Stock Code:2834

TAIWAN BUSINESS BANK LTD.

Financial Statements

With Independent Auditors' Report
For the Years Ended December 31, 2025 and 2024

ADDRESS: NO. 30, Ta-Cheng Street, Taipei, Taiwan, R.O.C.
TELEPHONE: 02-2559-7171

The independent auditors' report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' report and financial statements, the Chinese version shall prevail.

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Independent Auditors’ Report	3
4. Balance Sheets	4
5. Statements of Comprehensive Income	5
6. Statements of Changes in Equity	6
7. Statements of Cash Flows	7
8. Notes to the Financial Statements
(1) Company history	8
(2) Approval date and procedures of the financial statements	8
(3) New standards, amendments and interpretations adopted	8~10
(4) Summary of material accounting policies	10~23
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	23~24
(6) Explanation of significant accounts	24~114
(7) Related-party transactions	115~118
(8) Pledged assets	118
(9) Commitments and contingencies	118~122
(10) Losses from disasters	122
(11) Subsequent Events	123
(12) Others	123~129
(13) Other disclosures
(a) Information on significant transactions	130
(b) Information on investees	130~134
(c) Information on investments in Mainland China	134
(d) Information of major shareholders	135
(14) Segment information	135
9. Statement of significant accounts	136~156
10. Segment information of Security Division	157~185

KPMG

多侯速素群合作能源产品有限公司

台北市110615信義路5段7號68樓(台北101大樓)

68F., TAIPEI 101 TOWER, No. 7, Sec. 5,

Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)

電話 Tel +886 2 8101 6666

傳真 Fax +886 2 8101 6667

網址 Web kpmg.com/tw

Independent Auditors’ Report

To the Board of Directors of Taiwan Business Bank Ltd.:

Opinion

We have audited the financial statements of Taiwan Business Bank Ltd. (“the Bank”), which comprise the balance sheets as of December 31, 2025 and 2024, the statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Bank as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Public Held Banks, and with the Regulation Governing the preparation of Financial Reports by Securities Firms.

Basis for Opinion

We conducted our audits of the current period in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Jin-Kuan-Yin-Zi No.1082731571 and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Bank and subsidiaries in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

The assessment of loans impairment

Please refer to Note (4) (e) “Financial Instruments” for related accounting policy, Note 5 for accounting assumptions and estimates, and Note 6 (f) “Discount and loans, net” and Note 6 (ao) “Financial Risk Information” for details of loans impairment, respectively.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

KPMG
3-1

Description of key audit matter :

The management of the Bank assess the impairment of loans by determining if there is any observable evidence indicating impairment, and dividing them into collective assessment and individual assessment based on the materiality levels to measure by different impairment method. For the individual assessment with objective evidence of impairment, the measurement is based on expected future cash flow. For the collective assessment with objective evidence of impairment, the Bank needs to calculate the recovery rate of each group to measure the impairment amount. For the collectively assessed loans without objective evidence of impairment, the impairment is calculated by establishing an impairment model using the pass loss experience on assets with similar credit risk characteristic to form basic estimation. Besides the methods mentioned above, the management of the Bank should inspect weather the amount of impairment is in compliance with the minimum level made by the authority. Both the evaluation of impairment evidences and its methods, as well as the uses of assumptions, such as the expected recovery rates and default rates, which are applied to determine the future cash flow, involved significant judgements and estimations. Therefore, the assessment on the impairment of loans has been identified as a key audit matter in our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: understanding the methodology and related control procedure about how the management assesses and measures the impairment amount of loans. For individual assessment, we used sampling test to evaluate the use of the original effective interest rate, the appropriateness of the estimation of future recoverable amounts and value of collateral. For collective assessment, we assessed the impairment model adopted by the management and reviewed the appropriated of the calculation of the impairment parameters and verified the completeness of the loans portfolio via sampling. Meanwhile, we assessed the impaired amounts recognized by the management were in compliance with the related regulations issued by authority.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Public Held Banks, and the Regulations Governing the Preparation of Financial Reports by Securities Firms, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Bank's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Bank's financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

KPMG

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Bank to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

KPMG

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Lee, Feng-Hui and Tsai, Pei-Ju.

KPMG

Taipei, Taiwan (Republic of China)

February 26, 2026

Notes to Readers

The accompanying financial statements are intended only to present the statement of financial position, financial performance and cash flows in accordance with the 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 financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and financial statements, the Chinese version shall prevail.

(English Translation of Financial Statements and Report Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	Assets	December 31, 2025		December 31, 2024			December 31, 2025		December 31, 2024
		Amount	%	Amount	%		Liabilities and Equity	%	Amount	%
11000	Cash and cash equivalents (Notes 6(a) and 7)	$ 26,699,411	1	35,563,016	2		Liabilities
11500	Due from the central bank and call loans to banks (Notes 6(b) and 7)	161,817,616	6	167,755,372	7	21000	Deposits from the Central Bank and banks (Notes 6(n) and 7)	$ 197,280,651	8	240,697,672
12000	Financial assets at fair value through profit or loss (Note 6(c))	104,086,025	4	81,185,388	3	22000	Financial liabilities at fair value through profit or loss (Notes 6(o) and (s))	9,877,601	-	10,213,236
12100	Financial assets at fair value through other comprehensive income (Notes 6(g) and (p))	195,050,547	8	184,990,454	8	22500	Notes and bonds issued under repurchase agreement (Note 6(p))	5,359,765	-	2,011,108
12200	Investment in debt instruments at amortized cost (Note 6(h))	279,234,758	11	230,242,408	10	23000	Payables (Note 6(q))	19,237,979	1	20,056,886
12500	Securities purchased under resell agreements (Note 6(d))	31,484,029	1	10,252,365	-	23200	Current tax liabilities	468,344	-	851,123
13000	Receivables (Note 6(e))	9,276,552	-	9,792,787	-	23500	Deposits and remittances (Notes 6(r) and 7)	2,064,484,222	83	1,904,064,595
13200	Current tax assets	355,667	-	350,107	-	24000	Bank notes payable (Note 6(s))	53,910,000	2	53,460,000
13500	Discounts and loans, net (Notes 6(f) and 7)	1,669,667,843	67	1,619,036,334	68	25500	Other financial liabilities (Note 6(t))	2,472,641	-	2,528,132
15000	Investments measured by equity method (Note 6(i))	3,910,820	-	3,835,715	-	25600	Provisions (Notes 6(u) and (z))	2,519,764	-	2,384,421
15500	Other financial assets (Note 6(j))	5,961	-	6,837	-	26000	Lease liabilities (Note 6(v))	1,069,957	-	1,293,191
18500	Property and equipment, net (Note 6(k))	13,729,645	1	13,875,938	1	29500	Deferred tax liabilities (Note 6(y))	896,118	-	948,320
18600	Right-of-use assets, net (Note 6(l))	1,032,242	-	1,253,870	-	29500	Other liabilities (Note 6(w))	3,070,050	-	3,440,457
19000	Intangible assets, net	1,393,835	-	1,198,954	-		Total liabilities	2,360,647,092	94	2,241,949,141
19300	Deferred tax assets (Note 6(y))	1,899,251	-	1,899,955	-		Equity:
19500	Other assets, net (Note 6(m))	7,915,596	1	12,143,423	1	31101	Common stock (Note 6(x))	97,180,618	4	91,679,828
						31500	Capital surplus (Note 6(x))	816,129	-	816,129
							Retained earnings:
						32001	Legal reserve (Note 6(x))	27,728,853	1	23,647,983
						32003	Special reserve (Note 6(x))	185,128	-	185,128
						32005	Unappropriated retained earnings (Note 6(x))	15,629,224	1	14,767,272
						32500	Other equity interest (Note 6(x))	5,372,754	-	337,442
							Total equity	146,912,706	6	131,433,782
							Total liabilities and equity	$ 2,507,559,798	100	2,373,382,923
Total assets		$ 2,507,559,798	100	2,373,382,923	100

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

	For the years ended December 31,				Percent Change
		2025		2024
		Amount	%	Amount	%	%
41000	Interest income (Notes 6(ac) and 7)	$ 56,890,433	163	55,208,369	163	3
51000	Less:Interest expenses (Notes 6(ac) and 7)	(36,454,920)	(104)	(36,263,874)	(107)	1
	Net interest revenue	20,435,513	59	18,944,495	56	8
	Net revenue other than interest
49100	Net service fee revenue (losses) (Notes 6(ad) and 13)	6,669,065	20	6,531,242	19	2
49200	Gain on financial assets or liabilities measured at fair value through profit or loss (Note 6(ae))	5,354,145	15	6,146,298	18	(13)
49310	Realized gain on financial assets at fair value through other comprehensive income (Note 6(af))	1,452,168	4	1,154,743	4	26
49450	Gain arising from derecognition of financial assets measured at amortized cost (Note 6(h))	125	-	145	-	(14)
49600	Foreign exchange gain	304,667	1	330,751	1	(8)
49700	(Impairment loss on assets) reversal of impairment loss on assets (Note 6(ag))	(15,945)	-	22,436	-	171
49750	Share of profit of associates and joint ventures accounted for using equity method (Notes 6(i) and 6(ah))	142,030	-	160,147	-	(11)
49800	Net other revenue other than interest income (loss) (Note 6(ai))	73,763	-	105,219	-	(30)
49831	Net securities brokering revenue	496,328	1	523,327	2	(5)
	Net revenue	34,911,859	100	33,918,803	100	3
58200	Bad debts expense, commitment and guarantee liability provision (Note 6(aj))	(2,319,282)	(7)	(3,432,591)	(10)	(32)
	Operating expenses
58500	Employee benefits expenses (Note 6(ak))	(10,302,291)	(30)	(9,775,958)	(29)	5
59000	Depreciation and amortization expenses (Note 6(al))	(1,390,391)	(4)	(1,357,756)	(4)	2
59500	Other general and administrative expenses (Note 6(am))	(5,682,672)	(15)	(5,321,901)	(16)	7
	Total operating expense	(17,375,354)	(49)	(16,455,615)	(49)	6
61001	Income from continuing operation before tax	15,217,223	44	14,030,597	41	8
61003	Less: Income tax expenses (Note 6(y))	2,985,404	9	2,793,896	8	7
	Net income	12,231,819	35	11,236,701	33	9
65000	Other comprehensive income:
65200	Components of other comprehensive income that will not be reclassified to profit or loss
65201	Remeasurements of defined benefit plans (Note 6(e))	20,268	-	166,594	1	(88)
65204	Revaluation gains (losses) on investments in equity instruments measured at fair value through other comprehensive income	1,353,474	4	2,100,478	6	(36)
65207	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	105	-	876	-	(88)
65220	Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss (Note 6(y))	4,054	-	33,319	-	(88)
	Components of other comprehensive income that will not be reclassified to profit or loss	1,369,793	4	2,234,629	7	(39)
65300	Components of other comprehensive income that will be reclassified to profit or loss
65301	Exchange difference on translation	(372,677)	(1)	1,001,341	3	(137)
65308	Gains (losses) from investments in debt instruments measured at fair value through other comprehensive income	4,017,585	12	(1,334,815)	(4)	401
65307	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	4,258	-	28,143	-	(85)
65320	Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss (Note 6(y))	(61,743)	1	210,250	1	129
	Components of other comprehensive income that will be reclassified to profit or loss	3,710,909	10	(515,581)	(2)	(820)
65000	Other comprehensive income	5,080,702	14	1,719,048	5	196
	Total comprehensive income	$ 17,312,521	49	12,955,749	38	34
	Earnings per share (in NT dollar) (Note 6(aa))
	Basic earnings per share (in NT dollar)	$	1.26		1.16
	Diluted earnings per share (in NT dollar)	$	1.25		1.15

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2024

Net income for the year ended December 31, 2024

Other comprehensive income for the year ended December 31, 2024

Total comprehensive income for the year ended December 31, 2024

Appropriation and distribution of retained earnings:

Legal reserve appropriated

Reversal of special reserve

Cash dividends of ordinary share

Stock dividends of ordinary share

Other changes in capital surplus:

Donation from shareholders

Disposal of investment in equity instruments designated at fair value through other comprehensive income

Balance at December 31, 2024

Net income for the year ended December 31, 2025

Other comprehensive income for the year ended December 31, 2025

Total comprehensive income for the year ended December 31, 2025

Appropriation and distribution of retained earnings:

Legal reserve appropriated

Cash dividends of ordinary share

Stock dividends of ordinary share

Disposal of investments in equity instruments designated at fair value through other comprehensive income

Balance at December 31, 2025

Share capital		Retained earnings				Other equity interest
Common stock	Capital surplus	Legal reserve	Special reserve	Unappropriated retained earnings	Total	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
$ 82,224,061	815,900	20,028,865	3,954,803	12,114,062	36,097,730	(629,158)	1,613,752	120,122,285
-	-	-	-	11,236,701	11,236,701	-	-	11,236,701
-	-	-	-	133,275	133,275	829,216	756,557	1,719,048
-	-	-	-	11,369,976	11,369,976	829,216	756,557	12,955,749
-	-	-	-	-	-	-	-	-
-	-	3,619,118	-	(3,619,118)	-	-	-	-
-	-	-	(3,769,675)	3,769,675	-	-	-	-
-	-	-	-	(1,644,481)	(1,644,481)	-	-	(1,644,481)
9,455,767	-	-	-	(9,455,767)	(9,455,767)	-	-	-
-	229	-	-	-	-	-	-	229
-	-	-	-	2,232,925	2,232,925	-	(2,232,925)	-
91,679,828	816,129	23,647,983	185,128	14,767,272	38,600,383	200,058	137,384	131,433,782
-	-	-	-	12,231,819	12,231,819	-	-	12,231,819
-	-	-	-	16,214	16,214	(293,884)	5,358,372	5,080,702
-	-	-	-	12,248,033	12,248,033	(293,884)	5,358,372	17,312,521
-	-	4,080,870	-	(4,080,870)	-	-	-	-
-	-	-	-	(1,833,597)	(1,833,597)	-	-	(1,833,597)
5,500,790	-	-	-	(5,500,790)	(5,500,790)	-	-	-
-	-	-	-	29,176	29,176	-	(29,176)	-
$ 97,180,618	816,129	27,728,853	185,128	15,629,224	43,543,205	(93,826)	5,466,580	146,912,706

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	For the years ended December 31,
	2025	2024
Cash flows from operating activities:
Net income before tax	$ 15,217,223	14,030,597
Adjustments:
Income and expenses items:
Depreciation expense	918,968	987,474
Amortization expense	471,423	370,282
Provision for bad debt expense	2,228,994	3,399,898
Net loss on financial assets or liabilities at fair value through profit or loss	1,030,906	1,073,382
Interest expenses	36,454,920	36,263,874
Net gain arising from derecognition of financial assets measured at amortised cost	(125)	(145)
Interest income	(56,890,433)	(55,208,369)
Dividend income	44,316	15,442
Net change in provisions for guarantee liabilities	104,016	62,365
Net change in other provisions	(12,971)	(28,893)
Share of profit of subsidiaries, associates and joint ventures accounted for using equity method	(142,030)	(160,147)
Loss on disposal of property and equipment	6,443	2,916
(Reversal of) impairment loss on financial assets	15,945	(22,436)
Other items	247	(14)
Total adjustments to reconcile profit (loss)	(15,769,381)	(13,244,371)
Changes in operating assets and liabilities:
Changes in operating assets:
Decrease (increase) in due from the central bank and call loans to banks	5,937,564	(47,817,832)
Increase in financial assets at fair value through profit or loss	(23,307,788)	(9,592,321)
Increase in securities purchased under resell agreements	(21,231,664)	(3,141,880)
Decrease (increase) in receivables	487,494	(599,226)
Increase in discounts and loans	(52,775,363)	(131,144,156)
(Increase) decrease in other financial assets	(804)	4,773
Decrease (Increase) in other assets	3,667,969	(3,012,122)
Total changes in operating assets	(87,222,592)	(195,302,764)
Changes in operating liabilities:
(Decrease) increase in deposits from the central bank and banks	(43,417,021)	77,535,116
(Decrease) increase in financial liabilities at fair value through profit or loss	(959,390)	83,559
Increase in notes and bonds issued under repurchase agreement	3,348,657	224,393
Decrease in payable	(1,467,232)	(6,225,267)
Increase in deposits and remittances	160,419,627	80,426,792
(Decrease) increase in other financial liabilities	(55,491)	391,730
Increase (decrease) in provisions for employee benefits	65,543	(387,729)
Total changes in operating liabilities	117,934,693	152,048,594
Total changes in operating assets and liabilities	30,712,101	(43,254,170)
Total adjustments	14,942,720	(56,498,541)
Cash inflow (outflow) generated from operations	30,159,943	(42,467,944)
Interest received	56,869,229	54,585,973
Interest paid	(36,302,323)	(34,855,422)
Income taxes paid	(2,856,541)	(1,538,591)
Net Cash flows from (used in) operating activities	47,870,308	(24,275,984)
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through other comprehensive income	(4,683,887)	-
Proceeds from disposal of financial assets at fair value through other comprehensive income	-	5,174,123
Acquisition of financial assets at amortised cost	(205,815,374)	(166,836,782)
Proceeds from repayments of financial assets at amortised cost	156,803,149	189,497,956
Acquisition of property and equipment	(504,352)	(470,136)
Proceeds from disposal of property and equipment	222	115
Decrease (increase) in refundable deposits	214,062	(409,434)
Acquisition of intangible assets	(516,110)	(579,640)
Net cash flows (used in) from investing activities	(54,502,290)	26,376,202
Cash flows from (used in) financing activities:
Proceeds from issuing bank notes payable	2,000,000	-
Repayments of bank notes payable	(1,550,000)	(390,000)
(Decrease) increase in guarantee deposits received	(315,810)	1,580,977
Payment of lease liabilities	(443,127)	(442,686)
(Decrease) increase in other liabilities	(54,597)	103,162
Cash dividends paid	(1,833,597)	(1,644,481)
Other financing activities	-	229
Net cash flows used in financing activities	(2,197,131)	(792,799)
Effect of exchange rate changes on cash and cash equivalents	(34,492)	40,854
Net (decrease) increase in cash and cash equivalents	(8,863,605)	1,348,273
Cash and cash equivalents at beginning of period	35,563,016	34,214,743
Cash and cash equivalents at end of period	$ 26,699,411	35,563,016

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

TAIWAN BUSINESS BANK LTD. (the “Bank”) was formerly a general savings union known as “Taiwan Mutual Financing Bank” or “Tai-Shio Mutual Financing Bank” when it was established in 1915. After several mergers and acquisitions, it was renamed as Taiwan Business Bank, Ltd. in order to finance and provide banking assistance to small and medium-size businesses on July 1, 1976. The Bank’s major lines of business are the following:

(a) As prescribed by the Banking Law, provides professional services tailored to the needs of small and medium-size businesses;

(b) Trust and securities brokerage businesses as approved by the relevant authority;

(d) Other relevant businesses as authorized by the relevant authority in-charge.

As of December 31, 2025, the Bank not only sets up the business dept., international dept., securities dept. and trust dept. under head office but also has 124 domestic branches, 1 offshore banking unit, 8 overseas branches, 1 oversea representative office and 15 securities brokerage locations.

The Bank became listed on the Taiwan Stock Exchange on January 3, 1998.

Under the ”Statute for Privatization of State Enterprises” and upon the approval of Taiwan Province Government, the shares of the Bank owned by the provincial government were sold to the public. In line with privatization of the three other major Taiwan province government owned run commercial banks, the Bank had completed its own privatization on January 22, 1998.

As of December 31, 2025 and 2024, the Bank has 5,819 and 5,687 employees, respectively.

(2) Approval date and procedures of the financial statements:

These financial statements were authorized for issuance by the board of directors on February 26, 2026.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Bank has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2025:

Amendments to IAS21 “Lack of Exchangeability”

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(b) The impact of IFRS Accounting Standards endorsed by the FSC but not yet effective

The Bank assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2026, would not have a significant impact on its financial statements:

IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “Insurance Contracts”
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”
Annual Improvements to IFRS Accounting Standards—Volume 11
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”

The following new and amended standards, which may be relevant to the Bank, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations	Content of amendment	Effective date per IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	The new standard introduces three categories of income and expenses, two income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

• A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities. | January 1, 2027
Note: On September 25, 2025, the FSC issued a press release announcing that Taiwan will adopt IFRS 18 beginning in 2028. Entities that need to adopt the new standard earlier may do with the endorsement of the FSC. |

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Standards or Interpretations	Content of amendment	Effective date per IASB
	• Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.
• Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes.

The Bank is evaluating the impact on its financial position and financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Bank completes its evaluation.

The Bank does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 19 “Subsidiaries without Public Accountability: Disclosures” and amendments to IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”

(4) Summary of material accounting policies:

The material accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Public Held Banks and the Regulations Governing the Preparation of Financial Report by Securities Firms (hereinafter referred to as the “Regulation”).

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(b) Basis of preparation

(i) Basis of measurement

The financial statements have been prepared on a historical cost basis except for the following material items in the statement of financial position:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) Hedging financial instruments are measured at fair value;
4) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(k).

(ii) Consolidation of financial statement

The financial statements include the headquarter and all the domestic branches and foreign branches. The internal transactions within the headquarter, the domestic branches and the foreign branches are offset when preparing the financial statement.

(iii) Functional and presentation currency

The functional currency of the Bank is determined based on the primary economic environment in operating. The financial statements are presented in New Taiwan Dollar, which is the Bank’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies on the end of each subsequent reporting period (hereinafter referred to as the reporting date) are retranslated to the functional currency at the exchange rate of Bank of Taiwan at 10 AM. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of translation. Foreign currency differences arising on retranslation are recognized in profit or loss, except for the equity instruments measured at fair value through other comprehensive income which are recognized in other comprehensive income arising on the retranslation.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Bank disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non controlling interests. When the Bank disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(d) Cash and cash equivalents

Cash and cash equivalent comprise cash on hand, petty cash, foreign currency on hand and cash in banks, but excludes those items which are designated for specific purposes or restricted by contracts and law.

(e) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Bank becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Bank changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the next reporting period following the change in the business model.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

1) Investment in debt instruments measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Financial assets at fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL.

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Bank may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an investment-by-investment basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Bank’s right to receive payment is established.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

3) Financial assets at fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivate financial assets. On initial recognition, the Bank may irrevocably designate a financial asset, which otherwise meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Discount and loans, net

Discount and loans are recorded as initial fair value including direct transaction cost, and the subsequent measurement recognizes interest income via effective interest rate method if there is not much difference then it can adopt straight line method and is booked as per amortized cost deducted by impairment loss. Interest accrual on discount and loans are suspended if either of the following occurs:

Payment of principal or interest is very likely not to be redeemed as per contracts.
Non-performing loans are categorized as overdue loans in six months after the settlement period ends.

5) Impairment of financial assets

The Bank recognizes loss allowances for expected credit losses on financial assets measured at amortized cost, debt investments measured at FVOCI and loan commitments and financial guarantee contracts. Equity instrument investment does not need to recognize expected credit losses.

The Bank measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date; and
other debt securities, receivables, loan commitments and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instruments is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Bank is exposed to credit risk.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

When determining whether the credit risk of financial asset has increased significantly since initial recognition and when estimating ECL, the Bank considers reasonable and supportable information that is relevant and available (without undue cost or effort). This includes both quantitative and qualitative information and analysis, based on the Bank’s historical experience, informed credit assessment and including forward-looking information.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. The difference between the cash flows due to the Bank expects to receive. ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Bank assesses whether financial assets carried at amortized cost, debt securities at FVOCI, loan commitments and contracts of financial guarantee are credit-impaired. A financial asset is “credit-impaired” when one or move events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

significant financial difficulty of the borrower or issuer;
a breach of contract such as a default or being past due;
the restructuring of a loan or advance by the borrowers on terms that the borrowers would not consider otherwise;
it is probable that the borrower will enter bankruptcy or other financial reorganization;
the disappearance of an active market for a security because of financial difficulties; or
to purchase or initiate financial assets at a substantial discount that reflects the credit losses that have occurred.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

In addition to estimate the allowance for bad debts and guarantee liability provisions as above, according to “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”, and considering the situation of their finance and the default of principal and interest payment, the credit assets are classified as below:

1% of the first class credit assets deducted by the amount of credit assets from the government.
2% of the second class credit assets.
10% of the third class credit assets.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

50% of the fourth class credit assets.
100% of the fifth class credit assets.

The allowance for bad debts and guarantee liability provisions were assessed by the previously stated method shall not be less than the amount regulated by “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans.”

Unrecoverable overdue loans and bad debts of the Bank, which are not able to be recovered after the overdue collection process, are written-off after deducting the recoverable portion. Upon approval by the board of directors and notification to supervisors, the excess amount of written off loans over such allowance or reserve is reflected as a current loss.

(ii) Financial liabilities

Financial liability measured at fair value through profit or loss, if one of the following conditions is met

1) Financial liabilities held for trading

A financial liability is held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term; on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. A derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument, is classified as instrument held for trading as well.

2) Financial liabilities designated at fair value through profit or loss

Financial liabilities falling under this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes are measured at fair value and recognized in profit or loss. While for financial liabilities designated at fair value through profit or loss, the changes in fair value generated from credit risk should be recognized under other comprehensive income, except for avoiding accounting mismatch that should be recognized in profit or loss.

(iii) Reclassification of financial instruments

The Bank only reclassified all affected financial assets in accordance with the regulations when changing the business model of managing financial assets. These changes are expected to be extremely infrequent. In addition, the Bank must not reclassify any financial assets and liabilities of equity instruments.

If the Bank reclassify financial assets in accordance with the aforesaid circumstances, the reclassification shall be postponed from the reclassification date, and any previously recognized gains, losses (including impairment losses or reversal of impairment loss) or interest shall not be restated.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(iv) Derecognition of financial assets and liabilities

The Bank derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Bank neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Bank enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

The Bank derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Bank also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(v) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Bank currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(f) Impairment loss on non-financial assets

The Bank reviews the carrying amounts of its non-financial assets (other than contract assets and deferred tax assets) to determine whether there is any indication of impairment on the balance sheet date. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs).

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(g) Property, plant and equipment

(i) Recognition and measurement

Items of property and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Bank.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property and equipment.

Land is not depreciated.

The estimated useful lives of property and equipment for current and comparative periods are as follows:

1) Buildings 35~50 years
2) Equipment 3~8 years

The Bank reviews and adjusts the residual value and the useful lives of assets at the end of each annual reporting date and adjusted it appropriate.

(h) Investment in associates

The Bank uses the equity method to evaluate an investee that it controls in preparing the financial statements. Under the equity method, the profit or loss and other comprehensive income are the same as the allocated amount of those attributable to owners of parent in the financial statements, and owners' equity are the same as the equity attributable to owners of parent in the consolidated financial statements. Changes in the Bank's ownership interest in a subsidiary that do not result in a loss of control of a subsidiary are equity transactions with owners.

(i) Leases

At inception of a contract, the Bank assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(i) As a leasee

The Bank recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Bank incremental borrowing rate. Generally, the Bank uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Bank estimates of the amount expected to be payable under a residual value guarantee; or
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
there is a change of its assessment on whether it will exercise an extension or termination option; or
there are any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Bank accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognizes in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Bank has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Bank recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a leasor

When the Bank acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Bank makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Bank considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(j) Provisions

A provision is recognized if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as financial cost.

(k) Employee benefits

(i) Short term employee benefit

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

(ii) Retirement benefit

The pension provision of the Bank includes defined contribution plan and defined benefit plan. For the personnel of foreign offices, the Bank provides pension fund per the regulations of the local authorities.

Defined contribution plan refers to the plan that the Bank annually provides certain amount of money to funds to fulfill the obligation. The Bank provides pension based on compulsory obligation, contracts or voluntary will to public or private managed pension funds. If certain pension fund fails to pay the employees the benefit which they deserve for the service they provided, the Bank does not hold legal or constructive obligation to pay additional provision. The Bank recognizes the pension fund provided as current pension cost on accrual basis.

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TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

The Bank’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the terms of the Bank’s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Bank, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Bank. An economic benefit is available to the Bank if it is realizable during the life of the plan, or on settlement of the plan liabilities.

If the benefits of a plan are improved, the pension cost incurred from the portion of the increase benefit relating to past service by employees, is recognized immediately in profit or loss.

The remeasurements of defined benefit liability (asset) include:

1) Actuarial gains and losses;
2) Return on plan assets, excluding net interest on the net defined benefit liability (asset); and
3) The effect of the asset ceiling, excluding net interest on the net defined benefit liability (asset).

The remeasurements of defined benefit liability (asset) are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur.

Gains or losses on the curtailment or settlement of a defined benefit plan are recognized when the curtailment or settlement occurs. The gain or loss on curtailment arises from any changes in the fair value of plan assets, any changes in the present value of the defined benefit obligation, and any related actuarial gains or losses and past service cost which had not previously been recognized.

The pension cost in the interim financial statements was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year, for the reporting period, the rate will be adjusted by material market volatility, material curtailment, reimbursement and settlement or other material one-time events.

(iii) Deposits with favorable rate

The Bank provides deposits with favorable rate to employees, which include current employee fix amount deposits with favorable rate and retired employee fix amount deposits with favorable rate. The rate difference between the favorable rate and the market rate belongs to the category of employee benefit.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

According to article 28 of “Regulations Governing the Preparation of Financial Report by Public Banks”, the additional interests result from the difference between deposit with favorable rate and the deposits with market interest rate shall be calculated by actuary per the regulations related to defined benefit plan in IAS 19. The parameters of actuarial assumptions shall follow the regulations of the competent authority.

In accordance with the regulation of “Discussion of the employee benefit actuarial assumption related matter for adopting IAS 19 with respect to the additional interest of employee deposits with favorable rate” issued by the Banking Bureau, the difference between the actual payment and the estimated retirement benefit obligation is deemed as changes in accounting estimate and is recognized in profit or loss.

(iv) Termination benefits

Termination benefits are recognized as an obligation when the Bank is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. The Bank recognizes liabilities when a formal irrevocable termination project is undertaken or when benefit is provided for encouraging voluntary resignation. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value.

(l) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Bank has determined that the global minimum top-up tax – which it is required to pay under Pillar Two legislation – is an income tax in the scope of IAS 12. The Bank has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.

Current taxes comprise the expected tax payables or receivables on the taxable profits(losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(m) Revenue recognition

Interest is recognized according to interest method. Interest accrual is suspended from the date when the loan is reclassified to non-performing loan and only when the Bank receives cash, the revenue is recognized.

The revenue of handling fee is recognized when cash collected or when the process of the profit are mostly completed. In addition, for the individual loan which does not belong to labor service and the handling fee is over 1% of the principal, the interest rate shall be adjusted from the original agreed interest rate to the effective interest rate. For the individual loan which does not belong to the service and the handling fee is less than 1% of the principal, the recognition of the revenue should be deferred and be recognized as revenue during the loan period.

(n) Earnings per share (EPS)

The Bank discloses the basic and diluted earnings per share attributable to ordinary shareholders of the bank. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the bank divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Bank divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as stock that issued for employee bonuses.

(o) Segment information

The Bank has already disclosed segment information in the Bank’s consolidated financial statements; thus, this financial statements would not disclose segment information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing the financial statements, management has made judgments and estimates about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Bank’s risk management and climate-related commitments where appropriate. Revisions to estimates are recognised prospectively in the period of the change and future periods.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial reporting period is as follow.

Impairment losses on loans

The impairment of loans of the Bank were evaluated by identifying the credit risk of those financial assets have significantly increased or not at the reporting date if the credit risk has not significant incurred, the 12-month expected credit loss should be adopted to evaluate, or the lifetime credit loss evaluation should be adopted.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

To evaluate the expected credit losses for 12-month and lifetime, the Bank considers the unfavorable changes of payment status or the economic conditions of the countries or areas related to the default loans. When analyzing expected cash flows, the estimates by the management are based on the pass losses experience from assets with similar credit risk characteristics. In order to reduce losses from the difference between estimated and actual amount, the Bank has considered historical experience, current economic conditions and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the select inputs.

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Petty cash and revolving funds	$ 10,597,347	16,243,911
Foreign currencies on hand	964,184	1,028,938
Checks for clearing	2,314,696	2,406,858
Due from other banks	12,823,184	15,883,309
Total	$ 26,699,411	35,563,016

(b) Due from the Central Bank and call loans to banks

	December 31, 2025	December 31, 2024
Due from the Central Bank	$ 95,737,492	117,075,609
Deposits transferred to Central Bank	53,935	49,318
Call loans to banks	66,026,189	50,630,445
Trust fund indemnity reserve deposited	140,000	120,000
Securities serving as trust fund indemnity reserve deposited	(140,000)	(120,000)
Total	$ 161,817,616	167,755,372

As of December 31, 2025 and 2024, in accordance with the Banking Law and the Central Bank Law, the required reserve deposited by the Bank with the Central Bank amounted to $95,056,534 and $116,625,097 of which $63,924,930 and $58,351,432 respectively, were restricted and such restriction may only be lifted when the required reserve is adjusted to a lower amount.

As of December 31, 2025 and 2024, the Bank's overseas branches, in compliance with the Central Bank's reserve requirement set by local authorities, deposited $347,016 and $129,619 and in reserve, of which $102,726 and $63,880 were restricted.

Effective December 2000, in accordance with the amended "Regulations Governing the Audit and Adjustment of Deposit and Other Liability Reserves of Financial Institutions", the Bank provides the required additional reserve on foreign currency deposits. As of December 31, 2025 and 2024, the required reserve with the Central Bank amounted to $333,942 and $320,893 respectively, and its use was unrestricted.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

As of December 31, 2025 and 2024, deposits transferred to the Central Bank collected from the armed forces, prisons, and other treasury deposits were restricted.

Effective January 20, 2001, in accordance with the requirement of the Central Bank of China, the Bank complies with Clause 34 of the Trust Law to treat the discretionary trust of investments in overseas marketable securities as a default loss reserve. As of December 31, 2025 and 2024, the Bank deposited marketable securities of $140,000 and $120,000 as trust fund reserves.

