 $ 226,072 December 31, 2012 $ 11,259,482 316,051 99,425 $ 11,674,958 December 31, 2012 $ 166,815 1,218,141 997,766 499,185 111,972 503,574 1,671,862 391,056 $ 5,560,371 December 31, 2012 $ 2,974,630 31,614,166 52,960,380 87,548,604 23,138,500 193,672,326 24,660 $ 391,933,266	January 1, 2012 $ 467,389 41,271 426,118 123,584 3,059 $ 552,761 January 1, 2012 $ 11,236,270 544,952 4,509
		$ 11,785,731
		January 1, 2012 $ 102,244 1,373,093 864,256 457,695 137,291 332,333 817,187 411,221
		$ 4,495,320
		January 1, 2012 $ 3,695,949 28,301,271 50,602,247 86,199,374 24,478,500 176,716,076 5,145
		$ 369,998,562

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24. BANK DEBENTURES

		December 31,		December	December	December	31,		January 1,	January 1,	January 1,	January 1,
		2013			2012				2012
Domestic bank debentures		$ 23,002,603		$	23,072,123			$	20,230,280
Euro convertible bonds		4,101,282					-					-
		$ 27,103,885		$	23,072,123			$	20,230,280
Domestic bank debentures
	Issuance		December 31,			December 31,				January		1,
Item	Period	Note		2013			2012			2012
Senior bank debentures -	2005.08.26-	Interest payable on August 26 each	$	3,000,000		$	3,000,000		$	3,000,000
10-year maturity; fourth	2015.08.26	year; fixed interest rate at 2.30%
issue in 2005
Subordinated bank debentures -	2006.12.27-	Interest payable on December 27 each			-		2,000,000			2,000,000
seven-year maturity; first	2013.12.27	year; floating interest rate
issue in 2006
Subordinated bank debentures -	2007.02.13-	A coupons: Interest payable on		2,000,000			2,000,000			2,000,000
seven-year maturity; first	2014.02.13	February 13 each year; floating
issue in 2007		interest rate
		B coupons: Interest payable on
		February 13 each year; fixed
		interest rate at 2.55%
Subordinated bank debentures -	2007.03.12-	Interest payable on March 12 each		1,000,000			1,000,000			1,000,000
seven-year maturity; second	2014.03.12	year; floating interest rate
issue in 2007
Subordinated bank debentures -	2007.09.26-	Interest payable on September 26 each			-		2,000,000			2,000,000
five and a half years’	2013.03.26	year (will be paid on March 26 in
maturity; third issue in 2007		the last year); floating interest rate
Subordinated bank debentures -	2008.06.17-	A coupons: Interest payable on June		2,400,000			2,400,000			2,400,000
seven-year maturity; first	2015.06.17	17 each year; 3.90% fixed interest
issue in 2008		rate;
		B coupons: Interest payable on June
		17 each year; floating interest rate
Subordinated bank debentures -	2010.05.18-	Interest payable on May 18 each year;		2,000,000			2,000,000			2,000,000
seven-year maturity; first	2017.05.18	fixed interest rate at 2.98%
issue in 2010
Subordinated bank debentures -	2010.09.29-	Interest payable on September 29 each		2,000,000			2,000,000			2,000,000
seven-year maturity; second	2017.09.29	year; fixed interest rate at 2.10%
issue in 2010
Subordinated bank debentures -	2011.11.10 -	Interest payable on November 10 each		3,500,000			3,500,000			3,500,000
seven-year maturity; first	2018.11.10	year; fixed interest rate at 1.95%
issue in 2011
Subordinated bank debentures -	2012.06.27-	Interest payable on June 27 each year;		3,000,000			3,000,000					-
seven-year maturity; first	2019.06.27	fixed interest rate at 1.75%
issue in 2012
Subordinated bank debentures -	2013.11.06-	Interest payable on November 6 each		4,000,000				-				-
seven-year maturity; first	2020.11.06	year fixed interest rate at 2.10%
issue in 2013
Subordinated bank debentures -	2005.06.28-	Interest payable on simple interest		3,960				4,460			90,900
seven-year maturity; 1-1	2012.06.28	every half year; floating interest
issue in 2005; acquired from		rate; repayable in five equal annual
Chinfon Bank		installments from the third year of
		issuance
Subordinated bank debentures -	Matured on	-			240			240				240
seven-year maturity; 1-1	2009.06.28
issue in 2002; acquired from
Chinfon Bank
Total bank debentures				22,904,200			22,904,700			19,991,140
Add: Unrealized valuation				98,403			167,423			239,140
loss (Note 9)
			$	23,002,603		$	23,072,123		$	20,230,280

The hedging transactions with regard to the above bank debentures are shown in Note 9.

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Euro convertible bonds

On February 7, 2013 (the “Issue Date”), the Bank issued five-year unsecured zero coupon convertible bonds (the “Bonds”) with an aggregate principal of US$150,000 thousand; these bonds were listed on the Singapore Exchange Securities Trading Limited. The minimum lot size for the Bonds trading is US$200 thousand. On the Issue Date, the liability component of the Bonds amounted to NT$4,009,661 thousand net of a discount of NT$471,589 thousand but including transaction costs of NT$38,252 thousand. The initial effective interest rate of the liability component was 2.63%. The conversion option derivative component of the Bonds amounted to NT$433,337 thousand. Other terms and conditions of the Bonds are described below:

a. Redemption at maturity

Unless the Bonds have been previously redeemed, converted or repurchased and canceled, the Bank shall redeem the Bonds at 101.89% of their principal amount in U.S. dollars on February 7, 2018 (the “Maturity Date”). But if this day is not a business day, bond redemption will be on the preceding business day.

b. Redemption at the option of the Bank
1) At any time on or after August 7, 2015, the Bank may redeem the Bonds in whole or piecemeal (being US$200 thousand in principal amount and integral multiples thereof) at the early redemption amount which represents the principal amount of the Bonds plus a gross yield of the principal amount of the Bonds if the closing price on the Taiwan Stock Exchange (the “TWSE”) of the common shares, translated into U.S. dollars at the prevailing rate, within 20 out of 30 consecutive trading days, is at least 130% of the quotient of the early redemption amount divided by the number of common shares to be issued upon conversion of the Bonds on the applicable trading day based on the conversion price then in effect, translated into U.S. dollars at the fixed exchange rate. The early redemption amount for the Bonds is so calculated to provide the bondholder a gross yield of 0.375% semi-annually.
2) The Bank may redeem all, but not a portion of, the Bonds at the early redemption amount if more than 90% of the principal amount of the Bonds has already been redeemed, converted or repurchased and canceled.
3) The Bank is obliged to pay additional amounts as a result of any change relating to taxation in the relevant jurisdiction or any change in the general application or official interpretation of tax laws or regulations, and this obligation cannot be avoided by the Bank even by taking reasonable measures.
c. Details of conversion
1) Converted shares: Newly issued common shares of the Bank (the “Shares”)
2) Conversion period: Unless the Bonds have been previously redeemed, converted or repurchased and canceled, the Bonds are convertible, at the option of the bondholder at any time on or after March 20, 2013, which is the 41st calendar day after the Issue Date, and prior to the close of business on January 28, 2018, which is the 10th calendar day prior to the Maturity Date for bond conversion into Shares. In addition, conversion rights shall not be exercised during the following closed periods:
- a) 60 days prior to the date of the annual general shareholders’ meeting, 30 days prior to the date of the special general shareholders’ meeting, or on the date at least 5 days prior to the record date for determination of shareholders entitled to receive annual dividend, bonus, or other benefits and rights;

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b) from the date at least 15 business days prior to the record date for any free distribution of shares, cash dividend, or rights to subscribe for new shares in a rights offering until the distribution of these rights, or from the record date for capital reduction until one day prior to the resumption of trading of the reissued shares following the capital reduction; and
c) any other period as determined by ROC laws.
3) Adjustments to conversion price: On any stock dilution or events stated in the Offering Memorandum that occur after the Issue Date, the conversion price shall be adjusted in accordance with the formula stated in the Offering Memorandum.
4) Conversion price: The original conversion price was NT$15.24 per share, which was adjusted to NT$14.24 per share on September 9, 2013 because dividends had been issued. The conversion price was further adjusted to NT$14.09 per share on January 28, 2014 because of the issuance of new shares for an overseas offering of Global Depository Receipts (at the fixed exchange rate of NT$29.569 to US$1.00).
5) Redemption at the option of the bondholders:
a) Unless the Bonds have been early redeemed, converted or repurchased, each bondholder has a put right to require the Bank to redeem in whole or in part only (being US$200 thousand in principal amount and integral multiples thereof) the Bonds at the early redemption amount on August 7, 2015.
b) In the event that Bank’s shares cease to be listed or admitted to trading on the TWSE (a “Delisting”), the Bank shall notify the bondholders accordingly, and each bondholder shall have the right to require the Bank to redeem the Bondholder’s Bonds, in whole or in part only (being US$200 thousand in principal amount and integral multiples thereof) at the Early Redemption Amount on the 20th business day after the date of this notice.
c) If the Bank has a change of control, the Bank shall notify the bondholders, and each bondholder shall have the right to require the Bank to redeem all or a part of the Bonds (being US$200 thousand in principal amount and integral multiples thereof) at the Early Redemption Amount on the 20th business day after the date of this notice.

25. OTHER FINANCIAL LIABILITIES

December 31, 2013 December 31, 2012 Securities sold under repurchase agreements $ 1,299,471 $ - Short-term loans 364,966 969,980 Principal of structured notes 214,247 730,962 Deposits received 181,807 207,093 Lease payable - 35 $ 2,060,491 $ 1,908,070	January 1, 2012 $ 213,870 1,369,929 459,005 168,404 78
	$ 2,211,286

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The securities sold under repurchase agreements are as follows: //

December 31, 2013 December 31, 2012 Government bonds $ 181,453 $ - Foreign bank debentures 1,118,018 - $ 1,299,471 $ - Repurchase date 2014.01.07- 2014.01.24 - Repurchase price $ 1,302,319 $ - The short-term loans are as follows: December 31, 2013 December 31, 2012 Bank loans $ 340,000 $ 920,000 Commercial paper 24,966 49,980 $ 364,966 $ 969,980 Interest rates on bank loans 1.32%-1.38% 1.32%-1.41% The status of commercial paper is as follows: December 31, 2013 December 31, 2012 International Bills Finance Corp. $ 25,000 $ 50,000 Ta Chong Bank - - 25,000 50,000 Less: Unamortized discount on commercial paper 34 20 $ 24,966 $ 49,980 Interest rates 1.40% 1.38% 26. PROVISIONS December 31, 2013 December 31, 2012 Employee benefits - defined benefit plans $ 609,401 $ 609,057 Reserve for guarantee obligations 144,724 80,673 Contingency reserve - 8,115 $ 754,125 $ 697,845	January 1, 2012 $ 213,870 -
	$ 213,870
	2012.01.02 $ 213,870 January 1, 2012 $ 1,120,000 249,929
	$ 1,369,929
	1.30%-1.56% January 1, 2012 $ 50,000 200,000 250,000 71 $ 249,929 0.77%-0.86% January 1, 2012 $ 620,865 65,454 4,361 $ 690,680

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27. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The pension plan under the Labor Pension Act (LPA) is a defined contribution plan. For employees subjected to LPA, the Bank and its subsidiaries make contributions to their individual pension accounts in the Department of Labor at 6% of their monthly salaries and wages.

b. Defined benefit plans

The Bank adopted the defined benefit plan under the Labor Standards Law, under which pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Bank contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name.

The plan assets are invested in domestic (foreign) equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of Bureau of Labor Funds, Ministry of Labor or under the mandated management. However, in accordance with Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund the return generated by employees' pension contribution should not be below the interest rate for a 2-year time deposit with local banks.

Far Eastern Life Insurance Agency Co., Ltd. contributes amounts equal to 2% of total monthly salaries and wages to a pension fund which is deposited in the Bank of Taiwan. Because the balance of the pension fund as of September 30, 2010 is sufficient for paying pension obligations, further contributions to the pension fund have been suspended since October 2010 with the approval of the Department of Labor.

The actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate Expected rate of return on plan assets Expected rate of salary increase	Measurement Date
	December 31, 2013 December 31, 2012 January 1, 2012 2.25% 1.75% 1.75% 1.50% 1.50% 2.00% 2.50% 2.50% 2.50%

The assessment of the overall expected rate of return was based on historical return trends and analysts’ predictions of the market for the asset over the life of the related obligation, by reference to the aforementioned use of the plan assets and the impact of the related minimum return.

Amounts recognized in profit or loss in respect of these defined benefit plans are as follows:

Current service cost Interest cost Expected return on plan assets Actuarial losses Past service cost	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 12,106 16,881 (4,325) 1,059 (1,200) $ 24,521	2012 $ 12,169 14,700 (5,386) - (1,200) $ 20,283

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Movements in the present value of the defined benefit obligations were as follows:

Opening defined benefit obligation Current service cost Interest cost Actuarial losses Contributions from plan assets Benefits paid Closing defined benefit obligation	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 978,015 12,106 16,881 21,361 (18,868) (4,568) $ 1,004,927	2012 $ 857,300 12,169 14,700 109,843 (2,520) (13,477) $ 978,015

The amount included in the consolidated balance sheet arising from the Bank’s obligation in respect of its defined benefit plans was as follows:

December 31, 2013 December 31, 2012 Present value of defined benefit obligation $ 1,004,927 $ 978,015 Fair value of plan assets (283,869) (279,571) Deficit 721,058 698,444 Unrecognized actuarial loss, net (133,701) (112,631) Unrecognized past service cost 22,044 23,244 Employee benefits $ 609,401 $ 609,057	January 1, 2012 $ 857,300 (260,879) 596,421 - 24,444 $ 620,865

Movements in the fair value of the plan assets were as follows:

Opening fair value of plan assets Expected return on plan assets Actuarial losses Contributions from the employer Contributions from plan assets Closing fair value of plan assets	For the Year Ended	For the Year Ended	December 31
		2013 $ 279,571 4,325 (768) 19,609 (18,868) $ 283,869	2012 $ 260,879 5,386 (2,788) 18,614 (2,520) $ 279,571

The major categories of plan assets at the end of the reporting period for each category were disclosed based on the information announced by Bureau of Labor Funds, Ministry of Labor:

	December 31,	December 31,	January 1,
	2013	2012	2012
Equity instruments	44.77%	39.42%	40.75%
Debt instruments	31.58%	36.82%	35.25%
Deposits in banks	22.86%	23.69%	23.87%
Others	0.79%	0.07%	0.13%
	100.00%	100.00%	100.00%

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The Bank chose to disclose the history of experience adjustments as the amounts determined for each accounting period prospectively from the date of transition to IFRSs:

December 31, 2013 December 31, 2012 Present value of defined benefit obligation $ 1,004,927 $ 978,015 Fair value of plan assets $ 283,869 $ 279,571 Deficit $ 721,058 $ 698,444 Experience adjustments on plan liabilities $ (91,302) $ (52,368) Experience adjustments on plan assets $ (768) $ (2,788)	January 1, 2012 $ 857,300 $ 260,879 $ 596,421 $ - $ -

The Bank expects to make a contribution of NT$20,099 thousand and NT$19,609 thousand, respectively, to the defined benefit plans during the annual period beginning after 2013 and 2012.

28. OTHER LIABILITIES

December 31, 2013 December 31, 2012 Advance receipts $ 266,152 $ 277,618 Deferred revenue - customer loyalty programmes 91,718 89,108 Temporary receipts 40,995 49,119 Others 16,101 16,529 $ 414,966 $ 432,374	January 1, 2012 $ 270,537 106,517 32,486 17,897 $ 427,437

29. EQUITY

a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Amount of shares authorized Number of shares issued and fully paid (in thousands) Shares issued	December 31, 2013 4,500,000 $ 45,000,000 2,362,118 $ 23,621,182	December 31, 2012 4,500,000 $ 45,000,000 2,242,260 $ 22,422,596	January 1, 2012 4,500,000
			$ 45,000,000
			2,118,560
			$ 21,185,604

Ordinary common shares issued, which have a par value of $10, carry one vote per share and carry a right to dividends.

b. Capital surplus

The capital surplus arising from shares issued in excess of par and treasury stock transactions may be used to offset a deficit, or, if the Bank has no deficit, distributed as cash dividends or transferred to capital (limited to a certain percentage of the Bank’s paid-in capital and once a year). However, capital surplus arising from investments accounted for using equity method may not be used for any purpose.

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c. Retained earnings and dividend policy

The Bank’s Articles of Incorporation provide that the appropriations from the Bank’s annual earnings less its losses and all taxes and dues must be in the following order:

1) 30% as legal reserve;
2) Special reserve based on the relevant law or regulations; and
3) A portion to be retained on the basis of operational needs.
4) Any remainder:

	%
Shareholders’ bonus	92
Remuneration to directors and supervisors	2
Employees’ bonus	6
	100

The dividend policy of the Bank will be evaluated and adjusted after taking into account such factors as the present environment and future operation plans, and its cash dividends should not be less than 10% of total dividends distributed.

The Banking Law provides that, unless legal reserve reached the Bank’s paid-in capital, cash dividends are limited to 15% of paid-in capital.

Under the Company Law, legal reserve should be appropriated until it has reached the Bank’s paid-in capital. This reserve may be used to offset a deficit. According to an amendment to the Company Law, when the Bank has no deficit and its legal reserve has exceeded 25% of its paid-in capital, the excess may be distributed in the form of stocks or cash.

The appropriations of earnings for the 2012 and 2011, which were approved in the shareholders’ meetings on June 19, 2013 and June 26, 2012, respectively, were as follows:

Legal reserve Special reserve Cash dividends Stock dividends		Appropriation of Earnings 2012 2011 $ 769,012 $ 711,970 173,800 - 515,720 529,640 1,105,434 1,131,311 $ 2,563,966 $ 2,372,921	Dividends Per Share (Dollars)
		2012 $ 769,012 173,800 515,720 1,105,434 $ 2,563,966	2012 2011 $ 0.230 $ 0.250 0.493 0.534

The employees’ bonus (in stocks) and the remuneration to directors and supervisors approved in the foregoing shareholders’ meetings were NT$140,970 thousand and NT$144,431 thousand on the earnings of 2012 and 2011, respectively, and were not different from the accrual amount recognized in the 2012 and 2011 financial statements.

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The appropriations of earnings, employees’ bonus and the remuneration to directors and supervisors for 2012 were proposed according to the Bank’s financial statements for the year ended December 31, 2012, which were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks and the Generally Accepted Accounting Standard in the Republic of China (“ROC GAAP”).

The employees’ stock bonus for 2012 of 9,315 thousand shares was determined at NT$11.35 per share, the closing price of the Bank’s ordinary share (after considering the effect of cash and stock dividends) of the day preceding the shareholders’ meeting. As a result, the capital surplus of 2013 increased by NT$12,575 thousand. The employees’ stock bonus for 2011 of 10,568 thousand shares was determined at NT$10.25 per share, the closing price of the Bank’s ordinary share (after considering the effect of cash and stock dividends) of the day preceding the shareholders’ meeting. As a result, the capital surplus of 2012 increased by NT$2,642 thousand.

Under Rule No. 100116 and Rule No. 0950000507 issued by the FSC, an amount equal to the net debit balance of shareholders’ other equity items (including exchange differences on translating foreign operations, unrealized gain (loss) on available-for-sale financial assets, and the gain or loss on the hedging instrument relating to the effective portion of cash flow hedge) shall be transferred from unappropriated earnings to a special reserve before any appropriation of earnings generated before January 1, 2012 shall be made. Any special reserve appropriated may be reversed to the extent of the decrease in the net debit balance.

Under the Integrated Income Tax System, ROC-resident shareholders will be allocated imputation credit for the distribution of earnings that the Bank generated after January 1, 1998, the balance of which is maintained in the imputation credits account (ICA). The allocation of imputation credits is based on a creditable tax ratio, which is determined on the dividend ex-right date.

The Bank’s foreign shareholders are not entitled to the imputation credits, except those related to the 10% income tax on unappropriated earnings actually paid by the Bank. If dividends distributed to foreign shareholders are from the earnings subject to an additional 10% income tax, the tax can be used by the foreign shareholders to reduce the final withholding tax on their dividends income.