	December 31, 2025	December 31, 2024
Financial assets designated at fair value through profit or loss:
Derivative instruments not used for hedging:
Foreign exchange forward contracts	$ 4,996	10,004
Currency swap contracts	2,445,757	2,882,743
Foreign currency options-buy	8,646	11,352
Stock index futures	24,455	27,320
Interest rate swap	98,882	-
Non-derivative financial assets
Commercial paper	101,434,908	78,181,124
Private fund	68,381	72,845
Total	$ 104,086,025	81,185,388

Derivative financial instruments are used for hedging foreign exchange risk and interest rate risk arising from operating, financing and investing activities. The Bank held derivative financial instruments which did not apply to hedge accounting are as follows (reported as financial assets mandatorily measured at fair value through profit or loss and financial liabilities held for trading)

	December 31, 2025	December 31, 2024
Currency swaps contract	$ 226,391,217	212,126,990
Interest rate swaps contract	21,582,032	12,985,786
Option contract - buy	1,837,348	1,229,438
Option contract - sell	1,837,348	1,229,438
Forward foreign exchange contract	610,432	1,472,936

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(d) Securities purchased under resell agreements

	December 31, 2025	December 31, 2024
Securities under resell agreements	$ 31,484,029	10,252,365
Face amount	31,556,300	10,287,300
Resell period	2026.01.02~2026.01.29	2025.01.06~2025.01.17
Range of resell interest rate	1.44%~1.46%	1.64%-1.65%
Resell price	31,512,994	10,259,976

(e) Receivables, net

	December 31, 2025	December 31, 2024
Interest receivable	$ 6,056,070	6,056,498
Acceptances receivables	1,016,111	1,245,377
Accrued income	94,518	384,262
Accounts receivable	16,701	56,960
Spot exchange receivable-foreign currencies	50,756	27,414
Credit cards accounts receivable	1,316,849	1,283,650
Receivable price of securities purchased for customers	328,267	499,128
Settlement price	78,645	-
Notes receivables	112	-
Other receivables	430,162	322,824
Sub-total	9,388,191	9,876,113
Less: Allowance for bad debts	(111,639)	(83,326)
Total	$ 9,276,552	9,792,787

The outstanding contract amount of financial assets that have been written off and still have recourse as of December 31, 2025 and 2024 were $87,385,283 and $85,634,206, respectively.

The change in allowance for bad debts was as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 83,326	77,066
Provision	26,057	5,876
Foreign exchange	2,256	384
Ending balance	$ 111,639	83,326

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(f) Discounts and loans, net

	December 31, 2025	December 31, 2024
Import/export bills negotiated	$ 159,417	220,924
Bills and notes discounted	637,815	634,680
Overdrafts	-	19,228
Secured overdrafts	761,078	835,678
Short-term loans	152,429,778	180,131,363
Short-term secured loans	253,053,630	233,140,541
Margin loans receivable	3,510,471	4,072,823
Medium-term loans	230,091,911	219,030,813
Medium-term secured loans	317,487,989	329,201,296
Long-term loans	49,928,534	41,693,266
Long-term secured loans	682,111,743	630,763,210
Overdue loans	1,744,062	1,440,665
Sub-total	1,691,916,428	1,641,184,487
Less: Adjustment of discount and premium	(251,538)	(273,170)
Less: Allowance for bad debts	(21,997,047)	(21,874,983)
Total	$ 1,669,667,843	1,619,036,334

The change in allowance for bad debts was as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 21,874,983	19,602,842
Provision	2,221,026	3,423,798
Transfer out	(20,007)	(19,043)
Write-off	(5,400,044)	(3,791,865)
Write-off recovered	3,356,622	2,621,876
Foreign exchange	(35,533)	37,375
Ending balance	$ 21,997,047	21,874,983

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(g) Financial asset at fair value through other comprehensive income

	December 31, 2025	December 31, 2024
Investment in debt instruments measured at fair value through other comprehensive income:
Government bonds	$ 56,314,140	55,187,459
Corporate bonds	90,973,188	75,901,236
Financial debentures	28,191,472	35,671,677
Negotiable certificates of deposit	629,887	652,513
Sub-total	176,108,687	167,412,885
Investment in equity instruments measured at fair value through other comprehensive income:
Listed stocks	8,994,821	10,012,278
Unlisted stocks	9,846,739	7,446,379
Real Estate Investment Trust	100,300	118,912
Sub-total	18,941,860	17,577,569
Total	$ 195,050,547	184,990,454

(i) Investment in debt instruments measured at fair value through other comprehensive income

The Bank assessed that the above bond investments were held within a business model whose objective was achieved by both collecting contractual cash flows and selling financial assets. The bond investments have been classified as the financial asset measured at fair value through other comprehensive income. Some of the investment in debt instruments measured at fair value through other comprehensive income are used as resell condition. Please refer to Note 6 (p) for more details.

(ii) Investment in equity instruments measured at fair value through other comprehensive income

The Bank designated the investments shown above as equity securities as at fair value through other comprehensive income because these equity securities represent those investments intending to hold for long-term for strategic purpose.

The Bank designated the investments shown above as equity instrument as at fair value through other comprehensive income; therefore, the Bank recognized $1,446,314 and $1,154,467, respectively as dividend revenue for the years ended December 31, 2025 and 2024. In which, the disposal equity instruments were recognized $814,071 and $658,162 as dividend revenue for the years ended December 31, 2025 and 2024.

The Bank sold the investments which were measured as at fair value through other comprehensive income due to assets allocation. The fair value of disposed investments are $20,842,933 and $19,699,141. And gains on disposal are $29,176 and $2,232,925 for the years ended December 31, 2025 and 2024. Therefore, accumulated gains and losses on disposal were transferred from other equity to retained earnings.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(iii) Please refer to Note 6(ao) for the credit risk (including the impairment in debt instruments) and market risk information.

(iv) Reserve for provisional seizure bt the court:

	December 31, 2025	December 31, 2024
Court provisional seizure	$ 84,800	226,900

(v) The changes in the allowance for credit losses attribute to the FVOCI were as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 87,728	100,349
Reversal	(4,340)	(13,821)
Foreign exchange	(807)	1,200
Ending balance	$ 82,581	87,728

(h) Investment in debt instruments at amortized cost

	December 31, 2025	December 31, 2024
Certificates of deposit with the Central Bank	$ 207,570,000	154,215,000
Government bonds and treasury bills	20,402,405	25,405,650
Corporate bonds	30,985,563	31,241,169
Financial debentures	20,303,080	19,384,065
Negotiable certificates of deposit	66,035	68,849
Sub-total	279,327,083	230,314,733
Less:Accumulated impairment	(92,325)	(72,325)
Total	$ 279,234,758	230,242,408

The Bank assessed that these financial assets were held to collect the contractual cash flows, which consisted solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets measured at amortized cost.

(i) Please refer to Note 6(ao) for credit risk.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ii) The pledged assets provided by the above investment in debt instruments at amortized cost were shown follows:

	December 31, 2025	December 31, 2024
Reserve for provisional seizure by the court, international card payment reserve, trust claim reserve and operating guaranty funds	$ 1,306,000	850,600
Overseas branches required reserve of overdraft guarantee	66,035	68,849
Daylight overdraft guarantee	2,000,000	2,000,000
Guarantee for borrowing US dollars	29,000,000	29,000,000
Guarantee for borrowing JPY dollars	200,000	200,000
Total	$ 32,572,035	32,119,449

(iii) The changes in the allowance for credit losses attribute to investment in debt instwruments at amortized cost were as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 72,325	80,620
Provision (reversal)	20,285	(8,615)
Foreign exchange	(285)	320
Ending balance	$ 92,325	72,325

(iv) Disposal gain (loss) on disposal investment in assets at amortized cost:

	For the year ended December 31, 2025
	The carrying amount at the date of derecognition	Gain (Loss) on disposal
Corporate bonds	$ 12,101	125
	For the year ended December 31, 2024
	The carrying amount at the date of derecognition	Gain (Loss) on disposal
Corporate bonds	$ 13,903	145

For the years ended December 31, 2025 and 2024, it is due to the advanced redemption of the issuer.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(i) Investments accounted for using equity method, net

Subsidiary	December 31, 2025		December 31, 2024
	Amount	%	Amount	%
Investment measured by equity method
TBB International Leasing Co., Ltd.
—initial investment $400,000 thousand	$ 1,729,128	100.00	1,654,945	100.00
TBB (Cambodia) Microfinance Institution Plc.
—initial investment USD $10,000 thousand	642,327	100.00	661,327	100.00
TBB Venture Capital Co., Ltd.
—initial investment $300,000 thousand	1,465,500	100.00	1,413,660	100.00
TBB Consulting Co., Ltd.
—initial investment $50,000 thousand	73,865	100.00	105,783	100.00
Total	$ 3,910,820		3,835,715

The Bank’s share of profit of associates and joint ventures accounted for using equity method for the years ended December 31, 2025 and 2024 are $142,030 and $160,147 respectively.

As of December 31, 2025 and 2024, the Bank did not provide any investments accounted for using the equity method as collateral for its loans.

(j) Other financial assets, net

	December 31, 2025	December 31, 2024
Overdue receivable	$ 14,882	15,380
Less: Allowance for bad debts, overdue receivable	(8,921)	(8,543)
Total	$ 5,961	6,837

The change in allowance for bad debts was as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 8,543	11,490
Reversal	(18,327)	(22,426)
Transfer in	20,007	19,043
Write-off	(21,092)	(19,214)
Written-off recovered	19,790	19,650
Ending balance	$ 8,921	8,543

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(k) Property and equipment, net

December 31, 2025	Cost	Revaluation increment	Accumulated depreciation	Accumulated impairment	Total
Land	$ 6,746,952	2,984,621	-	14,031	9,717,542
Buildings	8,327,972	31,184	5,393,804	14,754	2,950,598
Machinery and equipment	2,831,653	-	2,219,890	-	611,763
Transportation equipment	257,370	-	217,059	-	40,311
Miscellaneous equipment	726,643	-	564,917	-	161,726
Leasehold improvements	171,328	-	117,176	-	54,152
Construction in progress	6,510	-	-	-	6,510
Prepayment for equipment	187,043	-	-	-	187,043
Total	$ 19,255,471	3,015,805	8,512,846	28,785	13,729,645
December 31, 2024	Cost	Revaluation increment	Accumulated depreciation	Accumulated impairment	Total
Land	$ 6,746,952	2,984,621	-	14,031	9,717,542
Buildings	8,241,481	31,184	5,185,589	14,754	3,072,322
Machinery and equipment	3,007,048	-	2,380,067	-	626,981
Transportation equipment	271,599	-	234,958	-	36,641
Miscellaneous equipment	703,519	-	570,872	-	132,647
Leasehold improvements	190,751	-	121,923	-	68,828
Construction in progress	1,812	-	-	-	1,812
Prepayment for equipment	219,165	-	-	-	219,165
Total	$ 19,382,327	3,015,805	8,493,409	28,785	13,875,938

Change of cost

	January 1, 2025	Increase	Decrease	Foreign Exchange	December 31, 2025
Land	$ 9,731,573	-	-	-	9,731,573
Buildings	8,272,665	86,491	-	-	8,359,156
Machinery and equipment	3,007,048	197,104	370,783	(1,716)	2,831,653
Transportation equipment	271,599	15,407	29,291	(345)	257,370
Miscellaneous equipment	703,519	65,191	40,787	(1,280)	726,643
Leasehold improvements	190,751	16,020	33,454	(1,989)	171,328
Construction in progress	1,812	26,813	22,115	-	6,510
Prepayment for equipment	219,165	139,111	170,285	(948)	187,043
Total	$ 22,398,132	546,137	666,715	(6,278)	22,271,276

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

	January 1, 2024	Increase	Decrease	Foreign Exchange	December 31, 2024
Land	$ 9,731,573	-	-	-	9,731,573
Buildings	8,174,873	97,792	-	-	8,272,665
Machinery and equipment	2,805,376	281,034	82,679	3,317	3,007,048
Transportation equipment	264,630	19,446	13,114	637	271,599
Miscellaneous equipment	666,897	63,643	29,264	2,243	703,519
Leasehold improvements	190,498	19,987	20,878	1,144	190,751
Construction in progress	61,737	1,812	61,737	-	1,812
Prepayment for equipment	220,805	119,047	120,968	281	219,165
Total	$ 22,116,389	602,761	328,640	7,622	22,398,132

Change of depreciation

	January 1, 2025	Increase	Decrease	Foreign Exchange	December 31, 2025
Buildings	$ 5,185,589	208,215	-	-	5,393,804
Machinery and equipment	2,380,067	205,882	364,586	(1,473)	2,219,890
Transportation equipment	234,958	11,400	29,126	(173)	217,059
Miscellaneous equipment	570,872	35,615	40,483	(1,087)	564,917
Leasehold improvements	121,923	30,609	33,455	(1,901)	117,176
Total	$ 8,493,409	491,721	467,650	(4,634)	8,512,846
	January 1, 2024	Increase	Decrease	Foreign Exchange	December 31, 2024
Buildings	$ 4,979,561	206,028	-	-	5,185,589
Machinery and equipment	2,166,790	290,388	80,048	2,937	2,380,067
Transportation equipment	227,072	20,549	13,036	373	234,958
Miscellaneous equipment	561,740	36,612	28,943	1,463	570,872
Leasehold improvements	109,666	32,358	20,877	776	121,923
Total	$ 8,044,829	585,935	142,904	5,549	8,493,409

Accumulated impairment

	January 1, 2025	Increase	Decrease	Foreign Exchange	December 31, 2025
Land	$ 14,031	-	-	-	14,031
Buildings	14,754	-	-	-	14,754
Total	$ 28,785	-	-	-	28,785
	January 1, 2024	Increase	Decrease	Foreign Exchange	December 31, 2024
Land	$ 14,031	-	-	-	14,031
Buildings	14,754	-	-	-	14,754
Total	$ 28,785	-	-	-	28,785

When the Bank first adopted IFRSs, it elected to apply the revaluation amount calculated per the regulation of GAAP of R.O.C as the original cost on the transition date.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

As of December 31, 2025, the appreciation from revaluation of properties all amounted to $3,015,805. Reserve for land incremental tax all amounted to $878,623 (Recognized under deferred tax liabilities).

As of December 31, 2025 and 2024, land which was occupied amounted to $348 and $5,496, respectively. Except for a portion of the land that had been negotiated with the occupant to collect the rent; the Bank intends to participate in land auction, urban renewal or by other appropriate means in due course.

(1) Right-of-use assets

The Bank leases many assets including buildings, machinery and transportation equipment. Information about leases on costs, depreciation and impairment for which the Bank as a lessee is presented below:

December 31, 2025	Cost	Accumulated depreciation	Accumulated impairment	Total
Buildings	$ 2,127,883	1,133,312	-	994,571
Transportation equipment	92,434	60,282	-	32,152
Miscellaneous equipment	12,735	7,216	-	5,519
Total	$ 2,233,052	1,200,810	-	1,032,242
December 31, 2024	Cost	Accumulated depreciation	Accumulated impairment	Total
---	---	---	---	---
Buildings	$ 2,096,328	886,178	-	1,210,150
Transportation equipment	86,420	49,471	-	36,949
Miscellaneous equipment	13,271	6,500	-	6,771
Total	$ 2,196,019	942,149	-	1,253,870

Change of cost

	January 1, 2025	Increase	Decrease	Foreign Exchange	December 31, 2025
Buildings	$ 2,096,328	194,572	157,072	(5,945)	2,127,883
Transportation equipment	86,420	21,317	15,218	(85)	92,434
Miscellaneous equipment	13,271	1,990	2,526	-	12,735
Total	$ 2,196,019	217,879	174,816	(6,030)	2,233,052
	January 1, 2024	Increase	Decrease	Foreign Exchange	December 31, 2024
---	---	---	---	---	---
Buildings	$ 2,001,440	384,381	300,976	11,483	2,096,328
Machinery and equipment	26,178	-	26,178	-	-
Transportation equipment	74,198	22,067	9,967	122	86,420
Miscellaneous equipment	11,484	3,544	1,757	-	13,271
Total	$ 2,113,300	409,992	338,878	11,605	2,196,019

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Change of depreciation

	January 1, 2025	Increase	Decrease	Foreign Exchange	December 31, 2025
Buildings	$ 886,178	399,143	152,488	479	1,133,312
Transportation equipment	49,471	25,142	14,363	32	60,282
Miscellaneous equipment	6,500	2,962	2,246	-	7,216
Total	$ 942,149	427,247	169,097	511	1,200,810
	January 1, 2024	Increase	Decrease	Foreign Exchange	December 31, 2024
Buildings	$ 783,093	399,923	298,475	1,637	886,178
Machinery and equipment	26,174	4	26,178	-	-
Transportation equipment	34,615	24,760	9,967	63	49,471
Miscellaneous equipment	5,218	3,029	1,747	-	6,500
Total	$ 849,100	427,716	336,367	1,700	942,149

(m) Other assets, net

	December 31, 2025	December 31, 2024
Office supplies	$ 30,025	29,855
Prepayments	4,150,161	5,142,698
Operating guarantee deposits and settlement fund	40,867	32,866
Guarantee deposits paid	2,569,377	2,783,439
Deferred assets	236	237
Temporary payments and suspense accounts	944,012	3,877,008
Proceeds of settlement and margin trading	4,466	100,889
Other assets	176,452	176,431
Total	$ 7,915,596	12,143,423

(n) Deposits from the Central Bank and banks

	December 31, 2025	December 31, 2024
Deposits from the Central Bank	$ 209,301	171,214
Due from the Central Bank	15,408,050	16,064,650
Deposits from banks	265,937	328,917
Call loans from banks	51,378,330	36,436,700
Overdrafts on banks	919,698	596,856
Deposits transferred from Chunghwa Post Co., Ltd.	129,099,335	187,099,335
Total	$ 197,280,651	240,697,672

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(o) Financial liabilities at fair value through profit or loss

	December 31, 2025	December 31, 2024
Financial liabilities designated at fair value through profit or loss:
Financial debentures	$ 9,525,881	9,927,272
Financial liabilities held for trading:
Derivative instruments not used for hedging
Foreign exchange forward contracts	7,612	18,220
Currency swap contracts	262,064	256,384
Foreign currency option-sell	8,652	11,360
Interest rate contract	73,392
Total	$ 9,877,601	10,213,236

Please refer to 6(s) for the information of financial liabilities designated at fair value through profit and loss.

Please refer to 6(c) for the nominal amount of unsettled financial derivatives instrument contracts of December 31, 2025 and 2024.

(p) Notes and bonds issued under repurchase agreement

Assets	December 31, 2025
	Par value	Selling Price (Recognized in securities sold under repurchase agreements)	Designated repurchase amount	Designated repurchase date
Financial assets at fair value through other comprehensive income	$ 5,618,509	5,359,765	5,401,838	2026/1/5~2026/6/10
Assets	December 31, 2024
---	---	---	---	---
	Par value	Selling Price (Recognized in securities sold under repurchase agreements)	Designated repurchase amount	Designated repurchase date
Financial assets at fair value through other comprehensive income	$ 2,121,000	2,011,108	2,022,769	2025/1/2~2025/7/10

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(q) Payables

	December 31, 2025	December 31, 2024
Accrued interest	$ 8,791,109	8,653,795
Accounts payable	2,331,711	2,619,355
Acceptances	1,023,428	1,261,717
Accrued expenses	4,684,566	4,205,871
Collection payable	963,212	1,695,036
Deposits received from securities borrowers	42,066	57,578
Guaranteed price deposits received from securities borrowers	51,256	74,701
Spot exchange payable, foreign currencies	43,204	27,110
Other payables	906,663	965,374
Prices payable of securities sold for customers	390,587	198,804
Settlement payable	-	291,302
Others	10,177	6,243
Total	$ 19,237,979	20,056,886

(r) Deposits and remittances

	December 31, 2025	December 31, 2024
Savings deposits	$ 819,745,752	794,086,046
Time deposits	680,655,245	604,131,525
Demand deposits	530,944,308	473,823,721
Checking account deposits	32,308,919	31,275,032
Remittances	829,998	748,271
Total	$ 2,064,484,222	1,904,064,595

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(s) Bank notes payable

Bonds	Issue date	Maturity date	Interest Rate & repayment	Type	Amount
					December 31, 2025	December 31, 2024
2015-2B	08/31/2015	08/31/2025	The debentures bear an annual interest rate of 2.10%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	Unsecured subordinated long-term financial debentures	$ -	300,000
2017-1B	03/28/2017	03/28/2025	The debentures bear an annual interest rate of 1.60%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	"	-	250,000
2017-1C	03/28/2017	03/28/2027	The debentures bear an annual interest rate of 1.85%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	"	3,360,000	3,360,000
2017-2	05/23/2017	05/23/2027	The debentures bear an annual interest rate of 1.85%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	"	1,300,000	1,300,000
2018-2	08/20/2018	08/20/2028	The debentures bear an annual interest rate of 1.45%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	"	5,450,000	5,450,000
2019-1A	03/21/2019	03/21/2026	The debentures bear an annual interest rate of 1.20%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	"	1,000,000	1,000,000
2019-1B	03/21/2019	03/21/2029	The debentures bear an annual interest rate of 1.30%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	"	4,800,000	4,800,000
2020-1	03/25/2020	03/25/2030	The debentures bear an annual interest rate of 0.80%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	"	10,000,000	10,000,000
2020-2	08/13/2020	None	The debentures bear an annual interest rate of 1.62%. Simple interest is accrued and paid annually. After calculating the early redeemable bond is in line with the capital adequacy ratio under the consent of the competent authority, the debentures are redeemable per face value plus accrued interest at the interest payment date after five years and a month from the issue date.	Perpetual non-accumulated subordinated financial debentures	10,000,000	10,000,000
2021-1	11/17/2021	None	The debentures bear an annual interest rate of 1.60%. Simple interest is accrued and paid annually. After calculating the early redeemable bond is in line with the capital adequacy ratio under the consent of the competent authority, the debentures are redeemable per face value plus accrued interest at the interest payment date after five years and a month from the issue date.	"	8,000,000	8,000,000
2023-1	06/20/2023	06/20/2030	The debentures bear an annual interest rate of 2.10%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	Unsecured subordinated long-term financial debentures	8,000,000	8,000,000
2023-2	09/27/2023	09/27/2025	The debentures bear an annual interest rate of 1.47%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	Unsecured senior financial debentures	-	1,000,000
2025-1	10/23/2025	10/23/2035	The debentures bear an annual interest rate of 2.20%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	Unsecured subordinated long-term financial debentures	1,000,000	-
2025-2	11/19/2025	11/19/2028	The debentures bear an annual interest rate of 1.70%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity.	Unsecured senior financial debentures	1,000,000	-
					$ 53,910,000	53,460,000

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

The Bank issued $120,000 and $180,000 dollar-denominated debentures with call option that can be executed on strike price after five years from the issued date. Without executing call options during the periods of debentures, the principal will be repaid in full at maturity. In order to avoid interest risk, the Bank buys interest rate swap contracts that are classified as financial assets at fair value through profit or loss. To eliminate the measurement or recognition inconsistency between IRSs and debentures, the Bank classified the debentures into financial liabilities at fair value through profit or loss. In addition, the Bank considers that the designated economic relationship is evaluated by the SLMM model method, if the amount of changes in the fair value of the corporate bonds attributable to changes in credit risk is listed in other comprehensive gains and losses, it will trigger or aggravate the accounting ratio of gains and losses. Therefore, the amount is reported in the profit and loss. The debentures are as follows:

Bonds	Terms of Transactions			Bond Issued
	Issue date	Maturity date	Interest Rate & repayment	Type	Amount
					December 31, 2025	December 31, 2024
2017-3	10/27/2017	10/27/2047	The zero-coupon debentures with call options can be executed on strike price after five years from the issued date. Without executing call options during the periods of debentures, the principal will be repaid in full at maturity.	Unsecured dollar-denominated senior financial debentures	$ 3,773,400	3,934,200
2018-3	09/27/2018	09/27/2048	The zero-coupon debentures with call options can be executed on strike price after five years from the issued date. Without executing call options during the periods of debentures, the principal will be repaid in full at maturity.	"	5,660,100	5,901,300
				Valuation adjustment	92,381	91,772
					$ 9,525,881	9,927,272

The increase (decrease) in fair value of the financial liabilities that are attributable to changes in credit risk are as follows:

	December 31, 2025	December 31, 2024
Fair value of corporate bonds	$ 9,525,881	9,927,272
Fair value increase not attributable to changes in market conditions that give rise to market risk	789,643	695,984
Difference between the carrying value and the amount payable at the end of the contract term	92,381	91,772

(t) Other financial liabilities

	December 31, 2025	December 31, 2024
Cumulative earnings on appropriated loans fund	$ 2,472,641	2,528,132

Cumulative earnings on appropriated loan fund is the project contract signed by National Development Fund, Executive Yuan, Small and Medium Enterprise Administration, Ministry of Economic Affairs, and the Bank. The Bank appropriates the fund to the companies which meet the conditions for loans. The fund is classified as principal account, interest yielding account, loaned account and un-loaned account. These accounts are used for transferring accounts and paying the deposit interests for each project contract.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(u) Provisions

	December 31, 2025	December 31, 2024
Provision for guarantee liabilities	$ 450,789	347,009
Provision for loan commitments	50,213	64,682
Indeterminate indemnity provisions	76,908	76,151
Provision for employee benefits	1,941,854	1,896,579
Total	$ 2,519,764	2,384,421

Change of provision

	January 1, 2025	Increase	Decrease	Use	Foreign exchange	December 31, 2025
Provision for guarantee liabilities	$ 347,009	104,016	-	-	(236)	450,789
Provision for loan commitments	64,682	-	13,728	-	(741)	50,213
Indeterminate indemnity provisions	76,151	757	-	-	-	76,908
Provision for employee benefits	1,896,579	215,918	135,314	35,329	-	1,941,854
Total	$ 2,384,421	320,691	149,042	35,329	(977)	2,519,764
	January 1, 2024	Increase	Decrease	Use	Foreign exchange	December 31, 2024
Provision for guarantee liabilities	$ 284,412	62,365	-	-	232	347,009
Provision for loan commitments	92,689	-	29,672	-	1,665	64,682
Indeterminate indemnity provisions	75,372	779	-	-	-	76,151
Provision for employee benefits	2,450,902	98,691	603,746	49,268	-	1,896,579
Total	$ 2,903,375	161,835	633,418	49,268	1,897	2,384,421

Please refer to Note 6(z) for the information with regard to provision for employee benefits shown above. Please refer to Note 9(d) for the information with regard to indeterminate indemnity provisions shown above.

(v) Lease liabilities

Lease liabilities as follows:

	December 31, 2025	December 31, 2024
Less than one year	$ 365,554	424,540
More than one year	$ 704,403	868,651

The amounts recognized in profit or loss were as follows:

	For the years ended December 31,
	2025	2024
Interest on lease liabilities	$ 15,283	16,804
Expenses relating to short-term leases	$ 12,210	13,889
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	$ 20,723	19,888

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

The amounts recognized in the statement of cash flows were as follows:

	For the years ended December 31,
	2025	2024
Total cash outflow for leases	$ 476,060	476,463

(i) Real estate leases

The Bank leased buildings for its office space. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases provide for additional rent payments that are based on changes in local price indices. Some also require the Bank to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined monthly.

(ii) Other leases

The Bank leased machinery and transportation equipment with lease terms of one to four years. In some cases, the Bank has options to purchase the assets at the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.

The Bank has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short term.

(w) Other liabilities

	December 31, 2025	December 31, 2024
Advance interest receipts	$ 4,512	4,193
Unearned revenue	373,134	454,842
Other advance receipts	94,215	70,911
Guarantee deposits received	2,556,230	2,872,040
Others	41,959	38,471
Total	$ 3,070,050	3,440,457

(x) Equity

(i) Common stock

As of December 31, 2025 and 2024, the Bank’s authorized capital were $130,000,000 and $100,000,000, and the paid-in capital for common shares of the Bank were $97,180,618 and $91,679,828, the face value of each share is $10. The outstanding shares were 9,718,062 thousand and 9,167,983 thousand shares, respectively.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Pursuant to the resolution approved by the regular stockholders’ meeting of the Bank on June 20, 2025, the Bank increased its capital from the retained earnings by $5,500,790 and issued 550,079 thousand shares. The capital increase has been approved by the Financial Supervisory Commission and came into effect on July 14, 2025. The base date of the capital increase was August 11, 2025. The Bank has completed the alteration of the registered capital amount on September 2, 2025.

Pursuant to the resolution approved by the regular stockholders’ meeting of the Bank on June 21, 2024, the Bank increased its capital from the retained earnings by $9,455,767 and issued 945,577 thousand shares. The capital increase has been approved by Financial Supervisory Commission and came into effect on July 15, 2024. The base date of the capital increase was August 16, 2024. The Bank has completed the alteration of the registered capital amount on September 5, 2024.

(ii) Capital surplus

Sources and statement of the Bank’s capital surplus were as follows:

	December 31, 2025	December 31, 2024
Additional paid-in capital	$ 815,900	815,900
Donation from shareholders	229	229
Total	$ 816,129	816,129

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends based on the shareholder’s initial number of shares. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(iii) Earnings distribution and dividend policy

Under the Bank’s Articles of Incorporation, earnings are used initially to pay for income taxes and restore cumulative losses, and 30% of the remaining earnings is set aside as legal reserve. Special reserve is appropriated from or reversed to earnings per other regulations. The accumulated retained earnings from prior periods are added back as part of the distributable dividends, 30 to 100% of the aggregated retained earnings are available to be distributed and will be resolved by the annual stockholders’ meeting according to the proposal submitted by the Board of Directors.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

In order to continuously expand scale and increase profitability, the Bank based on the future capital budget plan, adopts residual dividend policy and primarily distributes stock dividend to ensure the capital is sufficient. When there is surplus of capital, the remaining capital can be distributed by cash dividend. Cash dividend shall not be lower than 10% of the total dividend distributed. If the cash dividend distributed per share is lower than NTD$ 0.1, except for otherwise resolved by the shareholder's meeting, it is not distributed. If there is any situation conforms to that is regulated in article 44 item 1 of the Banking Act of The Republic of China, the Bank is not allowed to distribute earnings by cash or purchase shares outstanding. The maximum cash earning distribution is not allowed to be over 15% of the total paid in capital unless the legal reserve reaches the total paid-in capital.

In compliance with the Company Act, if the Company incurs no loss, under the consent of the shareholder's meeting, the Company is allowed to distribute new shares or cash dividends from legal reserve to the extent that the legal reserve issued is the surplus exceeding 25% of the paid in capital.

Under the Ruling No. 1010012865 issued on April 6, 2012 by the FSC, special reserve is appropriated from retained earnings based on the equivalent amounts of the contra accounts in equity. This special reserve may not be distributed as dividends to stockholders until the balances of these contra accounts in equity are reversed.

The Bank resolved the earning distribution for the earnings of 2024 and 2023 in the shareholders' meeting on June 20, 2025 and June 21, 2024, respectively. The dividends distributed were as follows:

	2024		2023
	Distribution rate (NT dollar)	Amount	Distribution rate (NT dollar)	Amount
Dividends to common shareholders
Stock dividends	$ 0.60	5,500,790	1.15	9,455,767
Cash dividends	0.20	1,833,597	0.20	1,644,481
Total		$ 7,334,387		11,100,248

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(iv) Other equity (net of tax)

	Unrealized gains from financial assets measured at fair value through other comprehensive income	Exchange differences on translation of foreign financial statements	Total
January 1, 2025	$ 137,384	200,058	337,442
Share of other comprehensive income of subsidiaries associates and joint ventures accounted for using equity method	105	4,258	4,363
Investment in financial assets measured at fair value through other comprehensive income
-Unrealized amount	5,364,121	-	5,364,121
-Realized amount	(5,854)	-	(5,854)
Foreign currency translation difference – Exchange difference	-	(298,142)	(298,142)
Disposal of investments in equity instruments measured at fair value through other comprehensive income	(29,176)	-	(29,176)
December 31, 2025	$ 5,466,580	(93,826)	5,372,754
January 1, 2024	$ 1,613,752	(629,158)	984,594
Share of other comprehensive income of subsidiaries associates and joint ventures accounted for using equity method	876	28,143	29,019
Investment in financial assets measured at fair value through other comprehensive income
-Unrealized amount	755,957	-	755,957
-Realized amount	(276)	-	(276)
Foreign currency translation difference – Exchange difference	-	801,073	801,073
Disposal of investments in equity instruments measured at fair value through other comprehensive income	(2,232,925)	-	(2,232,925)
December 31, 2024	$ 137,384	200,058	337,442

(y) Income taxes

(i) The income tax expenses were as follows:

	For the years ended December 31,
	2025	2024
Current tax expense
Current period	$ 2,798,818	2,900,274
Adjustment for prior period	71,013	(67,516)
Additional surtax on undistributed retained earnings	109,382	50,120
	2,979,213	2,882,878
Deferred tax expense
Origination and reversal of temporary differences	6,191	(88,982)
Income tax expenses	$ 2,985,404	2,793,896

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ii) The income tax expenses (income) recognized under other comprehensive income were as follows:

	For the years ended December 31,
	2025	2024
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans	$ 4,054	33,319
	For the years ended December 31,
	2025	2024
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign financial statements	$ (74,535)	200,268
Unrealized gains (losses) on valuation of financial assets measured at fair value through other comprehensive income	12,792	9,982
	$ (61,743)	210,250

The reconciliation between the income tax expense (income) and net income before tax of the Bank for 2025 and 2024 is as follows:

	For the years ended December 31,
	2025	2024
Income tax computed on net income before tax	$ 3,043,445	2,806,119
Tax-free income	(385,923)	(233,984)
Overseas branch income tax expenses	147,087	239,888
Additional surtax on undistributed retained earnings	109,382	50,120
Underestimate (Overestimate) prior income tax expense	71,013	(67,516)
Other	400	(731)
Income tax expense	$ 2,985,404	2,793,896

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(iii) Changes in deferred tax assets and liabilities of the Bank are as follows:

	For the year ended December 31, 2025
	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Others	Ending balance
Temporary difference
Deferred tax assets resulted from allowance for bad debts exceeding the limit regulated in Tax Law	$ 1,414,662	(31,422)	-	-	1,383,240
Loss on assets impairment	17,952	3,189	-	-	21,141
Reserve for employee benefit liabilities	238,766	21,891	-	-	260,657
Land value increment tax	(878,623)	-	-	-	(878,623)
Exchange differences from the translation of financial statements of foreign operations	(64,994)	-	74,535	-	9,541
Unrealized loss on valuation of financial assets measured at fair value through other comprehensive income	(4,703)	-	(12,792)	-	(17,495)
Actuarial gains and losses	213,345	-	(4,054)	-	209,291
Indeterminate indemnity provisions	15,230	151	-	-	15,381
Net deferred tax assets (liabilities)	$ 951,635	(6,191)	57,689	-	1,003,133
The information stated on the balance sheet is as follows:
Deferred tax assets	$ 1,899,955				1,899,251
Deferred tax liabilities	$ 948,320				896,118

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

	For the year ended December 31, 2024
	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Others	Ending balance
Temporary difference
Deferred tax assets resulted from allowance for bad debts exceeding the limit regulated in Tax Law	$ 1,230,075	184,587	-	-	1,414,662
Loss on assets impairment	22,439	(4,487)	-	-	17,952
Reserve for employee benefit liabilities	330,040	(91,274)	-	-	238,766
Land value increment tax	(878,623)	-	-	-	(878,623)
Exchange differences from the translation of financial statements of foreign operations	135,274	-	(200,268)	-	(64,994)
Unrealized loss on valuation of financial assets measured at fair value through other comprehensive income	5,279	-	(9,982)	-	(4,703)
Actuarial gains and losses	246,664	-	(33,319)	-	213,345
Indeterminate indemnity provisions	15,074	156	-	-	15,230
Net deferred tax assets (liabilities)	$ 1,106,222	88,982	(243,569)	-	951,635
The information stated on the balance sheet is as follows:
Deferred tax assets	$ 1,984,845				1,899,955
Deferred tax liabilities	$ 878,623				948,320

(iv) Uncertainty over income tax treatments

For tax returns that have not yet been assessed, the Bank has assessed relevant factors, including relevant IFRIC interpretations and historical experience, and believe that sufficient income tax liabilities have been estimated.

(v) The Bank’s income tax have been approved by the tax authorities to the year 2023. However, for the years 2020 and 2022 are still pending approval. Due to differing interpretations between the Bank and the tax authorities regarding the 2023 corporate income tax, the Bank disagreed with the examination results and has requested a reexamination.

(vi) Global minimum top-up tax

The Bank has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.

Some of the overseas branches have enacted new legislation to implement the global minimum top-up tax, with Australia effective from January 1, 2024, Japan effective from April 1, 2024, and Hong Kong effective from January 1, 2025. Preliminary assessments indicate that various tax jurisdictions can pass the global minimum top-up tax safe harbor test, and it is expected that no supplementary taxes under the minimum top-up tax will be required. However, as of December 31, 2025, the Bank has not yet obtained sufficient information to determine the quantitative impact and the tax region status brought about by Global minimum top-up tax.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(z) Provision for employee benefit

As of December 31, 2025 and 2024, the balance of provision for employee benefit of the Bank was as follows:

	December 31, 2025	December 31, 2024
Defined benefit plan	$ 787,839	823,657
Employee deposits with favorable rate	1,154,015	1,072,922
	$ 1,941,854	1,896,579

(i) Defined benefit plan

As of December 31, 2025 and 2024, the balance of provision for employee benefit of the Bank were as follows:

	December 31, 2025	December 31, 2024
Present value of defined benefit obligation	$ 5,483,641	5,679,140
Fair value of plan assets	(4,695,802)	(4,855,483)
Net defined benefit liabilities	$ 787,839	823,657

The Bank makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labour Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

According to the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with interest rates offered by local banks.

The Bank of Taiwan labour pension reserve account balance for the Bank amounted to $4,695,802 and $4,855,483 on December 31, 2025 and 2024. For information on the utilisation of the labour pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labour Fund, Ministry of Labor.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) Movements in the present value of the defined benefit obligations

The movements in the present value of the defined benefit obligations of the Bank were as follows:

	For the years ended December 31,
	2025	2024
Defined benefit obligation on January 1	$ 5,679,140	5,920,493
Current service and interest cost	203,855	204,792
Remeasurements of the net defined benefit liability
—Actuarial loss on experience adjustment	268,332	334,696
—Actuarial loss (gains) on financial assumptions changed	65,523	(71,665)
Benefits paid	(733,209)	(709,176)
Defined benefit obligation at December 31	$ 5,483,641	5,679,140

3) Movements of defined benefit plan assets

The movements in the fair value of defined benefit plan assets of the Bank were as follows:

	For the years ended December 31,
	2025	2024
Fair value of plan assets on January 1	$ 4,855,483	4,592,053
Interest income	69,031	56,560
Remeasurements of the net defined benefit liability
—plan assets revenue (excluded of current interest)	354,123	429,625
Contributions made	150,374	486,421
Benefits paid by the plan	(733,209)	(709,176)
Fair value of plan assets on December 31	$ 4,695,802	4,855,483

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss of the Bank were as follows :

	For the years ended December 31,
	2025	2024
Current service costs	$ 124,527	133,139
Net interest of the net liability of define benefit obligations	10,297	15,093
	$ 134,824	148,232

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

5) Remeasurements of the net defined benefit liability recognized in other comprehensive income

Remeasurements of the net defined benefit liability recognized in other comprehensive income for the years ended December 31, 2025 and 2024 were as follows:

	For the years ended December 31,
	2025	2024
Amount on January 1	$ 1,066,724	1,233,318
Recognized during the period	(20,268)	(166,594)
Amount on December 31	$ 1,046,456	1,066,724

6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follow :

	December 31, 2025	December 31, 2024
Discount rate	1.25 %	1.45 %
Future salary increase rate	1.50 %	1.50 %

The expected allocation payment made by the Bank to the defined benefit plans for the one-year after the reporting date is $240,000.

The weighted average lifetime of the defined benefit plans is 6 years.

7) Sensitivity analysis

The effects of changes in major actuarial assumptions adopted in defined benefit obligation on December 31, 2025 and 2024 were as follows :

	Influence of defined benefit plan obligation
	Increase 0.25%	Decrease 0.25%
December 31, 2025
Discount rate(Change 0.25%)	(1.49)%	1.53 %
Future salary increase rate(Change 0.25%)	1.45 %	(1.42)%
December 31, 2024
Discount rate(Change 0.25%)	(1.52)%	1.56 %
Future salary increase rate(Change 0.25%)	1.49 %	(1.46)%

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2025 and 2024.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ii) Defined contribution plan

The Bank allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Bank allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation. Employees based abroad are contributed in accordance with the local government’s regulations.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance, and local authorities responsible for the oversea branches of the Bank amounted to $226,082 and $205,029 for the years ended December 31, 2025 and 2024, respectively.

(iii) Employee deposit with favorable rate

	December 31, 2025	December 31, 2024
Present value of defined benefit obligation	$ 1,154,015	1,072,922
Fair value of plan assets	-	-
Net defined benefit liability	$ 1,154,015	1,072,922

The Bank conducted the obligation of time deposit with favorable rate for retired and current employees based on the internal regulation “Saving Deposits for Employees”.

1) Movements in the present value of the defined benefit obligations

The movements in the present value of the defined benefit obligations of the Bank for the years ended December 31, 2025 and 2024, were as follows:

	For the years ended December 31,
	2025	2024
Defined benefit obligation on January 1	$ 1,072,922	1,122,462
Interest cost	40,831	42,678
Remeasurements of the net defined benefit liability
-current actuarial gains and losses	265,005	128,468
Benefits paid by the plan	(224,743)	(220,686)
Defined benefit obligation on December 31	$ 1,154,015	1,072,922

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) Movements in fair value of the defined benefit plan assets

The movements in the present value of the defined plan assets of the Bank were as follows:

	For the years ended December 31,
	2025	2024
Fair value of plan assets on January 1	$ -	-
Contributions made	224,743	220,686
Benefits paid by the plan	(224,743)	(220,686)
Fair value of plan assets on December 31	$ -	-

3) Expenses recognized in profit or loss

The expenses recognized in profit or loss of the Bank were as follows:

	For the years ended December 31,
	2025	2024
Net interest on the net defined benefit liability	$ 305,836	171,146

4) Actuarial assumption

The material actuarial assumptions used to determine present value of a defined benefit obligation on the reporting date were as follow:

	December 31, 2025	December 31, 2024
Discount rate of employee deposit with favorable rate	4.00 %	4.00 %
Rate of return for capital deposited	2.00 %	2.00 %
Annual diminishing rate of account balance	1.00 %	1.00 %
Possibility that employee deposit with favorable rate be modified	50.00 %	50.00 %

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(aa) Earnings per share

	For the years ended December 31,
	2025	2024
Net income	$ 12,231,819	11,236,701
Weighted average number of common stock shares outstanding (in thousands) (Note 1)	9,718,062	9,718,062
Basic earnings per shares (in dollars)	$ 1.26	1.16
Dilutive potential common shares (in thousands) (Notes 1,2)	61,097	64,337
Weighted average number of shares outstanding for diluted EPS (in thousands) (Note 1)	9,779,159	9,782,399
Diluted earnings per shares (in dollars)	$ 1.25	1.15

Note 1: The earnings per share for the year ended December 31, 2024 has applied retrospective adjustments.

Note 2: The shares were calculated based on the stock price on the balance sheet date.

(ab) Employees and directors' remuneration

On June 20, 2025, the Bank resolved at the shareholders' meeting to amend its Articles of Incorporation. According to the amended Articles, if the Bank has profit in a given fiscal year, the profit shall be used to offset against any accumulated losses incurred by the Bank. The remainder, if any, 1%-6% shall be allocated as employee remuneration, inclusive of a minimum of 20% to those base level employees, and a maximum of 0.6% as remunerations for directors and supervisors. Prior to the amendment, the Articles of Incorporation stipulated that, if the Bank has profit in a given fiscal year, the profit shall be used to offset against any accumulated losses incurred by the Bank. The remainder, if any, 1%-6% should be allocated as employee remuneration and no more than 0.6% as remunerations for directors and supervisors.

For the years ended December 31, 2025 and 2024, the estimated employee remuneration were $977,552 and $901,323, and the estimated directors' remuneration were $97,755 and $90,132, the estimates are based on pre-tax net profit for the period, before deducting employees and directors' remuneration, multiplied by the elaboration of the Bank's Articles of Association of employees and the directors remuneration ratio, and recognized as operating cost. If the board's meeting decides to release stock dividends as employees' bonuses, the total number of employees bonus stocks to be issued shall be determined by the common stock closing price of the day before the meeting date.

There is no difference with actual distributions of 2024 remuneration. The information is available at the Market Observation Post System website.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ac) Net interest revenue

	For the years ended December 31,
	2025	2024
Interest income:
Loans	$ 15,114,629	15,282,162
Secured loans	30,717,184	28,610,836
Bills negotiated	4,254	5,189
Bank overdrafts	31,198	30,119
Discounts	35,866	33,039
Time deposit from Central Bank	2,179,668	2,091,178
Due from the Central Bank	645,748	608,297
Call loans to banks	1,311,399	1,634,369
Bonds	5,741,602	5,895,559
International credit card	35,206	35,029
Overdue loans	222,672	285,003
Bills	338,777	163,351
Due from Banks	231,367	284,560
Others	280,863	249,678
Subtotal	56,890,433	55,208,369
Interest expense:
Deposits	33,207,527	32,920,924
Deposits from banks	488	6,662
Call loans from banks	2,323,078	2,373,959
Financial debentures	799,811	805,104
Notes and bond issued under repurchase agreement	77,564	62,231
Others	46,452	94,994
Subtotal	36,454,920	36,263,874
Total	$ 20,435,513	18,944,495

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ad) Net service fee revenue

	For the years ended December 31,
	2025	2024
Service fee income:
Remittance service fee	$ 64,344	66,851
Import bills negotiated service fee	42,868	39,517
Export bills negotiated service fee	8,095	8,617
Letter of credit service fee	6,691	5,874
Certification service fee	2,313	1,743
Acceptance service fee	2,823	2,533
Trust service fee	811,094	725,157
Guarantee service fee	421,457	329,795
Agency service fee	21,074	26,289
Interbank service fee	129,703	121,977
Card service fee	185,458	186,245
Commission revenue of insurance premium	3,192,682	2,906,336
Custodian service fee	218,912	199,457
Foreign currency service fee	80,816	80,021
Commission of futures	2,619	3,030
Loan service fee	1,794,667	2,009,528
Miscellaneous fees	192,416	296,231
Subtotal	7,178,032	7,009,201
Service fee expense:
Foreign currency service fee	33,006	32,075
Interbank service fee	221,191	207,538
Trust service fee	4,503	3,745
Agency service fee	1,784	1,442
IC card service fee	141,262	127,082
Check clearing service fee	7,230	7,748
Remittance service fee	8,884	7,060
Custodian service fee	62,431	61,312
Call loans service fee	2,839	5,850
Futures option fee	13	3
Miscellaneous fees	25,824	24,104
Subtotal	508,967	477,959
Total	$ 6,669,065	6,531,242

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ae) Gain (loss) on financial assets or liabilities measured at fair value through profit or loss

	For the years ended December 31,
	2025	2024
Valuation gains (losses):
Financial debentures	$ (531,989)	(680,120)
Listed stocks and emerging stocks	-	(7,737)
Beneficiary certificates	-	1,556
Private fund	(1,064)	(5,355)
Commercial paper	(62,370)	11,385
Derivative financial instruments	(435,483)	(393,111)
Subtotal	(1,030,906)	(1,073,382)
Disposal gains (losses):
Listed stocks and emerging stocks	(25,785)	(31,707)
Beneficiary certificates	-	6,000
Commercial paper	(18,805)	(5,860)
Derivative financial instruments	4,923,265	6,039,921
Subtotal	4,878,675	6,008,354
Dividend revenue	1,643	11,328
Interest income	1,504,733	1,199,998
Total	$ 5,354,145	6,146,298

(af) Realized gain on financial assets at fair value through other comprehensive income

	For the years ended December 31,
	2025	2024
Gain on disposal of government bonds	$ 1,159	-
Gain on disposal of corporate bonds	4,695	276
Dividend revenue	1,446,314	1,154,467
Total	$ 1,452,168	1,154,743

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ag) (Impairment losses on assets) reversal of impairment loss on assets

	For the years ended December 31,
	2025	2024
Investment in debt instrument measured at fair value through other comprehensive income	$ 4,340	13,821
Investment in debt instrument measured at amortized cost	(20,285)	8,615
Total	$ (15,945)	22,436

(ah) Share of profit of associates and joint ventures accounted for using equity method

	For the years ended December 31,
	2025	2024
Investment income- TBB International Leasing Co., Ltd.	$ 69,925	78,219
Investment income- TBB (Cambodia) Microfinance Institution Plc	7,972	(10,583)
Investment income- TBB Venture Capital Co., Ltd.	51,735	43,270
Investment income- TBB Consulting Co., Ltd.	12,398	49,241
Total	$ 142,030	160,147

(ai) Net other revenue other than interest income

	For the years ended December 31,
	2025	2024
Rental revenue of operating assets	$ 13,517	12,357
Rental expense of operating assets	(1,898)	(1,867)
Loss on disposal and retirement of property and equipment	(6,443)	(2,916)
Loss of account error	(77)	(153)
Gold deposit book	11,275	4,090
Other operating expense	(76,068)	(52,494)
Other miscellaneous income	133,457	146,202
Total	$ 73,763	105,219

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(aj) Bad debts expenses, commitment and guarantee liability provision

	For the years ended December 31,
	2025	2024
Discounted and loans	$ 2,221,026	3,423,798
Call loans to banks	238	(7,350)
Receivables and other financial assets	7,730	(16,550)
Subtotal	2,228,994	3,399,898
Provisions for guarantee liabilities	104,016	62,365
Provisions for loan commitments	(13,728)	(29,672)
Total	$ 2,319,282	3,432,591

(ak) Employee benefits expenses

	For the years ended December 31,
	2025	2024
Salary expense	$ 8,478,591	8,139,309
Labor and health insurance	612,729	575,752
Pension expense	360,129	352,416
Directors’ remuneration	102,128	94,769
Other employee benefits	748,714	613,712
Total	$ 10,302,291	9,775,958

(al) Depreciation and amortization expense

	For the years ended December 31,
	2025	2024
Depreciation expense
Property and equipment	$ 491,721	559,758
Right-of-use assets	427,247	427,716
Amortization expense
Computer software	471,332	370,191
Other deferred charges	91	91
Total	$ 1,390,391	1,357,756

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(am) Other general and administrative expense

	For the years ended December 31,
	2025	2024
Compensation loss	$ 402	132
Utilities fee	109,060	112,304
Postage and telecommunication fee	294,031	287,758
Transportation fee	48,191	41,781
Printing and advertisement fee	586,612	470,825
Repair and maintenance fee	338,687	380,208
Insurance fee	411,075	411,766
Professional service fee	337,639	308,953
Materials and supplies	217,289	121,881
Rental expenses	32,933	33,777
Duties and levies	2,485,320	2,313,722
Membership, donation and partaking	635,330	632,807
Storage, packing and processing fee	59,080	50,718
Cash transit fee	66,218	64,056
Others	60,805	91,213
Total	$ 5,682,672	5,321,901

(an) Financial Instruments

(i) Fair value information

1) General description

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The financial instruments are record as fair value when original recognizing, usually refer to the transaction price in many circumstances. Except some amortized cost financial instruments, the financial instruments are measured in fair value. A quoted market price in an active market provides the most reliable evidence of fair value. If financial instruments are without active market, the Bank adopted the value technique, refer to Bloomberg, Reuters or the price at which the asset could be bought or sold in a current transaction between willing parties.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) The definition of fair value hierarchy

a) Level 1

The input of this level is quoted prices in active markets for identical financial instruments. The active market is a market in which transactions for the homogenous assets or liabilities take place with sufficient frequency and volume to provide pricing information. The stock of listed company, the beneficiary certificates and the derivative financial instruments with public quote inactive market processed by the Bank belong to Level 1.

b) Level 2

The input of this level is other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The investments such as government bonds, corporate bonds, financial debentures, convertible corporate bonds and derivative instruments, including financial debentures the Bank issued belong to Level 2.

c) Level 3

The input is unobservable for the asset or liability in market or counterparty prices. Unobservable inputs like: Option pricing model using the historical volatility. Because the historical volatility cannot represent the future volatility expected value of whole market participants. The input parameter used to measure the fair value of this level is not based on data that can be obtained in the market but using a combination of complex market prices to estimate their values. The assets have been categorized as a Level 3, due to the fact that their fair market value cannot be directly calculated. The equity instruments with no active market which the Bank invested are Level 3.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

3) Based on fair value measurement

a) The fair value hierarchy of information

The financial instruments which are record as fair value measure on an ongoing basis, the fair value hierarchy of information were as follows:

Assets and Liabilities	December 31, 2025
	Total	Level 1	Level 2	Level 3
Instruments measured at fair value on a recurring basis
Non-derivative financial assets and liabilities:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss, mandatorily measure at fair value
Others	$ 101,503,289	-	101,434,908	68,381
Financial assets at fair value through other comprehensive income
Security Investments	18,841,560	8,994,821	-	9,846,739
Bond Investments	175,478,800	-	175,478,800	-
Others	730,187	100,300	629,887	-
Financial liabilities at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss	9,525,881	-	9,525,881	-
Derivative financial assets and liabilities
Assets:
Financial assets at fair value through profit or loss	$ 2,582,736	24,455	2,558,281	-
Liabilities:
Financial liabilities at fair value through profit or loss	351,720	-	351,720	-

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Assets and Liabilities	December 31, 2024
	Total	Level 1	Level 2	Level 3
Instruments measured at fair value on a recurring basis
Non-derivative financial assets and liabilities:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss, mandatorily measure at fair value
Others	$ 78,253,969	-	78,181,124	72,845
Financial assets at fair value through other comprehensive income
Security Investments	17,458,657	10,012,278	-	7,446,379
Bonds Investment	166,760,372	97,980,180	68,780,192	-
Other	771,425	118,912	652,513	-
Financial liabilities at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss	9,927,272	-	9,927,272	-
Derivative financial assets and liabilities
Assets:
Financial assets at fair value through profit or loss	$ 2,931,419	27,320	2,904,099	-
Liabilities:
Financial liabilities at fair value through profit or loss	285,964	-	285,964	-

b) Valuation techniques used in estimating the fair values of financial instruments

If the financial instruments have quoted price in an active market, the quoted price is regarded as its fair value.

If the financial instruments of quoted price, which are from the Stock Exchange, Brokers, Pricing service agencies or Government institutions, are timely and frequently, and reflects the actual price, then the financial instruments have a quoted price in an active market. If the above conditions are not fulfilled, the market is inactive.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Except for the above financial instruments of quoted price in an active market, there is no quoted price in an active market for the financial asset, its fair value is estimated on the basis of the result of a valuation technique that refers to quoted prices considered the identical financial instrument with same characteristics and essential terms of transaction, Discounted-Cash-Flow model and other valuation techniques including the model using market information to be made of the calculation at the balance sheet date (e.g. Taipei Exchange reference yield curve, Reuters quoted the average commercial paper rate, the Taipei Financial industry call loan rate fixing TAIBOR).

The financial asset’s fair value is estimated on the basis of the result of a valuation technique, the Bank adopted that refers to quoted prices provided by financial institutions. Ask (bid) is used to evaluate the selling (buying) position by the Bank if the quoted price include ask and bid price. If there is not a quoted price for the financial asset, transaction price close to the balance sheet date is the fair value.

Fair value of financial derivatives is the amount of cash to be paid or to be received by the Bank, assuming that the contract will be terminated on the balance sheet date. The Bank adopts mark-to-model prices which are usually adopted among the banking industry, such as Discounted-Cash-Flow model and Black-Scholes model. The Bank adopts the price data from Reuters and Bloomberg to calculate the fair value of the holding position. The aforesaid price data is based upon the middle price and used consistently by the Bank. Furthermore, the fair value of the embedded financial derivatives is calculated based upon the quote from the counterparty, and separately calculated in accordance with the contracts.

c) Adjustment for fair value

i) The restraint of evaluation model and uncertain inputs

The estimates of output-based value using the evaluation model, which may not reflect the Bank’s all related factors. Therefore, the estimated value of the evaluation model will be appropriately adjusted according to the extra parameters such as model risk or liquidity risk. Information and price parameters used in the evaluation process are after careful assessment, and are appropriately adjusted according to the current market situation.

ii) Credit risk value adjustment

The Bank’s credit risk value adjustment of OTC transaction derivative instruments can be divided to Credit value adjustments (CVA) and debit value adjustments (DVA) to reflect the fair value of the counterparty or the default, and the Bank may not be received or paid full market value of trading possibilities.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

The Bank would calculate credit valuation adjustment (CVA) by assessing probability of default (PD) and loss given default (LGD) of the counterparty before multiplying exposure at default (EAD) of the counterparty. On the contrary, debit valuation adjustment (DVA).

The Bank assesses the probability of default on the assumption of 60%, but at the risk of the nature and circumstances of available data, we may use other loss given default assumptions.

d) Transfers between Level 1 and Level 2

For the years ended December 31, 2025, financial assets measured at fair value with a carrying amount of $107,090,090 were transferred from Level 1 to Level 2 due to the fact that the fair value is not measured directly by quoted market prices.

e) Changes in financial assets which were classified to Level 3 based on fair value measurement

Changes of financial assets categorized in Level 3:

Name	For the year ended December 31, 2025
	Beginning balance	Valuation profit and loss		Increase		Decrease		Ending balance
		Recognized in profit or loss	Recognized in other comprehensive income	Purchase or issue	Transfer into Level 3	Sale Disposition or Settlement	Transfer out from Level 3
Financial assets at fair value through profit or loss	$ 72,845	(1,064)	-	-	-	3,400	-	68,381
Investments in equity instruments measured at fair value through other comprehensive income	7,446,379	-	902,728	1,506,558	-	8,926	-	9,846,739
Name	For the year ended December 31, 2024
---	---	---	---	---	---	---	---	---
	Beginning balance	Valuation profit and loss		Increase		Decrease		Ending balance
		Recognized in profit or loss	Recognized in other comprehensive income	Purchase or issue	Transfer into Level 3	Sale Disposition or Settlement	Transfer out from Level 3
Financial assets at fair value through profit or loss	$ 78,200	(5,355)	-	-	-	-	-	72,845
Investments in equity instruments measured at fair value through other comprehensive income	5,796,004	-	1,222,225	428,150	-	-	-	7,446,379

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

f) Profit and loss information of Level 3

Current gain (loss) and other comprehensive income of holding assets are as follow:

	For the years ended December 31,
	2025	2024
Recognized on profit and loss (reported as unrealized gain (loss) from investments instruments measured at fair value through profit and loss)	$ (1,064)	(5,355)
Recognized on other comprehensive income (reported as unrealized gain (loss) from investments instruments measured at fair value through other comprehensive income)	902,728	1,222,225

g) Quantified information of the fair value measurement of significant unobservable inputs (Level 3)

The Bank financial instruments that use Level 3 inputs to measure fair value include financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. Without active market quotation, the Bank and subsidiaries takes professional financial information vendors and widely used by market participants for evaluation or counterparty quotation as reference. The unobservable inputs are as follows :

	December 31, 2025
	fair value	valuation methods	significant unobservable inputs	range	inter-relationship between significant unobservable inputs and fair value measurement
Financial asset at fair value through profit or loss
Private fund	$ 68,381	assets approach	liquidity discount	10%	The higher market liquidity discount, the lower fair value.
Financial assets at fair value through other comprehensive income
Unlisted stocks	9,846,739	market approach	liquidity discount	15.86%–26.53%	The higher market liquidity discount, the lower fair value.
		assets approach
		income approach	sustainable growth rate	0%–1.51%	The higher sustainable growth rate, the higher fair value.
		income approach	cost of equity	10.15%–12.06%	The higher rate of cost of equity, the lower fair value.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

	December 31, 2024
	fair value	valuation methods	significant unobservable inputs	range	inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through profit or loss
Private fund	$ 72,845	assets approach	liquidity discount	10.00%	The higher market liquidity discount, the lower fair value.
Financial assets at fair value through other comprehensive income
Unlisted stocks	7,446,379	market approach	liquidity discount	15.92%-26.92%	The higher market liquidity discount, the lower fair value.
		assets approach
		income approach	sustainable growth rate	0.00%-1.53%	The higher sustainable growth rate, the higher fair value.
		income approach	cost of equity	11.14%-12.57%	The higher rate of cost of equity, the lower fair value.

h) Sensitivity analysis of reasonably possible alternative assumptions for fair value measurement in Level 3.

Valuation techniques used by the Bank for fair value measurements of financial instruments are appropriate. However, the use of different valuation models or inputs could lead to different outcomes of fair value measurements. The following are the impact on the other comprehensive profit and loss if using different assumptions:

i) Assets approach/ Market approach

The evaluation methods of Level 3 financial instruments of the Bank are mainly based on the market approach or the assets approach. If the liquidity discount changes by 5% upwards or downwards, the impact on the other comprehensive profit and loss is as follows:

	the effects to the net income and other comprehensive income
	Favorable changes (-5%)	Unfavorable changes (5%)
December 31, 2025
Financial assets at fair value through profit or loss
Private fund	$ 3,799	(3,799)
Financial assets at fair value through other comprehensive income
Unlisted stocks	573,737	(573,737)

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

	the effects to the net income and other comprehensive income
	Favorable changes (-5%)	Unfavorable changes (5%)
December 31, 2024
Financial assets at fair value through profit or loss
Private fund	$ 4,047	(4,047)
Financial assets at fair value through other comprehensive income
Unlisted stocks	431,749	(431,749)

ii) Income approach

Adopting the income approach to evaluate Level 3 financial instruments of the Bank. The evaluation parameters are divided into sustainable growth rate and cost of equity capital. The effects of the two evaluation parameters on the other comprehensive profit and loss are as follows:

sustainable growth rate

	the effects to other comprehensive income
	Favorable changes (0.3%)	Unfavorable changes (-0.3%)
December 31, 2025
Financial assets at fair value through other comprehensive income
Unlisted stocks	$ 5,269	(4,899)
	the effects to other comprehensive income
	Favorable changes (0.3%)	Unfavorable changes (-0.3%)
December 31, 2024
Financial assets at fair value through other comprehensive income
Unlisted stocks	$ 3,699	(3,531)

cost of equity

	the effects to other comprehensive income
	Favorable changes (-3%)	Unfavorable changes (3%)
December 31, 2025
Financial assets at fair value through other comprehensive income
Unlisted stocks	$ 71,663	(34,680)
		(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

	the effects to other comprehensive income
	Favorable changes (-3%)	Unfavorable changes (3%)
December 31, 2024
Financial assets at fair value through other comprehensive income
Unlisted stocks	$ 74,568	(36,659)

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

4) Not based on fair value measurement

a) Fair value information

The following chart presents the financial instruments not based on fair value measurement of the Bank. Except those items, others’ fair value is reasonably approximate value, the Bank does not disclosure their fair value.

	December 31, 2025
	Book value	Fair value
Debt instruments measured at amortized cost	$ 279,234,758	280,481,069
	December 31, 2024
	Book value	Fair value
Debt instruments measured at amortized cost	$ 230,242,408	230,751,781

b) The fair value hierarchy of information

Assets and Liabilities	Total	December 31, 2025
		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Debt instruments measured at amortized cost $	280,481,069	-	280,481,069	-
Assets and Liabilities	Total	December 31, 2024
		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Debt instruments measured at amortized cost $	230,751,781	53,478,375	177,273,406	-

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

c) Valuation techniques

Methods and assumptions used by the Bank for fair value evaluation of financial instruments were as follows:

i) Cash and cash equivalents, due from Central Bank and call loans to banks, securities purchased under resell agreements, receivables, overdue receivables, exchange bills negotiated guarantee deposits paid, temporary payments and suspense accounts, proceeds of settlement and credit transaction, deposits from Central Bank and other banks, securities sold under repurchase agreements, payables, other financial liabilities, guarantee deposits received and temporary receipts and suspense accounts: since these instruments have short maturities, the book value is adopted as a reasonable basis in estimating the fair value.

ii) Discounts and loans (including non-performing loans): the interest rate of bank loans, dependent on the benchmark interest rate which plus or minus the input value (i.e. motorized interest rate), said market rates, therefore, the book value of financial assets is equivalent to their fair value. Among the case of fixed interest rate, the estimated fair value of long-term loans using the discounted value of its expected cash flows, but this is minority, so the book value of financial assets is equivalent to their fair value.

iii) Investment in debt instruments at amortized cost: the quoted price is regarded as its fair value. If there is no quoted price in an active market for the financial asset, its fair value is estimated on the basis of the result of a valuation technique.

Central Government Securities (NTD): using the comment of “Bonds a fair price for each of times” from Taipei Exchange.
Corporate bonds and bank debentures (NTD): the present value or fair price of Taipei Exchange determined using the future cash flow of yield curve discounting evaluation.

d) Deposits and remittance: to determine the fair value, considered Banking industry characteristics, the market interest rates (i.e. market price) is the fair value. And deposits are mostly due within one year, the carrying amounts is the fair value of reasonable basis. The fixed interest rate of long-term deposits should be estimated by the discounted value of its expected cash flows at fair value, and its maturity date no longer than three years, so its estimated fair value of the carrying amount is considered reasonable.

e) Bank debentures payable: The bank debentures payable, issued by the Bank, whose stated rate was equal the effective rate, using discounted cash flow projections to estimate the fair value, equivalent to its book value.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ao) Financial Risk Information

(i) General description

The goal of the financial risk management of the Bank is to effectively diversify, transfer and avoid risks by taking customer service, financial business operating target, overall risk tolerance and external limitation of laws into consideration and provide benefit to customers, shareholders and employees.

The Bank’s Financial Risk Management policy is to establish a risk management mechanism in terms of risk identification, risk measurement, risk monitoring, and risk control and to construct the overall risk management system. It is to facilitate the business model with appropriate risk management and to control the rationality between risks and rewards under the premise of legal capital ratio in order to achieve operating targets and increase the value of the Bank for the shareholders. The scope covers the management of credit risk, market risk, operation risk, banking book interest rate risk, capital liquidity risk, and capital adequacy.

(ii) Risk management organization structure

1) Risk Management Committee

The chairperson of the Risk Management Committee is appointed by the president. The chairpersons include general manager, deputy general manager of the non-regulatory compliance in head office and department directors of head office (excluding the director of audit department in the Board). This Committee is set up for the purpose of establishing a sound risk management system, strengthening risk management and the implementation of the Bank’s risk management and monitoring. The meeting will be held once a month in principle. The meeting can be held by the chairman of the Committee when it necessary. The duties are as follows:

a) Conduct Analysis and response project when significant domestic and foreign economic, financial and industrial risk management occur.
b) Risk management report of various risk exposure and agenda processing.
c) The processing of examination of the risk management relevant policy of the Bank and limitations, management indices and the response project when the risk exceeds the limitations.
d) Supervise the Bank’s capital adequacy management.
e) Conduct or supervise the issues that have to report to Risk Management Committee according to the regulations drawn by the competent authority at home and abroad.
f) Conduct or supervise other risk management related issues.

Risk Management Department is the assistant unit of the Risk Management Committee. The responsibility of the Risk Management Department is to execute preparing sittings agenda, convening sittings, agenda processing, taking meeting minutes and tracking resolution and regularly report the important resolution and various risk exposure to the board of (executive) directors.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) Assets and Liabilities Management Committee

The chairperson of the Assets and Liabilities Management Committee is the general manager, and the members are formed by the vice assistant general manager and the department heads of deposit, loan, financial transaction, capital deployment and risk management units. The responsibility of the Assets and Liabilities Management Committee is to monitor and manage the banking book interest rate risk and capital liquidity risk and convenes meetings regularly, to approve the analyzing and measurement methods of the capital liquidity risk and banking book interest rate risk exposure, to examine the capital liquidity risk and banking book interest rate risk management policy as well as the relevant limitations and management indices, to receive interest rate risk and capital liquidity risk exposure reports and adjust the assets and liabilities interest rate duration structure and capital maturity structure.

3) Credit Examination Committee

The convener of the Credit Examination Committee is the assistant general manager supervising Risk Management Center. The Committee in principle convenes weekly to examine the modification and establishment of the regulations (including main points, measures and procedures) for significant loans, foreign exchange and guarantee cases.

4) Overdue Loans Clearing Committee

The convener of the Overdue Loans Clearing Committee is the supervising vice president. The convener holds meetings as needed to discuss measures on reducing non-performing loans and approaches to handle overdue loans.

5) Cyber Security Management Committee

The Cyber Security Management Committee is convened by the supervising vice president who oversees the implementation and coordination of the Bank's cyber security policies. The committee holds meetings as needed to examine matters related to cyber security.

(iii) Credit risk

1) Source and definition of credit risk

Credit risk refers to the default risk resulted from the inability to fulfill the contract obligations due to deteriorating financial status of trade counterparties, pessimistic external economic situation or other factors. The primary source of the credit risk of the Bank is the loan business, such as loans of various terms, guarantees and letters of credit, loan commitments, etc., in addition, other sources of credit risk include call loans from banks, securities investments, derivative financial instrument transactions, etc.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) Credit risk management policy

In order to control the credit risk to a tolerable scope, the Bank continuously conduct below operations:

a) Fully understand the credit status and ratings of loan customers and trade counterparties as well as the purposes and payments of loans.

b) Prudently evaluates the credit risk status of loan customers and trade counterparties and consider the adequacy of collaterals and guarantees to assess risk and profit.

c) Establish credit rating mechanism for loan customers or apply the ratings from outside credit rating institutions as the reference for undertaking credit cases or interest rate determination.

d) Modify relevant regulations to control the credit risk to a tolerable extent for the Bank.