The appropriations of earnings for 2013 had been proposed by the Bank’s Board of Directors on March 4, 2014. The appropriations and dividends per share were as follows:

	Appropriation	Appropriation	Dividends Per
	of	Earnings	Share (NT$)
Legal reserve	$	871,132
Special reserve		124,400
Cash dividends		681,780	$ 0.250
Share dividends		1,224,476	0.449
	$	2,901,788

The employees’ bonus (in stocks) and the remuneration to directors and supervisors proposed in the foregoing Board of Directors meetings were NT$124,321 thousand and NT$41,440 thousand, respectively, on earnings of 2013. The proposed amounts were the same as the estimates made in 2013 according to the Bank’s Article of Incorporation. If the actual amounts approved by the shareholders differ from the proposed amounts, the differences are recorded in the year of shareholders’ resolution as a change in accounting estimate.

The appropriations of earnings, employees’ bonus, and the remuneration to directors and supervisors for 2013 are subject to the resolution of the shareholders’ meeting to be held on June 24, 2014.

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Information on the employees’ bonus and the remuneration to directors and supervisors is available on the Market Observations Post System Website of the Taiwan Stock Exchange.

d. Special reserve appropriated following Rule No. 1010012865 issued by the FSC

Under Rule No. 1010012865 issued by the FSC on April 6, 2012 and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, on the first-time adoption of IFRSs, a company should appropriate to a special reserve of an amount that was the same as these of unrealized revaluation increment and cumulative translation differences (gains) transferred to retained earnings as a result of the company’s use of exemptions under IFRS 1. However, at the date of transitions to IFRSs, if the increase in retained earnings that resulted from all IFRSs adjustments is not sufficient for this appropriation, only the increase in retained earnings that resulted from all IFRSs adjustments will be appropriated to special reserve. The special reserve appropriated as above may be reversed in proportion to the usage, disposal or reclassification of the related assets and thereafter distributed. The special reserve appropriated on the first-time adoption of IFRSs may be used to offset deficits in subsequent years. No appropriation of earnings shall be made until any shortage of the aforementioned special reserve is appropriated in subsequent years if the company has earnings and the original need to appropriate a special reserve is not eliminated.

The Bank had no unrealized revaluation increment, and cumulative translation adjustments had not been elected the use of exemptions under IFRS 1; therefore, no special reserve was appropriated on the first-time adoption of Taiwan-IFRSs.

On the first-time adoption of Taiwan-IFRSs, a company should appropriate to a special reserve an amount that is the same as the net debit balance of shareholders’ other equity items that arose in the current year and were transferred to retained earnings. At the date of transitions to Taiwan-IFRSs, if the increase in retained earnings that resulted from all Taiwan-IFRSs adjustments is not sufficient for this appropriation, only the increase in retained earnings that resulted from all Taiwan-IFRSs adjustments will be appropriated to special reserve. Distributions can be made out of any subsequent reversal of the debit to other equity items.

e. Other equity items

Movements of unrealized gain (loss) on available-for-sale financial assets under equity attributable to owners of the Bank were as follows:

Balance, beginning of the year Unrealized gain (loss) on available-for-sale financial assets Cumulative gain reclassified to profit or loss on sale of available-for-sale financial assets Share of unrealized loss on available-for-sale financial assets of associates Balance, end of the year	For the Year Ended	For the Year Ended	December 31
		2013 $ (173,800) (130,621) 5,268 (15,308) $ (314,461)	2012 $ 10,252 66,998 (239,635) (11,415) $ (173,800)

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30. NET INTEREST INCOME

Interest income Discounts and loans Credit cards Due from the Central Bank Bonds Recovered portion of written-off loans Others Interest cost Deposits and remittances Automobile financing obligations Bank debentures Others Net interest income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 9,029,985 936,003 607,783 296,999 205,346 187,805 11,263,921 3,311,560 2,414,119 475,285 178,590 6,379,554 $ 4,884,367	2012 $ 7,439,321 936,654 674,492 281,515 119,634 192,649 9,644,265 3,557,707 1,367,675 364,158 209,580 5,499,120 $ 4,145,145

31. NET SERVICE FEE INCOME

Service fee income Consigned funds and insurance Credit cards Credit business Others Service fee expense Agency service fee Visa and Master National Credit Card Center fee Outsourcing fee for collection Credit investigation Interbank service fee Others Net service fee income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 1,244,492 952,297 874,306 354,111 3,425,206 102,093 101,664 85,029 75,169 41,682 35,527 87,903 529,067 $ 2,896,139	2012 $ 1,089,828 999,655 669,955 319,633 3,079,071 92,627 88,487 73,726 76,525 44,594 35,798 95,392 507,149 $ 2,571,922

125

32. NET GAIN ON FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Net interest income Dividends Realized gains (losses) Derivative instruments Convertible bonds Others Gains (losses) on valuation Derivative instruments Convertible bonds Others Net gains	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 63,406 8,676 1,691,011 243,718 18,634 1,953,363 (2,236,821) 1,311,632 (2,458) (927,647) $ 1,097,798	2012 $ 43,346 8,326 573,463 740,401 (40,429) 1,273,435 669,882 (936,063) 11,690 (254,491) $ 1,070,616

33. NET GAIN ON AVAILABLE-FOR-SALE FINANCIAL ASSETS

Dividends Stocks Bonds Others	For the Year Ended	For the Year Ended	December 31
		2013 $ 52,670 38,804 (44,024) (48) $ 47,402	2012 $ 63,476 156,122 83,513 - $ 303,111

34. NONINTEREST INCOME AND GAINS - OTHERS

Gains on financial assets measured at cost - cash dividends Claim settlement of credit loan Sponsorship from Visa Gains on recovered debt investments with no active market Gains on recovered security deposits Others	For the Year Ended	For the Year Ended	December 31
		2013 $ 14,136 10,770 4,789 - - 27,832 $ 57,527	2012 $ 14,238 13,189 32,420 56,174 18,627 15,865 $ 150,513

126

35. EMPLOYEE BENEFITS EXPENSE

Salaries and bonus Employee insurance Temporary employee Employees’ bonus, remuneration to directors and supervisors Post-employment benefits Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 2,675,133 206,153 174,318 172,540 131,964 184,520 $ 3,544,628	2012 $ 2,499,866 193,002 257,466 147,267 125,030 192,746 $ 3,415,377

36. DEPRECIATION AND AMORTIZATION

Depreciation Amortization	For the Year Ended	For the Year Ended	December 31
		2013 $ 189,220 $ 41,299	2012 $ 212,395 $ 40,956

37. OTHER GENERAL AND ADMINISTRATIVE EXPENSES

Advertising Rental Tax and government fees Telecommunications Software Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 474,946 415,317 372,018 173,559 156,865 625,274 $ 2,217,979	2012 $ 453,317 413,360 335,155 170,323 158,432 651,381 $ 2,181,968

38. INCOME TAX EXPENSE

a. Income tax recognized in profit or loss

The major components of tax expenses were as follows:

Current tax expense Current period Prior years Deferred tax expense Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2013 $ 159,712 (9,478) 150,234 351,603 $ 501,837	2012 $ 173,298 3,707 177,005 187,187 $ 364,192

127

A reconciliation of accounting income and income tax expense is as follows:

Income before income tax Income tax expense calculated at the statutory rate Tax effect of adjusting items: Permanent differences Temporary differences Loss carryforwards used Additional income tax under the Alternative Minimum Tax Act Overseas branch income tax Current income tax expense Adjustments for prior years’ tax Deferred income tax expense Loss carryforwards Temporary differences Investment tax credits Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 3,563,107 $ 635,322 (182,079) 199,103 (615,800) 96,386 26,780 159,712 (9,478) 547,682 (197,765) 1,686 $ 501,837	2012 $ 2,914,957 $ 520,668 (257,816) 56,336 (307,808) 133,180 28,738 173,298 3,707 207,214 (23,455) 3,428 $ 364,192

The applicable tax rate used above is the corporate tax rate of 17% payable by the Bank and its subsidiaries in the ROC.

The outcome of the 2014 appropriation of the 2013 earnings is uncertain; thus, the potential tax consequences of the additional 10% tax on the 2013 unappropriated earnings could not be reliably estimated. As of December 31, 2013, the Bank and its subsidiaries had not recognized the additional tax at 10% of unappropriated earnings.

b. Current tax assets and liabilities

December 31, 2013 December 31, 2012 Current tax assets Tax refund receivable $ 1,003 $ 167 Current tax liabilities Income tax payable $ 10,870 $ 113,131	January 1, 2012 $ 176 $ 124,723

c. Deferred tax assets

The movements of deferred tax assets were as follows:

For the year ended December 31, 2013

	Beginning	Beginning	Recognized in	Recognized in		Ending
Deferred Tax Assets		Balance	Profit or Loss			Balance
Temporary differences
Unused loss carryforwards	$	613,741	$	(547,682)	$	66,059
Unused investment tax credit		1,686		(1,686)		-
						(Continued)

128

	Beginning	Beginning	Recognized in	Recognized in		Ending
Deferred Tax Assets		Balance	Profit or Loss			Balance
Allowance for possible losses in excess of
the limit	$	286,491	$	93,345	$	379,836
Pension cost in excess of the limit		81,289		56		81,345
Unrealized gain on financial instruments		(67,012)		105,806		38,794
Others		12,380		(1,442)		10,938
	$	928,575	$	(351,603)	$	576,972
						(Concluded)
For the year ended December 31, 2012
	Beginning		Recognized in			Ending
Deferred Tax Assets		Balance	Profit or Loss			Balance
Temporary differences
Unused loss carryforwards	$	820,955	$	(207,214)	$	613,741
Unused investment tax credit		5,114		(3,428)		1,686
Allowance for possible losses in excess of
the limit		244,420		42,071		286,491
Pension cost in excess of the limit		83,076		(1,787)		81,289
Unrealized gain on financial instruments		(50,091)		(16,921)		(67,012)
Others		12,288		92		12,380
	$	1,115,762	$	(187,187)	$	928,575
Unused loss carryforwards for which no deferred tax assets have			been	recognized in the		consolidated
balance sheets
	December 31,		December 31,		January 1,
		2013		2012		2012
Loss carryforwards
The Bank
Expire in 2018	$	994,577	$	1,448,144	$	2,060,812
Expire in 2021		133,968		133,968		-
	$	1,128,545	$	1,582,112	$	2,060,812
Far Eastern International Securities Co., Ltd
Expire in 2018	$	66,641	$	66,641	$	66,641
Expire in 2019		108,343		108,343		108,343
Expire in 2020		53,563		53,563		53,563
Expire in 2021		38,085		38,085		37,312
Expire in 2022		22,380		22,613		-
Expire in 2023		10,935		-		-
	$	299,947	$	289,245	$	265,859
						(Continued)

d. Unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

129

December 31, 2013 December 31, 2012 Far Eastern Insurance Brokerage Co., Ltd. Expire in 2019 $ - $ - Expire in 2020 1,991 1,617 Expire in 2021 2,413 2,413 Expire in 2022 555 - $ 4,959 $ 4,030	January 1, 2012 $ 860 2,476 2,413 - $ 5,749 (Concluded)

e. Information about unused loss carryforwards

As of December 31, 2013, loss carryforwards comprised:

Expiry Year The Bank 2018 2021 Far Eastern International Securities Co., Ltd. 2018 2019 2020 2021 2022 2023 Far Eastern Insurance Brokerage Co., Ltd. 2020 2021 2023	Unused Amount $ 1,383,161 (assessed) 133,968(assessed) $ 1,517,129 $ 66,641 (assessed) 108,343 (assessed) 53,563 (assessed) 38,085 (assessed) 22,380 (assessed) 10,935(estimated) $ 299,947 $ 1,991 (assessed) 2,413 (assessed) 555(estimated) $ 4,959

f. Integrated income tax

Unappropriated earnings of the Bank were all generated from January 1, 1998.

	December 31,	December 31,	January 1,
	2013	2012	2012
Imputation credits accounts	$ 25,978	$ 11,122	$ 23,184

130

The creditable ratios for the distribution of earnings of 2013 and 2012 were 4.21% (expected) and 8.25%, respectively.

Under the Income Tax Law, for distribution of earnings generated from January 1, 1998, the imputation credits allocated to ROC resident shareholders of the Bank were calculated on the basis of the creditable ratio as of the date of dividend distribution. The actual imputation credits allocated to shareholders of the Bank were based on the balance of the Imputation Credit Accounts (ICA) as of the date of dividend distribution. Therefore, the expected creditable ratio for the 2013 earnings may differ from the actual creditable ratio to be used in allocating imputation credits to the shareholders.

According to legal interpretation No. 10204562810 announced by the Taxation Administration of the Ministry of Finance on October 17, 2013, when calculating imputation credits in the year of first-time adoption of Taiwan-IFRSs, the cumulative retained earnings include the net increase or net decrease in retained earnings arising from the first-time adoption of Taiwan-IFRSs.

g. Income tax assessments

The income tax returns of the Bank, Far Eastern Assets Management Co., Ltd., Far Eastern Life Insurance Agency Co., Ltd. and Far Eastern Insurance Brokerage Co., Ltd. through 2011 had been assessed by the tax authorities. The income tax returns of Far Eastern Property Insurance Agency Co., Ltd. and Far Eastern International Securities Company Ltd. through 2012 had been assessed by the tax authorities.

39. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share (EPS) was based on the net income attributable to the Bank’s shareholders; the numerators and denominators used in calculating basic and diluted earnings per share were as follows:

Basic EPS Diluted EPS	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31
		2013 $ 1.30 $ 1.20	2012 $ 1.09 $ 1.08

The net income and weighted average number of ordinary shares outstanding for EPS calculation were as follows:

Net Income for the Year

Net income attributable to owners of the Bank Effect of dilutive potential ordinary shares Interest and valuation on Euro convertible bonds Net income used in the computation of diluted EPS	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 3,061,270 106,215 $ 3,167,485	2012 $ 2,550,765 - $ 2,550,765

131

Weighted Average Number of Ordinary Shares Outstanding (In Thousand Shares)

Weighted average number of ordinary shares in the computation of basic EPS Effect of dilutive potential ordinary shares Euro convertible bonds Employees’bonus Weighted average number of ordinary shares used in the computation of diluted EPS	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 2,355,713 279,897 14,299 2,649,909	2012 2,344,683 - 14,200 2,358,883

The weighted average number of ordinary shares outstanding for EPS calculation was retroactively adjusted for the issuance of stock dividends. The basic and diluted after-tax EPS were adjusted retrospectively as follows:

Basic EPS Diluted EPS	For the Year Ended December 31, 2012
	After Adjustment Before Adjustment $ 1.09 $ 1.14 $ 1.08 $ 1.13

Employees’ bonus for the current year should be considered in calculating the weighted-average number of shares outstanding used for calculating diluted EPS, and the number of bonus shares is estimated by dividing the entire amount of the bonus by the closing share price at the balance sheet date. The dilutive effect of the potential shares should be included in the calculation of diluted EPS until the shareholders resolve the number of shares to be distributed as employees’ bonus at their meeting in the following year.

40. RELATED-PARTY TRANSACTIONS

The Bank and its subsidiaries had business transactions with the following related parties:

Related Party
Yuan Long Stainless Steel Co., Ltd.
Far Eastern New Century Corp.
Ding Ding Integrated Marketing Service Co.
Asia Cement Corp.
Far Eastern Department Store Corp.
Yuan Ding Co., Ltd.
Far Eastern Geant Co., Ltd.
Bai Ding Investment Co.
Ding Ding Hotel Co., Ltd.
New Century InfoComm Tech Co., Ltd.
U-Ming Marine Transport Corp.
Yuan Ding Investment Co.

Relationship with the Bank and Its Subsidiaries

Equity-method investee of Far Eastern Asset
Management Co., Ltd.
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
Chairman is the vice-chairman of the Bank
(Continued)

132

Related Party

Relationship with the Bank and Its Subsidiaries

Bai Yang Investment Co. Director of the Board is the vice-chairman of the Bank Dah Chung Bills Finance Corp. Equity-method investee Far Eastern International Leasing Corp. (FEIL) Chairman of FEIL’s major shareholder is the vice-chairman of the Bank U-Ming Marine Transport (Singapore) Private, Ltd Chairman of parent company is the vice-chairman of the Bank Everest Textile Co., Ltd. Chairman is a second-degree relative of the vice chairman of the Bank Far Eastern City Super Co., Ltd. Chairman is a second-degree relative of the vice chairman of the Bank Others The Bank’s supervisors, managers, chairman, vice-chairman, or their second-degree relatives (Concluded)

The significant transactions and account balances with the above parties (in addition to those disclosed in other notes) are summarized as follows:

a. Loans to other banks

Related Party Highest Balance in Current Year Dah Chung Bills Finance Corp. For the year ended December 31 2013 $ 1,200,000 2012 $ 1,275,000	Ending Balance $ 700,000 $ 570,000	Interest Income Interest Rates $ 871 0.39%-0.44% $ 2,999 0.41%-0.72%

b. Loans

Highest Balance in Current Category Related Party Year For the year ended December 31, 2013 Consumer loans Three individuals $ 1,332 Loans for residential mortgage Thirteen individuals 90,502 Others Yuan Long Stainless Steel Co., Ltd. 1,845,000 Far Eastern International Leasing Corp. 847,000 Yuan Ding Co., Ltd. 450,000 Far Eastern New Century Corp. 616,777 Asia Cement Corp. 800,000 Bai Ding Investment Co. 500,000 Bai Yang Investment Co. 383,000 Far Eastern Geant Co., Ltd. 200,000 Yuan Ding Investment Co. 200,000 U-Ming Marine Transport Corp. 200,000 Everest Textile Co., Ltd. 194,305	Ending Balance $ 1,012 79,936 1,845,000 650,000 120,000 12,220 - - - - - - - $ 2,708,168	Normal Loans $ 1,012 79,936 1,845,000 650,000 120,000 12,220 - - - - - - - $ 2,708,168	Nonperforming Transactions Terms Different from Those for Unrelated Loans Collateral Parties $ - Unsecured loan Note - Real estate Note - Real estate and machinery Note - Real estate Note - Unquoted stock Note - Machinery Note - Listed and OTC stock Note - Listed, OTC and unquoted stock Note - Unquoted stock Note - Real estate Note - Unquoted stock Note - Listed stock Note - Real estate Note $ -

(Continued)

133

Highest Balance in Current Category Related Party Year For the year ended December 31, 2012 Consumer loan Three individuals $ 1,257 Loans for residential mortgage Nine individuals 72,358 Others Yuan Long Stainless Steel Co., Ltd. 1,850,000 Bai Ding Investment Co. 454,000 Bai Yang Investment Co. 383,000 U-Ming Marine Transport Corp. 2,000,000 Far Eastern Geant Co., Ltd. 100,000 Far Eastern New Century Corp. 37,701 Everest Textile Co., Ltd. 90,899 Far Eastern Department Store Corp. 550,000 Asia Cement Corp. 30,000	Ending Balance $ 556 48,013 1,845,000 454,000 383,000 200,000 30,000 5,264 4,413 - - $ 2,970,246	Normal Loans $ 556 48,013 1,845,000 454,000 383,000 200,000 30,000 5,264 4,413 - - $ 2,970,246	Nonperforming Transactions Terms Different from Those for Unrelated Loans Collateral Parties $ - Unsecured loan Note - Real estate Note - Real estate and machinery Note - Listed, OTC and unquoted stock Note Unquoted stock Note - Listed stock Note - Real estate Note - Machinery Note - Real estate Note - Listed, OTC and unquoted stock Note - Listed and OTC stock Note $ -

(Concluded)

Note: The terms of the loans were no superior to those for unrelated parties.