The credit risk management procedure and measurement methods of the Bank’s major business are as follows:

a) Credit Business (Including loan commitments and guarantees)

The categorization and credit quality rating of credit assets are as follows:

i) Categorization of credit assets

The credit assets are classified into 5 categories. Except for normal credit assets which are classified as the first category, others are classified, based on the assurance status and the time overdue, as second category (need attention), third category (possible to recover), fourth category (difficult to retrieve) and the fifth category (unable to retrieve). In order to manage creditor’s rights, the Bank established “Regulations Governing the Procedures to Evaluate Assets and Deal with Non-performing/Non-accrual Loans”, “Regulations Governing the Reconciliation of Non-performing/Non-accrual Loans” and its operating procedure “Operating procedure Governing the Collection of Non-performing/Non-accrual Loans” and “Code of Conduct to Deal With Non-Performing Loans” to serve as the guidelines for dealing with non-performing credit and overdue loans collection.

ii) Categorization of credit quality

Based on historical default data, the Bank established internal credit rating model and completed internal rating system to serve as a reference to credit risk control.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

In order to develop an appropriate credit rating model for the Bank to evaluate the credit risk for corporate banking customers and private banking customers, it applied statistical methods, professional expert judgments and relevant customer information to fulfill the requirements. The Bank examined whether the internal credit rating model is in conformity with the actual scenario based on practical default data quarterly and adjusted all parameters to optimize the estimated results.

b) Due from other banks and call loans to banks

The Bank evaluates the credit status of counterparties before transaction and takes the rating information from domestic and foreign credit rating institutions into consideration to determine various credit risk facilities for the counterparties.

c) Debt instrument investments and derivative financial instruments

The Bank manages credit risk of debt instruments through credit rating data of external institutions, credit quality of bonds, geographic situations and counterparties' risk so as to identify credit risk.

The financial institutions which the Bank conducts derivative instruments are mostly investment quality and are controlled based on the trade amount (including loans at call). Counterparties which do not have credit rating or which are of low quality shall be examined individually. For counterparties which are general customers, the Bank controls the credit risk exposure based on the derivative instrument risk facilities and conditions approved by general credit procedures.

3) Determining the credit risk has increased significantly since initial recognition

At each reporting date, the Bank shall assess the change in the risk of a default occurring over the expected life of the various credit assets and financial assets to determine whether the credit risk has increased significantly since initial recognition. To make that assessment, the Bank considers reasonable and supportable information (including forward-looking information) that is indicative of significant increases in credit risk since initial recognition. The main considerations include:

a) credit assets

i) The borrowers failed to pay the principal and interest overdue for more than 30 days, less than 90 days;

ii) When the Bank conducts review or follow-up review of the relevant management procedures after loan, it knows that the financial report of the borrowers have been issued by the accountant and it has issued opinions of the significant doubt on the ability to continue as a going concern;

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

iii) The deposits and assets of borrowers are compulsorily executed, besides, the deposits are compulsorily executed because of tax arrears. However, the borrowers that have enough deposit to bear the cost that assessed by the Bank is except;

iv) The bank knows (if it has received the notice from court) that the collaterals are compulsory executed by other banks;

v) Borrowers were notified the refund by the Bank and did not conduct refund notice;

vi) The letter of credit insurance fund notice due to the related company’s overdue debt in other bank, the creditor to stop the delivery;

vii) Because the borrowers have been involved in litigation and unfavorable judgments, their ability of credit performance is affected;

viii) The customer is classified as an early warning account by the Bank or has bad credit that aware by others.

b) Debt instrument investments

i) The latest credit rating on the report date was non-investment grade and fell more than two levels than the original rating, or;

ii) Investment target evaluation loss is up to 30% of investment cost.

4) The credit risk has not increased significantly or judged as low credit risk on the report date

On each report date, the Bank assessed that there was no significant increase in the risk of default for any credit asset during the expected duration of existence or a low credit risk. The amount of expected credit losses was not taken as the change of credit risk, if the credit risk of the credit asset was low on the report date, it also assumes that the credit risk of the credit asset has not increased significantly since the initial recognition. The credit assets with low credit risk refer to the low default risk and the borrower’s ability to perform its contractual cash flow obligations in the near term. No significant increase in risk relates to the borrower. The absence of economic, operational, and adverse changes in financial conditions and other bad debt conditions did not affect their ability to fulfill their contractual cash flow obligations. Financial assets on investment-grade or not on investment-grade but the ratings are not significantly reduced are also considered to be low-risk areas.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

5) Definitions of default and credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired not only the borrower defaults the loan more than 90 days, it also includes observable data as follows:

a) Credit assets

i) Significant financial difficulty of the issuer or the borrower;
ii) A breach of contract, such as a default or past due event;
iii) The lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
iv) It is becoming probable that the borrower will enter bankruptcy or other financial reorganization;
v) The disappearance of an active market for that financial asset because of financial difficulties;
vi) The purchase or origination of a financial asset at a considerable amount of discount that reflects the incurred credit losses;

b) Debt instrument investments

i) Significant financial difficulty of the issuer;
ii) The disappearance of an active market for that financial asset because of financial difficulties;
iii) The purchase or origination of a financial asset at a considerable amount of discount that reflects the incurred credit losses.
iv) Counterparty defaulting on agreement of other financial instruments (e.g. transactions settlement failure, a bank decide to execute early termination of transactions, or loans originated from derivatives settlement failure).

6) Write-off policy

The integral part or the portion of the credit assets that needs to be written-off should first be approved during the board of directors’ meeting; particularly, the portion that is deemed uncollectible.

The following are indicators that the financial assets are uncollectible:

a) The borrowers fail to recover all or part of the debt due to dissolution, escape, settlement, bankruptcy or other reasons.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

b) After the collateral and the assets of the principal and subordinate debtors have been priced low or deducted from the first-order mortgage, they cannot be repaid, the execution costs are close or may exceed the Bank’s reimbursable amount, and the implementation is not beneficial.

c) The collateral and the property of the principal and subordinate debtors were auctioned off at no cost and were not bought by anyone, and there was no one have substantial benefits.

d) Overdue loan and non-accrual loan have exceeded the liquidation period for two years.

The Bank, whose written-off claims may still have ongoing recourse, continues to follow laws and regulations to pursue the proceedings.

7) Modification of contractual cash flow of financial assets

The Bank may revise the contractual cash flow of the credit asset due to the borrower’s financial difficulties in negotiating, increasing the recovery rate of the borrowers that have problems, or maintaining the customer relationship. The modification of the contractual terms of the credit asset may include extending the contract period, modifying the payment time of interest, and modifying agreement rate and so on. If the contractual cash flow modification of the credit asset is due to the financial difficulty of the borrower, it is deemed as an impairment of the financial asset. If the contractual cash flow modification is not due to the financial difficulties of the borrower, the existing or projected unfavorable changes in the operating, financial or economic conditions under the borrower’s performance or the borrower’s ability to make the borrower’s ability to perform its debt obligations vary significantly. The cause of anomalies or other bad debts is supplemented by an assessment of whether the credit risk of financial assets has increased significantly.

8) Measuring the expected credit losses

a) Adoption of methods and assumptions

After considering the attributes of financial assets and credit assets and the adequacy of default experience, internal historical data or the information from external credit rating agency is used to estimate the Probability of default (PD), Loss given default (LGD), Exposure at default (EAD) and other credit risk components.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

In order to assess the expected credit losses of credit assets, the Bank is divided into the following combinations depending on the credit risk characteristics such as the identity of borrowers, products, and type of collateral:

Corporate banking	Government and public institution
	Financial institution (including banks, ticket companies, securities finance companies)
	Large Enterprise	The guarantee of the credit guarantee mechanism
		Secured
		Non-secured
	Medium and small enterprises	The guarantee of the credit guarantee mechanism
		Secured
		Non-secured
Private banking	Mortgage
	Microcredit
	Other-Secured
	Other-Non-secured
Entrepreneurship	The guarantee of the credit guarantee mechanism
	Secured
	Non-secured

If the credit risk on a credit asset has not increased significantly since initial recognition or the credit asset has low credit risk at the reporting date, the Bank shall measure the allowance for impairment using the 12-month expected credit losses; if the credit risk on a financial instrument has increased significantly or credit-impaired since initial recognition, the Bank shall measure the allowance for impairment using the lifetime expected credit losses.

In order to measure expected credit losses, the Bank considers the default probability (Probability of default, "PD") of borrowers, and loss given default rate ("LGD") multiplying the exposure at default ("EAD"), taking into account the time value of money as well evaluate 12-month and lifetime loss.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Default probability is the default probability of the borrower (default and credit impairment of financial assets), and the loss given default rate is the rate of loss caused by default by the borrower. The default probability and default loss rate used in the impairment assessment of the credit business are based on internal historical information of each group, and adjusted based on current observable information and forward-looking general economic information.

The Bank measures the EAD based on the book value of loans at reporting date. When estimating the 12-month and lifetime expected credit losses of the loan commitments and financial guarantee contracts, the definition of the credit risk increasing significantly and the credit-impaired assets are based on the rules mentioned above. Additionally, in order to determine the EAD used to calculate expected credit loss of off-balance sheet items, the Bank adopts the credit conversion factor (CCF) of standardized approach in credit risk which is legislated in the regulation of Proprietary Capital and Risk Capital of Banks.

b) Consideration of forward-looking information

The Bank obtains forward-looking information which it takes into consideration when determining whether the credit risk of financial instruments has increased significantly since initial recognition and assessing the expected credit losses. The Bank identified the relevant macroeconomic factors for credit risk of each portfolio by analyzing the historically data. These macroeconomic factors include Taiwan GDP (not seasonally adjusted), Taiwan’s actual industrial production index, Taiwan’s annual growth rate of retail sales, Taiwan’s real sales price index, unemployment rate (seasonally adjusted), Cathay National Real Estate Index (national) and Taiwan’s real consumer price index (Not seasonally adjusted) or other factors. The various economic factors and their impacts on Probability of Default (“PD”) are different depending on the type of financial instruments.

In order to determine the credit risk of investment in debt instruments at amortized cost and at fair value through other comprehensive income has increased significantly, the Bank uses the changes of external ratings published by international credit rating agencies as the quantitative indicators, while the assessment of expected credit losses are calculated by using the external ratings, as well as PD and Loss Given Default (“LGD”), published by Moody’s. Since the international credit rating agencies have already considered the forward-looking information while evaluating the credit ratings, which the Bank considered to be appropriate after its assessment, the credit ratings will be included in the Bank’s assessment of related expected credit losses.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

9) Credit risk hedging or diminishing.

a) Collaterals

The Bank adopts a series of policies and procedures to mitigate credit risk and enhance credit risk tolerance. The method applied most is to request customers to provide collaterals. The Bank established collateral accreditation code of conduct in term of collateral management and total loan amount to regulate the scope of collaterals and the accreditation method and regularly inspects the collaterals. When the collaterals devalue or the concern of devaluation occurs, the Bank shall increase collaterals or retrieve part of the loans to ensure the creditor’s right is intact.

b) Limit of credit risk and the control of credit risk concentration

i) In order to avoid the situation that the credit risk of single customer being too high, the credit limit of an individual, a related party or a related enterprise shall be in conformity with “Authorization method for subsection 3 of Article 33 of the Banking Act of the Republic of China” and the credit limit authorization steps are regulated in the Key Points of Credit Engagement Authorization and the Key Points of Credit Engagement Authorization for Overseas Branches of the Bank.

ii) To enhance the risk concentration management, the Bank established regulations in terms of countries, financial institutions, industries and group enterprises. The relevant limits are reviewed and approved annually and the usage of the credit is monitored on a daily basis. In addition, the results are reported regularly.

c) General agreement of net amount settlement

The transactions of the Bank are mostly settled with gross amount. Part of the transactions agreed on net amount settlement. When a default occurs, the Bank terminates all the transactions with the counterparty and settles by net amount to further lower credit risk.

d) Enhancement of other credit

The assessment of credit business applies to credit 5P principles, credit risk is offset by dividing self-liquidating loan commitments as the main, and set the accounts to master the repayment of cash flow. Also, in terms of the credit agreement stipulates the offset. (i.e. all kinds of deposits, except prohibition of low or the party’s agreement, the Bank can set off all the debts), thus to reduce the loan amount, shorter loan repayment period or are considered part or all of expiration of acceleration clauses. To strengthen the protection of creditor and reduce credit risk, using qualified and effective enhancement, such as the requirement of real property, personal property, demand deposits, time deposits, securities and the guarantee of financial institution or the credit guarantee mechanism approved by government. (e.g. R.O.C SMEG, Agricultural Credit Guarantee Fund, Overseas Credit Guarantee Fund)

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

10) Information on the financial assets of the Bank that has been credit derogated and the collateral for mitigating potential losses are as follows:

December 31, 2025	Carrying amount	Allowance impairment	Exposure (measured at amortized cost)	Value of collateral
Impairment financial assets:
Receivables
Interest receivable	$ 58,380	13,010	45,370	-
Discounts and loans	21,514,264	5,353,380	16,160,884	24,936,529
Overdue receivable	14,882	7,414	7,468	-
Total impairment financial assets	$ 21,587,526	5,373,804	16,213,722	24,936,529
December 31, 2024	Carrying amount	Allowance impairment	Exposure (measured at amortized cost)	Value of collateral
Impairment financial assets:
Receivables
Accounts receivables	$ 5,440	2,186	3,254	-
Interest receivable	53,196	12,036	41,160	-
Discounts and loans	18,943,078	5,032,126	13,910,952	23,074,264
Overdue receivable	15,380	7,946	7,434	-
Total impairment financial assets	$ 19,017,094	5,054,294	13,962,800	23,074,264

Note: The value of collateral is the real estate appraisal information and credit guarantee agency guarantee amount levied by the Bank’s credit assets.

11) Credit risk concentration

The Bank does not conduct significant transaction with single customer or single trade counterparty. The total amount of discounts and loans, overdue loans in terms of individual customer or individual trade counterparty is not significant. The information of credit risk concentration of the Bank’s discounts and loans and overdue loans are divided by industries, geographic areas and collaterals and listed as follows:

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

a) By industry

Distribution of discounts and loans, overdue loans based on industries.

Industry	December 31, 2025		December 31, 2024
	Amount	%	Amount	%
Private business	$1,015,907,710	60.05 %	994,458,590	60.59 %
Public business	16,439,455	0.97 %	23,659,672	1.44 %
Government institution	19,106,906	1.13 %	43,788,000	2.67 %
Nonprofit organization	2,886,026	0.17 %	2,672,117	0.16 %
Individual	509,998,083	30.14 %	464,452,775	28.30 %
Foreign financial institution	10,297,196	0.61 %	10,829,982	0.66 %
Foreign non-financial institution	115,895,962	6.85 %	99,622,258	6.07 %
Foreign individual	1,385,090	0.08 %	1,701,093	0.11 %
Total	$1,691,916,428	100.00 %	1,641,184,487	100.00 %

b) By geographic area

Distribution of discounts and loans, overdue loans based on geographic area.

Area	December 31, 2025		December 31, 2024
	Amount	%	Amount	%
Domestic	$1,564,338,180	92.46 %	1,529,031,154	93.17 %
Foreign	127,578,248	7.54 %	112,153,333	6.83 %
Total	$1,691,916,428	100.00 %	1,641,184,487	100.00 %

c) By collateral

Distribution of discounts and loans, overdue loans based on collateral.

Collateral	December 31, 2025		December 31, 2024
	Amount	%	Amount	%
Unsecured	$ 293,363,856	17.34 %	290,659,153	17.71 %
Stocks	11,579,740	0.68 %	11,434,500	0.70 %
Bonds	17,676,053	1.04 %	17,754,711	1.08 %
Real estate	1,088,339,699	64.33 %	1,031,845,127	62.87 %
Chattel	15,486,622	0.92 %	16,679,073	1.02 %
Notes receivable	1,887,066	0.11 %	2,357,604	0.14 %
Guarantees	250,270,097	14.79 %	260,374,328	15.87 %
Others	13,313,295	0.79 %	10,079,991	0.61 %
Total	$1,691,916,428	100.00 %	1,641,184,487	100.00 %

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Note: Secured credit are categorized in its respective item per the type of the collaterals. Non-secured credit (no collateral provided) is classified in unsecured. If the credit amount is higher than the accreditation value, the credit amount within the accreditation is classified in the respective item, the credit amount exceeds the accreditation value is classified in unsecured. The accreditation value is the value calculated per the accreditation regulations of the Bank, not the discounted value of the signed contract.

12) Maximum credit risk exposure

a) The maximum credit exposure of the assets in the financial statement is approximately the book value when not considering collaterals or other credit enhancement instruments. The maximum credit exposure off the balance sheet (when not considering collaterals or other credit enhancement instruments and not revocable) was as follows:

Off balance sheet items	Maximum credit risk exposure
	December 31, 2025	December 31, 2024
Issued and irrevocable loan commitments	$ 87,402,586	82,622,791
Irrevocable credit card loan commitments	18,758,256	17,974,642
Letters of credit issued yet unused	7,524,829	8,268,607
Various guarantee proceeds	32,096,231	33,893,522
Total	$ 145,781,902	142,759,562

The Management of the Bank evaluated the credit risk exposure and believed that it is able to continuously control and minimize the off-balance sheet credit risk exposure due to its strict appraisal process and regular subsequent examination.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

b) The credit quality analyses of the financial assets

i) Credit quality analysis of discounts and loans, receivables, guarantee and commitments

December 31, 2025	12-month ECL							Lifetime ECL—not impaired							Lifetime ECL—impaired
	Excellent	Good	Medium	Acceptable	Under standard	No rating	Subtotal	Excellent	Good	Medium	Acceptable	Under standard	No rating	Subtotal	High risk	Allowance impairment	Total
Receivable
Credit card	$ 573,528	137,152	55,459	169,590	1,525	373,140	1,210,394	694	567	1,020	3,656	507	3	6,455	-	1,481	1,315,368
Acceptances receivable	361,695	462,061	71,971	7,670	-	395,586	1,013,994	-	-	-	-	2,117	-	2,117	-	10,142	1,005,929
Other receivables	710,490	1,011,605	650,037	64,544	32,004	3,360,047	3,828,727	503	3,624	3,220	962	2,664	1,387	12,368	58,300	99,976	3,799,490
Discounts and loans
Private banking	266,658,813	169,559,425	61,664,176	2,957,484	1,144,605	4,984,494	506,968,997	52,142	173,812	389,748	110,720	153,450	914	879,986	3,534,191	6,461,306	504,921,868
Corporate banking	542,777,881	421,154,356	266,962,158	40,626,071	17,613,246	67,723,345	1,156,837,057	304,440	1,951,775	809,094	964,737	707,421	898,665	5,716,124	17,980,073	15,535,741	1,164,997,515
Other financial assets
Overdue receivable															14,092	8,921	5,961
Total	$ 611,482,407	592,305,399	329,403,803	43,825,568	10,791,380	76,550,612	1,671,959,169	627,779	2,129,978	1,203,090	1,080,065	866,161	900,969	6,617,050	21,587,526	22,117,607	1,670,046,130
Guarantee and commitments	$ 31,580,799	18,407,297	6,661,191	182,985	232,972	88,443,816	145,509,068	70,237	2,916	2,565	10,556	32,247	-	118,541	154,301	301,002	145,280,900
December 31, 2024	12-month ECL							Lifetime ECL—not impaired							Lifetime ECL—impaired
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Excellent	Good	Medium	Acceptable	Under standard	No rating	Subtotal	Excellent	Good	Medium	Acceptable	Under standard	No rating	Subtotal	High risk	Allowance impairment	Total
Receivable
Credit card	$ 490,011	255,117	153,914	5	1,545	373,399	1,273,991	2,276	2,311	3,223	-	127	1,722	9,659	-	1,441	1,282,200
Acceptances receivable	544,890	508,851	148,854	3,541	-	39,241	1,245,377	-	-	-	-	-	-	-	-	12,454	1,232,025
Other receivables	619,261	848,035	612,121	73,715	28,975	3,624,649	5,806,754	508	2,683	3,405	802	8,895	5,489	21,702	58,636	69,431	5,817,661
Discounts and loans
Private banking	239,613,287	157,115,714	55,730,886	2,859,702	1,405,153	4,839,886	461,572,428	22,854	191,334	288,000	32,373	157,949	3,074	696,284	3,885,156	6,000,481	460,145,307
Corporate banking	305,590,576	428,717,976	268,220,823	48,161,526	17,209,210	66,877,154	1,154,777,265	262,024	913,287	883,441	348,776	1,631,473	1,156,511	5,195,432	15,057,922	15,066,502	1,159,164,117
Other financial assets
Overdue receivable															15,380	8,543	6,837
Total	$ 546,858,025	587,445,693	324,074,398	51,098,487	18,644,083	95,754,329	1,624,675,815	287,662	1,109,355	1,178,069	381,951	1,798,444	1,166,796	5,923,077	19,017,094	21,966,852	1,627,649,134
Guarantee and commitments	$ 26,589,388	21,419,459	9,901,075	417,465	262,871	83,936,364	142,526,632	19,442	78,336	5,955	2,140	183	358	106,294	126,646	411,691	142,547,871

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

ii) Debt instruments

December 31, 2025	12-month ECL					Lifetime ECL—not impaired					Lifetime ECL—impaired
	Investment	Sub investment	High risk	No rating	Subtotal	Investment	Sub investment	High risk	No rating	Subtotal	High risk	Total	Accumulated impairment/(loss)
Investment in debt instruments measured at fair value through other comprehensive income
Overseas bonds	$ 67,520,862	-	-	-	67,520,862	-	-	-	-	-	-	67,520,862	17,789
NT bonds	107,957,938	-	-	-	107,957,938	-	-	-	-	-	-	107,957,938	64,558
Negotiable certificates of deposit	629,887	-	-	-	629,887	-	-	-	-	-	-	629,887	234
Investment in debt instruments at amortized cost
Overseas bonds	24,948,234	-	-	-	24,948,234	-	-	-	-	-	-	24,948,234	7,739
NT bonds	46,742,814	-	-	-	46,742,814	-	-	-	-	-	-	46,742,814	33,001
Certificates of deposit with the Central Bank	207,570,000	-	-	-	207,570,000	-	-	-	-	-	-	207,570,000	51,560
Negotiable certificates of deposit	66,035	-	-	-	66,035	-	-	-	-	-	-	66,035	25
Total	$ 455,435,770	-	-	-	455,435,770	-	-	-	-	-	-	455,435,770	174,906
December 31, 2024	12-month ECL					Lifetime ECL—not impaired					Lifetime ECL—impaired
---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Investment	Sub investment	High risk	No rating	Subtotal	Investment	Sub investment	High risk	No rating	Subtotal	High risk	Total	Accumulated impairment/(loss)
Investment in debt instruments measured at fair value through other comprehensive income
Overseas bonds	$ 68,780,192	-	-	-	68,780,192	-	-	-	-	-	-	68,780,192	20,900
NT bonds	97,980,180	-	-	-	97,980,180	-	-	-	-	-	-	97,980,180	66,583
Negotiable certificates of deposit	652,513	-	-	-	652,513	-	-	-	-	-	-	652,513	245
Investment in debt instruments at amortized cost
Overseas bonds	27,143,649	-	-	-	27,143,649	-	-	-	-	-	-	27,143,649	6,963
NT bonds	48,887,235	-	-	-	48,887,235	-	-	-	-	-	-	48,887,235	26,844
Certificates of deposit with the Central Bank	154,215,000	-	-	-	154,215,000	-	-	-	-	-	-	154,215,000	38,492
Negotiable certificates of deposit	68,849	-	-	-	68,849	-	-	-	-	-	-	68,849	26
Total	$ 397,727,618	-	-	-	397,727,618	-	-	-	-	-	-	397,727,618	160,053

Note: The cumulative impairment of the bond which measured at fair value through other comprehensive profit or loss is recognized as other equity.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

iii) The Maximum credit risk exposure for financial instruments are not subject to impairment regulations are as follows:

December 31, 2025	Maximum credit risk exposure	Collateral	Enhancement of other credit
Financial assets at fair value through profit or loss
— Commercial paper	$ 101,434,908	-	-
— Beneficiary certificates	68,381	-	-
— Derivative instrument	2,582,736	1,718,815	685,874
December 31, 2024	Maximum credit risk exposure	Collateral	Enhancement of other credit
Financial assets at fair value through profit or loss
— Commercial paper	$ 78,181,124	-	-
— Beneficiary certificates	72,845	-	-
— Derivative instrument	2,931,419	2,074,252	612,147

13) Changes in the expected credit losses of the Bank

a) Receivables

For the year ended December 31, 2025
	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ 18,352	646	14,222	33,220	50,106	83,326
Changes in financial instruments that have been identified at the beginning of the period:
— Transferred to 12-months ECL	304	(76)	(228)	-	-	-
— Transferred to lifetime ECL	(27)	33	(6)	-	-	-
— Transferred to the credit-impaired financial assets	(62)	(45)	107	-	-	-
— The financial assets that have been derecognized	(9,920)	(170)	(5,568)	(15,658)	-	(15,658)
New financial assets originated or purchased	9,302	216	5,681	15,199	-	15,199
Other changes	(335)	12	(1,198)	(1,521)	-	(1,521)
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	30,293	30,293
Ending balance	$ 17,614	616	13,010	31,240	80,399	111,639

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

For the year ended December 31, 2024

	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ 15,492	488	16,263	32,243	44,823	77,066
Changes in financial instruments that have been identified at the beginning of the period:
—Transferred to 12-months ECL	533	(157)	(376)	-	-	-
—Transferred to lifetime ECL	(21)	49	(28)	-	-	-
—Transferred to the credit-impaired financial assets	(39)	(34)	73	-	-	-
—The financial assets that have been derecognized	(8,092)	(88)	(3,014)	(11,194)	-	(11,194)
New financial assets originated or purchased	10,905	347	7,553	18,805	-	18,805
Other changes	(426)	41	(6,249)	(6,634)	-	(6,634)
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	5,283	5,283
Ending balance	$ 18,352	646	14,222	33,220	50,106	83,326

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

b) Discounts and loans

For the year ended December 31, 2025

	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ 5,678,500	407,406	5,032,126	11,118,032	10,756,951	21,874,983
Changes in financial instruments that have been identified at the beginning of the period:
—Transferred to 12-months ECL	155,283	(16,678)	(138,605)	-	-	-
—Transferred to lifetime ECL	(19,478)	22,603	(3,125)	-	-	-
—Transferred to the credit-impaired financial assets	(42,525)	(11,363)	53,888	-	-	-
—The financial assets that have been derecognized	(2,461,909)	(113,888)	(627,207)	(3,203,004)	-	(3,203,004)
New financial assets originated or purchased	2,914,611	89,595	726,503	3,730,709	-	3,730,709
Write-off	-	-	(5,013,494)	(5,013,494)	-	(5,013,494)
Other changes	6,620	66,282	5,323,294	5,396,196	-	5,396,196
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	(788,343)	(788,343)
Ending balance	$ 6,231,102	443,957	5,353,380	12,028,439	9,968,608	21,997,047
	For the year ended December 31, 2024
	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ 5,120,615	317,996	4,196,783	9,635,394	9,967,448	19,602,842
Changes in financial instruments that have been identified at the beginning of the period:
—Transferred to 12-months ECL	482,232	(147,652)	(334,580)	-	-	-
—Transferred to lifetime ECL	(17,061)	46,779	(29,718)	-	-	-
—Transferred to the credit-impaired financial assets	(28,314)	(9,572)	37,886	-	-	-
—The financial assets that have been derecognized	(2,310,481)	(40,691)	(634,768)	(2,985,940)	-	(2,985,940)
New financial assets originated or purchased	2,771,889	13,361	407,619	3,192,869	-	3,192,869
Write-off	-	-	(3,354,204)	(3,354,204)	-	(3,354,204)
Other changes	(340,380)	227,185	4,743,108	4,629,913	-	4,629,913
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	789,503	789,503
Ending balance	$ 5,678,500	407,406	5,032,126	11,118,032	10,756,951	21,874,983

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

c) Other financial assets

For the year ended December 31, 2025

	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ -	-	7,946	7,946	597	8,543
Changes in financial instruments that have been identified at the beginning of the period:
—The financial assets that have been derecognized	-	-	(17)	(17)	-	(17)
New financial assets originated or purchased	-	-	20,577	20,577	-	20,577
Write-off	-	-	(21,092)	(21,092)	-	(21,092)
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	910	910
Ending balance	$ -	-	7,414	7,414	1,507	8,921

For the year ended December 31, 2024

	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ -	-	10,891	10,891	599	11,490
Changes in financial instruments that have been identified at the beginning of the period:
—The financial assets that have been derecognized	-	-	(7)	(7)	-	(7)
New financial assets originated or purchased	-	-	16,096	16,096	-	16,096
Write-off	-	-	(19,214)	(19,214)	-	(19,214)
Other changes	-	-	180	180	-	180
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	(2)	(2)
Ending balance	$ -	-	7,946	7,946	597	8,543

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

d) Guarantee and commitments

For the year ended December 31, 2025

	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ 134,318	511	47,096	181,925	229,766	411,691
Changes in financial instruments that have been identified at the beginning of the period:
— Transfer to the credit-impaired financial assets	(74)	-	74	-	-	-
— The financial assets that have been derecognized	(57,076)	(2)	(35)	(57,113)	-	(57,113)
New financial assets originated or purchased	39,684	69	3,246	42,999	-	42,999
Other changes	(14,822)	(292)	6,444	(8,670)	-	(8,670)
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	112,095	112,095
Ending balance	$ 102,030	286	56,825	159,141	341,861	501,002

For the year ended December 31, 2024

	12-month ECL	Lifetime ECL—not impaired	Lifetime ECL—impaired	Impaired (IFRS9)	Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	Total
Beginning balance	$ 159,248	1,117	42,703	203,068	174,033	377,101
Changes in financial instruments that have been identified at the beginning of the period:
— Transfer to 12-months ECL	526	-	(526)	-	-	-
— The financial assets that have been derecognized	(62,330)	(1,104)	(850)	(64,284)	-	(64,284)
New financial assets originated or purchased	55,470	498	-	55,968	-	55,968
Other changes	(18,596)	-	5,769	(12,827)	-	(12,827)
Impairment difference of “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-Performing and Non-Accrual Loans”	-	-	-	-	55,733	55,733
Ending balance	$ 134,318	511	47,096	181,925	229,766	411,691

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

e) Debts investments

	For the year ended December 31, 2025
	12-month ECL	Lifetime ECL
— not impaired	Lifetime ECL
— impaired	Total
Beginning balance	$ 160,053	-	-	160,053
Additions	73,415	-	-	73,415
Derecognition	(58,846)	-	-	(58,846)
Other changes	284	-	-	284
Ending balance	$ 174,906	-	-	174,906
	For the year ended December 31, 2024
	12-month ECL	Lifetime ECL
— not impaired	Lifetime ECL
— impaired	Total
Beginning balance	$ 180,969	-	-	180,969
Additions	62,322	-	-	62,322
Derecognition	(74,117)	-	-	(74,117)
Other changes	(9,121)	-	-	(9,121)
Ending balance	$ 160,053	-	-	160,053

14) Collateral management policy

a) Collaterals are recognized under the account of other assets per the rules of "Regulations Governing the Preparation of Financial Reports by Public Banks".

b) Details were as follows:

Collaterals refer to the collaterals provided by clients as guarantee which are undertaken through public auction when the debtor is not able to fulfill its obligation. The collaterals assumed are recognized using the prices undertaken per the rules of "Regulations Governing the Preparation of Financial Reports by Public Banks" and measured by the book value or the fair value deducted by cost of sale, whichever is lower, at the end of the period. Collaterals will be sold when they are available to be sold and the proceeds received will be used to reduce the book amount of collaterals.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(iv) Liquidity risk

1) The origin and definition of liquidity risk

Liquidity risk refers to the potential financial loss results from the inability to liquidate assets or obtain finance to fulfill the financial obligation which is going to mature with sufficient fund, such as early rescind of time deposits, the channels and terms to call loan from other bank are deteriorated due to the influence of specific markets and the default of loan customers worsen and it is harder for the Bank to receive payments and liquidate financial instruments. The abovementioned situations may diminish the source of cash for the Bank to undertake loan business, trades and investment activities. Under some extreme circumstances, the lack of liquidity may increase the potential possibility of reduction of the overall position of consolidated financial statement, sale of assets and inability to fulfill loan obligation. Liquidity risk is an inherent risk of bank operations and is influenced by specific or overall events in various markets. Those events include but not limited to: Credit event, merger or buyout, systematic strike and natural disaster.

2) The management policy, process and measurement of liquidity risk

a) Policy

i) In accordance with the target and limit for liquidity risk management approved by the board of directors and monitor all liquidity risk positions.

ii) Established “Directions Governing the Capital Liquidity Risk Management of Taiwan Business Bank” and “Remarks Governing the Capital Liquidity Risk Management of Taiwan Business Bank” to serve as guidance to effectively control capital liquidity risk.

iii) Overseas branches shall regulate the code of conduct for liquidity risk management based on business characteristics and the regulations of local authorities. After being approved by the general manager, the Risk Management Department will be in charge of monitoring liquidity risk.

b) Process

i) Finance Department is in charge of daily capital deployment to ensure that the capital is sufficient to cope with various demands for capital.

ii) Risk Management Department is in charge of the identification, measurement, supervision and control of capital liquidity risk to establish a firm operation process and structure.

iii) Risk Management Department reports the result of capital liquidity risk measurement to the Assets and Liabilities Management Committee on a monthly basis and reports the results of capital liquidity risk and pressure test to the board of directors quarterly.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

c) Measurement

i) Maturity gap: To place the inflows and outflows of capital into various time zones accordingly based on the remaining days to maturity and calculate the gap of capital of each time zone in order to measure the capital deficiency of each time zone.

ii) Loan-deposit ratio: To calculate the deposits the Bank received which are used to conduct loan business. In other words, the percentage of the total loan amount accounts for the total deposit amount.

iii) Capital concentration and stability: In order to prevent the Bank from overrelying on single trade counterparty, product or market, the Bank observes several aspects such as the changes in large time deposit customers, the percentage of demand deposits and the continuity of deposits.

iv) Pressure test: Except for monitoring the capital demand under normal circumstances, the Bank conducts pressure test regularly in order to evaluate the capital liquidity under abnormal circumstances and ensure that the Bank is equipped with sufficient capital.