	Interest Rate	Interest Income
For the year ended December 31
2013	1.08%-2.38%	$ 41,468
2012	1.10%-2.38%	$ 42,118

c. Guarantees

Highest
Balance in
Current
Related Party
Year
For the year ended December 31, 2013
Ding Ding Hotel Co., Ltd.
$ 43,000
Yuan Long Stainless Steel Co., Ltd.
60,000
Everest Textile Co., Ltd.
311,676
Yuan Ding Co., Ltd.
11,000
Far Eastern City Super Co., Ltd.
3,000
For the year ended December 31, 2012
Everest Textile Co., Ltd.
$ 311,676
Ding Ding Hotel Co., Ltd.
46,000
Yuan Long Stainless Steel Co., Ltd.
60,000
Yuan Ding Co., Ltd.
14,000
Far Eastern City Super Co., Ltd.
3,000

Ending
Reserve for
Guarantee
Balance
Obligations
Interest Rate
Collateral
$ 38,000
$ 190
0.50%
Certificates of
deposit
30,000
150
0.60%
Real estate and
machinery
12,514
63
0.75%
Real estate
11,000
55
0.50%
Unquoted stock
3,000
15
0.60%
Certificates of
deposit
$ 94,514
$ 473
$ 311,676
$ 1,558
0.60%-0.75%
Real estate
43,000
215
0.50%
Certificates of
deposit
30,000
150
0.60%
Real estate and
machinery
11,000
55
0.50%
Unquoted stock
3,000
15
0.60%
Certificates of
deposit
$ 398,676
$ 1,993

134

d. Letters of credit issued

	December 31,	December 31,	December 31,	January	1,
	2013		2012	2012
Everest Textile Co., Ltd.	$ 70,934	$	3,864	$	-
Asia Cement Corp.	-		7,118		-
	$ 70,934	$	10,982	$	-

e. Security transactions - buy and sell

												Resale			Repurchase
		Held for Trading				Available-for-sale						Short Sales Agreement -		Agreement -
	Buy			Sell		Buy		Sell			Buy	Sell Bonds			Bonds
Dah Chung Bills Finance Corp.
For the year ended December 31
2013	$ 2,050,000		$	1,350,000 $		50,000	$		-	$	100,000 $ 200,000 $ 123,751,482			$	349,828
2012	$ 500,000		$	550,000 $		100,000	$		-	$	350,000 $ 250,000 $ 26,344,141			$	50,065
Derivative financial instruments
	Derivative financial				Contract	Nominal			Valuation			Balance Sheet
Related Party	Instrument				Period	Amount			Gain (Loss)			Account		Balance
For the year ended
December 31, 2013
Asia Cement Corp.	Cross-currency swap			2011.03.28 -		$ 9,134,750			$	119,911		Financial assets at fair value through	$		14,056
	contracts				2016.05.10							profit or loss
												Financial liabilities at fair value			99,748
												through profit or loss
U-Ming Marine	Cross-currency swap			2013.04.26 -		6,648,900				15,922		Financial assets at fair value through			4,870
Transport Corp.	contracts				2014.11.07							profit or loss
												Financial liabilities at fair value			41,453
												through profit or loss
U-Ming Marine	Interest rate	swap		2012.10.25 -			969,631			(957)		Financial liabilities at fair value			987
Transport (Singapore)	contracts				2022.10.25							through profit or loss
Private, Ltd.
Far Eastern New	Forward exchange			2013.11.04 -			787,683			(4,509)		Financial assets at fair value through			7,446
Century Corp.	contracts				2014.04.07							profit or loss
												Financial liabilities at fair value			12,083
												through profit or loss
Dah Chung Bills	Convertible	bond asset		2011.01.04 -			348,000			1,316		Financial assets at fair value through			45
Finance Corp.	swap contracts				2016.12.20							profit or loss
												Financial liabilities at fair value			872
												through profit or loss
New Century InfoComm	Foreign-currency swap			2013.12.25 -			149,750			(1,485)		Financial liabilities at fair value			500
Tech Co., Ltd.	contracts				2014.01.10							through profit or loss
For the year ended
December 31, 2012
U-Ming Marine	Cross-currency swap			2012.04.09 -		8,624,256				23,701		Financial assets at fair value through			134,699
Transport Corp.	contracts				2013.11.08							profit or loss
Asia Cement Corp.	Cross-currency swap			2011.03.28 -		8,012,400				(3,665)		Financial assets at fair value through			16,747
	contracts				2014.01.23							profit or loss
U-Ming Marine	Interest rate	swap		2012.10.25 -			943,278				(30)	Financial liabilities at fair value			30
Transport (Singapore)	contracts				2022.10.25							through profit or loss
Private, Ltd.
Far Eastern New	Forward exchange			2012.12.06 -			164,439			(1,369)		Financial assets at fair value through			904
Century Corp.	contracts				2013.01.30							profit or loss
												Financial liabilities at fair value			1,031
												through profit or loss
Dah Chung Bills	Convertible	bond asset		2011.01.14 -			360,000			(1,095)		Financial assets at fair value through			29
Finance Corp.	swap contracts				2015.07.12							profit or loss
												Financial liabilities at fair value			2,173
												through profit or loss
New Century InfoComm	Foreign-currency swap			2012.12.17 -			874,080			222		Financial assets at fair value through			985
Tech Co., Ltd.	contracts				2013.01.08							profit or loss

f. Derivative financial instruments

135

g. Deposits

Deposits of related parties (each account balance did not exceed 5% of total deposits) Interest expense h. Operating expenses		December 31, 2013 December 31, 2012 Amount Interest Rate Amount Interest Rate $ 33,539,756 0%-6.36% $ 35,424,892 0%-6.37% For the Year Ended December 31 2013 2012 $ 381,459 $ 460,404	December 31, 2013 December 31, 2012 Amount Interest Rate Amount Interest Rate $ 33,539,756 0%-6.36% $ 35,424,892 0%-6.37% For the Year Ended December 31 2013 2012 $ 381,459 $ 460,404		December 31, 2012	December 31, 2012

					2013 $ 381,459	2012 $ 460,404

Rental - Yuan Ding Co., Ltd. Telecommunications - New Century InfoComm Tech Co., Ltd. Advertising expense - Ding Ding Integrated Marketing Service Co. Advertising expense - Far Eastern Department Store Corp. Advertising expense - Ding Ding Hotel Co., Ltd.		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2013 Amount % to Total $ 62,054 1 45,805 1 196,307 3 37,955 1 16,930 - $ 359,051 6		2012
				Amount % to Total $ 75,403 2 48,873 1 137,139 2 67,988 1 11,701 - $ 341,104 6

The Bank rented part of their office premises from Yuan Ding Co., Ltd. Based on the lease agreements, the rents were payable monthly.

i. Disposal of buildings and land held for sale

In June 2012, Far Eastern Asset Management Co., Ltd. sold buildings and land held for sale, with book value of NT$278,000 thousand, to Far Eastern Resources Development Co., Ltd. for NT$278,131 thousand. Far Eastern Asset Management Co., Ltd. recognized a loss of NT$1,945 thousand after deducting the land value increment tax of NT$2,076 thousand.

j. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended	For the Year Ended	December 31
		2013 $ 140,313 2,085 $ 142,398	2012 $ 124,974 1,754 $ 126,728

136

The compensation of key management personnel was determined by reference to a comprehensive consideration of the market level of payments in banking industry, personal performance, the Bank’s long-term operating performance and future operational risk, etc. The remuneration committee evaluated the reasonableness of the compensation of management, and made recommendations to the Board of Directors.

41. PLEDGED ASSETS

December 31, 2013 December 31, 2012 Due from the Central Bank and other banks - certificates of deposit $ 4,000,000 $ 3,000,000 Available-for-sale financial assets - government bonds 2,625,000 2,647,600 $ 6,625,000 $ 5,647,600	January 1, 2012 $ 2,500,000 671,100
	$ 3,171,100

The certificates of deposit issued by the Central Bank have been pledged as collaterals to back the extension of intraday credit in the Central Bank’s real-time gross settlement system. The balance of intraday credit and the amount of collateral may vary at any time. The terms of government bonds had been provided as the reserve for compensation of Trust Department as well as security bond for provisional seizures of the debtors’ properties.

42. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those mentioned in Note 46, the Bank and its subsidiaries’ contingency liabilities and commitments resulting from operating activities as of December 31, 2013, December 31, 2012 and January 1, 2012 are summarized as follows:

a. Operating leases

The maturity analysis of rental payments under non-cancellable operating leases was as follows:

December 31, 2013 December 31, 2012 Within one year $ 341,143 $ 308,276 After one year but within five years 611,766 621,932 After five years 106,588 119,872 $ 1,059,497 $ 1,050,080	January 1, 2012 $ 333,389 799,907 66,678
	$ 1,199,974

137

b. Balance sheets and income statements of trust accounts and trust assets lists were as follows:

Balance Sheets of Trust Accounts

Assets Deposits in banks Accounts receivable Prepayment Funds Common stocks Real estate, net Marketable securities in custody Others Total Liabilities Payables Income tax payable Marketable securities in custody payable Trust capital Reserve and earnings Total		December 31	December 31
		2013 $ 6,906,582 11,372 3,714 40,020,561 5,465,302 395,188 2,543,801 307,364 $ 55,653,884 $ 2,696 134 2,543,801 51,669,151 1,438,102 $ 55,653,884	2012 $ 4,022,155 2,217 15,841 38,729,267 4,662,675 274,663 2,159,304 207,256 $ 50,073,378 $ 2,088 134 2,159,304 47,335,993 575,859 $ 50,073,378

Income Statements of Trust Accounts

Trust revenue Interest Cash dividends Realized investment gain Unrealized investment gain Revenue from stock lending Others Trust expenses Management Supervision Service charges Taxes Service fee for stock affairs Service fee for stock lending Realized investment loss Unrealized investment loss Income before tax Income tax Net income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 36,572 1,404,805 112,495 598,885 2,875 2,789 2,158,421 35,095 309 4,607 507 48 15 - - 40,581 2,117,840 11,283 $ 2,106,557	2012 $ 26,105 1,163,338 - - 2,978 - 1,192,421 27,065 314 563 333 50 15 518,791 257,732 804,863 387,558 1,979 $ 385,579

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Trust Asset Lists

Deposits in banks Accounts receivable Prepayment Funds Common stocks Real estate, net Land Building Construction in progress Marketable securities in custody Others Total		December 31	December 31
		2013 $ 6,906,582 11,372 3,714 40,020,561 5,465,302 219,799 43,728 131,661 2,543,801 307,364 $ 55,653,884	2012 $ 4,022,155 2,217 15,841 38,729,267 4,662,675 122,832 20,170 131,661 2,159,304 207,256 $ 50,073,378

As of December 31, 2013 and 2012, funds amounting to NT$889,572 thousand and NT$726,776 thousand, respectively, had been recognized in the OBU’s books as investments in overseas securities through Non-discretionary Pecuniary Trust of the OBU.

43. SIGNIFICANT LOSSES FROM DISASTER

None.

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	New Taiwan	Dollars			$ 42,310,685	5,759,147	1,361,223	821,408	1,071,806	1,894,955	7,409		124,465			45,011,451	1,927,846	2,105,217	2,774,919	1,746,554	1,576,810	414,673	346,135	131,842	2,579	657,067
January 1, 2012	Exchange	Rate			30.29	3.899	4.812	39.20	0.3904	30.75	23.31		30.29			30.29	30.75	4.812	3.899	0.3904	39.20	46.74	23.41	29.66	32.22	23.31
	Foreign	Currencies			$ 1,396,842	1,477,083	282,881	20,954	2,745,405	61,625	318		4,109			1,486,017	62,694	437,493	711,700	4,473,755	40,225	8,872	14,786	4,445	80	28,188
December 31, 2012	Foreign Exchange New Taiwan	Currencies Rate Dollars			$ 1,270,092 29.136 $ 37,005,170	2,153,765 3.759 8,096,003	226,826 4.678 1,061,095	16,212 38.61 625,936	1,583,772 0.3375 534,523	42,597 30.27 1,289,420	783 23.83 18,659		- - -			1,721,852 29.136 50,167,884	67,537 30.27 2,044,353	477,941 4.678 2,235,810	679,135 3.759 2,552,870	5,527,286 0.3375 1,865,459	24,726 38.61 954,664	5,013 46.95 235,339	8,795 23.94 210,541	2,567 29.30 75,222	205 31.94 6,556	722 23.83 17,203
December 31, 2013	Foreign Exchange New Taiwan	Currencies Rate Dollars			$ 1,409,192 29.95 $ 42,205,172	1,363,522 3.862 5,265,919	279,670 4.948 1,383,805	15,664 41.28 646,599	1,774,757 0.2852 506,161	17,041 26.71 455,165	10,973 23.68 259,842		- - -			1,851,006 29.95 55,437,580	77,398 26.71 2,067,309	335,990 4.948 1,662,476	401,518 3.862 1,550,663	4,809,643 0.2852 1,371,710	21,196 41.28 874,976	4,307 49.54 213,353	8,134 24.60 200,102	5,520 28.14 155,319	2,031 33.68 68,395	674 23.68 15,950
			Financial assets	Monetary items	USD	HKD	CNY	EUR	JPY	AUD	SGD	Non-monetary items	USD	Financial liabilities	Monetary items	USD	AUD	CNY	HKD	JPY	EUR	GBP	NZD	CAD	CHF	SGD

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45. SIGNIFICANT EVENTS AFTER REPORTING PERIOD

In January 2014, the Bank issued Global Depository Receipts (GDRs) for a capital increase. The price of GDR per unit was US$7.4, equivalent to NT$11.25 per share. For the issuance of 18,250,000 units of GDR, the total capital increase by cash consisted of 365,000 thousand common shares, representing 20 common shares per GDR unit. The Bank received all the proceeds of GDR issuance on January 28, 2014.

46. FINANCIAL INSTRUMENTS

a. Fair values of financial instruments were as follows:

Financial assets Cash and cash equivalents Due from the Central Bank and other banks Financial assets at fair value through profit or loss Derivative financial assets for hedging Securities purchased under resale agreements Receivables, net Discounts and loans, net Available-for-sale financial assets Held-to-maturity financial assets Debt investments with no active market Financial assets measured at cost Other financial assets, net Financial liabilities Due to the Central Bank and other banks Financial liabilities at fair value through profit or loss Derivative financial liabilities for hedging Payables Deposits and remittances Bank debentures (applying hedge accounting) Bank debentures (not applying hedge accounting) Other financial liabilities Financial assets Cash and cash equivalents Due from the Central Bank and other banks Financial assets at fair value through profit or loss Derivative financial assets for hedging Securities purchased under resale agreements Receivables, net	December 31, 2013	December 31, 2013
	Carrying Amount Fair Value $ 4,397,645 $ 4,397,645 88,827,255 88,827,255 18,795,444 18,795,444 111,034 111,034 23,006,325 23,006,325 20,672,272 20,672,272 292,517,032 292,517,032 21,735,693 21,735,693 3,105,972 3,122,487 8,477,868 8,477,868 101,379 101,379 2,647,143 2,647,126 13,782,129 13,782,129 7,288,065 7,288,065 12,631 12,631 13,502,992 13,502,992 398,305,940 398,305,940 4,698,403 4,698,403 22,405,482 22,405,482 2,060,491 2,060,491 December 31, 2012 Carrying Amount Fair Value $ 5,596,551 $ 5,596,551 82,818,608 82,818,608 16,110,835 16,110,835 180,242 180,242 23,741,992 23,741,992 20,781,182 20,781,182 (Continued)
		Fair Value $ 5,596,551 82,818,608 16,110,835 180,242 23,741,992 20,781,182 (Continued)

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Discounts and loans, net
Available-for-sale financial assets
Held-to-maturity financial assets
Debt investments with no active market
Financial assets measured at cost
Other financial assets, net
Financial liabilities
Due to the Central Bank and other banks
Financial liabilities at fair value through profit or loss
Derivative financial liabilities for hedging
Payables
Deposits and remittances
Bank debentures (applying hedge accounting)
Bank debentures (not applying hedge accounting)
Other financial liabilities
Financial assets
Cash and cash equivalents
Due from the Central Bank and other banks
Financial assets at fair value through profit or loss
Derivative financial assets for hedging
Securities purchased under resale agreements
Receivables, net
Discounts and loans, net
Available-for-sale financial assets
Held-to-maturity financial assets
Debt investments with no active market
Financial assets measured at cost
Other financial assets, net
Financial liabilities
Due to the Central Bank and other banks
Financial liabilities at fair value through profit or loss
Derivative financial liabilities for hedging
Payables
Deposits and remittances
Bank debentures (applying hedge accounting)
Bank debentures (not applying hedge accounting)
Other financial liabilities

December 31, 2012
Carrying
Amount
Fair Value
$ 280,219,426
$ 280,219,426
11,865,864
11,865,864
2,224,301
2,235,526
10,713,828
10,713,828
101,379
101,379
2,958,132
2,958,163
11,674,958
11,674,958
3,745,032
3,745,032
12,819
12,819
5,560,371
5,560,371
391,933,266
391,933,266
4,767,423
4,767,423
18,304,700
18,304,700
1,908,070
1,908,070
(Concluded)
January 1, 2012

Carrying
Amount
Fair Value
$ 6,002,314
$ 6,002,314
86,739,190
86,739,190
13,806,866
13,806,866
252,233
252,233
850,505
850,505
21,950,813
21,950,813
269,460,381
269,460,381
14,945,412
14,945,412
3,927,905
3,871,314
9,293,780
9,293,780
103,846
103,846
2,530,904
2,530,909
11,785,731
11,785,731
4,384,840
4,384,840
13,093
13,093
4,495,320
4,495,320
369,998,562
369,998,562
4,839,140
4,839,140
15,391,140
15,391,140
2,211,286
2,211,286

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b. Methods and assumptions used to estimate the fair values of financial instruments are as follows:
1) The carrying amounts of the following short-term financial instruments approximate their fair value because of their short maturities: Cash and cash equivalents; due from the Central Bank and other banks; securities purchased under resale agreements; receivables, net; due to the Central Bank and other banks; payables; and securities sold under repurchase agreements.
2) The fair values of financial instruments at fair value through profit or loss, derivative financial instruments for hedging, available-for-sale financial assets and held-to-maturity financial assets are based on their quoted prices in an active market. For those instruments with no quoted market prices, their fair values are determined using valuation techniques incorporating estimates and assumptions consistent with those generally used by other market participants to price financial instruments. Fair values of derivative financial instruments are estimated on the basis of quotations from the pricing system of Reuters.
3) Discounts and loans, deposits, bank debentures and principal of structured notes are interest-earning assets or interest-bearing liabilities. Their carrying amounts approximate their fair values. The fair values of nonaccrual loans and acquired receivables are based on their carrying amounts, net of allowance for possible losses.
4) Financial assets measured at cost are investments in stocks with no quoted prices in an active market. Thus, no fair value of these assets is presented.
5) Financial assets and liabilities other than those listed above are valued by using their estimated future cash flows as their carrying amounts. Thus, the carrying amounts of these assets and liabilities represent their fair value.
c. The definition of three levels of financial instruments at fair value
1) Level 1 inputs are observable inputs that reflect quoted prices for identical financial instruments in an active market. A market is active if it has these characteristics: Products traded in the market are homogeneous; willing buyers and sellers can be found immediately and the price information is publicly available. Listed and OTC stocks, beneficiary certificates, central government bonds, domestic convertible bonds, foreign bank debentures and derivative instruments with quoted prices in active markets are categorized into Level 1.
2) Level 2 inputs are observable inputs other than quoted prices for identical assets or liabilities in active markets, including direct inputs (such as market prices) or indirect inputs (such as prices derived from market prices). Commercial paper, negotiable certificates of deposit, foreign convertible bonds and most derivative instruments at fair value are categorized into Level 2.
3) Level 3 inputs are unobservable items such as inputs derived through extrapolation or interpolation and thus cannot be corroborated by observable market data. Some derivative instruments are categorized into Level 3.

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d. The fair value hierarchy of financial instruments was as follows:

Financial Instruments Nonderivative financial instruments Assets Financial assets at fair value through profit or loss Held for trading Government bonds Listed and OTC stocks Beneficiary certificates Financial assets designated as at fair value through profit or loss Convertible bonds Available-for-sale Government bonds Commercial paper Foreign bank debentures Listed and OTC stocks Negotiable certificate of deposits Derivative financial instruments Assets Financial assets at fair value through profit or loss Held for trading Derivative instruments held for hedging Liabilities Financial liabilities at fair value through profit or loss Derivative instruments held for hedging Total Financial Instruments Nonderivative financial instruments Assets Financial assets at fair value through profit or loss Held for trading Government bonds Listed and OTC stocks Beneficiary certificates Financial assets designated as at fair value through profit or loss Convertible bonds Available-for-sale Government bonds Listed and OTC stocks Negotiable certificates of deposit Commercial paper			December 31, 2013
		Total $ 1,617,257 332,666 149,162 12,039,304 13,619,393 5,045,261 1,243,923 1,109,537 717,579 4,657,055 111,034 (7,288,065) (12,631) $ 33,341,475	Level 1 Level 2 $ 1,617,257 $ - 332,666 - 149,162 - 12,030,369 8,935 13,619,393 - - 5,045,261 1,243,923 - 1,109,537 - - 717,579 - 4,571,329 - 111,034 - (6,831,718) - (12,631) $ 30,102,307 $ 3,609,789 December 31, 2012	Level 3 $ - - - - - - - - - 85,726 - (456,347) - $ (370,621)
		Total $ 1,334,349 130,962 107,521 11,679,558 10,355,436 807,991 452,394 250,043	Level 1 Level 2 $ 1,334,349 $ - 130,962 - 107,521 - 11,658,981 20,577 10,355,436 - 807,991 - - 452,394 - 250,043	Level 3 $ - - - - - - - - (Continued)

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Financial Instruments Derivative financial instruments Assets Financial assets at fair value through profit or loss Held for trading Derivative instruments held for hedging Liabilities Financial liabilities at fair value through profit or loss Derivative instruments held for hedging Total Financial Instruments Nonderivative financial instruments Assets Financial assets at fair value through profit or loss Held for trading Government bonds Listed and OTC stocks Beneficiary certificates Financial assets designated as at fair value through profit or loss Convertible bonds Available-for-sale Government bonds Listed and OTC stocks Liabilities Financial liabilities at fair value through profit or loss Short sale of bonds payable Derivative financial instruments Assets Financial assets at fair value through profit or loss Held for trading Derivative instruments held for hedging Liabilities Financial liabilities at fair value through profit or loss Derivative instruments held for hedging Total			December 31, 2012	December 31, 2012
		Total $ 2,858,445 180,242 (3,745,032) (12,819) $ 24,399,090	Level 1 $ - - - - $ 24,395,240 January 1,	Level 2 $ 2,680,152 180,242 (3,677,723) (12,819) $ (107,134) 2012	Level 3 $ 178,293 - (67,309) - $ 110,984 (Concluded)
		Total $ 1,722,733 36,819 57,286 10,656,510 14,044,274 901,138 (953,357) 1,333,518 252,233 (3,431,483) (13,093) $ 24,606,578	Level 1 $ 1,722,733 36,819 57,286 10,648,263 14,044,274 901,138 (953,357) - - - - $ 26,457,156	Level 2 $ - - - 8,247 - - - 1,285,421 252,233 (3,324,114) (13,093) $ (1,791,306)	Level 3 $ - - - - - - - 48,097 - (107,369) - $ (59,272)

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Movement of Level 3 financial assets:

		Decem	ber 31, 2013
Item	Beginning Balance	Valuation	Increase in the	Current Period	Decrease in the	Current Period	Ending Balance
			Purchase or Issue	Transfer-in	Sale, Disposition or Settlement	Transfer-out from Level 3
Financial assets at fair value through profit or loss Held for trading - derivative financial instruments	$ 178,293	$ (92,567)	$ -	$ -	$ -	$ -	$ 85,726
		Decem	ber 31, 2012
Item	Beginning Balance	Valuation	Increase in the	Current Period	Decrease in the	Current Period	Ending Balance
			Purchase or Issue	Transfer-in	Sale, Disposition or Settlement	Transfer-out from Level 3
Financial assets at fair value through profit or loss Held for trading - derivative financial instruments	$ 48,097	$ 130,196	$ -	$ -	$ -	$ -	$ 178,293

Movement of Level 3 financial liabilities:

December 31, 2013

Item	Beginning Balance	Valuation	Increase in the	Current Period	Decrease in the	Current Period	Ending Balance
			Purchase or Issue	Transfer-in	Sale, Disposition or Settlement	Transfer-out from Level 3
Financial liabilities at fair value through profit or loss Derivative financial instruments	$ 67,309	$ (44,299)	$ 433,337	$ -	$ -	$ -	$ 456,347
		Decem	ber 31, 2012
Item	Beginning Balance	Valuation	Increase in the	Current Period	Decrease in the	Current Period	Ending Balance
			Purchase or Issue	Transfer-in	Sale, Disposition or Settlement	Transfer-out from Level 3
Financial liabilities at fair value through profit or loss Derivative financial instruments	$ 107,369	$ (40,060)	$ -	$ -	$ -	$ -	$ 67,309

e. Transfers between Level 1 and Level 2

There was no transfer between Level 1 and Level 2 for the years ended December 31, 2013 and 2012.

f. The sensitivity analysis of reasonably possible alternative assumptions for fair value measurements categorized within Level 3

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The Bank’s fair value measurement of the financial instruments is reasonable; nevertheless, changes in the fair value measurement parameters may result in different measurement results. Had the valuation parameters for financial instruments categorized within Level 3 been 0.01% higher/lower, the impact on the profit or loss for the year would have been as follows:

Item	Impact on Gains and Losses	Impact on Gains and Losses
	December 31, 2013
	Favorable	Unfavorable
Assets Financial assets at fair value through profit or loss Held for trading - derivative financial instruments Liabilities Financial liabilities at fair value through profit or loss Derivative financial instruments	$ 1,557 1,953	$ (1,557) (2,402)

Item	Impact on Gains and Losses
	December 31, 2012
	Favorable	Unfavorable
Assets Financial assets at fair value through profit or loss Held for trading - derivative financial instruments Liabilities Financial liabilities at fair value through profit or loss Derivative financial instruments	$ 3,770 996	$ (3,770) (996)

Item	Impact on Gains and Losses
	January 1, 2012
	Favorable	Unfavorable
Assets Financial assets at fair value through profit or loss Held for trading - derivative financial instruments Liabilities Financial liabilities at fair value through profit or loss Derivativefinancial instruments	$ 910 1,654	$ (889) (1,732)

The favorable and unfavorable movement refers to the fluctuation of fair values, which is calculated on the basis of valuation techniques involving the use of input parameters. However, the table above does not reflect the correlation between input parameters and their volatility.

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47. FINANCIAL RISK MANAGEMENT

a. Overview

The Bank’s risk management policy is to form a risk management-oriented culture, and to use both qualitative and quantitative indexes from internal and external risk management regulations as operating strategies.

The Bank has set up an independent risk control department to implement and monitor risk management policies.

The Bank’s risk management policies are established to identify and measure the risks faced by the Bank, to set appropriate risk limits and controls, to monitor risks and adherence to limits, and to achieve the target profit.

b. Risk management framework

The Board of Directors, the highest decision department of the Bank, has overall responsibility for the establishment and oversight of the Bank’s risk management framework.

Asset and Liability Management Committee and Risk Management Committee have been formed to examine and manage the Bank’s risks, to assess the execution of risk management and to evaluate risk tolerance. The general manager is the convener, and is responsible for appointing members of committees.

Furthermore, the Bank has an independent Risk Management Department comprising of corporate banking and consumer banking groups which directly manage credit extension risks with regard to their respective areas: corporate banking, financial markets, individual banking, consumer banking and credit card business groups. For integrated risk management, each business unit of the Bank is required to present, first, to the Risk Management Department for review and then to the Bank’s top management for approval, all the related documents, including the credit extension principles and procedures, new product development, levels and degree of authorization, etc.

The Internal Audit Department undertakes regular reviews of risk management controls and procedures, including risk management framework, operating procedures of risk management, and provides timely suggestion and improvement.

c. Credit risk

1) Definition and scope of credit risk

Credit risk is the risk of financial loss to the Bank if a borrower, issuer or counterparty to a financial instrument fails to meet its contractual obligations due to its credit deterioration or other factors, such as a dispute between the borrower and its counterparty.

Credit risk includes all risks derived from on- and off-balance sheet business, and all credit risk related to products, businesses and positions.

148

2) Management policies on credit risk

The Bank shall identify risk factors and consider appropriate risk evaluation and control process prior to taking the existing or new business. For all credit risks identified on- and off-balance sheet, adequate credit limits are set based on the same borrower, counterparty, related party, group, or industry. The Bank shall establish review mechanism to track and assess changes in each borrower’s or issuer’s financial position; regularly assess and manage asset quality, also strengthen the management of unusual borrowers and make appropriate allowance for possible losses if applicable.

The credit risk management processes and valuation methods for credit extension (including loan commitments and guarantees) are as follows:

a) Classification of credit assets

Credit assets are grouped into 5 different categories according to the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Nonperforming/Non-accrual Loans.” Normal credit assets shall be classified as “Category One”, the remaining credit assets shall be further classified based on the collateral for loans and past due status as follows: Category Two- Special Mention loans; Category ThreeSubstandard; Category Four- Doubtful, and Category Five -Unrecoverable. Moreover, the Bank establishes internal requirements, such as the “Principles Governing the Procedures to Evaluate Assets and Deal with Nonperforming/Non-accrual Loans,” to manage problematic credit extension and credit collection and management.

b) Credit quality

Discounts and loans and receivables

The Bank sets credit quality grades according to product features, business types, operating conditions, collaterals and credit rating. Credit risk from corporate banking is categorized according to the business types, collaterals, credit rating and financial position of borrowers; credit risk from consumer banking is assessed on a case-by-case basis, except for unsecured loans and credit card products, which are assessed by internal credit rating models.

Interbank facilities, derivative financial instruments and investments in debt instruments

Total trading limits are determined each year by reference to financial institutions’ operating results, credit rating, rating on THE BANKER, net worth and background of shareholders, with summaries submitted to the Credit Committee, and to the Managing Directors for approval. In the month following the end of each quarter, reports on transaction limits for each financial institution and the quarterly balance are submitted to Credit Committee, and then to the general manager for approval.

Derivative financial instruments transactions entered into counterparties from banking sectors are those categorized as investment grade, and they are controlled using relevant transaction limits for each counterparty. For individual counterparty, its credit exposure is controlled using the limits placed on derivative instruments by both amounts and terms in the general credit approval process.

Credit risk for debt instruments is carried out by identifying the risk using the credit rating received external institutions, credit quality, geographic situations and counterparty credit risk.

149

3) Credit risk hedging and mitigation policies
a) To effectively reduce credit risk, terms of credit facilities are determined in the light of assessments of probability and amounts of default, collateral and guarantees are obtained, including bank deposit receipts, securities (such as treasury securities, government bonds, bank debentures, stocks and bonds guaranteed by financial institutions) and real estate such as land and buildings. Listed and OTC stocks are marked to market day to day, and changes in the value of their collaterals are monitored all the time; values of land and buildings are examined every time the contract is renewed.

Under the Bank’s “Principles for Acceptance and Disposal of Collaterals,” the Bank requires collaterals for nonperforming loans. For any loss on a nonperforming loan, the Bank will auction the collateral. If the minimum auction price of the collateral is too low and detrimental to the Bank’s interests, i.e., the loan principal and interest cannot be covered, the Bank will actively seek buyers of the collateral. If the collateral is real estate, the Bank should dispose of it within the period prescribed under the Banking Law.

According to the Bank’s “Principles for Acceptance and Disposal of Collaterals,” collateral of nonperforming loans secured through compulsory enforcement or participating distribution, if the minimum auction price or liquidation price of the collateral is too low and damage the Bank’s credit right, the Bank will participate in the auction or declare to undertake, for example, the minimum auction price is too low to compensate the principal and interest of loans but the collateral is not difficult to dispose in the future. For collaterals tender or undertaken, the Bank should actively seek buyers, and if the collateral is real estate, the Bank should dispose of it within the period prescribed under the Banking Law.

b) Reduce loans to non-target customers to mitigate credit risk.

c) Understand, control and monitor risks on a timely basis via credit limits prior to the credit being committed to customers, restrictive clauses in contracts, loans management, review mechanism to view changes of each case. Understand credit portfolios and overall credit risks the use of periodic reports and feedbacks.
d) Netting arrangement

Most of the Bank’s transactions are settled on a gross basis; however, it sometimes enters into transactions to settle on a net basis, or enters into netting arrangements to the extent that if a default occurs, all amounts with the counterparty are terminated and settled on a net basis to further reduce its credit risk.

4) Monitor maximum credit exposure on on-balance sheet assets and off-balance sheet items

For on-balance sheet assets, the carrying amounts represent the Bank’s maximum exposure to credit risk, without taking into account the collaterals held or other credit enhancements. For off-balance sheet commitments and guarantees, their amounts represent the maximum exposure to credit risk, without taking into account the collaterals held or other credit enhancements. For loan commitments and other credit-related commitments that are irrevocable over the life of the respective facilities, the maximum exposure to credit risk is the full amount of the commitment facilities. The off-balance sheet commitments were as follows:

150

The carrying amount represents the Bank’s maximum exposure to credit risk of the on-balance sheet assets, without taking into account of the collaterals held or other credit enhancements. The amounts of the maximum credit exposures of the off-balance commitments and guarantees, without taking into account the collaterals held, other credit enhancements or maximum irrevocable exposure were as follows:

	December 31,	December 31,	January 1,
	2013	2012	2012
Unused portion of credit card lines	$ 149,696,272	$ 149,717,675	$ 133,113,662
Financial guarantees and standby L/Cs	13,386,770	12,389,045	10,031,345
Irrevocable loan commitments	10,906,749	9,681,305	7,351,171

5) Monitor concentrations of credit risk

The concentration of credit risk exists when counterparties to financial transactions are individuals or groups engaging in similar business activities and having similar economic features. The similarity would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The Bank’s concentrations of credit risk by industry, geography and type of collaterals were as follows:

a) By industry

The Bank’s loans had no significant concentration risk of the Bank’s loans in a single customer or counterparty, but there were some risks in relation to specific industries, as follows:

Credit Risk Profile by Industry Sector Manufacturing Finance and insurance Transportation and warehousing	December 31, 2013 $ 37,669,346 24,137,512 13,097,447 $ 74,904,305	December 31, 2012 $ 41,015,594 28,376,562 13,434,668 $ 82,826,824	January 1, 2012 $ 44,012,107 32,456,609 14,229,779
			$ 90,698,495

b) By geography

The main businesses and customers of the Bank are in Taiwan; therefore, there is no significant geographic concentration risk.

c) By type of collaterals

Type of Collaterals Unsecured Secured Real estate Movable property Financial collateral Others		December 31, 2013 Amount % $ 87,963,079 30 152,903,889 51 35,848,045 12 14,076,860 5 5,988,639 2 $ 296,780,512 100		December 31, 2012	January 1, 2012
				Amount % $ 89,237,277 31 146,103,263 52 26,453,020 9 15,599,652 6 6,408,220 2 $ 283,801,432 100	Amount % $ 91,201,331 33 137,796,356 50 21,125,139 8 18,683,902 7 5,427,388 2 $ 274,234,116 100

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Net Amount (A)+(B)+(C)-(D) $ 292,517,032 14,968,591 2,589,013	Net Amount (A)+(B)+(C)-(D) $ 292,517,032 14,968,591 2,589,013	Net Amount (A)+(B)+(C)-(D) $ 280,219,426 14,703,604 3,389,938	Net Amount (A)+(B)+(C)-(D) $ 280,219,426 14,703,604 3,389,938	Net Amount (A)+(B)+(C)-(D) $ 269,460,381 14,755,753 3,805,951	Net Amount (A)+(B)+(C)-(D) $ 269,460,381 14,755,753 3,805,951
Allowance for Possible Losses (D)	Without Objective Evidence of Individual Impairment $ 1,522,654 73,507 16,879	Allowance for Possible Losses (D)	Without Objective Evidence of Individual Impairment $ 1,414,191 108,439 16,022	Allowance for Possible Losses (D)	Without Objective Evidence of Individual Impairment $ 950,416 226,528 18,820
	With Objective Evidence of Individual Impairment $ 2,740,826 557,024 429,640		With Objective Evidence of Individual Impairment $ 2,167,815 601,627 426,386		With Objective Evidence of Individual Impairment $ 3,823,319 547,807 426,594
	Total (A)+(B)+(C) $ 296,780,512 15,599,122 3,035,532		Total (A)+(B)+(C) $ 283,801,432 15,413,670 3,832,346		Total (A)+(B)+(C) $ 274,234,116 15,530,088 4,251,365
	Impaired Amount (C) $ 5,109,682 2,348,091 490,361		Impaired Amount (C) $ 6,418,978 2,767,664 498,011		Impaired Amount (C) $ 7,332,096 3,336,154 507,032
	Past due but not Impaired Amount (B) $ 4,771,292 324,389 -		Past due but not Impaired Amount (B) $ 2,925,143 1,018,057 -		Past due but not Impaired Amount (B) $ 2,662,532 335,240 -
Neither Past due Nor Impaired Amount	Subtotal (A) $ 286,899,538 12,926,642 2,545,171		Subtotal (A) $ 274,457,311 11,627,949 3,334,335		Subtotal (A) $ 264,239,488 11,858,694 3,744,333
	Special Mention $ 307,963 44,201 -	Neither Past due Nor Impaired Amount	Special Mention $ 226,827 59,368 -	Neither Past due Nor Impaired Amount	Special Mention $ 132,076 85,350 -
	Moderate $ 46,686,348 4,972,301 2,082,467		Moderate $ 36,652,230 4,761,431 2,241,245		Moderate $ 38,392,151 4,933,859 2,429,678
	Good $ 75,058,919 2,265,984 399,878		Good $ 75,445,980 1,994,985 388,220		Good $ 70,397,282 2,034,691 526,463
	Excellent $ 164,846,308 5,644,156 62,826		Excellent $ 162,132,274 4,812,165 704,870		Excellent $ 155,317,979 4,804,794 788,192
	December 31, 2013 Discounts and loans Receivables Credit card Others		December 31, 2012 Discounts and loans Receivables Credit card Others		January 1, 2012 Discounts and loans Receivables Credit card Others

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b) An analysis of credit quality of discounts and loans neither past due nor impaired by business types

types
December 31, 2013		Neith	er Past due Nor Impaired
	Excellent	Good	Moderate	Special Mention	Total
Corporate banking Secured Unsecured Consumer banking Housing mortgage Credit loans Others	$ 16,542,953 27,873,775 115,620,847 3,711,359 1,097,374	$ 12,613,104 19,838,900 11,907,560 5,706,391 24,992,964	$ 2,044,019 36,050,272 4,276,978 2,002,374 2,312,705	$ 4,858 144,100 - 159,005 -	$ 31,204,934 83,907,047 131,805,385 11,579,129 28,403,043
Total	$ 164,846,308	$ 75,058,919	$ 46,686,348	$ 307,963	$ 286,899,538

December 31, 2012		Neith	er Past due Nor Impaired
	Excellent	Good	Moderate	Special Mention	Total
Corporate banking Secured Unsecured Consumer banking Housing mortgage Credit loans Others	$ 16,654,306 29,627,570 111,516,500 3,521,335 812,563	$ 13,335,427 28,246,993 10,688,334 4,863,959 18,311,267	$ 2,080,020 26,584,640 4,064,897 1,868,261 2,054,412	$ 661 147,320 - 78,846 -	$ 32,070,414 84,606,523 126,269,731 10,332,401 21,178,242
Total	$ 162,132,274	$ 75,445,980	$ 36,652,230	$ 226,827	$ 274,457,311

January 1, 2012		Neith	er Past due Nor Impaired
	Excellent	Good	Moderate	Special Mention	Total
Corporate banking Secured Unsecured Consumer banking Housing mortgage Credit loans Others	$ 16,664,474 28,920,785 105,880,837 2,988,199 863,684	$ 12,515,380 32,899,496 10,145,112 3,914,833 10,922,461	$ 3,016,360 27,462,695 3,970,087 1,700,138 2,242,871	$ - - - 132,076 -	$ 32,196,214 89,282,976 119,996,036 8,735,246 14,029,016
Total	$ 155,317,979	$ 70,397,282	$ 38,392,151	$ 132,076	$ 264,239,488

c) Loans and receivables past due but not impaired

Financial assets past due 90 days or less are not considered impaired unless there is objective evidence that an impairment loss has been incurred. Financial assets might become past due but not impaired by reasons of borrowers’ late processing or other administrative delays.