3) Financial assets possessed for managing liquidity risk and maturity analysis for non-derivative financial liability

a) Financial assets possessed for managing liquidity risk

The Bank possesses cash and other high liquidity interest yielding assets to cope with payment obligations and potential emergent capital demands in the market. The assets possessed for managing liquidity risk include cash and cash equivalent, due from the Central Bank and call loans to banks, financial assets at fair value through profit or loss, discounts and loans, financial assets measured at fair value through other comprehensive income and investment in debt instruments at amortized cost.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

b) Maturity analysis for non-derivative financial liabilities

The table below shows the cash outflows from the non-derivative financial liabilities which are possessed by the Bank based on the remaining days from the consolidated financial statement date to the contract maturity date. The amount disclosed is based on the cash flows of the contracts.

	December 31, 2025
	0-30 days	31-90 days	91 days-1 year	1-5 years	Over 5 years	Total
Major matured cash outflow	$ 1,269,447,719	303,932,375	657,388,437	81,750,815	30,374,880	2,342,894,226
Deposits from the Central Bank and banks	475,238	-	-	-	-	475,238
Overdrafts on banks	919,698	-	-	-	-	919,698
Call loans from the Central Bank and banks	41,005,799	19,133,782	6,646,799	-	-	66,786,380
Financial liabilities designated at fair value through profit or loss	-	-	-	-	9,525,881	9,525,881
Notes and bonds issued under repurchase agreement	1,147,876	3,566,721	645,168	-	-	5,359,765
Interest payable	2,177,968	2,622,743	3,850,253	140,090	55	8,791,109
Deposits transferred from Chunghwa Post Co., Ltd.	20,000,000	33,099,335	76,000,000	-	-	129,099,335
Demand deposits	1,044,319,523	-	-	-	-	1,044,319,523
Time deposits	158,506,384	244,447,544	569,977,648	46,393,997	9,128	1,019,334,701
Remittance	829,998	-	-	-	-	829,998
Bank notes payable	-	1,000,000	-	33,910,000	19,000,000	53,910,000
Cumulative earnings on appropriated loan fund	500	1,750	28,250	740,933	1,701,208	2,472,641
Lease liabilities	64,735	60,500	240,319	565,795	138,608	1,069,957
	December 31, 2024
---	---	---	---	---	---	---
	0-30 days	31-90 days	91 days-1 year	1-5 years	Over 5 years	Total
Major matured cash outflow	$ 1,200,472,834	240,345,111	637,391,907	96,704,422	47,721,491	2,222,635,765
Deposits from the Central Bank and banks	500,131	-	-	-	-	500,131
Overdrafts on banks	596,856	-	-	-	-	596,856
Call loans from the Central Bank and banks	35,229,219	15,629,951	1,642,180	-	-	52,501,350
Financial liabilities designated at fair value through profit or loss	-	-	-	-	9,927,272	9,927,272
Notes and bonds issued under repurchase agreement	861,942	399,202	749,964	-	-	2,011,108
Interest payable	1,400,421	2,256,680	4,858,961	137,701	32	8,653,795
Deposits transferred from Chunghwa Post Co., Ltd.	21,000,000	18,099,335	113,000,000	35,000,000	-	187,099,335
Demand deposits	977,550,254	-	-	-	-	977,550,254
Time deposits	162,510,706	203,639,278	515,474,960	44,137,180	3,946	925,766,070
Remittance	748,271	-	-	-	-	748,271
Bank notes payable	-	250,000	1,300,000	15,910,000	36,000,000	53,460,000
Cumulative earnings on appropriated loan fund	4,501	3,250	79,250	804,000	1,637,131	2,528,132
Lease liabilities	70,533	67,415	286,592	715,541	153,110	1,293,191

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

4) Derivative financial liabilities maturity analysis

a) Derivative financial instruments settled by net amount

The derivative instruments of the Bank whose possession are settled by net amount include foreign derivative instruments, such as non-delivery forward contracts and net-delivery foreign exchange option. After evaluation the Bank concluded that the maturity date is the basic element to comprehend all the derivative financial instruments listed in the consolidated financial statement. The amount disclosed is based on the cash flows of the contracts and thus part of the amount disclosed may not correspond to the amount disclosed in the financial statement. As of December 31, 2025 and 2024, maturity analysis for the derivative financial liabilities settled by net amount is as follows:

	December 31, 2025
	0-30 days	31-90 days	91-180 days	181 days to 1 year	Over 1 year	Total
Derivative financial liabilities at fair value through profit or loss
- Foreign exchange derivative instrument	$ 290	1,080	-	-	-	1,370
- Interest rate derivative instrument	-	920	-	5,400	54,963	61,283
Total	$ 290	2,000	-	5,400	54,963	62,653
	December 31, 2024
	0-30 days	31-90 days	91-180 days	181 days to 1 year	Over 1 year	Total
Derivative financial liabilities at fair value through profit or loss
- Foreign exchange derivative instrument	$ -	1,340	-	470	-	1,810

b) Derivative financial instruments settled by gross amount

The derivative instruments of the Bank's possession settled by gross amount include the following:

i) Foreign exchange derivative financial instrument: Foreign exchange options settled by gross amount, foreign exchange forward contracts and currency swap contracts.

ii) Interest rate derivative financial instruments: interest rate swap contracts.

The table below shows the derivative financial instruments of the Bank whose possession are settled by gross amount based on the remaining days from the financial statement date to the contract maturity date. The amount disclosed is based on the cash flow of the contracts and thus part of the amount disclosed may not correspond to the amount disclosed in the financial statement. The maturity analysis for derivative financial liabilities settled by gross amount is as follows:

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

December 31, 2025	0-30 days	31-90 days	91-180 days	181 days to 1 year	Over 1 year	Total
Derivative financial instruments at fair value through profit or loss
— Foreign exchange derivative instruments
Cash outflow	$ 44,256,955	38,286,330	11,840,171	11,098,611	-	105,482,067
Cash inflow	44,565,197	38,303,029	11,605,571	10,795,586	-	105,269,383
Total cash outflow	44,256,955	38,286,330	11,840,171	11,098,611	-	105,482,067
Total cash inflow	44,565,197	38,303,029	11,605,571	10,795,586	-	105,269,383
Net cash flow	$ (308,242)	(16,699)	234,600	303,025	-	212,684
December 31, 2024	0-30 days	31-90 days	91-180 days	181 days to 1 year	Over 1 year	Total
Derivative financial instruments at fair value through profit or loss
— Foreign exchange derivative instruments
Cash outflow	$ 40,045,263	13,620,759	6,163,409	5,708,876	-	65,538,307
Cash inflow	39,427,193	13,508,692	5,944,896	5,382,052	-	64,262,833
— Interest rate derivative instrument
Total cash outflow	40,045,263	13,620,759	6,163,409	5,708,876	-	65,538,307
Total cash inflow	39,427,193	13,508,692	5,944,896	5,382,052	-	64,262,833
Net cash flow	$ 618,070	112,067	218,513	326,824	-	1,275,474

5) Maturity analysis of off-balance sheet items

December 31, 2025	0-30 days	31-90 days	91-180 days	181 days to 1 year	Over 1 year	Total
Issued and irrevocable loan commitments	$ 1,020,248	1,664,961	22,837,773	15,421,518	46,458,086	87,402,586
Irrevocable credit card loan commitments	2,500	38,475	49,870	137,048	18,530,363	18,758,256
Letters of credit issued yet unused	1,904,474	4,439,665	904,902	275,279	509	7,524,829
Other guarantees	1,982,543	1,262,040	1,082,937	6,619,542	21,149,169	32,096,231
Total	$ 4,909,765	7,405,141	24,875,482	22,453,387	86,138,127	145,781,902
December 31, 2024	0-30 days	31-90 days	91-180 days	181 days to 1 year	Over 1 year	Total
Issued and irrevocable loan commitments	$ 137,495	939,928	23,097,633	4,678,031	53,769,704	82,622,791
Irrevocable credit card loan commitments	1,849	76,833	54,394	95,299	17,746,267	17,974,642
Letters of credit issued yet unused	2,259,408	4,773,597	881,706	200,717	153,179	8,268,607
Other guarantees	1,997,787	2,002,498	1,380,366	4,709,858	23,803,013	33,893,522
Total	$ 4,396,539	7,792,856	25,414,099	9,683,905	95,472,163	142,759,562

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

6) Maturity analysis of lease contract commitments

The Bank only has operating lease contract, operating lease commitment refers to, when the Bank is the lessor or lessee and under the irrevocable operating lease conditions, the minimum total future rent payment. Below tables show the maturity analysis of the Bank operating lease contract commitments:

December 31, 2025	Below 1 year	1-5 years	Over 5 years	Total
Operating lease income (lessor)	$ 2,122	6,343	4,649	13,114
December 31, 2024	Below 1 year	1-5 years	Over 5 years	Total
Operating lease income (lessor)	$ 2,299	8,033	6,267	16,599

The capital expenditure commitment of the Bank refers to the contract signed to obtain buildings and equipment. The maturity analysis of the capital expenditure commitment of the Bank is as follows:

December 31, 2025	Below 1 year	1-5 years	Over 5 years	Total
Machinery and equipment	$ 1,213,544	-	-	1,213,544
Transportation equipment	1,447	-	-	1,447
Miscellaneous equipment	5,580	-	-	5,580
Total	$ 1,220,571	-	-	1,220,571
December 31, 2024	Below 1 year	1-5 years	Over 5 years	Total
Machinery and equipment	$ 1,320,333	-	-	1,320,333
Transportation equipment	5,542	-	-	5,542
Miscellaneous equipment	6,924	-	-	6,924
Total	$ 1,332,799	-	-	1,332,799

(v) Market risk

1) Definition of market risk

Market risk refers to the possible loss of the Bank's business in or off the balance sheet results from the disadvantageous fluctuation in market price in terms of interest rates, stock prices, foreign exchange rates and commodity prices.

2) Policies and procedures of market risk management

a) Strategy

i) To carry out market risk management, achieve operation target and maintain healthy capital adequacy by following “Directions Governing the Market Risk Management of Taiwan Business Bank” and other relevant regulations.

ii) Under the risk tolerance approved by the board of directors or board of executive directors, the Bank applies various risk control mechanism to effectively deploy and manage capital in order to maintain the market risk exposure within the tolerable extent and achieve earning target.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

b) Policies and procedures

In order to establish the market risk management mechanism and ensure that the market risk is within the tolerable extent, the Bank set up directions governing the market risk management, remarks governing the limit of market risk and financial product valuation procedures as the primary management guidance. Other than what is stated above, the Bank also establish limit control mechanism in terms of trade positions, stop-limit, suspensions and lines of alert based on the operation notices and procedures of different financial instruments, including fix income instruments, equity securities, foreign exchange transaction and derivative financial instruments.

3) Process for market risk management

a) Risk identification

In accordance with the rules of “Directions Governing the Market Risk Management of Taiwan Business Bank”, the Bank shall conduct appropriate market risk evaluation and document the process for later review before financial instruments are promoted. The content of evaluation includes risk factors identification, evaluation methods, cost-benefit analysis, market liquidity, risk strategy, adequacy of risk management mechanism and the influence on the Bank for undertaking market risk.

b) Risk measurement

i) Annually based on the business development of transaction units and submit to the board of directors or board of executive directors for approval. For the units which the positions and limits remain unchanged after evaluation, they can put the positions and limits into practice after receiving the approval from the general manager.

ii) The risk measurements (or evaluations) of the financial instruments of the Bank are conducted through different information systems. For the market data and parameters of the models applied for evaluation, they shall be random inspected regularly to determine the rationality.

c) Risk monitoring

i) Valuation reports of various financial instruments are prepared regularly for executives to review and serve as the guidance for daily risk management operation.

ii) All financial transactions are equipped with different regulations in terms of limit of loss and stop-limit. Provided that the valuation loss amount is over the limit, a stop-limit, suspension and subsequent risk control will be executed.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

d) Risk report

Risk management department report current market risk management status of the Bank to directors, executive directors and executives to facilitate them to control the risk exposure status and adjust management procedures properly.

4) Scope and method of market risk management

a) Foreign exchange risk management

i) Definition of foreign exchange risk management

Foreign exchange risk refers to the potential profit or loss of the foreign currency financial instruments which results from the transition among fluctuating currencies.

ii) Applicable scope

All the financial instruments which apply to trading book position and banking book position and involve in foreign currencies.

iii) Purpose for foreign exchange risk management

To avoid loss of earnings or deterioration of financial status due to intensive fluctuation of foreign exchange and to increase capital deployment efficiency and business operation integrity.

iv) Procedures of foreign exchange risk management

In order to control foreign exchange transaction risk, the Bank established trade position authorization standard for financial transaction operations, trade units and traders in current regulations. In addition, for non-commercial business foreign exchange operation, all trade units submit the required amounts of position annually based on operation status. Risk management department will evaluate the requirement and submit to the board of directors' (executive directors) for approval. The demand will be executed after the board of directors approved. For the units which the positions remain unchanged after evaluation, they can put the positions into practice after receiving the approval from the general manager.
The trade units conduct various foreign financial product business, they shall fully understand the content of commodities, the risk tolerance and trade purpose. Trade units shall establish financial products trading strategies based on market status in the meeting every morning and submit the risk-benefit evaluation in the meeting minutes for the department heads to review. The trading shall follow the relevant authorization rules of the Bank and the stop-limit of all trade positions shall be executed reliably.

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

v) Process of foreign exchange risk management

Identification and measurement

a. Risk Management department established risk factor chart based on different financial transactions to effectively identify risk factors and market risk resources. In addition, the financial transactions which the Bank conducts deal with simple type financial products. For complex financial products, the Bank conducts back-to-back hedge covering to effectively avoid market risk.

b. Risk Management department uses Greeks to measure the influence level of exchange rate for held-for-trading spot exchange and exchange rate derivative and setup Greek's sensitivity allowance, according to the yearly demand of trade units, the state of utilization, and monitor the load of fluctuation of exchange rate in each acceptable range.

c. Positions of the trading book shall be evaluated daily where the positions of the banking book shall be evaluated monthly. When there are public quotes for financial instruments, the quotes shall be the prior evaluation prices. If the financial instruments are evaluated by models, then they shall be evaluated by mathematic models prudently and the assumptions and parameters of the models shall be reviewed regularly.

Monitoring and report

a. When the evaluation loss of non-commercial foreign exchange transactions is over the limit, the trade units shall execute a stop-limit per the regulations. If the loss amount reaches the suspension warning line or suspension limit of the financial transaction, risk management units shall report to the general manager. Provided that the loss amount reaches the annual suspension line, risk management department shall report to the board of directors or executive directors.

b. Reports of operation results shall be prepared and submitted to the department heads for approval on a daily basis.

b) Equity security risk management

i) Definition of equity security risk

The market risks of the equity securities possessed by the Bank include the individual risk results from the market price fluctuation of individual equity security and the general market risk results from overall market price fluctuation.

(Continued)

100

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

ii) Applicable scope

Financial instruments similar to equity security in all trading books.

iii) Purpose of equity security risk management

To avoid loss of earnings or deterioration of financial status due to intensive fluctuation of equity securities and to increase capital deployment efficiency and business operation integrity.

iv) Procedures of equity security risk management

All trade units submit the required amounts of position annually base on operation status. Risk management department will evaluate the requirement and submit to the board of directors or executive directors. The demand will be executed after approved by the board of directors.
The trade units shall predict the possible trend of domestic stock market based on the information of foreign and domestic security markets so as to set up the operation strategies and directions. The traders shall pay close attention to the market trend when the market opens so as to conduct security transactions and the operations as well as the meeting minutes shall be submitted to the department heads to review.

v) Process of equity security risk management

Identification and measurement

a. The risk management department apply Value at Risk models to measure the market risk of equity security investment. Furthermore, based on the trade units' operation demand and the risk limit established by the Bank's risk tolerance, the risk management units effectively control the variation of risk factors under an acceptable extent.

b. Trading book position shall be evaluated daily. When there is a public quote in the market, the quote shall be adopted as the prior evaluation price. If the transaction is in secondary market and the liquidity is high, the closing price can be adopted as the evaluation price. If the financial instruments are evaluated by models, then they shall be evaluated by mathematic models prudently and the assumptions and parameters of the models shall be reviewed regularly.

(Continued)

101

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Monitoring and report

a. When the evaluation loss of equity security investment is over the limit, the trade units shall execute a stop-limit per regulations. If the loss amount reaches the suspension warning line or suspension limit of the financial transaction, risk management units shall report to the general manager. Provided that the loss amount reaches the annual suspension line, risk management department shall report to the board of directors or executive directors.

b. Transaction reports shall be prepared and submitted to the department heads for approval on a daily basis. And the investment gains or losses shall report to the board of directors or executive directors regularly for future reference.

c) Interest rate risk management

i) Definition of interest rate risk

Interest rate risk refers to the price decline of the Bank’s financial products which contain interest risk factors due to the disadvantageous changes in interest rate.

ii) Applicable scope

Financial instruments which contain interest rate factors in all trading books.

iii) Purpose of interest rate risk management

To avoid loss of earnings or deterioration of financial status due to intensive fluctuation of interest rate and to increase capital deployment efficiency and business operation integrity.

iv) Procedures of interest rate risk management

In order to control interest rate risk, the Bank established trade position authorization standard for financial transaction operations, trade units and trade counterparties in current regulations. In addition, for the positions held for trading, all trade units submit the required amounts of position annually based on operation status. Risk management department will evaluate the requirement and submit to the board of directors or executive directors for approval. The demand will be executed after the board of directors approved.
The trade units shall consider safety, liquidity and profitability and gather market information to assess the potential risk and benefit. In addition, the trade units shall choose investment target prudently through analyzing the issuers’ credit, financial status, country risks and interest rate trends.

(Continued)

102

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

v) Process of interest rate risk management

Identification and measurement

a. The risk management department establish risk factor charts based on different financial transaction to effectively identify risk factors and market risk resources. In addition, the financial transactions which the Bank conducts deal with simple type financial products. For complex financial products, the Bank conducts back-to-back hedge covering to effectively avoid market risk.

b. Position of the trading book shall be evaluated daily. When there are public quotes for financial instruments, the quotes shall be the prior evaluation prices. If the financial instruments are evaluated by models, then they shall be evaluated by mathematic models prudently and the assumptions and parameters of the models shall be reviewed regularly.

Monitoring and report

a. The risk management department apply DV01 to measure to what extent the trading book bond positions are influenced by the interest rate risk and set up interest rate sensitivity limit based on the requirements of the trade units and the risk tolerance of the Bank annually.

b. The trade units shall prepare the income assessment tables of trade positions and traders for the department heads to review. In addition, when the evaluation loss of the position is over the limit, the trade units shall execute a stop-limit per the regulations. If the loss amount reaches the suspension warning line or suspension limit of the financial transaction, risk management department shall report to the general manager. Provided that the loss amount reaches the annual suspension line, risk management units shall report to the board of directors or executive directors.

d) Concentration management

i) The trade counterparties of the Bank are mostly financial institutions. To avoid the risk being over concentrated and enhance credit risk management, the Bank established financial institution credit risk limit based on the world ranking of Level 1 capital and credit ratings from The Banker. The trade units shall also pay attention to the changes of the credit status of individual financial institution as well as the changes of the national credit rating to conduct the transaction prudently.

ii) For equity security investments, the Bank set up limits for single institution and single related party.

(Continued)

103

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

5) Interest rate risk management of the banking book

a) The definition and management purpose for the interest rate risk of the banking book

i) The interest rate risk of the banking book refers to the negative effect towards the future net interest income or economic value of equity results from the fluctuation of interest rate. Net Interest Income (hereafter NII) is the total amount of interest revenue deducted by the total amount of interest expense; Economic Value of Equity (hereafter EVE) is the total discounted future cash inflow from assets deducted by the total discounted future cash outflow from liabilities.

ii) The management purpose of the interest rate risk management of the banking book is to control the negative effect from the interest rate risk fluctuation towards NII or EVE within the approved limit extent.

b) The process for the interest rate risk management of the banking book

i) Identification and measurement

When the Bank conducts interest rate related products, it identifies the reprising risk, yield curve risk, basis risk and option characteristic risk and measures the possible influence on the earnings and economic value results from interest rate fluctuation.

ii) Monitoring and report

The Bank established limits of the ratio between interest-rate-sensitivity assets and interest-rate-sensitivity liabilities, the effect to NII in 1 year when the market interest rate parallel changes 1 BP and the effect to EVE when the market interest rate parallel changes 200 BP to control the banking book interest rate risk. The results of interest rate risk measurement are reported to the Assets and Liabilities Management Committee monthly and to the board of directors or executive directors quarterly. When the measurement result is over the limit, relevant units shall be convened to establish responding plan and the plan shall be submitted to the Assets and Liabilities Management Committee for discussion. After the plan is approved by the general manager, it shall be executed by the relevant business units and report to the board of directors or executive directors.

(Continued)

104

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

6) Value at Risk

a) Description of Value at Risk

Value at Risk (VaR) is a statistical amount used to evaluate the maximum possible loss of portfolio results from the changes of market risk factors within a certain period of time and a fixed confidence interval.

b) Value at Risk models and assumptions

In order to enhance the market risk control operation, the Bank established quantified indices of market risk for the equity security position of the trading book. Based on the historical information of the last 1 year and applies Historical Simulation Method (with the confidence interval being 99% and the duration of possession being 1 day), the Bank calculates and monitors the trend of Value at Risk.

c) The limit of Value at Risk model

Value at Risk is a tool to measure market risk under normal circumstance. The limits of the model are listed below:

i) Value at Risk cannot reflect the losses result from other type of risks, such as credit risk and liquidity risk.

ii) Value at Risk measures the possible loss of the position on hand at the end of the transaction day, but it cannot reflect the distribution of the part which actual loss exceeds Value at Risk.

iii) Value at Risk model is based on historical data to evaluate the amount, and therefore it may not be able to predict the future changes of risk factors, especially for those exceptions result from significant market fluctuation.

(Continued)

105

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

7) Foreign exchange risk disclosure and sensitivity analysis

a) Foreign exchange risk exposure

i) Significant net positions of foreign currencies (Market risk)

Significant net positions of foreign currencies (Market risk)
December 31, 2025
Currency	Foreign currency amount (in thousands)	NT$ amount
USD	$ 353,309	11,109,802
JPY	2,498,988	502,546
AUD	18,174	382,744
HKD	26,929	108,766
CNY	22,391	100,760
Significant net positions of foreign currencies (Market risk)
December 31, 2024
Currency	Foreign currency amount (in thousands)	NT$ amount
USD	$ 363,838	11,928,429
JPY	2,214,548	464,169
AUD	15,708	320,757
CNY	66,303	297,303
ZAR	64,162	111,899

Note 1: Main foreign currencies are the top five foreign currencies ranked in NTD value.

Note 2: Net foreign currency is the absolute value of the net positions of each foreign currency.

(Continued)

106

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

ii) Assets and liabilities of foreign currency

December 31, 2025

Currency	Monetary financial assets			Monetary financial liabilities
	Foreign currency amount (in thousands)	Spot rate	NTD amount	Foreign currency amount (in thousands)	Spot rate	NTD amount
USD	$ 15,935,039	31.4450	501,077,301	15,685,626	31.4450	493,234,510
AUD	5,669,537	21.0600	119,400,449	5,511,758	21.0600	116,077,623
CNY	11,105,044	4.5000	49,972,698	9,035,835	4.5000	40,661,258
JPY	183,250,759	0.2011	36,851,728	181,338,623	0.2011	36,467,197
HKD	11,772,050	4.0390	47,547,310	11,085,170	4.0390	44,773,002
EUR	304,209	36.9400	11,237,480	303,406	36.9400	11,207,818
ZAR	8,984,109	1.8940	17,015,902	8,979,694	1.8940	17,007,540
GBP	19,617	42.3500	830,780	19,398	42.3500	821,505
NZD	53,770	18.2000	978,614	53,629	18.2000	976,048
CAD	17,883	22.9700	410,773	17,903	22.9700	411,232
SGD	24,321	24.4900	595,621	24,342	24.4900	596,136
THB	218,637	1.0056	219,861	219,027	1.0056	220,254
SEK	35,819	3.4200	122,501	35,655	3.4200	121,940
Others (Note)	-	-	79,527	-	-	81,734

December 31, 2024

Currency	Non-monetary financial assets			None-monetary financial liabilities
	Foreign currency amount (in thousands)	Spot rate	NTD amount	Foreign currency amount (in thousands)	Spot rate	NTD amount
USD	$ 14,245,964	32.7850	467,053,930	13,801,949	32.7850	452,496,898
AUD	5,825,840	20.4200	118,963,653	5,688,882	20.4200	116,166,970
CNY	7,363,207	4.4840	33,016,620	7,360,226	4.4840	33,003,253
JPY	152,960,726	0.2096	32,060,568	151,370,493	0.2096	31,727,255
HKD	6,923,917	4.2220	29,232,778	6,294,779	4.2220	26,576,557
EUR	299,583	34.1400	10,227,764	299,590	34.1400	10,228,003
ZAR	6,435,608	1.7440	11,223,700	6,434,227	1.7440	11,221,292
GBP	24,948	41.1800	1,027,359	24,862	41.1800	1,023,817
NZD	42,106	18.5000	778,961	42,052	18.5000	777,962
CAD	16,029	22.8600	366,423	16,014	22.8600	366,080
SGD	12,582	24.1400	303,729	12,623	24.1400	304,719
THB	179,829	0.9637	173,301	179,037	0.9637	172,538
Others (Note)	-	-	126,472	-	-	129,117

Note: Consolidated disclosure is applied for other currencies not over $100,000.

(Continued)

107

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

b) Foreign exchange risk sensitivity analysis (Change by 1%)

Foreign exchange risk sensitivity analysis is the analysis that given other conditions remain the same, the influence on profit or loss and equity when each respective currency depreciate or appreciate by 1%.

Currency	December 31, 2025
	Depreciate by 1%		Appreciate by 1%
	Income	Income	Income	Income
USD	$ (25,251)	(25,137)	25,251	25,137
AUD	3,968	(2,195)	(3,968)	2,195
HKD	4,713	(1,759)	(4,713)	1,759
JPY	(300)	187	300	(187)
GBP	(99)	-	99	-
SGD	1	-	(1)	-
ZAR	(85)	-	85	-
SEK	(6)	-	6	-
CHF	22	-	(22)	-
CAD	5	-	(5)	-
THB	4	-	(4)	-
EUR	(312)	-	312	-
NZD	(37)	-	37	-
CNY	11,483	-	(11,483)	-
Total	$ (5,894)	(28,904)	5,894	28,904
Currency	December 31, 2024
---	---	---	---	---
	Depreciate by 1%		Appreciate by 1%
	Income	Income	Income	Income
USD	$ (3,581)	(82,652)	3,581	82,652
AUD	4,119	(32,046)	(4,119)	32,046
HKD	3,301	(29,741)	(3,301)	29,741
JPY	51	(3,441)	(51)	3,441
GBP	(36)	-	36	-
SGD	6	-	(6)	-
ZAR	(25)	-	25	-
CHF	26	-	(26)	-
CAD	(3)	-	3	-
THB	(8)	-	8	-
EUR	2	-	(2)	-
NZD	(21)	-	21	-
CNY	(59,714)	-	59,714	-
Total	$ (55,883)	(147,880)	55,883	147,880

(Continued)

108

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

8) Interest rate risk disclosure and sensitivity analysis

a) Interest rate sensitivity analysis

The assumption of interest rate sensitivity analysis is, under the circumstance that other conditions remain the same, the yield of the market increase or decrease by 1 basis point (1 bp).

Currency	December 31, 2025
	Interest rate increases by 1 bp		Interest rate decreases by 1 bp
	Income	Income	Income	Income
Trading book
TWD	$ (2,660)	(1,118)	2,660	1,118
Banking book
TWD	-	(80,711)	-	80,711
USD	-	(40,700)	-	40,700
EUR	-	(1,634)	-	1,634
AUD	-	(79)	-	79
HKD	-	(457)	-	457
CNY	-	(776)	-	776
ZAR	-	(56)	-	56
Total	$ (2,660)	(125,531)	2,660	125,531
Currency	December 31, 2024
---	---	---	---	---
	Interest rate increases by 1 bp		Interest rate decreases by 1 bp
	Income	Income	Income	Income
Trading book
TWD	$ (1,808)	(1,563)	1,808	1,563
Banking book
TWD	-	(79,763)	-	79,763
USD	-	(28,514)	-	28,514
EUR	-	(1,754)	-	1,754
AUD	-	(129)	-	129
HKD	-	(215)	-	215
CNY	-	(964)	-	964
ZAR	-	(83)	-	83
Total	$ (1,808)	(112,985)	1,808	112,985

(Continued)

109

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

b) Sensitivity analysis of expected net revenue/Sensitivity of equity in terms of interest rate fluctuation

Scenario	December 31, 2025
	Effect on NII in 1 year		Effect on EVE in 1 year
	TWD	TWD	TWD	TWD
Interest rate increases by 100 bp	1,847,927	(20,448)	(5,261,704)	(110,493)
Interest rate decreases by 100 bp	(2,807,082)	11,004	13,395,665	127,455
Scenario	December 31, 2024
---	---	---	---	---
	Effect on NII in 1 year		Effect on EVE in 1 year
	TWD	TWD	TWD	TWD
Interest rate increases by 100 bp	1,732,841	(25,222)	(5,345,546)	(128,314)
Interest rate decreases by 100 bp	(2,529,293)	20,755	13,044,638	114,999

9) Equity security risk disclosure and sensitivity analysis

a) Equity security sensitivity analysis (Changes by 1%)

The assumption of equity security sensitivity analysis is, under the circumstance that other conditions remain the same, the price of equity security increased or decreased by 1%.

There were no effect on income or equity if the price of equity security increased or decrease by 1% for the years ended December 31, 2025 and 2024.

b) Value at Risk of equity security

Value at Risk	From January 1, 2025 to December 31, 2025
	Average	Maximum	Minimum
Equity security risk	3,595	14,193	-
Value at Risk	From January 1, 2024 to December 31, 2024
---	---	---	---
	Average	Maximum	Minimum
Equity security risk	11,128	28,200	-

(vi) Transferred financial assets that are not fully derecognized

The transactions, relating to transferred financial assets not qualifying for full derecognition, the Bank conducts during daily operation mostly involve securities lending in accordance to repurchase agreements. Since the right to receive contractual cash flow has been transferred to others and the Bank's obligation to repurchase the transferred assets for a fixed price at a future date is recognized under liability, for these transactions, the Bank cannot use, sell or pledge those transferred financial assets in availability period, the Bank has interest rate risk and credit risk, the said transferred assets are not fully derecognized.

As of December 31, 2025 and 2024, there were no any financial assets of the Bank that are not fully derecognized.

(Continued)

110

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(vii) Offsetting financial assets and financial liabilities

The Bank has an exercisable master netting arrangement or similar agreement in place with counterparties. When both parties reach a consensus regarding net settlement, the aforesaid exercisable master netting arrangement or similar agreement can be net settled by offsetting financial assets and financial liabilities. If not, the transaction can be settled at total amount. In the event of default involving one of the parties, the other party can have the transaction net settled.

The following tables present the aforementioned offsetting financial assets and financial liabilities:

December 31, 2025
Financial assets under offsetting or general agreement of net amount settlement or similar norm
Item	Gross amounts of recognized financial assets (a)	Gross amounts of financial liabilities offset in the balance sheet (b)	Net amount of financial assets presented in the balance sheet (c)=(a)-(b)	Amounts not set off in the balance sheet (d)		Net amount (e)=(c)-(d)
				Financial instruments (Note)	Cash collateral received
Derivative financial instruments	$ 845,527	-	845,527	685,874	1,718,815	(1,559,162)
December 31, 2025
---	---	---	---	---	---	---
Financial liabilities under offsetting or general agreement of net amount settlement or similar norm
Item	Gross amounts of recognized financial liabilities (a)	Gross amounts of financial assets offset in the balance sheet (b)	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b)	Amounts not set off in the balance sheet (d)		Net amount (e)=(c)-(d)
				Financial instrument (Note)	Cash collateral pledged
Derivative financial instruments	$ 88,200	-	88,200	-	2,392,336	(2,304,136)
December 31, 2024
---	---	---	---	---	---	---
Financial assets under offsetting or general agreement of net amount settlement or similar norm
Item	Gross amounts of recognized financial assets (a)	Gross amounts of financial liabilities offset in the balance sheet (b)	Net amount of financial assets presented in the balance sheet (c)=(a)-(b)	Amounts not set off in the balance sheet (d)		Net amount (e)=(c)-(d)
				Financial instruments (Note)	Cash collateral received
Derivative financial instruments	$ 1,235,990	-	1,235,990	612,147	2,074,252	(1,450,409)
December 31, 2024
---	---	---	---	---	---	---
Financial liabilities under offsetting or general agreement of net amount settlement or similar norm
Item	Gross amounts of recognized financial liabilities (a)	Gross amounts of financial assets offset in the balance sheet (b)	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b)	Amounts not set off in the balance sheet (d)		Net amount (e)=(c)-(d)
				Financial instruments (Note)	Cash collateral pledged
Derivative financial instruments	$ 110,082	-	110,082	-	2,577,622	(2,467,540)

Note: Master netting arrangements and non-cash financial collaterals are included.

(Continued)

111

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ap) Capital Management

(i) The Bank takes business development and risk control into consideration and calculates capital adequacy per “Regulations Governing the Capital Adequacy Ratio and Capital Category of Banks” and “Calculation Methods and Forms of Proprietary Capital and Risk Capital of Banks”. The ratio between proprietary capital and risk capital shall remain above the regulated minimum ratio.

(ii) In order to maintain adequate capital and reach a balance between risk control and business development, the Bank established “Directions Governing Capital Adequacy” as the guidance for controlling capital adequacy. The scope of the directions includes, except for the least capital requirements for credit risk, market risk and operation risk, significant risk such as banking book interest rate risk, liquidity risk and concentration risk. In addition, in order to link business strategies, capital and risk management, the Bank sets up capital management plan annually for the president’s approval and reports to Risk Management Committee and the board of directors quarterly about relevant risks and capital control status.

(iii) The Bank identifies, measures, monitors and reports various risks based on the directions, notices and relevant rules of competent authority regarding credit risk, market risk, operation risk, interest rate risk of the banking book, and liquidity risk so as to be familiar with current business environment and monitors and adjusts capital adequacy effectively.

(iv) To cope with the implementation of new Basel Accord, the Bank set up complete risk management system, risk management operation tracking procedures to provide the management with appropriate risk management information for making decisions. Therefore, the Bank is able to maintain adequate capital within the tolerable extent and to ensure the provision of proprietary capital of the Bank corresponds with the overall operating risk characteristics of the Bank.

1) Tier 1 capital

a) Common stock equity: The item includes common stock deducted by treasury stock, goodwill and other intangible assets, deferred tax assets based on future profit status of the Bank, unrealized gain on financial assets measured at fair value through other comprehensive income, operating reserve and deficiency of allowance for bad debts, real estate retained earning increment arising from applying the fair value or the revaluation reserve as the deemed cost when first adopting IFRSs, and 25% of the major investment on financial related business.

b) Other Tier 1 capital: 25% of the perpetual non-accumulated subordinated financial debentures deducted by the major investment on financial related business.

(Continued)

112

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) Tier 2 capital

The item includes perpetual accumulated subordinated financial debentures, long term subordinated debenture, real estate retained earning increment arising from applying the fair value or the revaluation reserve as the deemed cost when first adopting IFRSs, 45% of unrealized gain on financial assets measured at fair value through other comprehensive income, and 50% of the major investment on financial related business.

Item			December 31, 2025	December 31, 2024
Eligible capital	Common stock equity		140,960,393	126,593,958
	Other tier 1 capital		17,998,498	18,000,000
	Tier 2 capital		40,348,177	45,604,557
	Eligible Capital		199,307,068	190,198,515
Risk-weighted assets	Credit risk	Standardized approach	1,337,185,948	1,325,373,529
		Internal ratings-based approach	-	-
		Securitization	99,260	72,220
	Operational risk	Basic indicator approach	-	-
		Standardized approach	50,403,772	55,660,035
		Advanced measurement approach	-	-
	Market risk	Standardized approach	35,519,475	47,441,638
		Internal model approach	-	-
	Total risk-weighted assets		1,423,208,455	1,428,547,422
Capital adequacy ratio			14.00 %	13.31 %
Common stock equity/ Risk-weighted assets ratio			9.90 %	8.86 %
Tier 1 capital / Risk-weighted assets ratio			11.17 %	10.12 %
Leverage ratio			6.19 %	5.84 %

The formulas of the table are listed as follows:

a) The eligible capital, risk-weighted assets and exposure are calculated per “Regulations Governing the Capital Adequacy and Capital Category of Banks” and “The Calculation and Forms of Eligible Capital and Risk Assets of Banks”.

b) The Bank shall fill out the capital adequacy of this period and last period. For the semi-annual report, the Bank shall disclose the capital adequacy of this period and last period and additionally disclose the capital adequacy of the previous period ended December 31.

c) Note 1. Eligible Capital = Common stock equity + Other Tier 1 Capital + Tier 2 Capital

Note 2. Total risk-weighted assets = Credit risk weighted asset + (operational risk charge + market risk charge) × 12.5

(Continued)

113

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Note 3. Capital adequacy ratio = Eligible Capital ÷ Risk weighted asset.

Note 4. Common stock equity / Risk-weighted assets ratio = Common stock equity / total risk weighted assets

Note 5. Tier 1 capital / Risk-weighted assets ratio = (Common stock equity + other tier 1 capital) / Risk-weighted assets

Note 6. Leverage ratio = Net Tier 1 capital / Total risk exposure.

d) Above table is not required to be disclosed when preparing the financial reports of the first quarter and third quarter.

(aq) Investing and financing activities not affecting current cash flow

The Bank’s investing and financing activities which did not affect the current cash flow for the years ended December 31, 2025 and 2024 were carried out to acquire right-of-use assets under leases. Please refer to Note 6(l).

Reconciliation of liabilities arising from financing activities were as follows:

	Non-cash changes
	January 1, 2025	Cash flows	Foreign exchange rate movement	Fair value changes	Other changes	December 31, 2025
Financial liabilities at fair value through profit or loss	$ 9,927,272	-	(402,000)	609	-	9,525,881
Bank notes payable	53,460,000	450,000	-	-	-	53,910,000
Lease liabilities	1,293,191	(443,127)	(7,797)	-	227,690	1,069,957
Total liabilities from financing activities	$ 64,680,463	6,873	(409,797)	609	227,690	64,505,838
	Non-cash changes
	January 1, 2024	Cash flows	Foreign exchange rate movement	Fair value changes	Other changes	December 31, 2024
Financial liabilities at fair value through profit or loss	$ 9,175,560	-	624,000	127,712	-	9,927,272
Bank notes payable	53,850,000	(390,000)	-	-	-	53,460,000
Lease liabilities	1,298,137	(442,686)	13,465	-	424,275	1,293,191
Total liabilities from financing activities	$ 64,323,697	(832,686)	637,465	127,712	424,275	64,680,463

(Continued)

114

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ar) Structured entities that not included in consolidated financial reports

(i) The table below presents the types of structured entities that the Bank does not include in financial reports but in which they hold an interest:

Types of structured entities	Nature and purpose	Interests held by the Bank
Private fund	Investing in funds that cannot be freely traded on the open market	Investing in units or limited partnership interests issued by these funds.
Asset securitization product	Investing in commercial real estate assets securitization products	Investment in asset-backed securities issued by unconsolidated structured entities

(ii) The scales of structures entities not included in financial reports were as follow:

	December 31, 2025	December 31, 2024
Private fund	$ 68,381	72,845
Asset securitization product	8,413,908	480,013
Total	$ 8,482,289	552,858

(iii) The carrying amounts of interests held by the Bank in these structured entities were as follows:

Assets held by the Bank	December 31, 2025	December 31, 2024
Financial assets at fair value through profit or loss	$ 68,381	72,845
Financial assets at fair value through other comprehensive income	8,368,569	420,142
Investments in debt instruments at amortized cost	45,339	59,871
Total	$ 8,482,289	552,858

The maximum amount of risk exposure to the Bank endures to a loss incurred from special purpose entities that are not includedraren financial reports is the carrying amount of interests held by the Bank.

(iv) As of December 31, 2025 and 2024, the Bank has not provided any financial support to its special purpose entities that is not included in consolidated financial reports.

(Continued)

115

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(7) Related-party transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the financial statements consolidated financial statements.

Name of related party	Relationship with the Bank and subsidiaries
Bank of Taiwan	Corporate director of the Bank
Ministry of Finance, R.O.C	Corporate director of the Bank
National Development Fund, Executive Yuan	Corporate director of the Bank
Taiwan Business Bank Guild	Corporate director of the Bank
TBB International Leasing Co., Ltd.	Investee company of the Bank
TBB (CAMBODIA) Microfinance Institution Plc.	Investee company of the Bank
TBB Venture Capital Co., Ltd.	Investee company of the Bank
TBB Consulting Co., Ltd.	Investee company of the Bank
Taiwan Business Bank International Leasing Co., Ltd.	Investee companies measured by using the equity method
Small and Medium Enterprise Credit Guarantee Fund of Taiwan. (Note)	Substantive related parties
TBB No. 1 Venture Capital Limited Partnership.	Substantive related parties
Fubon Securities Co., Ltd. (Note)	Substantive related parties
Media Talk Consulting Co., Ltd.	Associates
Others	Management and other related parties of the Bank

Note: No longer a related party commencing from the third quarter of 2024. Therefore, the amounts disclosed below reflect only the transactions that occurred during the period in which the entity was considered a related party.

(b) Significant transactions with related parties

(i) Due from banks

December 31, 2025
	Amount	%
Bank of Taiwan	$ 197,231	1.54
December 31, 2024
	Amount	%
Bank of Taiwan	$ 157,342	0.99

Interest rates are the same as those with regular clients.

(Continued)

116

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ii) Call loans to banks

For the year ended December 31, 2025	Maximum balance	December 31, 2025	Interest Income	Annual interest rate
Bank of Taiwan	$ 36,497,415	436,650	13,130	0.350%-4.530%
For the year ended December 31, 2024	Maximum balance	December 31, 2024	Interest Income	Annual interest rate
Bank of Taiwan	$ 1,725,608	-	1,304	1.407%-5.570%

Interest rates are the same as those with regular clients.

(iii) Call loans from banks

For the year ended December 31, 2025	Maximum balance	December 31, 2025	Interest Expense	Annual interest rate
Bank of Taiwan	$ 9,182,643	-	96,910	0.900%-4.930%
For the year ended December 31, 2024	Maximum balance	December 31, 2024	Interest Expense	Annual interest rate
Bank of Taiwan	$ 17,692,715	1,279,090	98,871	0.600%-5.870%

Interest rates are the same as those with regular clients.

(iv) Deposits

	December 31, 2025
	Amount	%
TBB International Leasing Co., Ltd.	$ 55,991	-
Taiwan Business Bank International Leasing Co., Ltd.	104,294	0.01
TBB Venture Capital Co., Ltd.	23,052	-
TBB Consulting Co., Ltd.	76,401	-
Others	1,609,981	0.08
Total	$ 1,869,719	0.09
	December 31, 2024
	Amount	%
TBB International Leasing Co., Ltd.	$ 34,676	-
Taiwan Business Bank International Leasing Co., Ltd.	24,349	-
TBB Venture Capital Co., Ltd.	74,537	-
TBB Consulting Co., Ltd.	89,181	-
Others	1,557,190	0.08
Total	$ 1,779,933	0.08

Interest rates are the same as those with regular clients.

(Continued)

117

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(v) Credit

December 31, 2025
Category	Number of clients or name of related party	Highest balance	Ending balance	Performing situations		Collaterals	Transaction terms are different to regular clients
				Performing loan	Non-performing Loans
Employee consumer loans	16	9,819	7,867	7,867	-	none	none
Self-use home mortgages loans	78	508,802	485,695	485,695	-	real estate	none
Others	Natural person	468,325	447,225	447,225	-	real estate	none
December 31, 2024
---	---	---	---	---	---	---	---
Category	Number of clients or name of related party	Highest balance	Ending balance	Performing situations		Collaterals	Transaction terms are different to regular clients
				Performing loan	Non-performing Loans
Employee consumer loans	16	14,362	4,500	4,500	-	none	none
Self-use home mortgages loans	70	593,976	383,471	383,471	-	real estate	none
Others	Natural person	595,978	391,026	391,026	-	real estate	none

(vi) Donation:

For the years ended December 31,
	2025	2024
Small and Medium Enterprise Credit Guarantee Fund of $ Taiwan	-	163,580
Taiwan Business Bank Guild	4,500	4,500
Total	$ 4,500	168,080

(vii) Property transaction :

1) Acquisition of financial assets

Related-party	Category	December 31, 2024
		Number of shares	Underlying	Amount
Fubon Securities Co., Ltd.	Financial assets at fair value through other comprehensive income - stocks	5,000,000	Taiwan Stock Exchange	428,150

(viii) Guarantees: None.

(ix) Service fees: None.

(Continued)

118

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(x) Rental revenue:

	For the years ended December 31,
	2025	2024
TBB International Leasing Co., Ltd.	$ 907	899
TBB Venture Capital Co., Ltd.	180	178
TBB Consulting Co., Ltd.	998	990
Total	$ 2,085	2,067

(xi) Derivatives financial instrument transactions: None.
(xii) Sales of Non-Performing Loans Transactions: None.

	For the years ended December 31,
	2025	2024
Salary and other short-term employee benefits	$ 148,051	142,613
Post-employment benefits	2,785	2,701
Total	$ 150,836	145,314

(8) Pledged assets:

Please refer to notes 6(g) and notes 6(h) for more details.

(9) Commitments and contingencies:

(a) Significant commitments and contingencies were as follows:

	December 31, 2025	December 31, 2024
Marketable securities held for custody	$ 4,783,340	5,185,261
Bills collected for others	34,887,885	38,732,548
Bills lent for others	43,314,467	39,588,139
Guarantees and letters of credit	39,621,060	42,162,129
Trust liabilities	312,265,477	299,620,745
Items held for custody	844,009	737,404
Registered government bonds for sale	69,839,200	71,430,200
Registered short-term bills for sale	3,306,793	4,425,334
Guarantee notes payable	32,590,800	32,277,500

(b) Unrecognized contractual commitments:

As of December 31, 2025 and 2024, major constructions in progress and purchases amounted to $1,688,738 and $1,143,904 respectively, of which $1,487,785 and $919,362 respectively, remained unpaid.

(Continued)

119

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(c) The Bank’s trust department plans, manages, and operates trust services in accordance with the Banking Law and Trust Law. Special purpose funds are used to invest in marketable securities and the Bank also manages trust funds. The trust information as of December 31, 2025 and 2024 is as follows:

Trust Balance Sheet

December 31, 2025 and 2024

Trust Assets	December 31, 2025	December 31, 2024
Cash in Bank	$ 5,703,733	7,731,053
Stocks	1,854,077	1,356,828
Funds	62,002,131	65,517,846
Bonds	13,017,264	10,794,327
Real estate	31,519,962	31,751,248
Securities custody	197,881,061	182,140,253
Other assets	287,249	329,190
Total trust assets	$ 312,265,477	299,620,745
Trust Liabilities	December 31, 2025	December 31, 2024
Securities held for custody	$ 197,881,061	182,140,253
Trust capital	114,305,285	117,348,937
Accumulated loss	(2,699,331)	(2,239,813)
Net income	2,778,462	2,371,368
Total trust liabilities	$ 312,265,477	299,620,745

(Continued)

120

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Trust Property Accounts

December 31, 2025 and 2024

Investment in	December 31, 2025	December 31, 2024
Cash in bank	$ 5,703,733	7,731,053
Stocks	1,854,077	1,356,828
Funds	62,002,131	65,517,846
Bonds	13,017,264	10,794,327
Real estate
Land	17,585,604	19,250,782
Buildings	63,265	63,057
Construction in progress	13,871,093	12,437,409
Securities in custody	197,881,061	182,140,253
Other assets	287,249	329,190
Total	$ 312,265,477	299,620,745

Note: As of December 31, 2025 and 2024, the amounts above included OBU transaction on "foreign currency designated trust funds investment in foreign negotiable securities business" amounting to $1,425,939 and $1,458,123, respectively.

(Continued)

121

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Trust Income Statement

For the years ended December 31, 2025 and 2024

Investment items	For the years ended December 31,
	2025	2024
Trust Revenue
Interest income	$ 472,340	455,114
Realized capital gain-fund	1,785,636	1,490,564
Realized gain-stocks	33,706	11,099
Realized gain-bonds	14,679	8,476
Dividend revenue	2,352,405	2,212,947
Other revenues	5,033	6,494
Sub-total	4,663,799	4,184,694
Trust Expense
Administrative expenses	102,553	98,186
Postage and telecommunication expense	4,968	2,423
Duties	125	26
Realized loss-fund	1,685,305	1,672,420
Realized loss-bonds	77,835	29,484
Realized loss-stocks	7,114	1,713
Capital fee	250	-
Other expenses	6,831	8,305
Sub-total	1,884,981	1,812,557
Income before income tax	2,778,818	2,372,137
Income tax expense	(356)	(769)
Net income	$ 2,778,462	2,371,368

(Continued)

122

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(d) In 1996, the Bank’s World Trade Center Branch was sued for handling a letter of credit export collection from Chin Seen Industrial Ltd., which allegedly used a forged export document and failed to ship the goods to the importer, the International Comagnie de Commercialization et d’Invertissement (I.C.C.I.) of the Republic of Zaire, who suffered a loss thereon. In November 1998, I.C.C.I. initiated a case with the Court of Commerce of Brussels in Belgium, requesting the L/C opening bank (Banque Bruxelles Lambert, or BBL) and the Bank to jointly pay compensation of USD$7,830, plus interest, losses, and expenses for the L/C. On August 31, 2005, the Court of Commerce of Brussels ordered the Bank has to compensate for the damage of USD$7,674, plus interest to I.C.C.I. Disatisfied with the decision made by the court, the Bank has engaged a local attorney in Belgium to formally file an appeal. In February 2011, Court of Appeal in Brussels had made an intermediate adjudication wherein both I.C.C.I and the Bank were responsible for the offense. Furthermore, on November 16, 2011, the court ruled that the Bank should be responsible for 90% of the negligence proportion. In terms of the decision made by the court on the second instance, the Bank has filed an appeal on November 3, 2011, in which the court ruled against the Bank on February 6, 2013. Since the Bank and I.C.C.I could not reach an agreement on the exchange rate and the calculation of the compensation, I.C.C.I filed an appeal to the Court of Frankfurt in Germany in October 2016, demanding for the Bank’s account in Germany to be seized, in which the Bank lodged the guaranty amount of EUR13,200 to the court to rescind the order for attachment.

In July 2017, I.C.C.I applied for compulsory execution to the guaranty amount, which was transferred to I.C.C.I. by the court. The Bank then filed a lawsuit objecting to the debt through the attorney, in which the case was dismissed by the Court of Frankfurt in November 2018 and remanded back for reconsideration in November 2019 after the Bank’s appeal was granted by the High Court of Frankfurt. On March 16, 2019, I.C.C.I. has filed a statement of grounds for objection and requested the Frankfurt High Court to revoke its ruling, wherein the Bank has appointed a lawyer to act as an attorney in the Federal Supreme Court of Justice to defend its case, which is currently being tried by the Regional Court of Frankfurt. The Federal Supreme Court of Justice has denied the I.C.C.I interlocutory appeal on May 20, 2021. The Frankfurt District Court ruled in favor of the Bank in the first instance on August 23, 2023. Moreover, I.C.C.I. was ordered to pay the Bank the amount of EUR1,046, plus interest, on November 17, 2017, wherein it disagreed with the ruling and filed an appeal on September 25, 2023. The High Court of Frankfurt dismissed the appeal on July 11, 2024. On April 4, 2025, the appointed attorney confirmed that I.C.C.I did not file an appeal to the Federal Court of Justice. Consequently, this judgment in favor of our bank is now conclusive and binding.

Also, in October and November 2019, the Bank received subpoenas from the court of the Democratic Republic of Congo by a third person Star Marine, who demanded I.C.C.I to pay the damage of USD1,130, and held the Bank jointly liable. I.C.C.I, in turn, demanded the Bank to pay the amount of USD20,060, less its reimbursed amount, to make a security deposit of EUR14,000. In light of the above matter, the Bank has engaged local attorneys to represent itself in the Court of Congo, who will merge the two cases as one. In April 2021, the Court of Congo demanded the Bank to pay the approximate amount of EUR20,060 to I.C.C.I., who will have to compensate Star Marine the damage amounting to USD1,130, as well as make a security deposit of EUR14,000 in the domestic bank in Congo. According to the statement of plaintiff and considering that I.C.C.I has already received the amount of EUR14,860, an addition provision for lawsuit amounting to $76,908 has been made in 2021. Please refer to Note 6(u) for more details. As of December 31, 2025, the Bank has accrued the compensation of $261,924 and EUR$9,660.

(10) Losses from disasters: None

(Continued)

123

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(11) Subsequent Events: None

(12) Others:

(a) Information on loan quality, concentration of credit extensions, interest rate-sensitivity, profitability and maturity analysis

(i) Loan quality:

Items	December 31, 2025
		Non-performing loans (Note1)	Total loans	Non-performing loan ratio (Note2)	Allowance for credit losses	Coverage ratio (Note3)
Corporate finance	Secured	1,712,645	793,688,175	0.22 %	10,278,983	600.18 %
	Unsecured	640,149	398,454,851	0.16 %	5,256,758	821.18 %
Consumer finance	Residence mortgages(Note 4)	178,096	312,384,165	0.06 %	4,034,416	2,265.30 %
	Cash cards	-	-	- %	-	- %
	Microcredit(Note 5)	3,211	555,283	0.58 %	9,223	287.23 %
	Others	71,096	175,851,803	0.04 %	2,270,868	3,194.09 %
	(Note 6)	43,425	10,982,151	0.40 %	146,799	338.05 %
Total loan business		2,648,622	1,691,916,428	0.16 %	21,997,047	830.51 %
		Overdue receivables	Total receivables	Delinquency ratio	Allowance for credit losses	Coverage ratio
Credit cards business		582	1,329,570	0.04 %	8,241	1,415.98 %
Account receivable factoring-without recourse (Note 7)		-	-	- %	-	- %
Items	December 31, 2024
---	---	---	---	---	---	---
		Non-performing loans (Note1)	Total loans	Non-performing loan ratio (Note2)	Allowance for credit losses	Coverage ratio (Note3)
Corporate finance	Secured	2,099,371	791,779,808	0.27 %	10,498,619	500.08 %
	Unsecured	336,268	395,200,885	0.09 %	5,367,883	1,596.31 %
Consumer finance	Residence mortgages(Note 4)	129,309	278,754,583	0.05 %	3,681,544	2,847.09 %
	Cash cards	-	-	- %	-	- %
	Microcredit(Note 5)	4,694	402,305	1.17 %	7,758	165.27 %
	Others	185,206	162,726,471	0.11 %	2,153,456	1,162.74 %
	(Note 6)	11,190	12,320,435	0.09 %	165,723	1,480.99 %
Total loan business		2,766,038	1,641,184,487	0.17 %	21,874,983	790.84 %
		Overdue receivables	Total receivables	Delinquency ratio	Allowance for credit losses	Coverage ratio
Credit cards business		841	1,298,254	0.06 %	9,260	1,101.07 %
Account receivable factoring-without recourse (Note 7)		-	-	- %	-	- %

Note 1 Non-performing loans represent the amount of overdue loans as reported in accordance with the “Regulations on the Procedures for Banking Institutions to Evaluate Assets and Deal with Past Due/Non-performing Loans”. The credit card overdue loans represent the amount of overdue loans as reported in accordance with Jin-Kuan-Yin-(4)-Zi No. 0944000378, dated July 6, 2005.

Note 2 Non-performing loan ratio = Non-performing loans ÷ total loans; Credit card delinquency ratio = Overdue receivables ÷ receivables

Note 3 Coverage ratio for loans = allowance for credit losses ÷ non-performing loans; Coverage ratio for credit card business = allowance for credit losses ÷ overdue receivables.

(Continued)

124

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Note 4 For residential mortgage loans, a borrower provides his/her (or spouse’s or minor child’s) house as collateral in full and pledges it to the financial institution for the purpose of obtaining funds to purchase property and to construct or repair a house.

Note 5 Microcredit loans are defined by Jin-Kuan-Yin-(4)-Zi No. 09440010950, dated December 19, 2005, and do not include credit cards or cash cards.

Note 6 Others in consumer finance are secured and unsecured consumer loans other than residential mortgage loans, cash card loans, and microcredit loans, and do not include credit cards.

Note 7 In accordance with Jin-Kuan-Yin-(5)-Zi No. 0945000494, dated July 19, 2005, the amounts of without-recourse factoring will be classified as overdue receivables within three months from the date that suppliers or insurance companies resolve not to compensate the loss.

Overdue loans and receivables exempted from reporting

	December 31, 2025		December 31, 2024
	Loans may be exempted from reporting as a non-performing loan	Receivables may be exempted from reporting as overdue receivables	Loans may be exempted from reporting as a non-performing loan	Receivables may be exempted from reporting as overdue receivables
Pursuant to a contract under a debt negotiation plan (Note1)	$ 57	323	95	463
Pursuant to a contract under a debt liquidation plan and a debt relief plan (Note 2)	82,624	11,795	79,064	13,300
Total	$ 82,681	12,118	79,159	13,763

Note 1: In accordance with Jin-Kuan-Yin-(1)-Zi No. 09510001270, dated April 25, 2006, a bank is required to make supplemental disclosure of credit information which was approved under the debt coordination mechanism of unsecured consumer debts by the Bankers Association of the R.O.C.

Note 2: In accordance with Jin-Kuan-Yin-(1)-Zi No. 09700318940, dated September 15, 2008 and Jin-Kuan-Yin-Fa-Zi No. 10500134790, dated September 20, 2016, a bank is required to make supplemental disclosure of credit information once debtors apply for pre-negotiation, pre-conciliation, relief and liquidation under the “Consumer Debt Clearance Act.”

(Continued)

125

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ii) Concentration of credit extensions

December 31, 2025
Ranking	Group enterprise	Credit amount	Credit amount to equity ratio (%)
1	A group. (Real estate for sale and rental with own or leased property)	23,699,617	16.13 %
2	B company. (Railway transportation)	20,228,474	13.77 %
3	C group. (Other holding)	17,146,312	11.67 %
4	D group. (Steel rolling and extruding)	12,511,263	8.52 %
5	E group. (Computers manufacturing)	7,646,062	5.20 %
6	F group. (Liquid crystal panel and components manufacturing)	7,630,277	5.19 %
7	G group. (Real estate development)	7,366,866	5.01 %
8	H group. (Real estate development)	7,366,377	5.01 %
9	I group. (Construction of other civil engineering projects)	7,126,786	4.85 %
10	J group. (Real estate development)	6,637,366	4.52 %
December 31, 2024
---	---	---	---
Ranking	Group enterprise	Credit amount	Credit amount to equity ratio (%)
1	A company. (Real estate for sale and rental with own or leased property)	22,774,375	17.33 %
2	B group. (Railway transportation)	20,228,474	15.39 %
3	C group. (Other holding)	14,640,993	11.14 %
4	D group. (Steel rolling and extruding)	9,579,930	7.29 %
5	F group. (Liquid crystal panel and components manufacturing)	8,398,427	6.39 %
6	H group. (Real estate development)	7,416,110	5.64 %
7	E group. (Computers manufacturing)	7,292,812	5.55 %
8	J group. (Real estate development)	7,027,987	5.35 %
9	G group. (Real estate development)	6,987,484	5.32 %
10	K group. (Financial leasing)	6,979,217	5.31 %

Note 1 The top ten enterprise groups other than government or stated-owned enterprises are ranked according to their total outstanding credit amount. If the borrowers belong to an enterprise group, the aggregate credit balance of the enterprise should be calculated and disclosed as a code number for each such borrower together with an indication of the borrowers' line of business. In addition, if the borrowers are enterprise groups, the enterprise group's industry sector with the maximum exposure to credit risk in its main industry sector should be disclosed, along with the "class" of the industry, in compliance with the Standard Industrial Classification System of the R.O.C. posted by the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.

(Continued)

126

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Note 2 Enterprise group is as defined in Article 6 of the “Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings”.

Note 3 Consists of loans (import/export bills negotiated, bills and notes discounted, overdrafts, short-term loans, short-term secured loans, margin loans receivable, medium-term loans, medium-term secured loans, long-term loans, long-term secured loans, overdue loans), exchange bills negotiated, accounts receivable factoring without recourse, bankers’ acceptance receivable, guarantees proceeds.

Note 4 In the calculation of Credit amount to equity ratio, the domestic bank should be calculated in the net value of head office. The Foreign bank should be calculated in the net value of Taiwan branch.

(iii) Interest rate-sensitivity information

1) Analysis of interest rate-sensitive assets and liabilities (New Taiwan dollars)

Unit: %

December 31, 2025
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 1,841,182,276	37,130,869	53,716,799	145,515,423	2,077,545,367
Interest rate-sensitive liabilities	1,496,640,507	177,162,510	107,896,043	48,369,183	1,830,068,243
Interest rate sensitivity gap	344,541,769	(140,031,641)	(54,179,244)	97,146,240	247,477,124
Net worth					146,912,706
Ratio of interest rate-sensitive assets to liabilities (%)					113.52
Ratio of interest rate-sensitive gap to net worth (%)					168.45
December 31, 2024
---	---	---	---	---	---
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 1,710,951,247	37,165,355	42,802,710	146,534,932	1,937,454,244
Interest rate-sensitive liabilities	1,464,813,013	94,762,368	111,936,395	53,379,521	1,724,891,297
Interest rate sensitivity gap	246,138,234	(57,597,013)	(69,133,685)	93,155,411	212,562,947
Net worth					131,433,782
Ratio of interest rate-sensitive assets to liabilities (%)					112.32
Ratio of interest rate-sensitive gap to net worth (%)					161.73

Note 1 Listed amount refers to the Bank’s amount of N.T. dollars and does not include contingent assets or liabilities.

Note 2 Interest rate-sensitive assets and liabilities refer to revenues or costs of interest–yielding assets and interest–bearing liabilities, which are affected by interest rate fluctuations.

Note 3 Interest rate-sensitivity gap = Interest rate-sensitive assets - Interest-rate-sensitive liabilities.

Note 4 Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets ÷ Interest rate-sensitive liabilities (New Taiwan dollars interest-rate-sensitive assets and New Taiwan dollars interest-rate-sensitive liabilities).

(Continued)

127

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) Analysis of the interest-sensitive assets and liabilities (US dollars)

Unit: In Thousands of US Dollars, %

December 31, 2025
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 5,366,418	624,069	168,894	1,990,672	8,150,053
Interest rate-sensitive liabilities	8,098,931	1,924,200	2,097,799	-	12,120,930
Interest rate sensitivity gap	(2,732,513)	(1,300,131)	(1,928,905)	1,990,672	(3,970,877)
Net worth					4,672,053
Ratio of interest rate-sensitive assets to liabilities (%)					67.24
Ratio of interest rate-sensitive gap to net worth (%)					(84.99)
December 31, 2024
---	---	---	---	---	---
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 4,299,171	368,321	171,449	1,976,057	6,814,998
Interest rate-sensitive liabilities	6,866,815	2,268,523	2,166,345	-	11,301,683
Interest rate sensitivity gap	(2,567,644)	(1,900,202)	(1,994,896)	1,976,057	(4,486,685)
Net worth					4,008,961
Ratio of interest rate-sensitive assets to liabilities (%)					60.30
Ratio of interest rate-sensitive gap to net worth (%)					(111.92)

Note 1 Listed amount refers to the Bank’s amount of US dollars and does not include contingent assets or liabilities.

Note 2 Interest rate-sensitive assets and interest rate-sensitive liabilities refer to the interest yielding assets and interest-bearing liabilities which the revenue and cost are affected by interest rate fluctuation.

Note 3 Interest rate sensitivity gap = interest rate-sensitive assets-interest rate-sensitive liabilities.

Note 4 Ratio of interest rate-sensitive assets to liabilities=Interest rate-sensitive assets÷Interest rate-sensitive liabilities (US dollars interest-rate-sensitive assets and US dollars interest-rate-sensitive liabilities).

(Continued)

128

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(iv) Profitability

Unit: %

Item		December 31, 2025	December 31, 2024
The ratio of return on assets	Before income tax	0.62	0.61
	After income tax	0.50	0.49
The ratio of return on equity	Before income tax	10.93	11.16
	After income tax	8.79	8.93
Net income ratio		35.04	33.13

Note 1 The ratio of return on assets = Income before (after) income tax expense ÷ average assets.

Note 2 The ratio of return on equity = Income before (after) income tax expense ÷ average equity.

Note 3 Net income ratio = Net income after income tax expense ÷ Net revenue.

Note 4 Income before (after) income tax expense refers to income accumulated from January of the current year to the current period end.

(v) Maturity analysis for assets and liabilities

1) Maturity analysis in New Taiwan dollars

December 31, 2025
	Total	Amount during the maturity period from the balance sheet date to due date
		0-10days	11-30days	31-90days	91-180days	181days-1year	Over 1 year
Major maturity capital inflow	$ 2,176,607,638	294,112,730	189,234,692	195,736,319	188,965,538	157,856,158	1,150,702,201
Major maturity capital outflow	2,645,801,954	51,034,084	138,995,061	272,673,698	375,471,234	488,587,399	1,319,040,478
Gap	(469,194,316)	243,078,646	50,239,631	(76,937,379)	(186,505,696)	(330,731,241)	(168,338,277)

Note: Listed amounts are denominated in New Taiwan dollars of the Bank, including loan commitments of credit agreement and estimates to outflow $475,371,827.

December 31, 2024
	Total	Amount during the maturity period from the balance sheet date to due date
		0-10days	11-30days	31-90days	91-180days	181days-1year	Over 1 year
Major maturity capital inflow	$ 2,062,028,075	275,546,802	111,168,658	183,300,924	190,601,135	199,560,713	1,101,849,843
Major maturity capital outflow	2,500,180,857	54,039,652	141,896,057	224,242,889	254,965,444	553,220,800	1,271,816,015
Gap	(438,152,782)	221,507,150	(30,727,399)	(40,941,965)	(64,364,309)	(353,660,087)	(169,966,172)

Note: Listed amounts are denominated in New Taiwan dollars of the Bank, including loan commitments of credit agreement and estimates to outflow $443,780,063.

(Continued)

129

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

2) Maturity analysis in US dollars

Unit: In Thousands of US Dollars

December 31, 2025
	Total	Amount during the maturity period from the balance sheet date to due date
		0-30days	31-90days	91-180days	181days-1year	Over 1 year
Major maturity capital inflow	$ 14,485,817	3,422,432	2,358,770	1,554,433	3,765,142	3,385,040
Major maturity capital outflow	14,980,522	4,023,809	3,570,979	2,440,295	2,989,638	1,955,801
Gap	(494,705)	(601,377)	(1,212,209)	(885,862)	775,504	1,429,239

Note: Listed amounts are denominated in US dollars of the Bank, including loan commitments of credit agreement and estimates to outflow USD $518,960.

December 31, 2024
	Total	Amount during the maturity period from the balance sheet date to due date
		0-30days	31-90days	91-180days	181days-1year	Over 1 year
Major maturity capital inflow	$ 12,714,577	3,371,963	1,991,120	793,677	3,412,664	3,145,153
Major maturity capital outflow	13,348,668	3,312,719	2,700,650	2,700,382	2,789,305	1,845,612
Gap	(634,091)	59,244	(709,530)	(1,906,705)	623,359	1,299,541

Note: Listed amounts are denominated in US dollars of the Bank, including loan commitments of credit agreement and estimates to outflow USD $586,992.

(Continued)

130

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

(i) Cumulative purchase or sale of the same investee’s capital stock up to $300,000 or 10% of paid-in capital: None.
(ii) Acquisition of real estate amounting to over $300,000 or 10% of paid-in capital: None.
(iii) Disposal of real estate amounting to over $300,000 or 10% of paid-in capital: None.
(iv) Discount of commissions fees with related parties amounting to over $5,000: None.
(v) Receivables from related parties amounting to over $300,000 or 10% of paid-in capital: None.
(vi) Sale of non-performing loans information: None.
(vii) Types of securitization instruments and related information approved by financial assets securitization rules or real estate securitization rules: None.
(viii) Other significant transactions that might have influence over the decision-making process of the financial statements users: None.