The aging analysis of loans and receivables past due but not impaired was as follows:

Items	December 31, 2013	December 31, 2013	December 31, 2013
	Past Due Up to 1 Month	Past Due Over 1 Month to 3 Months	Total
Discounts and loans Corporate banking Consumer banking Housing mortgage Credit loans Others Receivables Creditcard	$ 11,340 2,286,657 420,598 1,731,328 269,231	$ 744 201,609 71,088 47,928 55,158	$ 12,084 2,488,266 491,686 1,779,256 324,389

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Items	December 31, 2012	December 31, 2012	December 31, 2012
	Past Due Up to 1 Month	Past Due Over 1 Month to 3 Months	Total
Discounts and loans Corporate banking Consumer banking Housing mortgage Credit loans Others Receivables Credit card	$ 13,460 1,532,987 270,212 758,548 960,036	$ - 226,531 61,670 61,735 58,021	$ 13,460 1,759,518 331,882 820,283 1,018,057

Items		January 1, 2012
	Past Due Up to 1 Month	Past Due Over 1 Month to 3 Months	Total
Discounts and loans Corporate banking Consumer banking Housing mortgage Credit loans Others Receivables Credit card	$ 4,762 1,516,399 229,022 572,557 287,402	$ 80 236,659 58,589 44,464 47,838	$ 4,842 1,753,058 287,611 617,021 335,240

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Net Amount (A)+(B)+(C)-(D) $ 14,863,316 5,045,261 1,109,537 717,579 2,207,472 898,500 101,379 8,477,868 $ 33,420,912	Net Amount (A)+(B)+(C)-(D) $ 14,863,316 5,045,261 1,109,537 717,579 2,207,472 898,500 101,379 8,477,868 $ 33,420,912	Net Amount (A)+(B)+(C)-(D) $ 10,355,436 807,991 452,394 250,043 1,787,261 437,040 101,379 10,713,828 $ 24,905,372	Net Amount (A)+(B)+(C)-(D) $ 10,355,436 807,991 452,394 250,043 1,787,261 437,040 101,379 10,713,828 $ 24,905,372	Net Amount (A)+(B)+(C)-(D) $ 14,044,274 901,138 3,776,455 151,450 103,846 9,293,780 $ 28,270,943	Net Amount (A)+(B)+(C)-(D) $ 14,044,274 901,138 3,776,455 151,450 103,846 9,293,780 $ 28,270,943
Allowance for Possible Losses (D) $ - - - - - - - 149,750 $ 149,750		Allowance for Possible Losses (D) $ - - - - - - - 160,567 $ 160,567		Allowance for Possible Losses (D) $ - - - - - 225,638 $ 225,638
Total (A)+(B)+(C) $ 14,863,316 5,045,261 1,109,537 717,579 2,207,472 898,500 101,379 8,627,618 $ 33,570,662		Total (A)+(B)+(C) $ 10,355,436 807,991 452,394 250,043 1,787,261 437,040 101,379 10,874,395 $ 25,065,939		Total (A)+(B)+(C) $ 14,044,274 901,138 3,776,455 151,450 103,846 9,519,418 $ 28,496,581
Impaired (C) $ - - - - - - - 149,750 $ 149,750		Impaired (C) $ - - - - - - - 178,975 $ 178,975		Impaired (C) $ - - - - - 328,684 $ 328,684
Past due but Not Impaired (B) $ - - - - - - - - $ -		Past due but Not Impaired (B) $ - - - - - - - - $ -		Past due but Not Impaired (B) $ - - - - - - $ -
Neither Past due Nor Impaired	Subtotal (A) $ 14,863,316 5,045,261 1,109,537 717,579 2,207,472 898,500 101,379 8,477,868 $ 33,420,912	Neither Past due Nor Impaired	Subtotal (A) $ 10,355,436 807,991 452,394 250,043 1,787,261 437,040 101,379 10,695,420 $ 24,886,964	Neither Past due Nor Impaired	Subtotal (A) $ 14,044,274 901,138 3,776,455 151,450 103,846 9,190,734 $ 28,167,897
	Special Mention $ - - - - - - - - $ -		Special Mention $ - - - - - - - - $ -		Special Mention $ - - - - - - $ -
	Moderate $ - - - - - - 101,379 5,183,368 $ 5,284,747		Moderate $ - 224,196 - - - - 101,379 2,382,360 $ 2,707,935		Moderate $ - 214,021 - - 103,846 2,800,210 $ 3,118,077
	Good $ - 5,045,261 490,268 717,579 1,576,374 449,250 - 1,946,750 $ 10,225,482		Good $ - 177,792 452,394 250,043 1,171,044 - - 3,651,300 $ 5,702,573		Good $ - 238,442 2,687,296 151,450 - 2,090,010 $ 5,167,198
	Excellent $ 14,863,316 - 619,269 - 631,098 449,250 - 1,347,750 $ 17,910,683		Excellent $ 10,355,436 406,003 - - 616,217 437,040 - 4,661,760 $ 16,476,456		Excellent $ 14,044,274 448,675 1,089,159 - - 4,300,514 $ 19,882,622
	December 31, 2013 Available-for-sale financial assets Bonds Commercial paper Stocks Negotiable certificates of deposit Held-to-maturity financial assets Bonds Others Financial assets measured at cost Debt investments with no active market Total		December 31, 2012 Available-for-sale financial assets Bonds Stocks Negotiable certificate of deposit Commercial paper Held-to-maturity financial assets Bonds Others Financial assets measured at cost Debt investments with no active market Total		January 1, 2012 Available-for-sale financial assets Bonds Stocks Held-to-maturity financial assets Bonds Others Financial assets measured at cost Debt investments with no active market Total

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d. Liquidity risk
1) Sources and definition of liquidity risk

Liquidity risk is the risk that the Bank is unable to liquidate assets or obtain loans to meet its obligations when they fall due as a result of customer deposits being early withdrawn, deteriorating access to and terms of interbank facilities, deteriorating delinquency by borrowers, or financial instruments not easily liquidated. Such outflows would deplete available cash resources for client lending, trading activities and investments. In extreme circumstances, lack of liquidity could result in reductions in the consolidated statement of financial position and sales of assets, or potentially an inability to fulfill lending commitments. The risk that the Bank will be unable to do so is inherent in all banking operations and can be affected by a range of institution-specific and market-wide events including, but not limited to, credit events, merger and acquisition activities, systemic shocks and natural disasters.

2) Risk management policies on liquidity risk

The Bank’s liquidity management processes, which are managed by an independent department, include:

a) Day-to-day funding, managed by monitoring future cash flows to ensure that requirements can be met;
b) Maintaining a portfolio of highly marketable assets that can easily be liquidated as protection against any unforeseen interruption to cash flow;
c) Monitoring the liquidity ratios of the consolidated balance sheet against internal and regulatory requirements; and
d) Managing the concentration and profile of debt maturities.

Monitoring and reporting take the form of cash flow measurement and projections for the next ten days, one month, two months.…, one year and over one year respectively. The starting point for those projections is an analysis of the contractual maturity of the financial liabilities and the expected collection date of the financial assets.

Related information is submitted regularly to the Bank’s Asset and Liability Management Committee and the Board of Directors.

3) Financial assets held for liquidity risk management purposes

To support payment obligation and contingent funding in a stresses market environment, the Bank holds high-quality highly-liquid interest-earning assets comprising cash and cash equivalent, due from the central bank and other banks, financial assets at fair value through profit or loss, available-for-sale financial assets for which there is an active and liquid market.

4) Maturity analysis of non-derivative financial liabilities

The table below presents the cash flows payable by the Bank under non-derivative financial liabilities by remaining contractual maturities at the date of the consolidated balance sheet.

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December 31, 2013	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Due to the Central Bank and other banks Payables Deposits and remittances Bank debentures Other financial liabilities	$ 5,276,796 10,262,206 69,838,851 4,200 1,700,252	$ 7,606,591 721,337 89,149,107 3,000,000 118,235	$ 799,742 293,433 64,052,879 - 27,217	$ 99,000 238,774 93,327,672 - 33,014	$ - 1,987,242 81,937,431 24,392,500 181,807	$ 13,782,129 13,502,992 398,305,940 27,396,700 2,060,525

December 31, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Due to the Central Bank and other banks Payables Deposits and remittances Bank debentures Other financial liabilities	$ 6,404,392 2,501,457 76,046,351 4,700 907,794	$ 4,961,049 967,341 77,727,152 2,000,000 532,785	$ 204,104 297,810 66,656,403 - -	$ 104,794 387,785 105,877,150 2,000,000 260,383	$ 619 1,405,978 65,626,210 18,900,000 207,128	$ 11,674,958 5,560,371 391,933,266 22,904,700 1,908,090

January 1, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Due to the Central Bank and other banks Financial liabilities at fair value through profit or loss - short sales of bonds payable Payables Deposits and remittances Bank debentures Other financial liabilities	$ 3,676,780 953,357 1,603,410 55,651,514 3,740 1,524,406	$ 7,654,092 - 587,690 67,119,820 - 518,469	$ 258,487 - 329,253 79,767,411 87,400 -	$ 196,372 - 390,166 112,228,611 - -	$ - - 1,584,801 55,231,206 19,900,000 168,482	$ 11,785,731 953,357 4,495,320 369,998,562 19,991,140 2,211,357

Note: The amounts disclosed in the table are the contractual undiscounted cash flows, some of which may not reconcile to the corresponding items in the consolidated balance sheet.

In the maturity analysis of “Deposits and remittance” disclosed in the previous table, the cash flows are split into the maturity buckets in which the cash flows occur based on historical experience. If demand deposits are expected to be drawn down in the earliest period, cash outflows due in 30 days bucket might increase NT$91,059,744 thousand, NT$76,138,866 thousand and NT$70,966,075 thousand as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively.

5) Maturity analysis of derivative financial liabilities

Derivative instruments settled on a net basis

a) Foreign exchange derivatives: Foreign exchange options, non-deliverable forwards; and

b) Interest rate derivatives: Interest rate swap options, interest rate swaps and other interest rate contracts for which net cash flows are exchanges.

Maturity analysis of derivative financial liabilities that will be settled on a net basis is as follows:

December 31, 2013	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Derivative financial liabilities at fair value through profit or loss Foreign exchange derivatives Interest rate derivatives Derivative financial liabilities held for hedging Interest rate derivatives	$ 1,116 4,632 -	$ 92 24,012 7,330	$ 7,401 7,243 -	$ 6,234 18,059 -	$ - 532,820 5,301	$ 14,843 586,766 12,631
Total	$ 5,748	$ 31,434	$ 14,644	$ 24,293	$ 538,121	$ 614,240

December 31, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Derivative financial liabilities at fair value through profit or loss Foreign exchange derivatives Interest rate derivatives Derivative financial liabilities held for hedging Interest rate derivatives	$ 423 3,292 -	$ 9,774 712 -	$ 22,750 21,238 -	$ 8,697 32,287 -	$ - 263,682 12,819	$ 41,644 321,211 12,819
Total	$ 3,715	$ 10,486	$ 43,988	$ 40,984	$ 276,501	$ 375,674

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January 1, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Derivative financial liabilities at fair value through profit or loss Foreign exchange derivatives Interest rate derivatives Derivative financial liabilities held for hedging Interest rate derivatives	$ 771 1,810 -	$ 177 303,360 -	$ 2,707 462,768 -	$ 13,826 17,082 -	$ - 265,702 13,093	$ 17,481 1,050,722 13,093
Total	$ 2,581	$ 303,537	$ 465,475	$ 30,908	$ 278,795	$ 1,081,296

Note: The amounts disclosed in the table are the contractual undiscounted cash flows, some of which may not reconcile to the corresponding items in the consolidated balance sheet.

Derivative instruments on a gross basis

a) Foreign exchange derivatives: Foreign exchange swaps, foreign exchange options; and

b) Interest rate derivatives: Cross currency swaps.

Maturity analysis of derivative financial liabilities that will be settled on a gross basis is as follows:

December 31, 2013	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Derivative financial liabilities at fair value through profit or loss Foreign exchange derivatives Cash outflow Cash inflow Interest rate derivatives Cash outflow Cash inflow	$ 49,278,220 49,396,817 8,236,250 8,140,000	$ 9,000,034 9,906,546 3,536,850 3,410,995	$ 7,493,524 8,470,062 1,796,800 1,792,750	$ 5,236,919 25,474,399 2,096,500 2,067,800	$ 119,020 22,698,855 - -	$ 71,127,717 115,946,679 15,666,400 15,411,545
Subtotal of cash outflow Subtotal of cash inflow	57,514,470 57,536,817	12,536,884 13,317,541	9,290,324 10,262,812	7,333,419 27,542,199	119,020 22,698,855	86,794,117 131,358,224
Net cash flow	$ 22,347	$ 780,657	$ 972,488	$ 20,208,780	$ 22,579,835	$ 44,564,107

December 31, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Derivative financial liabilities at fair value through profit or loss Foreign exchange derivatives Cash outflow Cash inflow Interest rate derivatives Cash outflow Cash inflow	$ 29,966,083 31,445,448 - -	$ 19,173,401 19,857,803 - -	$ 9,861,603 10,327,491 - -	$ 7,438,804 13,148,617 - -	$ 93,134 2,234,381 7,635,145 7,429,680	$ 66,533,025 77,013,740 7,635,145 7,429,680
Subtotal of cash outflow Subtotal of cash inflow	29,966,083 31,445,448	19,173,401 19,857,803	9,861,603 10,327,491	7,438,804 13,148,617	7,728,279 9,664,061	74,168,170 84,443,420
Net cash flow	$ 1,479,365	$ 684,402	$ 465,888	$ 5,709,813	$ 1,935,782	$ 10,275,250

January 1, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Derivative financial liabilities at fair value through profit or loss Foreign exchange derivatives Cash outflow Cash inflow	$ 14,337,613 15,139,119	$ 8,656,727 9,199,652	$ 2,217,486 2,297,900	$ 4,238,000 4,781,826	$ - 1,208,923	$ 29,449,826 32,627,420
Subtotal of cash outflow Subtotal of cash inflow	14,337,613 15,139,119	8,656,727 9,199,652	2,217,486 2,297,900	4,238,000 4,781,826	- 1,208,923	29,449,826 32,627,420
Net cash flow	$ 801,506	$ 542,925	$ 80,414	$ 543,826	$ 1,208,923	$ 3,177,594

Note: The amounts disclosed in the table are the contractual undiscounted cash flows, some of which may not reconcile to the corresponding items in the consolidated balance sheet.

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6) Maturity analysis of off-balance sheet items

Maturity analysis of issued financial guarantee contracts on the basis of their earliest possible contractual maturity:

December 31, 2013	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Developed and irrevocable loan commitments Irrevocable credit card commitments Issued but unused letters of credit Otherguarantees	$ 10,906,749 149,696,272 1,029,701 6,072,979	$ - - - 2,498,900	$ - - - 635,607	$ - - - 531,983	$ - - - 2,617,600	$ 10,906,749 149,696,272 1,029,701 12,357,069
Total	$ 167,705,701	$ 2,498,900	$ 635,607	$ 531,983	$ 2,617,600	$ 173,989,791

December 31, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Developed and irrevocable loan commitments Irrevocable credit card commitments Issued but unused letters of credit Otherguarantees	$ 9,681,305 149,717,675 766,439 4,990,451	$ - - - 1,908,500	$ - - - 627,000	$ - - - 200,000	$ - - - 3,896,655	$ 9,681,305 149,717,675 766,439 11,622,606
Total	$ 165,155,870	$ 1,908,500	$ 627,000	$ 200,000	$ 3,896,655	$ 171,788,025

January 1, 2012	Due in 30 Days	Due Between 31 Days and 90 Days	Due Between 91 Days and 180 Days	Due Between 181 Days and One Year	Due After One Year	Total
Developed and irrevocable loan commitments Irrevocable credit card commitments Issued but unused letters of credit Otherguarantees	$ 7,351,171 133,113,662 1,059,748 4,554,762	$ - - - 1,556,000	$ - - - -	$ - - - -	$ - - - 2,860,835	$ 7,351,171 133,113,662 1,059,748 8,971,597
Total	$ 146,079,343	$ 1,556,000	$ -	$ -	$ 2,860,835	$ 150,496,178

e. Market risk

1) Definition and scope of market risk

Market risk is the risk that unfavorable changes in market prices, such as interest rates, foreign exchange rates, equity prices and commodity prices will affect the Bank’s income or its holdings of on- and off-balance sheet positions. The Bank’s market risk mainly comes from equity investment securities, interest rates and foreign exchange rates. Equity investment securities risk positions include domestic listed and OTC stocks and domestic convertible bonds; interest rate risk positions include bonds and interest rate derivative instruments, such as fixed and floating interest rate swap; foreign exchange rate risk positions include foreign currencies and related derivative instruments, such as spot exchange, forward exchange, foreign currency swap and option.

2) Management policies of market risk

The Bank develops appropriate management process to identify, measure and monitor market risk, and to effectively manage and control credit limits, valuation of profits and losses, sensitivities analysis and stress tests of each financial instrument positions. Besides, the Bank takes appropriate risk management strategy while facing market risk in its daily operating activities and management processes.

The Bank separates its exposure to market risk between trading and non-trading portfolios, which are managed, monitored and disclosed by the Risk Management Department. A summary report, including suggestion, is submitted regularly to the Risk Management Committee and the Board of Directors.

3) Management process of market risk
a) Identification and measurement of market risk

The Bank’s risk measurement system, firstly, identifies market risk factors of exposure positions, and then, measures risks on- and off-balance sheet trading positions by examining the movement of the identified risk factors, such as interest rates, stock prices, foreign exchange rates and commodity prices.

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The Bank’s risk measurement system also applies sensitivity analysis (DV01, Delta and Vega) or different scenarios analysis to assess value changes of asset portfolios, and performs stress tests, as required by the authority, to measure exceptional losses incurred during extreme, but plausible, conditions.

b) Monitoring and reporting

To fully understand the management of market risk, information for execution of market risk management objectives, management of positions and profits and losses, sensitivity analysis and stress tests is submitted regularly to Risk Management Committee and the Board of Directors by the Risk Management Department. The Bank has explicit management process. It imposes trading limits and stop loss order on each transaction.

A stop loss order would be executed once a given stop price has been reached; otherwise, the trading unit should report, including reasons for not executing stop loss order and corresponding remedial action taken, to top management for approval.

4) Management of interest rate risk

Interest rate risk is the risk loss or changes in the fair values resulting from interest rate fluctuations. It includes interest rate related securities and derivative instruments.

The Bank separates the interest rate risk positions between trading book and banking book. Financial instruments and commodity positions held for trading purpose or to hedge against trading book positions are carried in trading book. Positions held for trading purpose are those held with the intention of profiting from actual or forecast spread. Positions not belonging to trading book are carried in banking book.

Management of interest rate risk in trading book

a) Management process

To limit the loss within acceptable range, the Bank imposes trading limits and stop loss limits on trading room, traders and commodity; it also imposes monthly maximum loss limit on trading positions.

b) Valuation methods

Securities are marked-to-market, and the risk of interest rate related derivative instruments are measured using DV01 and Vega. Both stop loss limits are controlled on a daily basis.

Management of interest rate risk in banking book

Interest rate risk management of banking book is to improve interest risk management, capital efficiency and business operations.

a) Strategies

To improve its capacity to adapt to changes, the Bank measures, manages and hedges changes in its profits and losses and economic values of balance sheet items arising from interest rate fluctuations.

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b) Management process

Prior to undertaking interest rates related business, the Bank identifies re-pricing and yield curve risks, and measures the possible impact of changes in interest rate on profits and losses. The Bank analyzes and monitors position limits and various risk management objectives in respect of interest rates on a quarterly basis, and the results are submitted regularly to the Asset and Liability Management Committee and the Board of Directors.

If the risk management objectives are found to be in excess of designated limits during the monitoring process, the Bank will report to the Asset and Liability Management Committee and propose remedial action to be taken.

c) Valuation methods

Interest rate risk measures the re-pricing risk arising from different maturity or re-pricing dates of assets and liabilities carried in the banking book. To stabilize long-term profitability taken into account of business growth, the Bank sets up various monitoring indexes, such as the ratio of interest rate sensitivity gap over total assets, for key holding periods. Those indexes are reported to and reviewed by management periodically.

5) Management of foreign exchange risk
a) Definition of foreign exchange risk

Foreign exchange risk is the risk of loss or changes in fair value arising from open positions in currency due to exchange rate fluctuations. Foreign exchange transactions include spot exchange, forward exchange, non-deliverable forward and foreign currency option between New Taiwan dollars and a foreign currency or between two foreign currencies.

b) Foreign exchange risk management policies, process and valuation methods

To manage foreign exchange risk and limit the loss within acceptable range, the Bank imposes trading limits and stop loss limits on trading room, traders and commodity; it also imposes monthly maximum loss limit on trading positions. Spot exchange, forward exchange, non-deliverable forward and foreign currency option are controlled collectively using Delta; foreign currency option is controlled using Vega. The stop loss limits are controlled on a daily basis.

6) Management of equity securities market risk
a) Definition of equity price risk

Equity price risk is the risk arising from open positions in equity securities as a result of fluctuations in the market prices of individual securities.

b) Management processes of equity price risk

The Bank sets gross limits on overall positions, by industries, and by groups. For listed and OTC stocks and beneficiary certificates, the Bank sets the limit of investment in each stock and stop loss/gain limits on overall and particular positions, which are monitored daily.