(b) Information on investees:

(i) The following is the information on investees (excluding information on investees in Mainland China):

(Unit: thousand shares)

Name of investee	Location	Main business scope	Shareholding ratio	Book value	Investment gain (loss)	The cross holding of the Bank and its related parties
						Number of shares	Number of proforma shares	Total
								Number of shares	Shareholding ratio
TBB International Leasing Co., Ltd.	Taiwan	Leasing business	100.00%	1,729,128	69,925	162,000	-	162,000	100.00%
TBB (Cambodia) Microfinance Institution Plc	Cambodia	SMEs and personal finance business	100.00%	642,327	7,972	20	-	20	100.00%
TBB Venture Capital Co., Ltd.	Taiwan	Investing business	100.00%	1,465,500	51,735	137,075	-	137,075	100.00%
TBB Consulting Co., Ltd.	Taiwan	Consulting business	100.00%	73,865	12,398	5,000	-	5,000	100.00%
Media Talk Consulting Co., Ltd.	Taiwan	Investing cultural and creative business	20.00%	-	-	200	-	200	20.00%

(ii) Loans to others:

NO.	Creditor	Debtor	Interaction Account	Related party	Highest Amount	Ending balance	Actual drawdown amount	Range of interest rate	Nature of the loan	Dealing amount	The necessary reason for short-term loans	Allowance for bad debts	Guarantee	Limited amount for individual object	Total limited amount for loan
Name	Value
1	TBB International Leasing Co., Ltd.	Hon Chuan Construction Co., Ltd.	Financial receivables	No	79,385	62,844	100,000	2%-10%	2	-	To the lender for buying goods	628	None	-	432,271
1	TBB International Leasing Co., Ltd.	Xi Quan Restaurant Co., Ltd	Financial receivables	No	98,827	88,016	153,000	2%-10%	2	-	To the lender for buying goods	880	None	-	432,271
1	TBB International Leasing Co., Ltd.	Maw Shing Top Co., Ltd.	Financial receivables	No	15,758	5,512	15,000	2%-10%	2	-	To the lender for buying goods	55	None	-	432,271
1	TBB International Leasing Co., Ltd.	Yu Ding Investment Co., Ltd.	Financial receivables	No	80,000	80,000	130,000	2%-10%	2	-	To the lender for buying goods	800	None	-	432,271
1	TBB International Leasing Co., Ltd.	V-Optech Inc.	Financial receivables	No	9,731	-	10,000	2%-10%	2	-	To the lender for buying goods	-	None	-	432,271
1	TBB International Leasing Co., Ltd.	Wen Ying International Logistics Co., Ltd.	Financial receivables	No	3,853	3,853	3,853	2%-10%	2	-	To the lender for buying goods	193	None	-	432,271

(Continued)

131

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

NO.	Creditor	Debtor	Interaction Account	Related party	Highest Amount	Ending balance	Actual drawdown amount	Range of interest rate	Nature of the loan	Dealing amount	The necessary reason for short-term loans	Allowance for bad debts	Guarantee		Limited amount for individual object	Total limited amount for loan
													Name	Value
1	TBB International Leasing Co., Ltd.	Says Yao Steel Co., Ltd.	Financial receivables	No	30,000	2,561	30,000	2%-10%	2	-	To the lender for buying goods	26	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Flagship Square Enterprise Co. Ltd.	Financial receivables	No	25,000	18,607	25,000	2%-10%	2	-	To the lender for buying goods	186	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Weineng Machinery Sheet Metal Co., Ltd.	Financial receivables	No	8,000	6,353	8,000	2%-10%	2	-	To the lender for buying goods	64	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Liang-wai Tobacco & Liquor Co., Ltd.	Financial receivables	No	10,000	1,711	10,000	2%-10%	2	-	To the lender for buying goods	17	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Good Appetite Co., Ltd.	Financial receivables	No	8,000	4,727	8,000	2%-10%	2	-	To the lender for buying goods	47	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Yousing Enterprise Co. Ltd.	Financial receivables	No	30,000	24,750	30,000	2%-10%	2	-	To the lender for buying goods	247	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Wisdom International Pet Science CO., LTD.	Financial receivables	No	15,088	2,551	10,000	2%-10%	2	-	To the lender for buying goods	26	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Mr. Mick CO. LTD.	Financial receivables	No	2,000	1,347	2,000	2%-10%	2	-	To the lender for buying goods	13	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Chi Hung Enterprise Co. Ltd	Financial receivables	No	4,000	1,990	4,000	2%-10%	2	-	To the lender for buying goods	20	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	De Yi Construction Co., Ltd.	Financial receivables	No	20,000	6,141	20,000	2%-10%	2	-	To the lender for buying goods	61	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Guan Lin Electric Engineering Co., Ltd.	Financial receivables	No	5,000	2,955	5,000	2%-10%	2	-	To the lender for buying goods	30	None	-	432,271	1,729,086
1	TBB International Leasing Co., Ltd.	Hermit Crab Rent Co., Ltd.	Financial receivables	No	15,000	5,105	15,000	2%-10%	2	-	To the lender for buying goods	51	None	-	432,271	1,729,086

Note1: The meaning of the number is as follows.
(1) Zero stands for issuer.
(2) Investee companies are numbered in a sequence of Arabic numerals from 1 based on company category.
Note2: The amount of loans is still valid up to now.
Note3: The nature of the loan nature is as follows.
(1) 1 stands for business relation.
(2) 2 stands for the necessity for short-term loans.
Note4: Limited amount for individual object: 25% net worth of the latest TBB International Leasing Co., Ltd's audited financial statements.
Note5: Total limited amount for loan: 100% net worth of the latest TBB International Leasing Co., Ltd.'s audited financial statements.

(iii) Endorsements and guarantee for others: None

(Continued)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(iv) Acquisition of securities:

Company acquired	Type and name of the security	Relationship with the security issuer	Account	At the end of the period				Note
				Number of shares	Carrying amount	Share proportion	Market price
TBB International Leasing Co., Ltd.	Taiwan Business International Leasing Co., Ltd.	Parent company	Investment under equity method	-	1,102,909	100.00%	1,102,909
TBB International Leasing Co., Ltd.	G12245 - G12246	-	Financial assets at fair value through profit or loss	-	100,000	- %	100,000	Financial debentures
TBB Venture Capital Co., Ltd.	G12245	-	Financial assets at fair value through profit or loss	-	101,936	- %	101,936	"
TBB Venture Capital Co., Ltd.	Energenesis Biomedical Co., Ltd.	-	Financial assets at fair value through profit or loss	548	23,547	0.62 %	23,547	Listed Stocks
TBB Venture Capital Co., Ltd.	Langtah Shipbuilding Co., Ltd	-	Financial assets at fair value through profit or loss	479	63,718	0.42 %	63,718	"
TBB Venture Capital Co., Ltd.	Tigerair Taiwan Co., Ltd.	-	Financial assets at fair value through profit or loss	212	13,698	0.05 %	13,698	"
TBB Venture Capital Co., Ltd.	Starkas Airlines Co., Ltd.	-	Financial assets at fair value through profit or loss	5,532	130,558	0.18 %	130,558	"
TBB Venture Capital Co., Ltd.	Eir Genis, Inc.	-	Financial assets at fair value through profit or loss	845	52,137	0.28 %	52,137	"
TBB Venture Capital Co., Ltd.	Song Chuan Precision Co., Ltd.	-	Financial assets at fair value through profit or loss	804	108,937	1.01 %	108,937	"
TBB Venture Capital Co., Ltd.	Chenfull Precision Co., Ltd	-	Financial assets at fair value through profit or loss	147	15,950	0.25 %	15,950	OTC Stocks
TBB Venture Capital Co., Ltd.	Handa Pharmaceuticals, Inc.	-	Financial assets at fair value through profit or loss	1,539	132,316	0.91 %	132,316	"
TBB Venture Capital Co., Ltd.	Locus Cell Co., Ltd.	-	Financial assets at fair value through profit or loss	1,338	38,468	0.67 %	38,468	Emerging Stocks
TBB Venture Capital Co., Ltd.	TFBS Bioscience, Inc.	-	Financial assets at fair value through profit or loss	260	5,564	0.74 %	5,564	"
TBB Venture Capital Co., Ltd.	Iovtec Co., Ltd.	-	Financial assets at fair value through profit or loss	636	44,835	2.59 %	44,835	"
TBB Venture Capital Co., Ltd.	MegaPro Biomedical Co., Ltd	-	Financial assets at fair value through profit or loss	141	1,755	0.18 %	1,755	"
TBB Venture Capital Co., Ltd.	Annji Pharmaceutical Co., Ltd	-	Financial assets at fair value through profit or loss	400	20,480	0.43 %	20,480	"
TBB Venture Capital Co., Ltd.	Ina Energy Corporation	-	Financial assets at fair value through profit or loss	2,179	46,621	0.98 %	46,621	"
TBB Venture Capital Co., Ltd.	aetherAl Co., Ltd.	-	Financial assets at fair value through profit or loss	1,730	58,820	1.95 %	58,820	"
TBB Venture Capital Co., Ltd.	ION Electronic Materials Co., LTD.	-	Financial assets at fair value through profit or loss	300	20,430	0.77 %	20,430	"
TBB Venture Capital Co., Ltd.	Techplasma Technology Co., Ltd	-	Financial assets at fair value through profit or loss	944	78,439	2.84 %	78,439	Unlisted Stocks
TBB Venture Capital Co., Ltd.	Hephas Energy Corporation Ltd.	-	Financial assets at fair value through profit or loss	1,008	90,323	3.00 %	90,323	"
TBB Venture Capital Co., Ltd.	Manford Machinery Co., Ltd	-	Financial assets at fair value through profit or loss	1,195	33,842	2.99 %	33,842	"
TBB Venture Capital Co., Ltd.	E-Fomula Technologies Inc.	-	Financial assets at fair value through profit or loss	760	30,096	2.84 %	30,096	"
TBB Venture Capital Co., Ltd.	Amazing Cool Technology Corporation.	-	Financial assets at fair value through profit or loss	390	12,250	1.87 %	12,250	"
TBB Venture Capital Co., Ltd.	Long-Shan Green Energy Technology Ltd.	-	Financial assets at fair value through profit or loss	1,135	22,700	2.99 %	22,700

(Continued)

133

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Company acquired	Type and name of the security	Relationship with the security issuer	Account	At the end of the period				Note
				Number of shares	Carrying amount	Share proportion	Market price
TBB Venture Capital Co., Ltd.	Toyo Automation Co., Ltd	-	Financial assets at fair value through profit or loss	289	31,001	0.95 %	31,001	Unlisted Stocks
TBB Venture Capital Co., Ltd.	Quants AI Inc.	-	Financial assets at fair value through profit or loss	1,600	11,408	8.89 %	11,408	"
TBB Venture Capital Co., Ltd.	Honley Auto. Parts Co., Ltd	-	Financial assets at fair value through profit or loss	7,042	169,008	5.78 %	169,008	"
TBB Venture Capital Co., Ltd.	Juncheng Technology Co., Ltd	-	Financial assets at fair value through other comprehensive income	600	9,444	1.53 %	9,444
TBB Venture Capital Co., Ltd.	Asia Hydrogen Energy Corporation	-	Financial assets at fair value through profit or loss	490	38,474	3.34 %	38,474
TBB Venture Capital Co., Ltd.	Eti Ca Battery Inc.	-	Financial assets at fair value through profit or loss	575	42,619	2.76 %	42,619	"
TBB Venture Capital Co., Ltd.	Yi Chuan Technology Co., Ltd	-	Financial assets at fair value through profit or loss	1,189	16,726	0.98 %	16,726	"
TBB Venture Capital Co., Ltd.	How Kan Entertainment Production Co., Ltd	-	Financial assets at fair value through profit or loss	580	15,743	2.87 %	15,743	"
TBB Venture Capital Co., Ltd.	Maxima Biotech Inc.	-	Financial assets at fair value through profit or loss	1,425	35,084	4.76 %	35,084	"
TBB Venture Capital Co., Ltd.	GoodLinker Co., Ltd.	-	Financial assets at fair value through profit or loss	100	5,858	1.67 %	5,858	"
TBB Venture Capital Co., Ltd.	Yiyi Pictures Co., Ltd.	-	Financial assets at fair value through profit or loss	85	4,855	2.94 %	4,855	"
TBB Venture Capital Co., Ltd.	Longwalk social enterprise, Co., Ltd.	-	Financial assets at fair value through profit or loss	120	302	7.48 %	302	"
TBB Venture Capital Co., Ltd.	Carpent Co., Ltd.	-	Financial assets at fair value through profit or loss	330	1,511	2.84 %	1,511	"
TBB Venture Capital Co., Ltd.	Rising FinTech Corp.	-	Financial assets at fair value through profit or loss	38	2,508	1.95 %	2,508	"
TBB Venture Capital Co., Ltd.	Unoscope Technology Inc.	-	Financial assets at fair value through profit or loss	90	420	0.96 %	420	"
TBB Venture Capital Co., Ltd.	QBit Semiconductor Ltd.	-	Financial assets at fair value through profit or loss	400	36,800	0.93 %	36,800	"
TBB Venture Capital Co., Ltd.	Pinkoi Inc.	-	Financial assets at fair value through profit or loss	93	15,079	0.53 %	15,079	"
TBB Venture Capital Co., Ltd.	Taiwania Buffalo III Biotechnology Venture Capital LLP.	-	Financial assets at fair value through profit or loss	-	70,320	4.57 %	70,320	Private fund
TBB Venture Capital Co., Ltd.	Ju He Venture Capital LLP.	-	Financial assets at fair value through profit or loss	-	29,272	2.46 %	29,272	"
TBB Venture Capital Co., Ltd.	TBB No.1 Venture Capital Limited Partnership	-	Financial assets at fair value through profit or loss	-	12,470	1.12 %	12,470	"
TBB Venture Capital Co., Ltd.	Outstanding Capital Limited Partnership	-	Financial assets at fair value through profit or loss	-	28,146	4.86 %	28,146	"
TBB Venture Capital Co., Ltd.	Jiu Du International Development Co., Ltd.	-	Financial assets at fair value through other comprehensive income	2,919	30,613	8.52 %	30,613	Unlisted Stocks
TBB Consulting Co., Ltd.	Media Talk Consulting Co., Ltd	Associates	Investment under equity method	200	-	20.00 %	-
TBB Consulting Co., Ltd.	TBB No.1 Venture Capital Limited Partnership	-	Financial assets at fair value through profit or loss	-	1,247	0.11 %	1,247	Private fund

(Continued)

134

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(v) Accumulative purchases or sales of the same investee companies amounting to over $300,000 or 10% of paid-in capital: None.

(vi) Acquisition of real estate amounting to over $300,000 or 10% of paid-in capital: None.

(vii) Disposition of real estate amounting to over $300,000 or 10% of paid-in capital: None.

(viii) Discount of commissions and handling fees with related parties amounting to over $5,000: None.

(ix) Receivables from related parties amounting to over $300,000 or 10% of paid-in capital: None.

(x) Transactions of financial derivatives: None.

(xi) Sale of non-performing loans information: None.

(xii) Types of securitization instruments and related information approved by financial assets securitization rules or real estate securitization rules: None.

(xiii) Other significant transactions that might have substantial influence over the decision making of the financial statement users: None.

(i) Name and major business item of the investee in China:

Name of investee company in Mainland China	Major business	Paid-in capital	Investment method (Note 1)	Accumulated amount transferred from Taiwan, beginning of the period	Investment transferred out or recovered		Accumulated amount transferred from Taiwan, end of the period	The current profit or loss of the investee (Note 2)	Shares directly or indirectly possessed by the Bank	Investment income for the period (Note 3 and 4)	Ending carving value of investment	Accumulated inward remittance of earnings or of the end of period
					Transferred out	Recovered
Taiwan Business Bank, Ltd. Shanghai branch	Banking business	3,918,537 (CNY800 million) (Operating capital)	(3)	3,918,537 (CNY800 million)	-	-	3,918,537 (CNY800 million)	-	Shanghai branch of the Bank, not an investee company	Note 4	4,715,362	None
Taiwan Business Bank, Ltd. Wuhan branch	Banking business	3,942,815 (CNY800 million) (Operating capital)	(3)	3,942,815 (CNY800 million)	-	-	3,942,815 (CNY800 million)	-	Wuhan branch of the Bank, not an investee company	Note 4	4,573,718	*
Taiwan Business Bank International Leasing Co., Ltd.	Leasing business	838,305 (CNY170 million) (Operating capital)	(1)	838,305 (CNY170 million)	-	-	838,305 (CNY170 million)	46,045 (2)c	100%	46,045 (2)c	1,102,909	*

Note 1: Investment method is divided into three categories and are listed as follows:

(1) Directly invest in Mainland China.

(2) Investment in Mainland China companies through a third region.

(3) Others: establishment of overseas branches

Note 2: The column of "Investment gains (losses)":

(1) If the company is still in the preparation process, and does not have any investment gain or loss, please specify.

(2) The bases for recognition of investment income or loss have three methods, please specify.

a. The audited financial reports that are issued by an international accounting firm which is connected to an accounting firm in Taiwan.

b. The audited financial reports that are issued by the Taiwan parent company's designated accounting firm.

c. Others

(3) Please specify if information regarding current gains or losses of an investee is not retrievable.

Note 3: The number is expressed in New Taiwan Dollars.

Note 4: The operating result of Shanghai and Wuhan branch have been included in the Bank.

(ii) Limitation on investment in Mainland China:

Name of Company	Accumulated outflow of investment from Taiwan to Mainland China, as of the end of period	Investment amount authorized by Investment Commission, MOEA	Upper limit on investment authorized by Investment Commission, MOEA
Taiwan Business Bank, Ltd.(Note)	8,691,657 (CNY 1,770 million)	8,691,657 (CNY 1,770 million)	88,147,624

Note: The investment amount in China of the subsidiary TBB International Leasing Co, Ltd is included.

(Continued)

135

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(d) Information of major shareholders:

Shareholder's Name	Shareholding	Shares	Percentage
Bank of Taiwan		1,575,653,636	16.21 %
National Development Fund, Executive Yuan		570,126,700	5.87 %

(14) Segment information:

Please refer to the Consolidated Financial Statements for the year ended December 31, 2025.

136

TAIWAN BUSINESS BANK LTD.

Statement of Cash and Cash Equivalents

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Summary		Amount
Cash on hand, revolving funds and foreign currencies	NTD		$ 10,597,347
	USD	11,141 , spot rate 31.4450	350,327
	HKD	28,069 , spot rate 4.0390	113,368
	JPY	1,225,494 , spot rate 0.2011	246,447
	EUR	5,062 , spot rate 36.9400	186,997
	CNY	14,899 , spot rate 4.5000	67,045
	Subtotal		11,561,531
Checks for clearing			2,314,696
Due from other banks	NTD		208,748
Due from other banks	USD	95,993 , spot rate 31.4450	3,018,498
	HKD	266,379 , spot rate 4.0390	1,075,904
	AUD	89,012 , spot rate 21.0600	1,874,583
	JPY	2,886,758 , spot rate 0.2011	580,527
	CNY	1,285,239 , spot rate 4.5000	5,783,574
	Others		281,350
	Subtotal		12,823,184
Total			$ 26,699,411

137

TAIWAN BUSINESS BANK LTD.

Statement of Receivables

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Summary	Amount
Interest receivable		$ 6,056,070
Less: allowance for bad debts		(23,540)
Net		6,032,530
Acceptances receivable		1,016,111
Less: allowance for bad debts		(10,182)
Net		1,005,929
Accrued incomes		94,518
Accounts receivable		16,701
Less: allowance for bad debts		(102)
Net		16,599
Spot exchange receivable, foreign currencies		50,756
Credit cards accounts receivable		1,316,849
Less: allowance for bad debts		(1,481)
Net		1,315,368
Notes receivable		112
Receivable price of securities purchased for customers		328,267
Settlement price		78,645
Other receivables	Advance payment-letter of credit	292,807
	Advance payment	93,219
	International debit cards payment	12,635
	Others	31,501
	Subtotal	430,162
Less: allowance for bad debts		(76,334)
Net		353,828
Total		$ 9,276,552

138

TAIWAN BUSINESS BANK LTD.

Statement of Financial Assets at Fair Value through Profit or Loss

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Summary	Amount	Note
Financial assets at fair value through profit or loss, mandatorily measured at fair value	Forward contracts	$ 4,996	Note
	Currency swap contracts	2,445,757	Note
	Foreign currency options-call	8,646	Note
	Stock index futures	24,455	Note
	Interest rate contract	98,882	Note
	Commercial paper	101,434,908	Note
	Beneficiary certificates	68,381	Table 1
Total		$ 104,086,025

Note: None of the other items exceeds 5% of the account balance.

Statement of Financial Assets at Fair Value through Profit or Loss - Beneficiary certification

(Expressed in Thousands of New Taiwan Dollars)

Table 1

Item	Numbers of shares (thousand)	Acquisition cost	Fair value
			Unit price	Total
Taiwania Capital Biotechnology II Corporation	8,160	$ 81,600	8.38	68,381

139

TAIWAN BUSINESS BANK LTD.

Statement of Financial Assets at Fair Value through Other Comprehensive Income

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount	Note
Investment in debt instruments measured at fair value through other comprehensive income
Government bonds	$ 56,314,140	Note 1, Note 2
Corporate bonds	90,973,188	Note 2
Financial debentures	28,191,472	Note 2
Negotiable certificates of deposit	629,887	Note 2
Subtotal	176,108,687
Investment in equity instruments measured at fair value through other comprehensive income
Listed stocks	8,994,821	Table 1
Unlisted stocks	9,846,739	Table 2
Real estate investment trust	100,300	Note 2
Subtotal	18,941,860
	$ 195,050,547

Note 1: $84,800 have been pledged.

Note 2: None of the other items exceeds 5% of the account balance.

140

TAIWAN BUSINESS BANK LTD.

Statement of Financial Assets at Fair Value through Other Comprehensive Income - Listed stocks

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Table 1

Item	Number of shares (thousand)	Acquisition cost	Valuation Adjustment	Fair value
				Unit price	Total
THSRC	44,500	$ 445,000	801,000	28.00	1,246,000
MTK	860	1,102,633	127,167	1,430.00	1,229,800
CHB	164,627	2,636,028	730,586	20.45	3,366,614
IBF	84,414	1,092,862	304,192	16.55	1,397,054
SMP	1,299	555,397	(89,056)	359.00	466,341
Others (Note)	22,945	1,546,274	(257,262)	-	1,289,012
Total		$ 7,378,194	1,616,627		8,994,821

Note: None of the other items exceeds 5% of the account balance.

141

TAIWAN BUSINESS BANK LTD.

Statement of Financial Assets at Fair Value through Other Comprehensive Income - Unlisted stocks

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Number of shares (thousand)	Acquisition cost	Valuation adjustment	Fair value
				Unit price	Total
Taiwan Stock Exchange Corporation	27,823	$ 881,162	2,537,506	122.87	3,418,668
Taiwan Futures Exchange Corporation	7,216	20,000	618,882	88.54	638,882
CDIB & Partners Investment Holding Corp.	54,000	500,000	466,060	17.89	966,060
Taiwan Asset Management Corporation	60,000	600,000	61,200	11.02	661,200
Taiwan Sugar Corporation	16,832	58,294	1,883,392	115.36	1,941,686
Taipei Financial Center Corporation	44,100	1,579,662	(77,616)	34.06	1,502,046
Others (Note)	23,907	202,817	515,380	-	718,197
Total		$ 3,841,935	6,004,804		9,846,739

Note: None of the other items exceeds 5% of the account balance.

Table 2

142

TAIWAN BUSINESS BANK LTD.

Statement of Investment in Debt Instruments at Amortized Cost

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amortized balance	Accumulated impairment	Carrying Amount	Note
Certificates of deposit with the Central Bank	$ 207,570,000	(51,560)	207,518,440	Note 1
Government bonds	18,400,967	(4,337)	18,396,630	Table 1
Treasury bills	2,001,438	(497)	2,000,941
Corporate bonds	30,985,563	(30,311)	30,955,252	Table 2
Financial debentures	20,303,080	(5,595)	20,297,485	Table 3
Negotiable certificates of deposit	66,035	(25)	66,010	Note 2
Total	$ 279,327,083	(92,325)	279,234,758

Note 1: In order to comply with the immediate tax settlements mechanism of Central Bank and the interbank funds transfer system, the Bank provided certificates of deposit with the Central Bank amounting to $2,000,000 as overdraft guarantee. The amount of the guarantee could be modified anytime and the remaining amount could be served as liquid reserves.

As of December 31, 2025, the Bank provided Central bank with certificates of deposit with par value of $29,000,000 and $200,000 respectively to serve as a guarantee for borrowing US and JPY dollars from Central bank.

Note 2: Overseas branches' reserve of overdraft guarantee is $66,035.

143

TAIWAN BUSINESS BANK LTD.

Statement of Investment in Debt Instruments at Amortized Cost - Government Bonds

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Financial instrument	Summary	Number of units (thousand)	Total par value	Coupon rate	Accumulated Impairment	Unamortized (discount) price	Carrying amount	Note
A01107	Annual interest payment 8/10, maturity date 2032/8/10	33,700	$ 3,370,000	1.500 %	(850)	50,802	3,419,952	$781,600 have been pledged
A95102	Annual interest payment 2/24, maturity date 2026/2/24	10,500	1,050,000	1.875 %	(261)	1,568	1,051,307
A96102	Annual interest payment 2/14, maturity date 2027/2/14	60,500	6,050,000	2.000 %	(1,520)	71,051	6,119,531
A14107	Annual interest payment 6/13, maturity date 2035/6/13	10,000	1,000,000	1.500 %	(247)	(4,652)	995,101	$5,300 have been pledged
US TreasurAF Bond	Annual interest payment 2/29, maturity date 2028/2/29	9,434	943,350	4.000 %	-	-	943,350
Others (Note)		57,000	5,700,000	0.625%~3.875%	(1,459)	168,848	5,867,389	$519,100 have been pledged
Total			$ 18,113,350		(4,337)	287,617	18,396,630

Note: None of the other items exceeds 5% of the account balance.

144

TAIWAN BUSINESS BANK LTD.

Statement of Investment in Debt Instruments at Amortized Cost - Corporate Bonds

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Table 2

Financial instrument	Summary	Number of units (thousand)	Total par value	Coupon rate	Accumulated impairment	Unamortized (discount) price	Carrying amount
B68125	Annual interest payment 4/11, maturity date 2029/4/11	19,000	$ 1,900,000	1.75 %	(5,900)	-	1,894,100
B99005	Annual interest payment 6/24, maturity date 2034/6/24	30,000	3,000,000	3.50 %	(2,429)	-	2,997,571
Others (Note)		-	26,094,400	0.55%~5.82%	(21,982)	(8,837)	26,063,581
Total			$ 30,994,400		(30,311)	(8,837)	30,955,252

Note: None of the other items exceeds 5% of the account balance.

145

TAIWAN BUSINESS BANK LTD.

Statement to Investment in Debt Instruments at Amortized Cost - Financial Bonds

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Table 3

Financial instrument	Summary	Total per value	Coupon rate	Accumulated impairment	Unamortized premium	Carrying amount
Credit Industriel Et Commercial	Maturity date 2028/05/26	$ 1,257,800	O/N SOFR+145bps	(469)	-	1,257,331
JPMorgan Chase Financial Company LLC	Maturity date 2028/05/10	1,257,800	O/N SOFR+90bps	(469)	-	1,257,331
Korea Development Bank	Maturity date 2028/05/11	1,257,800	O/N SOFR+85bps	-	-	1,257,800
Standard Chartered Bank (Callable)	Maturity date 2033/05/25	1,257,800	5.18%	(469)	-	1,257,331
RoAFal Bank of Canada (Callable)	Maturity date 2033/05/17	1,257,800	5.09%	-	-	1,257,800
BARCLAAFS BANK PLC.	Maturity date 2034/01/18	1,257,800	5.46%	(469)	-	1,257,331
Others (Note)		12,756,280		(3,719)	-	12,752,561
Total		$ 20,303,080		(5,595)	-	20,297,485

Note: None of the other items exceeds 5% of the account balance.

146

TAIWAN BUSINESS BANK LTD.

Statement of Changes in Investments Measured by Equity Method

For the year ended December 31, 2025

(Expressed in Thousands of New Taiwan Dollars, Thousands Shares)

Company	Beginning balance		Increase		Decrease		Ending balance			Market value or net worth		Guaranteed or pledged
	Number of shares	Amount	Number of shares	Amount	Number of shares	Amount	Number of shares	Shareholding ratio%	Amount	Unit Price	Total
TBB International Leasing Co., Ltd.	155,000	$ 1,654,945	7,000	74,183	-	-	162,000	100.00	1,729,128	10.67	1,729,128	None
TBB (Cambodia) Microfinance Institution Plc	20	661,327	-	7,972	-	26,972	20	100.00	642,327	32,116.35	642,327	"
TBB Venture Capital Co., Ltd.	133,181	1,413,660	3,894	51,840	-	-	137,075	100.00	1,465,500	10.69	1,465,500	"
TBB Consulting Co., Ltd.	5,000	105,783	-	12,398	-	44,316	5,000	100.00	73,865	14.77	73,865	"
Total		$ 3,835,715		146,393		71,288			3,910,820		3,910,820

Note 1: The increase of $146,393 includes $142,030 for investment income, $4,258 for cumulative translation adjustments, and $105 for change in other comprehensive income.
Note 2: The decrease of $471,844 includes $26,972 for cumulative translation adjustments, and $44,316 of cash dividends from investee.

147

TAIWAN BUSINESS BANK LTD.

Statement of Changes in Intangible Assets

For the year ended December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Beginning balance	Increase	Decrease	Ending balance	Note
Computer software	$ 1,198,954	666,725	471,844	1,393,835

Note 1: The increase of $666,725 includes $516,110 for purchases, $150,615 transferred from prepaid equipment.

Note 2: The decrease of $471,844 is due to the amortizations of $471,332 and exchange differences of $512.

148

TAIWAN BUSINESS BANK LTD.

Statement of Other Assets

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount	Summary
Office supplies	$ 30,025
Prepayments	4,060,004	Prepayments for inter-bank clearing fund and network system
	45,285	Amortization of other expenses
	44,872	Others
	4,150,161	Subtotal
Operation guarantee deposits and settlement fund	40,867
Guarantee deposits paid	52,868	House deposit
	55,855	Membership deposit for golf clubs
	1,819	Money lodged at courts
	10,400	Performance bonds
	2,392,336	Transactions of financial derivatives
	56,099	Other
Less: allowance for bad debts	-
Net	2,569,377
Deferred assets	236
Temporary payments and suspense	944,012
Proceeds of settlement and margin trading	4,466
Miscellaneous assets	176,452
Total	$ 7,915,596

149

TAIWAN BUSINESS BANK LTD.

Statement of Deposits from the Central Bank and Banks

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Summary				Amount
Deposits from the Central Bank					$ 209,301
Due from the Central Bank					15,408,050
Deposits from banks					265,937
Call loans from banks	USD	858,497,	spot rate	31.4450	26,995,449
	EUR	2,500,	spot rate	36.9400	92,350
	JPY	2,838,841,	spot rate	0.2011	570,891
	HKD	3,768,462,	spot rate	4.0390	15,220,820
	AUD	147,000,	spot rate	21.0600	3,095,820
	CNY	1,200,000,	spot rate	4.5000	5,400,000
	NTD				3,000
	Subtotal				51,378,330
Overdrafts on banks	USD	18,244,	spot rate	31.4450	573,676
	EUR	708,	spot rate	36.9400	26,139
	JPY	1,113,416,	spot rate	0.2011	223,908
	CNY	17,455,	spot rate	4.5000	78,547
	ZAR	1,905,	spot rate	1.8940	3,608
	AUD	26,	spot rate	21.0600	552
	CAD	464,	spot rate	22.9700	10,667
	THB	2,587,	spot rate	1.0056	2,601
	Subtotal		Subtotal		919,698
Deposits transferred from Chunghwa Post Co., Ltd.					129,099,335
	Total		Total		$ 197,280,651

150

TAIWAN BUSINESS BANK LTD.

Statement of Payables

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount	Summary
Accrued interest	$ 2,458,549	Non-drawing time savings deposits interest
	4,096,408	Bond interest
	1,391,288	Time deposits interest
	844,864	Others
	8,791,109	Subtotal
Accounts payable	2,314,696	Checks for clearing
	17,015	Others
	2,331,711	Subtotal
Acceptances	1,023,428
Accrued expenses	1,308,040	Performance bonus
	556,173	Overtime premium
	1,075,307	Employee and directors compensation
	400,415	Annual bonuses
	376,320	Business tax
	293,823	Business promotion fee
	674,488	Others
	4,684,566	Subtotal
Collection payable	240,898	Media transfer
	240,310	Withholding tax
	123,776	Tax of clean price
	61,639	Receipts under custody-tax authority account
	90,866	Clearing House media exchange automatic transfer
	205,723	Others
	963,212	Subtotal
Spot exchange payable, foreign currencies	43,204
Deposits received from securities borrowers	42,066
Guaranteed price deposits received from securities borrowers	51,256
Other payable	233,739	Deposits from dishonored account
	18,350	Labor retirement fund
	154,636	Pending accounts
	88,354	Stop payment reserve fund
	62,986	Deposit account settlement
	348,598	Others
	906,663	Subtotal
Prices payable of securities sold for customers	390,587
Others	10,177	Dividends and other taxes payable
Total	$ 19,237,979

151

TAIWAN BUSINESS BANK LTD.

Statement of Deposits and Remittances

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount	Summary
Savings deposits	$ 462,570,868	Savings account deposits
	18,495,427	Staff demand savings deposits
	200,870	Club savings deposits
	50	Annuity savings deposits
	80,005,489	Non-drawing time savings deposits
	258,473,048	Interest drawing savings deposits
	819,745,752	Subtotal
Time deposits	13,538,401	Government treasury
	382,798,052	Time deposits
	284,318,792	Foreign currencies
	680,655,245	Subtotal
Demand deposits	12,631,078	Government treasury
	424,757,792	New Taiwan dollars
	93,555,438	Foreign currencies
	530,944,308	Subtotal
Checking account deposits	32,308,919
Remittances	829,886	Remittances outstanding
	112	Remittances under custody
	829,998	Subtotal
Total	$ 2,064,484,222

152

TAIWAN BUSINESS BANK LTD.

Statement of Lease Liabilities

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Leasing Period	Discount Rate	Ending
Buildings	2019.03.01~2041.05.15	1.4392%~1.44%	$ 1,031,556
Transportation equipment	2018.12.27~2029.06.02	1.4399%	32,527
Miscellaneous equipment	2019.08.01~2030.12.31	1.4365%~1.44%	5,874
			$ 1,069,957

153

TAIWAN BUSINESS BANK LTD.

Statement of Other Liabilities

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount	Summary
Unearned revenue	$ 231,322	Advance receipt for guarantee service fee revenue
	48,126	Advance receipt for trust administrative expense
	93,686	Others
	373,134	Subtotal
Advance interest receipts	4,512
Other advance receipts	71,514	Credit card prepayments
	22,701	Others
	94,215	Subtotal
Guarantee deposits received	155,369	Rental deposit
	128,144	Letter of credit for domestic and international deposit
	296,045	Performance bond
	1,698,357	CSA
	244,579	Warranty bond
	33,736	Others
	2,556,230	Subtotal
Deferred revenue	41,959
Total	$ 3,070,050

154

TAIWAN BUSINESS BANK LTD.

Statement of Foreign Exchange Gain

For the year ended December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount	Note
USD	$ 4,542
AUD	37,020
CAD	3,573
HKD	11,851
GBP	5,944
SGD	5,602
ZAR	27,968
SEK	7,193
CHF	388
JPY	75,093
THB	(17,675)	.
EUR	74,119
NZD	2,471
CNY	66,578
	$ 304,667

155

TAIWAN BUSINESS BANK LTD.