A stop loss/gain order would be executed once a given stop price has been reached; otherwise, traders should report to the manager of its department, including reasons for not executing stop loss/gain order.

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c) Measurement

The Bank manages price risk on the basis of closing prices of equity securities.

7) Valuation techniques of market risk

Stress tests

Stress tests are performed by the Risk Management Department at least once a year to assess the impact of risk factors that have become extremely volatile on asset portfolios carried in trading books and risk tolerance, and to ensure that the Bank will be able to handle potential losses incurred during extreme, but plausible, events.

The Bank applies market risk factors sensitivities analysis to analyze the impact on asset that could arise under extreme scenarios:

a) Interest rate: Evaluate impacts on the values of interest-rate-based securities if yield curves move in parallel manner.
b) Foreign exchange: Evaluate impacts on changes in foreign exchange rates.
c) Equity securities: Evaluate impacts on changes in stock prices and its related derivatives volatility.
d) Commodity: Evaluate impacts on changes in commodity prices and its related derivatives volatility.

The Bank will submit the results of stress tests to the Board of Directors and Risk Management Committee as a reference of the Bank’s ability to encounter adverse economic conditions.

Sensitivity analysis

a) Interest rate risk

Interest rate factor sensitivities (DV01 or PVBP) are, at the balance sheet date, the impact on the discounted future cash flows of bonds and interest-rate-based derivative instruments for 1 basis points (bps) parallel shift in all yield curves.

Assuming all other variables remain constant, there would be a decrease in pre-tax profits of $1,914 thousand or an increase of $1,465 thousand for the ended December 31, 2013, where the interest rate increases (decreases) by 1 bps. There would be a decrease (increase) in pre-tax profits of $426 thousand for the year ended December 31, 2012. There would be a decrease (increase) of $6,386 thousand and $3,039 thousand in other comprehensive income for the years ended December 31, 2013 and 2012, respectively.

b) Foreign exchange risk

Foreign exchange rate factor sensitivities (FX Delta) are, at the balance sheet date, the impact on the values of foreign exchange positions for a 1% change in foreign exchange rates.

Where the foreign exchange increases (decreases) by 1%, assuming all other variables remain constant, there would be an increase (decrease) in pre-tax profits of $327,210 thousand for the year ended December 31, 2013. There would be an increase (decrease) in pre-tax profits of $307,184 thousand for the year ended December 31, 2012.

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c) Equity securities price risk

Equity price factor sensitivities are, at the balance sheet date, the impact on the values of open positions in equity securities for a 1% change in stock market prices.

Where the equity prices increase (decrease) by 1%, assuming all other variables remain constant, there would be an increase (decrease) in pre-tax profits of NT$142,475 thousand for the year ended December 31, 2013. There would be an increase (decrease) in pre-tax profits of $146,260 thousand for the year ended December 31, 2012. There would be an increase (decrease) of $11,095 thousand and $8,080 thousand in other comprehensive income for the years ended December 31, 2013 and 2012, respectively.

8) Concentration of foreign exchange risk

For information of concentration of foreign currency exposures at the balance sheet date are shown in Note 44.

f. Disclosures required by the Regulations Governing the Preparation of Financial Reports by Public Banks
1) Asset quality of loans

Nonperforming loans and nonperforming receivables

Business	Item	Item			December 31, 2013
			Nonperforming Loans (Note a)	Loans	Ratio of Nonperforming Loans (Note b)	Allowance for Possible Losses	Coverage Ratio (Note c)
Corporate Banking	Secured		$ 683,919	$ 33,492,451	2.04%	$ 858,111	125.47%
	Unsecured		12,826	85,087,569	0.02%	1,177,351	9,179.41%
Consumer Banking	Residential mortgage(Note d)		129,852	108,959,120	0.12%	1,243,113	957.33%
	Cash card		-	-	-	-	-
	Small-scale credit	loan(Note e)	206,995	16,336,493	1.27%	365,978	176.81%
	Others (Note f)	Secured	49,679	37,956,817	0.13%	434,241	874.09%
		Unsecured	5,404	14,948,062	0.04%	184,686	3,417.58%
Total			1,088,675	296,780,512	0.37%	4,263,480	391.62%
			Nonperforming Receivables	Accounts Receivable	Ratio of Nonperforming Receivables	Allowance for Possible Losses	Coverage Ratio
Credit card			39,256	15,599,122	0.25%	630,531	1,606.21%
Accounts receivab	le factored without	recourse(Noteg)	-	2,161,061	-	13,791	-

Business	Item	Item			December 31, 2012
			Nonperforming Loans (Note a)	Loans	Ratio of Nonperforming Loans (Note b)	Allowance for Possible Losses	Coverage Ratio (Note c)
Corporate Banking	Secured		$ 871,834	$ 34,597,922	2.52%	$ 1,005,640	115.35%
	Unsecured		11,271	86,692,419	0.01%	863,058	7,657.33%
Consumer Banking	Residential mortgage(Note d)		186,867	108,257,443	0.17%	990,155	529.87%
	Cash card		-	-	-	-	-
	Small-scale credit	loan(Note e)	192,776	14,971,798	1.29%	364,313	188.98%
	Others (Note f)	Secured	40,374	35,593,097	0.11%	318,136	787.97%
		Unsecured	13,985	3,688,753	0.38%	40,704	291.05%
Total			1,317,107	283,801,432	0.46%	3,582,006	271.96%
			Nonperforming Receivables	Accounts Receivable	Ratio of Nonperforming Receivables	Allowance for Possible Losses	Coverage Ratio
Credit card			61,453	15,413,670	0.40%	710,066	1,155.46%
Accounts receivab	le factored without	recourse(Noteg)	-	2,830,761	-	13,863	-

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Business	Item	Item			January 1, 2012
			Nonperforming Loans (Note a)	Loans	Ratio of Nonperforming Loans (Note b)	Allowance for Possible Losses	Coverage Ratio (Note c)
Corporate Banking	Secured		$ 136,993	$ 36,541,927	0.37%	$ 2,458,868	1,794.89%
	Unsecured		12,654	90,151,628	0.01%	904,487	7,147.83%
Consumer Banking	Residential mortgage(Note d)		227,571	105,671,044	0.22%	821,554	361.01%
	Cash card		-	-	-	-	-
	Small-scale credit	loan(Note e)	192,345	13,805,008	1.39%	359,604	186.96%
	Others (Note f)	Secured	21,302	26,149,086	0.08%	203,293	954.34%
		Unsecured	21,685	1,915,423	1.13%	25,929	119.57%
Total			612,550	274,234,116	0.22%	4,773,735	779.32%
			Nonperforming Receivables	Accounts Receivable	Ratio of Nonperforming Receivables	Allowance for Possible Losses	Coverage Ratio
Credit card			34,168	15,530,088	0.22%	774,335	2,266.26%
Accounts receivab	le factored without	recourse(Noteg)	-	3,412,000	-	17,151	-

Note a: Nonperforming loans represent the amounts of nonperforming loans reported to the authorities and disclosed to the public, as required by the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Nonperforming/Non-accrual Loans.”

Nonperforming credit cards receivables represent the amounts of nonperforming receivables reported to the authorities and disclosed to the public, as required by the Banking Bureau’s letter dated July 6, 2005 (Ref. No. 0944000378).

Note b: Ratio of nonperforming loans: Nonperforming loans ÷ Outstanding loan balance.

Ratio of nonperforming credit cards receivables: Nonperforming credit cards receivables ÷ Outstanding credit cards receivables balance.

Note c: Coverage ratio of allowance for possible losses for loans: Allowance for possible losses for loans ÷ Nonperforming loans.

Coverage ratio of allowance for possible losses for credit cards receivables: Allowance for possible losses for credit cards receivables ÷ Nonperforming credit cards receivables.

Note d: Residential mortgage is a loan given to the borrower who provides a house, to be purchased (or already owned) by the borrower or the spouse or the minor children of the borrower, as a mortgage to the Bank and will use the loan for house purchase or refurbishment.
Note e: Small-scale credit loans refer to the loans under the Banking Bureau’s regulation, dated December 19, 2005 (Ref. No. 09440010950), excluding small-scale unsecured loans obtained through credit cards and cash cards.
Note f: Other loans of consumer banking refer to secured or unsecured loans, excluding residential mortgage, cash card, small-scale credit loans and credit card.

Note g: As required by the Banking Bureau’s letter dated July 19, 2005 (Ref. No. 0945000494), factoring without recourse is disclosed as nonperforming receivables in three months upon the factors’ or insurance companies’ rejection of claims.

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Nonperforming loans and nonperforming receivables excluded from the information stated above

Item Business	December 31, 2013	December 31, 2013
	Nonperforming Loans Excluded	Nonperforming Receivables Excluded
Loans not classified as NPL upon debt restructuring and performed as agreed(Note a)	$ 336,679	$ 869,163
Loans upon performance of a debt discharge program and rehabilitationprogram(Note b)	617,379	1,335,762
Total	954,058	2,204,925

Item Business	December 31, 2012
	Nonperforming Loans Excluded	Nonperforming Receivables Excluded
Loans not classified as NPL upon debt restructuring and performedasagreed (Notea)	$ 458,950	$ 1,157,342
Loans upon performance of a debt discharge program and rehabilitationprogram(Note b)	563,620	1,368,460
Total	1,022,570	2,525,802

Item Business	January 1, 2012
	Nonperforming Loans Excluded	Nonperforming Receivables Excluded
Loans not classified as NPL upon debt restructuring and performedasagreed (Notea)	$ 643,243	$ 1,575,374
Loans upon performance of a debt discharge program and rehabilitationprogram(Note b)	535,484	1,415,117
Total	1,178,727	2,990,491

Note a: Supplementary disclosure related to the loans which need not be classified as NPL upon debt restructuring and performed as agreed, as stipulated in the Banking Bureau’s letter dated April 25, 2006 (Ref. No. 09510001270).

Note b: Supplementary disclosure related to the loans which need not be classified as NPL upon performance of a debt discharge program and rehabilitation program, as stipulated in the Banking Bureau’s letter dated September 15, 2008 (Ref. No. 09700318940).

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2) Concentration of credit extensions

Ranking (Note a)	December 31, 2013
	Group Entity (Note b) Industry and Code (Note a)	Total Balances of Credit Extensions (Note c)	Ratio of Credit Extensions to Net Worth (%)
1	A Group - 6499 - non-categorized and other financial intermediaries	$ 2,954,572	10
2	BGroup- 2413-steel rollingand extruding	2,722,306	9
3	C Group - 5232 - ocean freight transportation forwarding services	2,704,050	9
4	D Group - 2613 -semiconductor packaging and testing industry	2,325,952	8
5	E Group- 1850 - artificial fiber	2,272,093	8
6	FGroup-3510-electronic powersupplyindustry	1,907,900	7
7	G Group - 6499 - non-categorized and other financial intermediaries	1,855,695	6
8	H Group - 2699 - non-categorized and other parts and componentsmanufacturing	1,819,371	6
9	I Group - 6499 - non-categorized and other financial intermediaries	1,807,757	6
10	J Group- 6811 - real estate leasingindustry	1,644,128	6

Ranking (Note a)	December 31, 2012
	Group Entity (Note b) Industry and Code (Note a)	Total Balances of Credit Extensions (Note c)	Ratio of Credit Extensions to Net Worth (%)
1	B Group - 2499 - non-categorized and other basic metal manufacturing	$ 4,217,402	16
2	C Group - 5232 - ocean freight transportation forwarding services	2,973,840	11
3	A Group - 6499 - non-categorized and other financial intermediaries	2,639,001	10
4	K Group - 1700 - petroleum and coal product manufacturing	2,479,719	9
5	G Group - 6499 - non-categorized and other financial intermediaries	2,418,693	9
6	EGroup- 1850- artificial fiber	2,014,731	8
7	L Group - 6499 - non-categorized and other financial intermediaries	1,860,285	7
8	M Group - 2641 - liquid crystal panel and components manufacturing	1,736,418	7
9	N Group - 6499 - non-categorized and other financial intermediaries	1,716,021	6
10	O Group - 2641 - liquid crystal panel and components manufacturing	1,690,020	6

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Ranking (Note a)	January 1, 2012
	Group Entity (Note b) Industry and Code (Note a)	Total Balances of Credit Extensions (Note c)	Ratio of Credit Extensions to Net Worth (%)
1	B Group- 2413 - steel rollingand extruding	$ 5,566,747	23
2	KGroup-5010-oceanwater transportation	3,493,631	14
3	P Group- 2611 - integrated circuits manufacturing	2,823,382	12
4	M Group - 2641 - liquid crystal panel and components manufacturing	2,485,091	10
5	EGroup- 1850- artificial fiber	2,259,714	9
6	D Group- 2630 -printed circuits manufacturing	2,248,242	9
7	I Group - 6499 - non-categorized and other financial intermediaries	2,046,291	8
8	O Group - 2641 - liquid crystal panel and components manufacturing	2,002,101	8
9	A Group - 6499 - non-categorized and other financial intermediaries	1,863,045	8
10	L Group - 6499 - non-categorized and other financial intermediaries	1,811,764	7

Note a: The rankings above represent the top 10 corporate entities except for government or state-owned enterprises, based on the total balance of credit extension granted by the Bank. The amount of credit extensions should be disclosed in aggregate for each group entity, the code and industry of which are also required. The industry of the group entities is designated as the industry of the individual group entity with the greatest risk exposure. The lines of industry should conform to the industry sub-categorization of the Standard Industrial Classification System of the Republic of China published by the Directorate-General of Budget, Accounting and Statistics under the Executive Yuan.
Note b: “Group Entity” is defined in Article 6 of “Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.”
Note c: Credit extension balance includes various loans (import and export negotiations, discounted, overdrafts, unsecured and secured short-term loans, margin loans receivable, unsecured and secured medium-term loans, unsecured and secured long-term loans; and nonaccrual loans), bills purchased, factored accounts receivable without recourse, acceptances and guarantees.
3) Interest rate sensitivity

Table 1: For New Taiwan dollar items

Interest Rate Sensitivity Analysis December 31, 2013

(In Thousands of New Ta	(In Thousands of New Ta	(In Thousands of New Ta	(In Thousands of New Ta	(In Thousands of New Ta	iwan Dollars, %)
Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest rate-sensitive assets	$ 260,953,971	$ 121,028,199	$ 4,401,458	$ 22,164,593	$ 408,548,221
Interest rate-sensitive liabilities	154,343,200	131,243,929	63,713,243	22,514,955	371,815,327
Interest rate sensitivity gap	106,610,771	(10,215,730)	(59,311,785)	(350,362)	36,732,894
Net worth					28,500,442
Ratio of interest rate-sensitive assets to liabilities					109.88%
Ratio of interest rate-sensitivity gapto net worth					128.89%

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Interest Rate Sensitivity Analysis December 31, 2012

(In Thousands of New Taiwan Dollars, %)

Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest rate-sensitive assets	$ 253,480,225	$ 110,101,594	$ 5,506,331	$ 19,502,917	$ 388,591,067
Interest rate-sensitive liabilities	156,809,605	119,546,396	70,706,563	18,904,581	365,967,145
Interest rate sensitivity gap	96,670,620	(9,444,802)	(65,200,232)	598,336	22,623,922
Net worth					26,353,494
Ratio of interest rate-sensitive assets to liabilities					106.18%
Ratio of interest rate-sensitivity gapto net worth					85.85%

Interest Rate Sensitivity Analysis January 1, 2012

(In Thousands of New Taiwan Dollars, %)

Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest rate-sensitive assets	$ 231,853,494	$ 104,937,888	$ 696,476	$ 24,456,197	$ 361,944,055
Interest rate-sensitive liabilities	150,954,515	118,967,341	59,999,402	14,006,339	343,927,597
Interest rate sensitivity gap	80,898,979	(14,029,453)	(59,302,926)	10,449,858	18,016,458
Net worth					24,542,500
Ratio of interest rate-sensitive assets to liabilities					105.24%
Ratio of interest rate-sensitivity gapto net worth					73.41%

Note a: The New Taiwan dollar amounts held by the Bank.
Note b: Interest rate-sensitive assets and liabilities refer to interest-earning assets and interest-bearing liabilities that were affected by interest rate changes.
Note c: Interest rate sensitivity gap = Interest rate-sensitive assets - Interest rate-sensitive liabilities.
Note d: Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets ÷ Interest rate-sensitive liabilities.

Table 2: For U.S. dollar items

Interest Rate Sensitivity Analysis December 31, 2013

(In Thousands of U.S. Dollars, %)

Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest rate-sensitive assets	$ 1,410,040	$ 76,741	$ 1,811	$ 16,286	$ 1,504,878
Interest rate-sensitive liabilities	1,165,852	642,234	99,718	150,000	2,057,804
Interest rate sensitivity gap	244,188	(565,493)	(97,907)	(133,714)	(552,926)
Net worth					25,516
Ratio of interest rate-sensitive assets to liabilities					73.13%
Ratio of interest rate-sensitivity gapto net worth					(2,166.98%)

Interest Rate Sensitivity Analysis December 31, 2012

(In Thousands of U.S. Dollars, %)

Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest rate-sensitive assets	$ 1,151,415	$ 73,165	$ 3,169	$ 13,921	$ 1,241,670
Interest rate-sensitive liabilities	842,195	576,977	261,103	-	1,680,275
Interest rate sensitivity gap	309,220	(503,812)	(257,934)	13,921	(438,605)
Net worth					12,894
Ratio of interest rate-sensitive assets to liabilities					73.90%
Ratio of interest rate-sensitivity gapto net worth					(3,401.62%)

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Interest Rate Sensitivity Analysis January 1, 2012

(In Thousands of U.S. Dollars, %)

Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest rate-sensitive assets	$ 1,256,664	$ 92,529	$ 9,075	$ 22,799	$ 1,381,067
Interest rate-sensitive liabilities	749,276	471,641	229,467	-	1,450,384
Interest rate sensitivity gap	507,388	(379,112)	(220,392)	22,799	(69,317)
Net worth					4,837
Ratio of interest rate-sensitive assets to liabilities					95.22%
Ratio of interest rate-sensitivity gapto net worth					(1,433.06%)

Note a: The total U.S. dollar amounts held by the Bank, excluding contingent assets and liabilities. Note b: Interest rate-sensitive assets and liabilities refer to interest-earning assets and interest-bearing liabilities that were affected by interest rate changes.

Note c: Interest rate sensitivity gap = Interest rate-sensitive assets - Interest rate-sensitive liabilities.

Note d: Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets/Interest rate-sensitive liabilities.

4) Profitability

Items		For Year Ended December 31, 2013	For Year Ended December 31, 2012
Return on total assets	Before tax	0.74%	0.64%
	After tax	0.64%	0.56%
Return on equity	Beforetax	12.87%	11.45%
	After tax	11.05%	10.02%
Net incomeratio		32.27%	29.98%

Note a: Return on total assets = Income before (after) income tax/Average total assets.

Note b: Return on equity = Income before (after) income tax/Average equity.

Note c: Net income ratio = Income after income tax/Total net revenues.

5) Maturity analysis of assets and liabilities
a) For New Taiwan dollar items

December 31, 2013

(In Thousands of New Taiwan Dollars)

	Total		A	mount for Remaini	ng Period to Matur	ity
		0 to 10 Days	11 to 30 Days	From 31 Days to 90 Days	From 91 Days to 180 Days	From 181 Days to one Year	Over one Year
Main capital inflow on maturity	$ 526,438,358	$ 102,897,040	$ 79,884,556	$ 40,751,607	$ 31,699,709	$ 34,169,403	$ 237,036,043
Main capital outflow on maturity	532,097,824	51,590,560	55,866,937	115,517,387	71,415,914	104,731,253	132,975,773
Gap	(5,659,466)	51,306,480	24,017,619	(74,765,780)	(39,716,205)	(70,561,850)	104,060,270
			December 31	, 2012

(In Thousands of New Taiwan Dollars)

	Total		A	mount for Remaini	ng Period to Matur	ity
		0 to 10 Days	11 to 30 Days	From 31 Days to 90 Days	From 91 Days to 180 Days	From 181 Days to one Year	Over one Year
Main capital inflow on maturity	$ 472,950,337	$ 55,040,883	$ 86,357,304	$ 43,401,150	$ 29,079,834	$ 37,661,583	$ 221,409,583
Main capital outflow on maturity	479,803,703	25,815,138	60,445,431	88,694,541	72,943,294	109,832,711	122,072,588
Gap	(6,853,366)	29,225,745	25,911,873	(45,293,391)	(43,863,460)	(72,171,128)	99,336,995

169

January 1, 2012

(In Thousands of New Taiwan Dollars)

	Total		A	mount for Remaini	ng Period to Maturit	y
		0 to 10 Days	11 to 30 Days	From 31 Days to 90 Days	From 91 Days to 180 Days	From 181 Days to one Year	Over one Year
Main capital inflow on maturity	$ 416,967,038	$ 43,713,010	$ 50,774,880	$ 54,911,668	$ 31,082,913	$ 36,074,818	$ 200,409,749
Main capital outflow on maturity	420,134,673	18,032,016	40,013,387	64,376,666	77,596,601	114,959,051	105,156,952
Gap	(3,167,635)	25,680,994	10,761,493	(9,464,998)	(46,513,688)	(78,884,233)	95,252,797

Note: This table refers to the New Taiwan dollar amounts held by the Bank.

b) For U.S. dollar items

December 31, 2013

(In Thousands of U.S. Dollars)

	Total		Amount for	Remaining Period	to Maturity
		1 to 30 Days	From 31 Days to 90 Days	From 91 Days to 180 Days	From 181 Days to 1 Year	Over 1 Year
Main capital inflow on maturity	$ 5,537,675	$ 2,200,168	$ 1,452,976	$ 702,668	$ 559,903	$ 621,960
Main capital outflow on maturity	5,583,964	2,969,093	972,137	704,181	527,490	411,063
Gap	(46,289)	(768,925)	480,839	(1,513)	32,413	210,897

December 31, 2012

(In Thousands of U.S. Dollars)

	Total		Amount for	Remaining Period	to Maturity
		1 to 30 Days	From 31 Days to 90 Days	From 91 Days to 180 Days	From 181 Days to 1 Year	Over 1 Year
Main capital inflow on maturity	$ 4,284,117	$ 1,395,021	$ 974,256	$ 619,656	$ 401,131	$ 894,053
Main capital outflow on maturity	4,267,959	1,532,606	885,793	688,615	653,929	507,016
Gap	16,158	(137,585)	88,463	(68,959)	(252,798)	387,037

January 1, 2012

(In Thousands of U.S. Dollars)

	Total		Amount for	Remaining Period	to Maturity
		1 to 30 Days	From 31 Days to 90 Days	From 91 Days to 180 Days	From 181 Days to 1 Year	Over 1 Year
Main capital inflow on maturity	$ 3,091,512	$ 1,078,065	$ 596,969	$ 216,338	$ 521,166	$ 678,974
Main capital outflow on maturity	3,113,858	886,681	747,768	440,660	717,083	321,666
Gap	(22,346)	191,384	(150,799)	(224,322)	(195,917)	357,308

Note: This table refers to the U.S. dollar amounts held by the Bank.

48. CAPITAL MANAGEMENT

The Bank shall include all risks in the capital adequacy assessment according to the “Regulations Governing the Capital Adequacy and Capital Category of Banks”. The Bank makes the capital planning based on the operating plans and budget target approved by the Board of Directors, the developing strategies, capital adequacy, dividend policy and etc. The capital planning, including stress tests and forecasts of capital adequacy, aims to achieve the capital adequacy target and to consolidate the capital structure.

To monitor the capital adequacy, the execution and changes in the parameters of the capital planning are reviewed quarterly by the Bank’s Assets and Liabilities Management Committee. To maintain appropriate capital adequacy, the Bank will find the causes and propose remedial action when the actual capital adequacy might get lower than the target.

170

The authority classifies banks’ level of capital into different categories based on the common equity tier 1 ratio, Tier 1 capital ratio and total capital adequacy ratio reported by the banks. If a bank’s level of capital is graded “under-capitalized”, “substantially under-capitalized” or “critically under-capitalized”, the authority will take correction measures in accordance with Paragraph 1 to 3 of Article 44-2 of the Banking Law.

The calculations of eligible capital, risk-weighted assets and capital adequacy ratio were as follows:

			December 31, 2013	December 31, 2013
			The Bank	Consolidation
Eligible capital	Common equity		$ 25,690,005	$ 26,238,006
	Other Tier I capital		-	-
	Tier IIcapital		13,123,625	13,676,786
	Total eligible capital		38,813,630	39,914,792
Risk-weighted assets	Credit risk	Standardizedapproach	288,008,208	291,547,743
		Internal rating-based approach	-	-
		Assetsecuritization	-	-
	Operational risk	Basic indicator approach	13,241,600	12,714,700
		Standardized approach/alternative standardizedapproach	-	-
		Advanced measurement approach	-	-
	Market risk	Standardizedapproach	10,309,788	10,309,788
		Internal models approach	-	-
	Total risk-weighted assets		311,559,596	314,572,231
Capital adequacyratio			12.46%	12.69%
Ratio of common equityto risk-weighted assets			8.25%	8.34%
Ratio of Tier I capital to risk-weighted assets			8.25%	8.34%
Leverageratio			4.58%	4.68%

Note a: Eligible capital, risk-weighted assets and risk-exposure assets are calculated under the “Regulations Governing the Capital Adequacy Ratio of Banks” and the “Explanation of Methods for Calculating the Eligible Capital and Risk-weighted Assets of Banks” amended by the FSC on November 26, 2012.
Note b: An annual report should include both the current year’s and prior year’s capital adequacy ratio, but a semiannual report should include the capital adequacy ratio of the most recent year.

Note c: Formulas used were as follows:

1) Eligible capital = Common equity + Other Tier I capital + Tier II capital.
2) Total risk-weighted assets = Risk-weighted assets for credit risk + (Capital requirements for operational risk and market risk) × 12.5.
3) Capital adequacy ratio = Eligible capital/Total risk-weighted assets.
4) Ratio of Common equity to risk-weighted assets = Common equity/Total risk-weighted assets.
5) Ratio of Tier I capital to risk-weighted assets = (Common equity + Other Tier I capital)/Total risk-weighted assets.
6) Leverage ratio = Tier I capital ÷ Risk-exposure Assets

171

			December 31, 2012	December 31, 2012
			The Bank	Consolidation
Eligible capital	Tier Icapital		$ 25,122,063	$ 25,712,352
	Tier II capital		11,154,742	11,750,266
	Tier IIIcapital		-	-
	Totaleligible capital		36,276,805	37,462,618
Risk-weighted assets	Credit risk	Standardized approach	268,086,022	272,198,189
		Internal rating-based approach	-	-
		Assetsecuritization	-	-
	Operational risk	Basicindicator approach	12,326,475	11,876,975
		Standardized approach/alternative standardizedapproach	-	-
		Advanced measurement approach	-	-
	Market risk	Standardizedapproach	10,578,788	10,578,788
		Internal models approach	-	-
	Total risk-weighted assets		290,991,285	294,653,952
Capital adequacyratio			12.47%	12.71%
Ratio of Tier I capital to risk-weighted assets			8.63%	8.72%
Ratio of Tier II capital to risk-weighted assets			3.84%	3.99%
Ratio of Tier III capital to risk-weighted assets			-	-
Ratio of common shareholders’ equityto total assets			4.82%	4.82%
Leverage ratio			5.59%	5.70%

Note a: Eligible capital and risk-weighted assets are calculated under the “Regulations Governing the Capital Adequacy Ratio of Banks” and the “Explanation of Methods for Calculating the Eligible Capital and Risk-weighted Assets of Banks” amended by the FSC on June 30, 2009.
Note b: Formulas used were as follows:
1) Eligible capital = Tier I capital + Tier II capital + Tier III capital.
2) Total risk-weighted assets = Risk-weighted assets for credit risk + (Capital requirements for operational risk and market risk) × 12.5.
3) Capital adequacy ratio = Eligible capital/Total risk-weighted assets.
4) Ratio of Tier I capital to risk-weighted assets = Tier I capital/Total risk-weighted assets.
5) Ratio of Tier II capital to risk-weighted assets = Tier II capital/Total risk-weighted assets.
6) Ratio of Tier III capital to risk-weighted assets = Tier III capital/Total risk-weighted assets.
7) Ratio of common stock to total assets = Common stock/Total assets.
8) Leverage ratio = Tier I capital ÷ Adjusted average total asset (the average total asset excludes goodwill, deferred losses on the sale of nonperforming loans and items deducted from Tier I capital because of ineligibility as defined under the “Explanation of Methods for Calculating the Eligible Capital and Risk-Weighted Assets of Banks”).

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49. SEGMENT INFORMATION

Information provided to the Bank’s and its subsidiaries’ chief operating decision makers for resource allocation and segment performance assessment focuses on nature of operation and profits. Based on IFRS 8 - “Operating Segments,” the reportable segments were as follows:

a. Individual banking: Mainly includes consumer banking loans such as mortgages, credit loans, car loans, installment, etc.; credit cards; individual deposits; and wealth management;
b. Corporate banking: Mainly includes corporate-related business, foreign-currency business and financial market business;
c. Others: Any business not included in individual and corporate banking.

The accounting policies of the reportable segments are the same as those stated in Note 4 to the consolidated financial statements.

Segment Income and Operating Results

The income and operating results of the reportable segments of the Bank and its subsidiaries were as follows:

For the year ended December 31, 2013 Net interest income (loss) Noninterest income and gains, net Net service fee income Other net income Net profit (loss) Reversal of provision (provision) for possible losses Operating expenses Segment income (loss) before income tax For the year ended December 31, 2012 Net interest income (loss) Noninterest income and gains, net Net service fee income Other net income (loss) Net profit (loss) Reversal of provision (provision) for possible losses Operating expenses Segment income (loss) before income tax	Individual Banking $ 4,141,159 2,359,495 313,904 6,814,558 10,469 (4,514,780) $ 2,310,247 $ 3,787,548 2,191,230 493,922 6,472,700 21,652 (4,422,936) $ 2,071,416	Corporate Banking (Including Overseas Branches) $ 1,856,007 382,128 1,391,663 3,629,798 336,015 (1,042,049) $ 2,923,764 $ 1,658,141 229,000 1,555,014 3,442,155 (147,211) (1,009,699) $ 2,285,245	Others $ (1,112,799) 154,516 1,556 (956,727) (277,880) (436,297) $ (1,670,904) $ (1,300,544) 151,692 (258,096) (1,406,948) 383,305 (418,061) $ (1,441,704)	Total $ 4,884,367 2,896,139 1,707,123 9,487,629 68,604 (5,993,126) $ 3,563,107 $ 4,145,145 2,571,922 1,790,840 8,507,907 257,746 (5,850,696) $ 2,914,957

Geographical Information

The major operations of the Bank and its subsidiaries were described as mainly domestic because the operating incomes generated by overseas branches were only a minor portion of the aggregate operating income of the Bank and its subsidiaries.

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Major Customers Information

The Bank and its subsidiaries did not disclose major customers information because revenues from transactions with a single external customer were less than 10% of revenues of the Bank and its subsidiaries.

50. FIRST-TIME ADOPTION OF TAIWAN-IFRSs

a. Basis of the preparation of financial information under Taiwan-IFRSs

The Bank and its subsidiaries’ consolidated financial statements for the for the year ended December 31, 2013 not only follows the significant accounting policies stated in Note 4 but also applies the - requirements under IFRS 1 “First time Adoption of IFRS” as the basis for the preparation.

b. Impact on the transition to Taiwan-IFRSs

The impact on the transition to Taiwan-IFRSs on the consolidated balance sheets and consolidated statements of comprehensive income were as follows:

1) Reconciliation of consolidated balance sheet as of January 1, 2012

ROC GAAP	Amount $ 6,005,214 86,739,190 13,806,866 - 850,505 20,855,894 269,460,381 15,674,659 3,927,905 2,474,458 9,293,780 2,884,083 2,943,673 1,905,193 - 1,633,309 $ 438,455,110 $ 11,785,731 4,081,035 - 4,691,225 - 369,998,562 20,230,280 2,224,379 - 789,520 413,800,732 21,185,604 29,008 3,409,346	Effect of Transition to Taiwan-IFRSs $ (2,900) - - 252,233 - 1,094,919 - (729,247) - (2,071) - (249,333) - - 1,115,762 (1,080,548) $ 398,815 $ - 303,805 13,093 (195,905) 124,723 - - (13,093) 690,680 (362,083) 561,220 - (9,302) (145,697)		Taiwan-IFRSs Amount Item Note $ 6,002,314 Cash and cash equivalents 5) a) 86,739,190 Due from the Central Bank and other banks 13,806,866 Financial assets at fair value through profit or loss 252,233 Derivative financial assets for hedging 5) 1) 850,505 Securities purchased under resale agreements 21,950,813 Receivables, net 5) b), 5) c) 269,460,381 Discounts and loans, net 14,945,412 Available-for-sale financial assets 5) b) 3,927,905 Held-to-maturity financial assets 2,472,387 Investments accounted for using equity method 5) d) 9,293,780 Debt investments with no active market 2,634,750 Other financial assets, net 5) a), 5) l) 2,943,673 Property and equipment, net 1,905,193 Intangible assets, net 1,115,762 Deferred tax assets 5) c), 5) h), 5) l) 552,761 Other assets, net 5) l) $ 438,853,925 Total $ 11,785,731 Due to the Central Bank and other banks 4,384,840 Financial liabilities at fair value through profit or loss 5) b) 13,093 Derivative financial liabilities for hedging 5) l) 4,495,320 Payables 5) f), 5) g), 5) l) 124,723 Current tax liabilities 5) l) 369,998,562 Deposits and remittances 20,230,280 Bank debentures 2,211,286 Other financial liabilities 5) l) 690,680 Provisions 5) h), 5) l) 427,437 Other liabilities 5) f), 5) l) 414,361,952 Total liabilities 21,185,604 Share capital 19,706 Capital surplus 5) e) 3,263,649 Retained earnings 5) k) (Continued)
Item 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 Discounts and loans, net Available-for-sale financial assets Held-to-maturity financial assets Investments accounted for by the equity method Debt investments with no active market Other financial assets Properties Intangible assets Other assets Total Due to the Central Bank and other banks Financial liabilities at fair value through profit or loss Payables Deposits and remittances Bank debentures Other financial liabilities Other liabilities Total liabilities Capital stock Capital surplus Retained earnings

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ROC GAAP	Amount $ 12,762 17,658 24,654,378 $ 438,455,110	Effect of Transition to Taiwan-IFRSs $ - (7,406) (162,405) $ 398,815		Taiwan-IFRSs Amount Item Note Other equity $ 12,762 Exchange differences on translating foreign operations 10,252 Unrealized gain on available-for-sale financial assets 5) b) 24,491,973 Total equity $ 438,853,925 Total (Concluded)
Item Equity adjustments Cumulative translation adjustments Unrealized valuation gain on available-for-sale financial assets Total shareholders’ equity Total

2) Reconciliation of consolidated balance sheet as of December 31, 2012

ROC GAAP	Amount $ 5,599,451 82,818,608 16,110,835 - 23,741,992 20,726,506 280,219,426 11,865,864 2,224,301 2,372,398 10,713,828 3,236,853 2,879,693 1,868,048 - 1,120,509 $ 465,498,312 $ 11,674,958 3,745,032 - 5,708,177 - 391,933,266 23,072,123 1,920,889 - 842,522 438,896,967 22,422,596 31,650 4,311,768 9,131 (173,800) 26,601,345 $ 465,498,312	Effect of Transition to Taiwan-IFRSs $ (2,900) - - 180,242 - 54,676 - - - (3,850) - (177,342) - - 928,575 (894,437) $ 84,964 $ - - 12,819 (147,806) 113,131 - - (12,819) 697,845 (410,148) 253,022 - (9,302) (158,756) - - (168,058) $ 84,964		Taiwan-IFRSs Amount Item Note $ 5,596,551 Cash and cash equivalents 5) a) 82,818,608 Due from the Central Bank and other banks 16,110,835 Financial assets at fair value through profit or loss 180,242 Derivative financial assets for hedging 5) l) 23,741,992 Securities purchased under resale agreements 20,781,182 Receivables, net 5) c) 280,219,426 Discounts and loans, net 11,865,864 Available-for-sale financial assets 2,224,301 Held-to-maturity financial assets 2,368,548 Investments accounted for using equity method 5) d) 10,713,828 Debt investments with no active market 3,059,511 Other financial assets, net 5) a), 5) l) 2,879,693 Property and equipment, net 1,868,048 Intangible assets, net 928,575 Deferred tax assets 5) c), 5) h), 5) l) 226,072 Other assets, net 5) l) $ 465,583,276 Total $ 11,674,958 Due to the Central Bank and other banks 3,745,032 Financial liabilities at fair value through profit or loss 12,819 Derivative financial liabilities for hedging 5) l) 5,560,371 Payables 5) f), 5) g), 5) l) 113,131 Current tax liabilities 5) l) 391,933,266 Deposits and remittances 23,072,123 Bank debentures 1,908,070 Other financial liabilities 5) l) 697,845 Provisions 5) h), 5) l) 432,374 Other liabilities 5) f), 5) l) 439,149,989 Total liabilities 22,422,596 Share capital 22,348 Capital surplus 5) e) 4,153,012 Retained earnings Other equity 9,131 Exchange differences on translating foreign operations (173,800) Unrealized loss on available-for-sale financial assets 26,433,287 Total equity $ 465,583,276 Total
Item 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 Discounts and loans, net Available-for-sale financial assets Held-to-maturity financial assets Investments accounted for by the equity method Debt investments with no active market Other financial assets Properties Intangible assets Other assets Total Due to the Central Bank and other banks Financial liabilities at fair value through profit or loss Payables Deposits and remittances Bank debentures Other financial liabilities Other liabilities Total liabilities Capital stock Capital surplus Retained earnings Equity adjustments Cumulative translation adjustments Unrealized valuation loss on available-for-sale financial assets Total shareholders’ equity Total

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3) Reconciliation of the consolidated statement of comprehensive income for the year ended December 31, 2012

ROC GAAP	Amount $ 9,539,494 5,560,748 3,978,746 2,585,141 1,027,270 310,517 (88,047) 21,830 44,803 289,342 1,274,721 195,753 5,661,330 9,640,076 897,341 3,366,501 253,351 2,195,187 5,815,039 2,927,696 364,323 $ 2,563,373	Effect of Transition to Taiwan-IFRSs $ 104,771 (61,628) 166,399 (13,219) 43,346 (7,406) (1,328) - - - (1,274,721) (45,240) (1,298,568) (1,132,169) (1,155,087) 48,876 - (13,219) 35,657 (12,739) (131) $ (12,608)		Taiwan-IFRSs Amount Item Note $ 9,644,265 Interest income 5) c), 5) j), 5) l) 5,499,120 Interest cost 5) i), 5) j) 4,145,145 Net interest income 2,571,922 Net service fee income 5) f) 1,070,616 Net gain on financial assets and liabilities at fair value through profit or loss 5) j) 303,111 Net gain on available-for-sale financial assets 5) b) (89,375) Share of loss of associates 5) d) 21,830 Net foreign exchange gain 44,803 Net gain on reversal of provision for asset impairment loss 289,342 Gain on nonperforming receivables recovered - 5) l) 150,513 Other general and administrative expenses 5) c) 4,362,762 Total noninterest income and gains, net 8,507,907 Net profit (257,746) Provision (reversal of provision) for possible losses and guarantee reserve 5) l) 3,415,377 Employee benefits expense 5) g), 5) h), 5) i) 253,351 Depreciation and amortization 2,181,968 Others 5) f) 5,850,696 Total operating expenses 2,914,957 Income before income tax 364,192 Income tax expense 5) c), 5) h) 2,550,765 Net income for the year Other comprehensive income (3,631) Exchange differences on translating foreign operations 5) l) (172,637) Unrealized loss on available-for-sale financial assets 5) l) (11,866) Share of other comprehensive loss of associates 5) d), 5) l) (188,134) Other comprehensive loss for the year $ 2,362,631 Total comprehensive income for the year
Item Interest income Interest cost Net interest income Noninterest income and gains, net Net service fee income Net gain on financial assets and liabilities at fair value through profit or loss Net gain on available-for-sale financial assets Investment loss recognized by the equity method Net foreign exchange gain Net gain on reversal of provision for asset impairment loss Gain on nonperforming receivables recovered Recovery of written-off credits Others Total noninterest income and gains, net Net profit Provision for possible losses Operating expenses Personnel expense Depreciation and amortization Others Total operating expenses Income before income tax Income tax expense Consolidated net income

4) The elected exemptions under IFRS 1

IFRS 1 establishes the procedures for the Bank and its subsidiaries’ first consolidated financial statements prepared in accordance with Taiwan-IFRSs. According to IFRS 1, the Bank and its subsidiaries are required to determine the accounting policies under Taiwan-IFRSs and retrospectively apply those accounting policies in its opening balance sheet at the date of transition to Taiwan-IFRSs, January 1, 2012; except for optional exemptions and mandatory exceptions to such retrospective application provided under IFRS 1.

The Bank and its subsidiaries retrospectively apply those accounting policies such as deemed cost and cumulative translation differences except for the following main exemptions. There were no differences after the retrospective adjustment.

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The major optional exemptions the Bank and its subsidiaries adopted are summarized as follows:

Business combinations

The Bank and its subsidiaries elected not to apply IFRS 3 - “Business Combinations” retrospectively to business combinations that occurred before the date of transition. Therefore, in the opening balance sheet, the amount of assets and liabilities related to past business combinations remains the same compared with the one under ROC GAAP as of December 31, 2011.

The exemption of not elected to apply IFRS 3 - “Business Combinations” also applied to investments in associates acquired in the past.

Employee benefits

The Bank and its subsidiaries elected to recognize all cumulative actuarial gains and losses in retained earnings as of the date of transition to Taiwan-IFRSs.

Compound financial instruments

As the liability component was no longer outstanding at the date of transition to Taiwan-IFRSs, the Bank and its subsidiaries elected not to split the compound financial instruments issued before the date of transition to Taiwan-IFRSs into separate retained earnings and equity component.

The effect of the abovementioned optional exemptions elected by the Bank and its subsidiaries was stated in item 8) below.

5) Explanations of significant reconciling items in the transition to Taiwan-IFRSs

Material differences between the accounting policies under ROC GAAP and the accounting policies adopted under Taiwan-IFRSs were as follows:

a) Time deposits with a maturity of more than three months

Under ROC GAAP, cash and cash equivalents include cash on hand, demand deposits, checking deposits, time deposits and certificates of deposit which can be redeemed or sold immediately without any loss of principal. Under Taiwan-IFRSs, cash equivalents are investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. Therefore, only short-term investments that have a maturity of three months or less from the date of acquisition normally meet the definition of cash equivalents under Taiwan-IFRSs. Thus, time deposits with a maturity of more than three months are reclassified as other financial assets on Taiwan-IFRSs transition.

As of December 31, 2012 and January 1, 2012, the Bank and its subsidiaries reclassified the time deposits with a maturity of more than three months of $2,900 thousand to other financial assets.

b) Regular way transactions

Before applying Taiwan-IFRSs, the Bank applies settlement date accounting to government bonds and trade date accounting to the rest of its financial assets when recording financial asset transactions. Under Taiwan-IFRSs, trade date accounting or settlement date accounting should be applied consistently to all purchases and sales of financial assets that belong to the same category of financial assets. The Bank applies trade date accounting to all regular way purchase or sale of financial assets. As of January 1, 2012, accounts receivable increased by $1,033,052 thousand; available-for-sale financial assets decreased by $729,247 thousand; financial liabilities at fair value through profit or loss increased by $303,805 thousand; and other

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equity decreased by $7,406 thousand. As of December 31, 2012, no adjustments should be made. For the year ended December 31, 2012, realized gain on available-for-sale financial assets decreased by $7,406 thousand.

c) Acquired receivables

Under ROC GAAP, receivables acquired by an asset management company are accounted for by the cost recovery method. Income shall not be recognized to the extent that the amounts received exceed the carrying amount of the acquired receivables. Under Taiwan-IFRSs, acquired receivables are measured at amortized cost. Interest income is recognized using the effective interest method over the relevant period.

As of December 31, 2012 and January 1, 2012, accounts receivables increased by $54,676 thousand and $61,867 thousand, respectively; deferred tax assets decreased by $9,295 thousand, and $10,517 thousand, respectively; and deferred tax liabilities increased by $8,405 thousand, and $9,613 thousand, respectively. For the year ended December 31, 2012, the interest income increased by $38,049 thousand, income tax expense decreased by $1,222 thousand, and noninterest income and gains - others decreased by $45,240 thousand.

d) Investments accounted for using equity method

To comply with the requirements of Taiwan-IFRSs, the Bank and its subsidiaries’ associates accounted for using equity method have also assessed the material differences between previous accounting policies under ROC GAAP and the accounting policies adopted under Taiwan-IFRSs.

As of December 31, 2012 and January 1, 2012, investments accounted for using equity method decreased by $3,850 thousand and $2,071 thousand, respectively, to comply with the requirements of Taiwan-IFRSs. For the year ended December 31, 2012, the share of loss of associates and the share of other comprehensive loss of associates decreased by $1,328 thousand and $451 thousand, respectively.

e) Capital surplus arising from investments accounted for using equity method

Under ROC GAAP, when an investor subscribes for its investee’s newly issued shares at a percentage different from its percentage of ownership in the investee, the investor records the change in its equity in the investee’s net assets as an adjustment to investments, with a corresponding amount credited or charged to capital surplus. In compliance with the “Questions and Answers on IFRSs adoption” issued by the Taiwan Stock Exchange, the Bank reclassified such capital surplus to retained earnings. As a result, the capital surplus decreased by $9,302 thousand as of December 31, 2012 and January 1, 2012, respectively.

f) Customer loyalty programmes

Under ROC GAAP, the liabilities arising from reward points are recognized when the reward points are granted. Under IFRIC 13 - “Customers Loyalty Programmes”, some of the consideration received is allocated to award credits. The consideration allocated to the award credits should be measured by reference to their fair value and recognized as income when the obligations to supply the award are fulfilled.

As of December 31, 2012 and January 1, 2012, payables decreased by $73,244 thousand, and $106,517 thousand, respectively; other liabilities - deferred revenue increased by $73,244 thousand and $106,517 thousand, respectively. For the year ended December 31, 2012, other general and administration expenses and service fee income decreased by $13,219 thousand.

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g) Employee benefits - short-term accumulating compensated absences

ROC GAAP does not address the treatment of compensated absences. Companies usually recognize the cost when absences actually occur. Under Taiwan-IFRSs, such cost is recognized when employees render services that increase their entitlement to future compensated absences.

As of December 31, 2012 and January 1, 2012, accrued expenses increased by $38,569 thousand and $35,335 thousand, respectively, to comply with the accounting treatment of short-term accumulating compensated absences. The salaries and bonus increased by $3,234 thousand for the year ended December 31, 2012.

h) Employee benefits - actuarial gains and losses on the defined benefit plan

In compliance with IAS 19 - “Employee Benefits” and IFRS 1 - “First-time Adoption of International Financial Reporting Standards,” the Bank had revalued its defined benefit plan and recognized actuarial gains and losses immediately. As a result, accrued pension liabilities and deferred tax assets increased by $212,468 thousand and $36,119 thousand, respectively, as of January 1, 2012. As of December 31, 2012, accrued pension liabilities increased by $206,048 thousand; deferred tax assets increased by $35,028 thousand. For the year ended December 31, 2012, pension cost decreased by $6,420 thousand and income tax expense increased by $1,091 thousand.

i) Employee benefits - employees’ savings accounts with preferential interest rate

In compliance with IAS 19 - “Employee Benefits” and “Regulations Governing the Preparation of Financial Reports by Public Banks,” the preferential interest rate costs in excess of the market interest rate costs is recognized as employee benefits expense.

For the year ended December 31, 2012, the Bank and its subsidiaries reclassified interest cost of $52,062 thousand, the preferential interest rate in excess of the market interest rate, to employee benefits expense.

j) Interest income and cost derived from financial instruments at fair value through profit and loss (FVTPL)

Under Taiwan-IFRSs, items in the statement of other comprehensive income are classified on the basis of their nature; thus, interest income and cost derived from financial instruments at FVTPL should be reclassified as gain or loss on financial instruments at FVTPL.

For the year ended December 31, 2012, gain on financial assets and liabilities at FVTPL increased by $43,346 thousand, the interest income decreased by $52,912 thousand, and the interest cost decreased by $9,566 thousand.

k) Reconciliation of retained earnings

The retained earnings under Taiwan-IFRSs as of January 1, 2012 decreased by $145,697 thousand compared with those under ROC GAAP, mainly resulted from (a) an increase of $7,406 thousand in regular way transactions; (b) an increase of $51,350 thousand in acquired receivables; (c) a decrease of $2,071 thousand in investments accounted for by the equity method; (d) an increase of $9,302 thousand in capital surplus arising from equity-method investments; (e) a decrease of $35,335 thousand in employee benefits - short-term accumulating compensated absences; and (f) a decrease of $176,349 thousand in employee benefits - actuarial gains and losses of the defined benefit plan.

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l) Differences in presentation

In compliance with the Regulations Governing the Preparation of Financial Reports by Public Banks, effective 2013, certain line items in the balance sheet and the statement of comprehensive income will be presented in accordance with Taiwan-IFRSs on and after the date of transitions to IFRS.

6) Reconciliation of consolidated statement of cash flows

Under ROC GAAP, interest paid and received and dividends received are classified as operating activities, while dividends paid are classified as financing activities. Additional disclosure is required for interest paid when reporting cash flow using indirect method. Under IAS 7 - “Statement of Cash Flows”, cash flows from interest and dividends received and paid shall be classified in a consistent manner from period to period as operating, investing or financing activities. Therefore, interest received and paid and dividends received by the Bank and its subsidiaries’ of $9,673,900 thousand, $5,365,610 thousand, and $86,040 thousand, respectively, for the year ended December 31, 2012, were presented separately at the date of transition to Taiwan-IFRSs.

Except for the above differences, there are no other significant differences between ROC GAAP and Taiwan-IFRSs in the consolidated statement of cash flows.

51. ADDITIONAL DISCLOSURES

a. Following are the additional disclosures required by the Securities and Futures Bureau for the Bank and its investees:
1) Financings provided: Nil
2) Endorsement/guarantee provided: Nil
3) Marketable securities held: Table 1 (attached)
4) Marketable securities acquired and disposed of at cost or prices at least NT$300 million or 10% of the paid-in capital: Nil
5) Acquisition of individual real estate at cost of at least NT$300 million or 10% of the paid-in capital: Nil
6) Disposal of individual real estate at prices of at least NT$300 million or 10% of the paid-in capital: Nil
7) Service charge discounts on transactions with related parties in aggregated amount of at least NT$5 million: Nil
8) Receivables from related parties amounting to at least NT$300 million or 10% of the paid-in capital: Nil
9) Sale of nonperforming loans: Nil
10) Related information of investees on which the Bank and its subsidiaries exercises significant influence: Table 2 (attached)
11) Derivative transactions: Notes 8, 9 and 46

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12) Intercompany relationships and significant intercompany transactions: Table 3 (attached)
13) The type and related information of any securitization product that has been approved in accordance with the Financial Asset Securitization Act or the Real Estate Securitization Act: Nil
b. Information about branches and investments in mainland China: Nil

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	Note
December 31, 2013	Market Value or Net Asset Value	$ 799,971
	Percentage of Ownership	49.00
	Carrying Amount	$ 799,971
	Shares/Units (In Thousands)	98,000
	Financial Statement Account	Investment accounted for using equity method
Security Issuer’s Relationship with the Holding Company		Equity-method investee
Type and Issuer of Securities Held		Common stock Yuan Long Stainless Steel Co., Ltd.
Holding Company		Far Eastern Asset Management Management Co., Ltd.

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		Note
The Proportionate Share of The Bank and Its Affiliates in Investees	Total	Percentage of Ownership (%)	40.00 100.00 100.00 22.07 100.00 100.00 100.00 0.40 3.46 1.14 10.00 1.76 100.00
		Shares (In Thousands)	12,000 3,000 350 95,524 120,000 20,000 900 80 207 5,119 300 2,238 200,000
		Pro Forma Shares	- - - - - - - - - - - - -
		Present Shares (In Thousands)	12,000 3,000 350 95,524 120,000 20,000 900 80 207 5,119 300 2,238 200,000
	Investment Income (Loss) Recognized		$ (17,583) 169,084 11,231 74,756 4,548 (10,782) (556) - - - - - (3,975)
	Carrying Amount		$ 143,871 233,376 18,367 1,421,984 645,137 199,122 4,131 800 2,073 45,500 3,000 50,006 799,971
	Percentage of Ownership (%)		40.00 100.00 100.00 22.06 100.00 100.00 100.00 0.40 3.46 1.14 10.00 1.76 49.00
	Main Businesses and Products		Securities investment trust funds Life insurance agent Property insurance agent Underwriting, dealing and brokering of short-term bills Purchase, evaluation, auction and management of creditor’s rights to financial institutions Foreign securities broker, wealth management and offshore fund consulting Insurance brokerage Foreign exchange, cross - currency swaps, etc. Management of creditor’s rights and rendering of commercial detective services Data processing service and electronic information supply ATM maintenance, replacement and repair Cable TV network offering news, variety shows, etc. Iron and steel rolls over extends and crowding, and secondary processing of steel products
	Location		7F, No. 207 Dun Hwa South Road, Sec. 2, Taipei, Taiwan 6F-3, No. 189 Yan Ping South Road, Taipei, Taiwan 6F-3, No. 189 Yan Ping South Road, Taipei, Taiwan 4F, 4F-1, 4F-2, 4F-3, Np. 88 Dun Hwa Notrth Road, Taipei, Taiwan 4F-1, No. 267 Dun Hwa South Road, Sec. 2, Taipei, Taiwan 51F, No. 7, Xinyi Road, Sec. 5, Taipei, Taiwan 51F, No. 7, Xinyi Road, Sec. 5, Taipei, Taiwan 8F., No. 400, Bade Road, Sec. 2, Taipei, Taiwan 15F., No. 218, Dun Hwa South Road, Sec. 2, Taipei, Taiwan No. 81, Kangning Road, Sec. 3, Taipei, Taiwan 3F., No. 139, Jhengjhou Road, Taipei, Taiwan 2F., No. 39, Rueihu Road, Taipei, Taiwan No. 28, Daye South Road, Kaohsiung, Taiwan
	Investee Company		Financial business Deutsche Far Eastern Asset Management Co., Ltd. Far Eastern Life Insurance Agency Co., Ltd. Far Eastern Property Insurance Agency Co., Ltd. Dah Chung Bills Finance Corp. Far Eastern Asset Management Co., Ltd. Far Eastern International Securities Co., Ltd. Far Eastern Insurance Brokerage Co., Ltd. Taipei Foreign Exchange Agency Co., Ltd. Sunshine Asset Management Co., Ltd. Financial Information Service Co., Ltd. Nonfinancial business An Feng Enterprise Co., Ltd. ERA Communications Co., Ltd. Yuan Long Stainless Steel Co., Ltd

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Percentage of Consolidated Net Profit or Consolidated Total Assets (Note b)	- 0.05 3.11 0.04 - 0.04 - 0.06 0.02 -	-	0.05 3.11 0.04 - 0.04 0.04	- 0.06	0.02 0.04	-
Terms	Note c Note c Note c Note c Note c Note c Note c Note c Note c Note c	-	- - - - - -	- -	- -	-
Amount	$ 3,217 245,651 294,682 3,828 3,580 3,580 19,708 5,570 87,027 3,930	3,217	245,651 294,682 3,828 3,580 3,580 3,904	19,708 5,570	87,027 3,904	3,930
Financial Statement Account	Deposits and remittances Deposits and remittances Service fee income Interest cost Receivables Noninterest income and gain - others Deposits and remittances Service fee income Deposits and remittances Deposits and remittances	Cash and cash equivalents	Cash and cash equivalents Other general and administrative expenses Interest income Payables Employee benefits expense Other general and administrative expenses	Cash and cash equivalents Other general and administrative expenses	Cash and cash equivalents Service fee income	Cash and cash equivalents
Flow of Transaction	From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary From parent company to subsidiary	From subsidiary to parent company	From subsidiary to parent company From subsidiary to parent company From subsidiary to parent company From subsidiary to parent company From subsidiary to parent company From subsidiary to subsidiary	From subsidiary to parent company From subsidiary to parent company	From subsidiary to parent company From subsidiary to subsidiary	From subsidiary to parent company
Counterparty	Far Eastern Asset Management Co., Ltd. Far Eastern Life Insurance Agency Co., Ltd. Far Eastern Life Insurance Agency Co., Ltd. Far Eastern Life Insurance Agency Co., Ltd. Far Eastern Life Insurance Agency Co., Ltd. Far Eastern Life Insurance Agency Co., Ltd. Far Eastern Property Insurance Agency Co., Ltd. Far Eastern Property Insurance Agency Co., Ltd. Far Eastern International Securities Co., Ltd. Far Eastern Insurance Brokerage Co., Ltd.	Far Eastern International Bank Ltd.	Far Eastern International Bank Ltd. Far Eastern International Bank Ltd. Far Eastern International Bank Ltd. Far Eastern International Bank Ltd. Far Eastern International Bank Ltd. Far Eastern International Securities Co., Ltd.	Far Eastern International Bank Ltd. Far Eastern International Bank Ltd.	Far Eastern International Bank Ltd. Far Eastern Life Insurance Agency Co., Ltd.	Far Eastern International Bank Ltd.
Company Name	Far Eastern International Bank Ltd.	Far Eastern Asset Management Co., Ltd.	Far Eastern Life Insurance Agency Co., Ltd.	Far Eastern Property Insurance Agency Co., Ltd.	Far Eastern International Securities Co., Ltd.	Far Eastern Insurance Brokerage Co., Ltd.
No. (Note a)	0	1	2	3	4	5

184

遠東國際商業銀行股份有限公司董事長：

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台北市敦化南路二段 207 號 26.27 樓 26.27/F 207 Tun Hwa S.Road,Sec.2,Taipei Tel:(02)2378 ~~-~~ 6868 Fax:(02)2377 ~~-~~ 9000 Swift Code : FEINTWTP http://www.feib.com.tw

AI assistant

FEIB — Annual Report 2013

52204_rns_2014-07-07_4ecdc8b7-8f23-417c-809a-75ed8c27fbe1.pdf

2013 年英文年報目錄 2013 Annual Report Contents

38 伍 經營概況 Business Overview

重要財務比率 Key Financial Ratios(%)

Our Mission Statement

Our

Competitive Strengths

未來經營方針

2014 年業務推展，重點計畫如下 :

一、預期營業目標

二、經營方針與重要經營政策

（一）個人金融業務：

（二）消金及信用卡業務：

101 分行提供高端理財服務

Taipei 101 Branch Offers High-end Private Banking Services

Operating Goals Operating Outlook for 2014 is summarized as follows:

1. Operating Targets:

2. Operating Highlights:

(1) Individual Banking Business

(2) Consumer Banking and Credit Card Business

A. Consumer Banking Business

2. 信用卡方面

（三）法人金融業務

（四）金融市場業務

B. Credit Card Business

(3) Corporate Banking Business

(4) Financial Markets Business

一、基本資料

二、銀行簡介

(1)General Corporate Data

Dec 31,2013

(2)Introduction

三、本行沿革

(3)Milestones

四、本行組織系統簡圖

(4)FEIB Organization Chart

一、公司治理守則

(1) Corporate Governance Principles

董監事成員 Board of Directors and Supervisors

二、董監事成員 Board of Directors and Supervisors

( 承上頁 )

經營團隊 Management Team

前排由左至右 (Seated From Left to Right)

後排由左至右 (Standing From Left to Right)

( 承上頁 )

三、經營團隊 Management Team

( 承上頁 )

( 承上頁 )

四、政策委員會

( 一 ) 資產負債管理委員會

( 二 ) 授信審議委員會

( 三 ) 人事評議委員會

( 四 ) 投資審議委員會

( 五 ) 信託財產評審委員會

( 六 ) 資訊業務指導委員會

( 七 ) 風險管理委員會

( 八 ) 薪資報酬委員會

(4) Policy Committees

A. Asset and Liabilities Management Committee

B. Credit Committee

C. Personnel Committee

E. Trust Assets Committee

F. IT Steering Committee

H. Remuneration Committee

一、關鍵績效成果

( 一 ) 預算執行情形

( 二 ) 財務獲利能力分析

二、核心事業

( 一 ) 個人金融業務

1. 財富管理業務

2. 中小企業服務部

( 二 ) 消金及信用卡業務

1. 消費金融業務

2. 信用卡業務

( 三 ) 法人金融業務

(1)Key Performance Results

(2)Core Businesses

1.Wealth Management

FEIB Annual Report 2013

38 伍經營概況 Business Overview