Statement of Employee Benefits

Expenses

For the year ended December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount
	Employee benefit expenses	Net other revenue other than interest income	Other general and administrative expense	Total
Salary expense	$ 8,478,591	-	170,231	8,648,822
Labor and health insurance	612,729	-	-	612,729
Pension expense	360,129	-	-	360,129
Director’s remuneration	102,128	-	964	103,092
Other employee benefits	748,714	-	2,273	750,987

Note:

The employee numbers amounted to 5,819 and 5,687 people and the number of directors who are not employees both amounted to 11 people as of December 31, 2025 and 2024.
Financial statements for the years ended December 31, 2025 and 2024 should disclose the following information:

(1) The average of employee benefits expenses for the years ended December 31, 2025 and 2024 are $1,786 and $1,734, respectively.

(2) The average of salary expense for the years ended December 31, 2025 and 2024 are $1,489 and $1,461, respectively.

(3) The average movement of employees’ salary is 1.92%.

(4) The supervisor’s remuneration is $0 in both 2025, and the supervisor’s remuneration is $0 in 2024.

(5) Information on the Bank’s remuneration policy:

A. Directors’ remuneration is paid with reference to peer industry standards, personal performance, company operating performance, and performance evaluation results of the board of directors. The remuneration of independent directors is executed in accordance with the monthly remuneration proposal appropriated by the shareholders meeting in 2011. Exclude the monthly fixed remuneration, the independent directors will not draw the remuneration according to the corporation by-laws.

B. The remuneration of managers and employees not only refers to the standards of the same industry, but also considers personal performance and the company’s operating performance. Respectively in accordance with the relevant regulations of the Bank, such as the “Guidelines for Staff Salary Payment”, “Guidelines for Issuance of Annual and Performance Bonus”, “Guidelines for Staff Remuneration” and “Organizational Rules of the Salary and Compensation Committee”.

156

TAIWAN BUSINESS BANK LTD.

December 31, 2025

Please refer to the notes below for information on statements of other significant accounts:

(1) Statement of securities purchased under resell agreements, Note 6(d)
(2) Statement of discounts and loans, Note 6(f)
(3) Statement of other financial assets, Note 6(j)
(4) Statement of changes in accumulated impairment of property and equipment, Note 6(k)
(5) Statement of changes in property and equipment, Note 6(k)
(6) Statement of changes in accumulated depreciation of property and equipment, Note 6(k)
(7) Statement of changes in right-of-use assets, Note 6(l)
(8) Statement of changes in accumulated depreciation of right-of-use assets, Note 6(l)
(9) Statement of deferred taxes assets, Note 6(y)
(10) Statement of financial liabilities at fair value through profit or loss, Notes 6(o) and (t)
(11) Statement of notes and bonds issued under repurchase agreements, Note 6(p)
(12) Statement of bank notes payable, Note 6(s)
(13) Statement of other financial liabilities, Note 6(t)
(14) Statement of provisions, Note 6(u)
(15) Statement of deferred tax liabilities, Note 6(y)
(16) Statement of interest income, Note 6(ac)
(17) Statement of interest expenses, Note 6(ac)
(18) Statement of net service fee revenue, Note 6(ad)
(19) Statement of gains (losses) on financial assets or liabilities measured at fair value through profit or loss, Note 6(ae)
(20) Statement of realized gains (losses) on financial assets at fair value through other comprehensive income, Note 6(af)
(21) Statement of gains arising from derecognition of financial assets measured at amortized cost, Note 6(h)
(22) Statement of (impairment loss on assets) reversal of impairment loss on assets, Note 6(ag)
(23) Statement of share of profit (loss) of associates and joint ventures accounted for using equity method, Note 6(ah)
(24) Statement of net revenue other than interest, Note 6(ai)
(25) Statement of bad debts expenses, commitment and guarantee liability provision, Note 6(aj)
(26) Statement of depreciation and amortization expense, Note 6(al)
(27) Statement of other general and administrative expenses, Note 6(am)

157

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

For the Years Ended December 31, 2025 and 2024

The independent auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and financial statements, the Chinese version shall prevail.

158

Contents	Page
1. Cover Page	157
2. Table of Contents	158
3. Balance Sheets of Security Division	159
4. Statements of Comprehensive Income of Security Division	160
5. Notes to the Financial Statements of Security Division
(1) Company history	161
(2) Approval date and procedures of the financial statements	161
(3) New standards, amendments and interpretations adopted	161
(4) Summary of material accounting policies	161~162
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	162
(6) Explanation of significant accounts	163~172
(7) Related-party transactions	173
(8) Pledged assets	173
(9) Commitments and contingencies	173
(10) Losses from disasters	173
(11) Subsequent Events	173
(12) Others	173
(13) Other disclosures
(a) Information on significant transactions	173
(b) Information of investees	173
(c) Information on investments in Mainland China	173
(14) Segment information	173
6. List of major account titles	174~185

159

(English Translation of Financial Statements and Report Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Balance Sheets of Security Division

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Assets		December 31, 2025		December 31, 2024			Liabilities and equity		December 31, 2025		December 31, 2024
Current Assets :		Amount	%	Amount	%		Current Liabilities :		Amount	%	Amount	%
113200	Current financial assets at fair value through other comprehensive income (Notes 6(a))	$ 2,348,481	28	1,098,288	11	214010	Liabilities for bonds with attached repurchase agreements (Note 6(g))	$ 1,081,287	13	941,063	9
114030	Margin loans receivable (Note 4 and 6(b))	3,475,366	40	4,032,095	38	214040	Securities financing refundable deposits (Note 4 and 6(b))	42,066	-	57,578	1
114130	Accounts receivable (Notes 6(c))	476,141	6	590,132	6	214050	Deposits payable for securities financing (Note 4 and 6(b))	51,256	-	74,701	1
119000	Other current assets	11,306	-	108,446	1	214130	Accounts payable (Note 6(h))	392,393	5	493,774	4
	Total current assets	6,311,294	74	5,828,961	56	216000	Current lease liabilities (Note 6(i))	30	-	30	-
	Non-current Assets :					219000	Provision for liabilities	74,066	1	157,519	1
123200	Non-current financial assets at fair value through other comprehensive income (Notes 6(a))	1,906,223	22	4,301,380	41		Total current liabilities	1,641,098	19	1,724,665	16
123300	Non-current financial assets at amortized cost (Notes 6(d))	299,177	4	299,067	3	229030	Guaranteed deposits received	20	-	20	-
125000	Property and equipment, net (Note 6(e))	30,593	-	34,469	-	226000	Non-current lease liabilities (Note 6(i))	54	-	84	-
125800	Right-of-use assets, net (Note 6(f))	83	-	113	-	229110	Inter-department accounts, credit	4,414,148	51	6,272,775	60
127000	Intangible assets	28,413	-	26,362	-		Total non-current liabilities	4,414,222	51	6,272,879	60
129000	Other non-current assets	41,562	-	33,613	-		Total liabilities	6,055,320	70	7,997,544	76
	Total non-current assets	2,306,051	26	4,695,004	44		Equity parent company
						301110	Assigned working capital	2,200,000	26	2,200,000	21
						304020	Special reserve	185,127	2	185,127	2
						304040	Unappropriated retained earnings	261,542	3	287,922	3
						305290	Other equity interest-other	(84,644)	(1)	(146,628)	(2)
							Total equity	2,562,025	30	2,526,421	24
Total assets		$ 8,617,345	100	10,523,965	100		Total liabilities and equity	$ 8,617,345	100	10,523,965	100

160

(English Translation of Financial Statements Financial Statements Originally Issued in Chinese.)

TAIWAN BUSINESS BANK LTD.

Statements of Comprehensive Income of Security Division

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

		For the year ended December 31,
		2025		2024
		Amount	%	Amount	%
Revenues :
401000	Brokerage handling fee revenue (Note 6(j))	$ 549,413	76	578,035	75
401110	Handling fees from securities financing	680	-	745	-
421200	Interest revenue (Note 6(k))	168,323	23	187,884	24
424100	Future commission revenue	2,619	1	3,030	1
425300	Impairment loss (impairment gain and reversal of impairment loss)	371	-	362	-
428000	Other operating income (Note 6(l))	1,158	-	769	-
		722,564	100	770,825	100
Expenses :
501000	Brokerage handling fee expenses (Note 6(m))	41,242	6	42,452	6
503000	Refinancing processing fee expenses	31	-	23	-
521200	Financial costs (Note 6(n))	9,309	1	6,904	1
528000	Other operating expenditure (Note 6(o))	751	-	813	-
530000	Operating expenses (Note 6(p))	365,112	51	364,476	47
602000	Other (gains) and losses (Note 6(q))	44,577	6	68,235	9
		461,022	64	482,903	63
Net income		261,542	36	287,922	37
805000 Other comprehensive income :
805615	Unrealized gains from investment in debt instruments measured at fair value through other comprehensive income	61,984	9	(34,821)	(5)
805000	Other comprehensive income (net amount after tax)	61,984	9	(34,821)	(5)
Total comprehensive income		$ 323,526	45	253,101	32

161

(English Translation of Financial Statements Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

The securities division of Taiwan Business Bank, Ltd. was approved by the Securities Regulatory Commission, Ministry of Finance on May 8, 1976 to concurrently operate in proprietary securities and brokerage businesses and began its operation in the same year.

(2) Approval date and procedures of the financial statements:

The approval date and procedures of the financial statements of the securities division are consistent with those of the Bank. Please refer to the Bank’s financial statements.

(3) New standards, amendments and interpretations adopted:

The new standards, amendments, and interpretations adopted by the securities division are consistent with those of the Bank. Please refer to the Bank’s financial statements.

(4) Summary of material accounting policies:

The financial statements for the securities division have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Firms.

Except for the following items, the material accounting policies of the securities division are consistent with those of the Bank. Please refer to the Bank’s financial statements.

(a) Classification of current and non-current assets and liabilities

The Securities division classifies the asset as current under one of the following criteria, and all other assets are classified as non current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

(ii) It is held primarily for the purpose of trading;

(iii) It is expected to be realized within twelve months after the reporting period; or

(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Securities division classifies the liability as current under one of the following criteria, and all other liabilities are classified as non current.

(i) It is expected to be settled in the normal operating cycle;

(ii) It is held primarily for the purpose of trading;

(iii) It is due to be settled within twelve months after the reporting period; or

(Continued)

162

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(iv) The Securities division does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

(b) Margin loans, short sales, relending, and securities refinancing

When conducting margin purchase operations in securities trading, the securities division recognizes financing funds from securities investors purchasing stocks as margin loans receivable. All stocks purchased by the margin financiers are used as collaterals, which are to be returned when repayment from the financiers is settled.

When conducting short sale operations in securities trading, the securities division recognizes deposits from short sellers as deposits and charges short sale proceeds (deducting securities transaction tax, handling fee from brokered trading and handling fee from securities financing) as collateral, recognizing it as deposits payable for securities financing. Both deposits and short sale proceeds are to be returned when repayment from short sellers is settled.

When conducting margin purchase and short sale operations in securities trading, the securities division with insufficient fund shall recognize refinancing from securities finance company as refinancing borrowings and all shares purchased are to be used as collaterals. The securities division may borrow securities from securities finance company via refinancing borrowings, and deposits paid are recognized as refinancing margin. The short sale proceeds paid by short sellers as refinancing collateral to the security finance company are recognized as deposits payable for securities financing and refinancing collateral receivable respectively.

According to the former No.82416 of Taiwan Financial Certificate issued by the Securities and Futures Commission, Ministry of Finance, when the overall collateral maintenance ratio of the customer margin account falls below the required number, and the account fails to cover the deficiency within deadline, the finance receivable balance is recognized as overdue receivable. If the securities in customer margin account cannot be disposed of, the securities finance receivable balance is recognized as other receivables or overdue receivables, and assessed as well as recognized allowance for bad debts by its impairment amount in accordance with the IFRS 9.

The working capital refers to the amount allocated to the securities division as the Bank concurrently operates in securities business.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The securities division's significant accounting assumptions and judgments, and major sources of estimation uncertainty is consistent with those of the Bank. Please refer to the Bank's financial statements.

(Continued)

163

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(6) Explanation of significant accounts:

(a) Financial asset at fair value through other comprehensive income

	December 31, 2025	December 31, 2024
Current:
Government bonds	$ 2,253,376	1,101,044
Corporate bonds	100,253	-
Valuation adjustment on securities held for operations-proprietary	(5,148)	(2,756)
Total	$ 2,348,481	1,098,288
Non-current:
Government bonds	$ 1,681,377	3,938,298
Corporate bonds	305,546	508,529
Valuation adjustment on securities held for operations-proprietary	(80,700)	(145,447)
Total	$ 1,906,223	4,301,380

(i) Investment in debt instruments measured at fair value through other comprehensive income

The securities division of the Bank assessed that the above bond investments were held within a business model whose objective was achieved by both collecting contractual cash flows and selling financial assets. The bond investments have been classified as the financial asset measured at fair value through other comprehensive income. Some of the investment in debt instruments measured at fair value through other comprehensive income are held for reverse repurchase agreement. Please refer to Note 6 (g).

(ii) Please refer to the financial statements for information on credit risk (including the impairment in debt instruments) and market risk.

(iii) The changes in allowance for credit losses attributed to the FVOCI in the security division of the Bank were as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 1,575	1,924
Reversal	(371)	(349)
Ending balance	$ 1,204	1,575

(Continued)

164

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(b) Margin loans receivable

(i) The securities financing transactions as of December 31, 2025 and 2024 were as follows:

	December 31, 2025	December 31, 2024
Margin loans receivable	$ 3,510,471	4,072,823
Less: allowance for bad debts	(35,105)	(40,728)
Total	$ 3,475,366	4,032,095

The change in allowance for bad debts was as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 40,728	31,542
Provision	(5,623)	9,186
Ending balance	$ 35,105	40,728

(ii) The guaranteed deposits received from securities transaction of the securities division as of December 31, 2025 and 2024 are $42,066 and $57,578, respectively; the deposits payable for securities financing are $51,256 and $74,701, respectively.

(iii) Since the securities division is doing securities lending/borrowing, the collateral securities provided by clients and the securities information on short sales as of December 31, 2025 and 2024 were as follows:

	December 31, 2025		December 31, 2024
	Number of shares (Note)	Par value	Number of shares (Note)	Par value
Financing-backed securities	102,753	$ 1,027,526	117,766	1,177,656
Margin lending securities	851	$ 8,510	501	5,010

Note: the unit is in thousands.

	December 31, 2025	December 31, 2024
Receivable price of securities purchased for customers	$ 328,267	499,128
Settlement price	78,645	-
Interests receivable	69,236	91,013
Less: allowance for bad debts	(7)	(9)
Total	$ 476,141	590,132

(Continued)

165

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

Change in allowance for bad debts:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 9	11
Reversal	(2)	(2)
Ending balance	$ 7	9

(d) Financial assets at amortized cost

	December 31, 2025	December 31, 2024
Non-current:
Government bonds	$ 299,252	299,142
Less: accumulated impairment	(75)	(75)
Total	$ 299,177	299,067

The securities division of the Bank assessed that these financial assets were held to maturity to collect the contractual cash flows, which consisted solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets measured at amortized cost.

(i) Please refer to the independent auditors’ report in the financial statements for credit risk information.

(ii) The pledged assets provided by the above investment in debt instruments at amortized cost were as follows:

	December 31, 2025	December 31, 2024
Operation guarantee deposits	$ 260,000	270,000

(iii) The securities division of the Bank assessed the impairment of investment in debt instruments at amortized cost as of December 31, 2025 and 2024. The changes in allowance for credit losses attribute to these financial assets were as follows:

	For the years ended December 31,
	2025	2024
Beginning balance	$ 75	88
Reversal	-	(13)
Ending balance	$ 75	75

(Continued)

166

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(e) Property and equipment

The statement of changes in the securities division's property and equipment cost, depreciation and impairment loss were as follows:

(i) The beginning and ending book values and accumulated depreciation of the property and equipment

December 31, 2025	Cost	Accumulated depreciation	Total
Equipment	$ 116,588	(87,233)	29,355
Leasehold improvement	3,092	(1,854)	1,238
Total	$ 119,680	(89,087)	30,593
December 31, 2024	Cost	Accumulated depreciation	Total
---	---	---	---
Equipment	$ 109,330	(76,717)	32,613
Leasehold improvement	3,092	(1,236)	1,856
Total	$ 112,422	(77,953)	34,469

(ii) Statement of changes in property and equipment costs

	January 1, 2025	Increase	Decrease	December 31, 2025
Equipment	$ 109,330	10,577	(3,319)	116,588
Leasehold improvement	3,092	-	-	3,092
Total	$ 112,422	10,577	(3,319)	119,680
	January 1, 2024	Increase	Decrease	December 31, 2024
---	---	---	---	---
Equipment	$ 103,384	11,744	(5,798)	109,330
Leasehold improvement	3,092	-	-	3,092
Total	$ 106,476	11,744	(5,798)	112,422

(iii) Statement of changes in accumulated depreciation of property and equipment

	January 1, 2025	Increase	Decrease	December 31, 2025
Equipment	$ 76,717	13,843	(3,327)	87,233
Leasehold improvement	1,236	618	-	1,854
Total	$ 77,953	14,461	(3,327)	89,087
	January 1, 2024	Increase	Decrease	December 31, 2024
---	---	---	---	---
Equipment	$ 68,096	14,177	(5,556)	76,717
Leasehold improvement	618	618	-	1,236
Total	$ 68,714	14,795	(5,556)	77,953

(Continued)

167

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

Property and equipment are depreciated on a straight-line basis with an useful life between 3 to 8 years basis.

Property and equipment are not pledged as collateral.

(f) Right-of-use assets

Information about leases on costs, depreciation and impairment for which the securities division of the Bank as a lessee is presented below:

December 31, 2025	Cost	Accumulated depreciation	Accumulated impairment	Total
Miscellaneous and equipment	$ 151	(68)	-	83
December 31, 2024	Cost	Accumulated depreciation	Accumulated impairment	Total
Miscellaneous and equipment	$ 151	(38)	-	113

Change of cost

	January 1, 2025	Increase	Decrease	Foreign Exchange	December 31, 2025
Miscellaneous and equipment	$ 151	-	-	-	151
	January 1, 2024	Increase	Decrease	Foreign Exchange	December 31, 2024
Miscellaneous and equipment	$ 175	-	(24)	-	151

Change of depreciation

	January 1, 2025	Increase	Decrease	Foreign Exchange	December 31, 2025
Miscellaneous and equipment	$ 38	30	-	-	68
	January 1, 2024	Increase	Decrease	Foreign Exchange	December 31, 2024
Miscellaneous and equipment	$ 32	30	(24)	-	38

(g) Liabilities for bonds with attached repurchase agreements

Assets	December 31, 2025
	Par value	Selling Price (Recognized in securities sold under repurchase agreements)	Designated repurchase amount	Designated repurchase date
Financial assets at fair value through other comprehensive income	$ 1,083,800	1,081,287	1,085,474	2026/1/5~2026/6/10

(Continued)

168

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

Assets	December 31, 2024
	Par value	Selling Price (Recognized in securities sold under repurchase agreements)	Designated repurchase amount	Designated repurchase date
Financial assets at fair value through other comprehensive income	$ 944,400	941,063	946,615	2025/1/3~2025/7/10

(h) Accounts payable

	December 31, 2025	December 31, 2024
Prices payable of securities sold for customers	$ 390,587	198,804
Settlement cost	-	291,302
Interest payable	1,806	3,668
Total	$ 392,393	493,774

(i) Lease liabilities

	December 31, 2025	December 31, 2024
Current	$ 30	30
Non-current	54	84
Total	$ 84	114

The amounts recognized in profit or loss were as follows:

	For the years ended December 31,
	2025	2024
Interest on lease liabilities	$ 1	2
Expenses relating to short-term leases	$ 613	606
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	$ 644	637

(j) Brokerage handing fee revenue

	For the years ended December 31,
	2025	2024
Settlement from brokered trading-TWSE	$ 418,526	440,416
Settlement from brokered trading-OTC	129,764	136,083
Front-end load	1,123	1,536
Total	$ 549,413	578,035

(Continued)

169

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(k) Interest income

	For the years ended December 31,
	2025	2024
Financing and securities refinancing interest	$ 124,907	139,495
Bond interest	43,416	48,389
Total	$ 168,323	187,884

(l) Other operating income

	For the years ended December 31,
	2025	2024
Clearing and settlement interest	$ 207	218
Miscellaneous income	951	551
Total	$ 1,158	769

(m) Brokerage handing fee expense

	For the years ended December 31,
	2025	2024
Brokerage handling fee expense	$ 41,215	42,426
Proprietary handling fee expense	27	26
Total	$ 41,242	42,452

(n) Financial costs

	For the years ended December 31,
	2025	2024
Securities financing interest expense	$ 219	212
Securities sold under repurchase agreements interest expense	9,089	6,690
Miscellaneous interest	1	2
Total	$ 9,309	6,904

(o) Other operating expenses

	For the years ended December 31,
	2025	2024
Processing fee expenses	$ 751	813

(Continued)

170

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(p) Operating expenses

	For the years ended December 31,
	2025	2024
Salary expense	$ 201,377	203,013
Overtime premium	7,034	7,035
Stationery printing	593	689
Traveling expense	134	92
Postage expenses	17,512	17,381
Repairs and maintenance expense	1,000	988
Employee benefits	1,050	1,093
Utilities expense	4,581	4,505
Insurance expense	19,657	19,045
Miscellaneous purchases	1,039	584
Labor service fees	2,425	2,621
Meal expense	8,100	8,149
Subscription and magazine	162	190
Taxes	13,713	14,444
Commissions expense	5,056	2,187
Depreciations	14,491	14,801
Amortizations	14,388	11,647
Information technology expense	23,992	22,578
Membership fee	248	265
Loss on error trading	77	153
Transportation expense	920	768
Pension expense	10,769	10,524
Depository service expense	11,843	12,256
Micellaneous disbursements	3,837	8,792
Rental expense	613	606
Holiday duty bonus	424	-
Advertising Fees	77	70
Total	$ 365,112	364,476

(Continued)

171

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(q) Other gains and losses

	For the years ended December 31,
	2025	2024
Financial income	$ (246,569)	(251,841)
Losses (Gains on reversal) of bad debts	(5,737)	9,178
Other income	(738)	(1,496)
Financial expenses	297,613	312,380
Assets retirement losses	8	14
Total	$ 44,577	68,235

(r) Financial Instruments disclosure

(i) Fair value information

The fair value information of the securities division is consistent with that of the Bank. Please refer to the Bank’s financial report.

(ii) Based on fair value measurement

1) The fair value hierarchy of information

The financial instruments which are record as fair value are measured on an ongoing basis. The fair value hierarchy of information were as follows:

Assets and Liabilities	December 31, 2025
	Total	Level 1	Level 2	Level 3
Instruments measured at fair value on a recurring basis
Non-derivative financial assets and liabilities:
Current financial assets at fair value through other comprehensive income	$ 2,348,481	-	2,348,481	-
Non-current financial assets at fair value through other comprehensive income	1,906,223	-	1,906,223	-
Assets and Liabilities	December 31, 2024
---	---	---	---	---
	Total	Level 1	Level 2	Level 3
Instruments measured at fair value on a recurring basis
Non-derivative financial assets and liabilities:
Current financial assets at fair value through other comprehensive income	1,098,288	1,098,288	-	-
Non-current financial assets at fair value through other comprehensive income	$ 4,301,380	4,301,380	-	-

(Continued)

172

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

2) Valuation techniques used in estimating the fair values of financial instrument

The valuation techniques used in estimating the fair values of financial instruments by the securities division is consistent with those of the Bank. Please refer to the Bank’s financial report.

(iii) Not based on fair value measurement

1) Fair value information

The following chart presents the financial instruments not based on fair value measurement of the Bank. Except those items, others’ fair value are reasonably approximate value; therefore, the Bank does not disclose their fair value.

	December 31, 2025
	Book value	Fair value
Investment in debt instruments at amortized cost - non current	$ 299,177	298,380
	December 31, 2024
	Book value	Fair value
Investment in debt instruments at amortized cost - non current	$ 299,067	292,324

2) The fair value hierarchy of information

Assets and Liabilities	December 31, 2025
	Total	Level 1	Level 2	Level 3
Investment in debt instruments at amortized cost - non current	$ 298,380	-	298,380	-
	December 31, 2024
Assets and Liabilities	Total	Level 1	Level 2	Level 3
Investment in debt instruments at amortized cost - non current	$ 292,324	292,324	-	-

3) Valuation techniques

The valuation techniques used by the securities division for fair value evaluation of financial instruments are consistent with those of the Bank. Please refer to the Bank’s financial report.

(s) Financial risk information

In order to achieve the goals of risk management, the Bank develops risk control strategies corresponding to different types of risks. Please refer to the Bank’s financial report for relevant financial risk information on credit risk, market risk, liquidity risk and cash flow risk resulted from changes in the interest rate.

(Continued)

173

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements of Security Division

(7) Related-party transactions: None
(8) Pledged assets: None. Please refer to notes 6(d) for more details.
(9) Commitments and contingencies: None
(10) Losses from disasters: None
(11) Subsequent Events: None
(12) Others:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

	For the years ended December 31,
	2025	2024
	Operating Expense	Operating Expense
By item
Employee benefits expense
Salary expense	$ 208,835	210,048
Labor and health insurance expense	19,657	19,045
Pension expense	10,769	10,524
Other employee benefits expense	9,150	9,242
Subtotal	248,411	248,859
Depreciation expense	14,491	14,801
Amortization expense	14,388	11,647
Total	$ 277,290	275,307

As of December 31, 2025 and 2024, The security division of the Bank has 219 and 227 employees, respectively.

(13) Other disclosures:

(a) Information on significant transactions: None
(b) Information of investees: None
(c) Information on investments in Mainland China: None.

(14) Segment information:

The security division of the Bank is dealing and brokerage business of military securities, which is a single industry, and therefore is not applicable.

174

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Current Financial Assets at Fair Value through

Other Comprehensive Income

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Financial Instrument	Summary	Number of units	Par value	Total amount	Interest rate	Acquisition cost	Accumulated impairment (Note)	Fair value
								Unit price	Total amount
Government bonds –
A05104	Annual interest payment 03/04 · maturity date 2026/03/04	11,000	100 $	1,100,000	0.750 %	1,099,923	273		1,099,105
A05111	Annual interest payment 09/07 · maturity date 2026/09/07	7,500	100	750,000	0.625 %	749,698	186		746,948
A95107	Annual interest payment 11/10 · maturity date 2026/11/10	4,000	100	400,000	2.125 %	403,755	100		402,277
Subtotal		22,500		2,250,000		2,253,376	559		2,248,330
Corporate bonds –
Other (Note 2)		1,000	100	100,000	1.920 %	100,253	56		100,151
Subtotal		1,000		100,000		100,253	56		100,151
Total		23,500		$ 2,350,000		2,353,629	615		2,348,481

Note 1: The accumulated impairment of debt instruments measured at fair value through other comprehensive income is recognized as other equity.
Note 2: None of the other items exceeds 5% of the total account balance.

175

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Margin Loans Receivable

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Name of Securities	Number of shares	Amount	Note
Others	101,366,000	$ 3,510,471	Note
Less: allowance for bad debts		(35,105)
Total		$ 3,475,366

Note: None of the items exceeds 5% of the total amount.

Statement of Other Current Assets

Item	Summary	Amount
Prepayments	Other prepaid taxes	$ 6,840
Amount held for settlement		4,466
Total		$ 11,306

176

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Non-current Financial Assets at Fair Value through Other Comprehensive Income

For the year ended December 31, 2025
(Expressed in Thousands of New Taiwan Dollars)

Financial Instrument	Beginning balance		Increase		Decrease		Ending balance		Accumulated impairment (Note 2)	Note
	Number of units	Fair Value	Number of units	Amount	Number of units	Amount	Number of units	Fair Value
Government bonds —
A95107	4,000	$ 404,986	-	-	(4,000)	(404,986)	-	-	-	Current
A01102	1,000	100,154	-	1,574	-	-	1,000	101,728	25
A02103	1,000	99,059	-	1,938	-	-	1,000	100,997	25
A05104	10,500	1,041,839	-	-	(10,500)	(1,041,839)	-	-	-	Current
A05111	7,500	739,976	-	-	(7,500)	(739,977)	-	-	-	Current
A07109	1,000	97,611	-	1,203	-	-	1,000	98,814	25
A09108	2,000	166,725	-	7,824	-	-	2,000	174,548	50
A09109	10,000	927,449	-	23,878	-	-	10,000	951,327	248
A10107	1,000	92,600	-	2,459	-	-	1,000	95,059	25
Others (Note1)	1,300	129,188	-	877	(500)	(49,611)	800	80,454	20
Subtotal	39,300	3,799,587	-	39,753	(22,500)	(2,236,413)	16,800	1,602,927	418
Corporate bonds —
B401D6	3,000	301,436	-	1,860	-	-	3,000	303,296	171
B402B8	2,000	200,357	-	-	(2,000)	(200,357)	-	-	-	Current
Subtotal	5,000	501,793	-	1,860	(2,000)	(200,357)	3,000	303,296	171
Total	44,300	$ 4,301,380	-	41,613	(24,500)	(2,436,770)	19,800	1,906,223	589

The financial assets at fair value through other comprehensive income shown above are hold for resale agreement.
Note1: None of the other items exceeds 5% of the total account balance.
Note2: The accumulated impairment of debt instruments measured at fair value through other comprehensive income is recognized as other equity.

177

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Non-current Financial Assets at Amortised Cost
For the year ended December 31, 2025
(Expressed in Thousands of New Taiwan Dollars)

Item	Beginning Balance		Increase		Decrease		Ending Balance		Accumulated impairment	Grananteed or pledged	Note
	Number of units	Amount	Number of units	Amount	Number of units	Amount	Number of units	Par value
Government bonds — A11107	3,000	$ 299,142	-	110	-	-	3,000	299,252	75	Par value of pledged asset is $260,000

178

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Other Non-current Assets

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Summary	Amount	Note
Operation guarantee deposits		$ 260,000
Securities for operation guarantee deposits		(260,000)
Clearing and settlement fund		40,867
Guarantee deposits paid		695
Overdue receivables		612
Less: allowance for bad debts		(612)
Total		$ 41,562

179

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Liabilities for Bonds with Attached Repurchase Agreements

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Financial instrument	Terms of Transactions			Amount
	Issue date	Maturity date	Interest rate	Type	Par value	Turnover
A09108	2025.12.15	2026.04.01	0.95%~1.00%	Government bonds	$ 105,000	105,000
A09109	2025.01.23	2026.06.10	0.90%~1.10%	Government bonds	978,800	976,287
					$ 1,083,800	1,081,287

180

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Securities Financing Refundable Deposits

December 31, 2025
(Expressed in Thousands of New Taiwan Dollars)

Securities	Number of shares	Amount	Note
Others	684,000	$ 42,066	Note

Note: None of the securities balance exceeds 5% of the total amount.

Statement of Deposits Payable for Securities Financing

Securities	Number of shares	Amount	Note
Others	684,000	$ 51,256	Note

Note: None of the securities balance exceeds 5% of the total amount.

181

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Accounts Payable

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Client Name	Summary	Amount
Client	Prices payable of securities sold for customers	$ 390,587
Client	Interest payable	1,806
		$ 392,393

Statement of Other Current Liabilities

Item	Summary	Amount
Advance receipts		$ 18,139
Receipts under custody		12,105
Accrued expenses	Labor and health insurance expense and pension	700
	Business tax, welfare fund and stamp tax	2,902
	Bonus for unused vacation, yearend and group bonus	22,242
	Handling fee expense, depository premiums, and securities investor protection service expense fee	12,950
Other payables	Others	5,028
Total		$ 74,066

182

TAIWAN BUSINESS BANK LTD. SECURITIES DIVISION DISCLOSURE

Statement of Lease Liabilities

December 31, 2025

(Expressed in Thousands of New Taiwan Dollars)

Item	Summary	Leasing Period	Discount rate	Ending Balance	Note
Equipment	Phone System	2023.10~2028.09	1.4400 %	$ 84	Note

Note: Current liabilities protion of lease liabilities which matures within 12 months amount to $30.

183

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Brokerage Handling Fee Revenue
For the year ended December 31, 2025
(Expressed in Thousands of New Taiwan Dollars)

Month	Handling fee revenues from brokered trading		Handling fees from securities financing	Other handling fee revenues
	Brokered trading-TWSE	Brokered trading-OTC
January	$ 23,053	7,081	29	50
February	31,401	10,290	56	123
March	30,794	10,820	63	161
April	26,182	7,660	81	14
May	26,697	8,423	38	65
June	28,914	9,474	58	26
July	32,695	10,337	33	68
August	40,504	14,008	61	90
September	42,604	15,049	78	160
October	46,363	12,206	48	121
November	45,602	11,588	69	94
December	43,717	12,828	66	151
	$ 418,526	129,764	680	1,123

184

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

Statement of Employees benefits, Depreciation, Amorization and Other Operating Expenses

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount
	2025	2024
Employee benefit expenses
Salary expense	$ 208,835	210,048
Labor and health insurance expenses	19,657	19,045
Pension expenses	10,769	10,524
Other employee benefit	9,150	9,242
Depreciation expenses	14,491	14,801
Amortization expenses	14,388	11,647
Other operating expenses	87,822	89,169
Total	$ 365,112	364,476

Notes:

As of December 31, 2025 and 2024, the securities brokerage division of the Bank has 219 and 227 employees, respectively, and the number of directors who are not employees both amounted to 0 people.
Financial statement for the years ended December 31, 2025 and 2024 should disclose the following information:

(1) The average of employee benefit expenses for the years ended December 31, 2025 and 2024 are $1,134 and $1,096 respectively.

(2) The average of salary expense for the years ended December 31, 2025 and 2024 are $954 and $925 respectively.

(3) The average movement of employees' salary is 3.14%.

(4) The supervisor's remuneration for this year and the previous year are both $0.

(5) Please refer to the Bank's financial report for the remuneration policies.

185

TAIWAN BUSINESS BANK LTD.

SECURITIES DIVISION DISCLOSURE

December 31, 2025

Please refer to the notes below for information on statements of other significant accounts:

(1) Statement of accounts receivable, Note 6(c).

(2) Statement of changes in cost and accumulated depreciation of property and equipment, Note 6(e).

(3) Statement of changes in cost and accumulated depreciation of right-of-use assets, Note 6(f).

(4) Statement of interest revenue, Note 6(k).

(5) Statement of finance cost, Note 6(n).

AI assistant

TBB — Audit Report / Information 2025

52201_rns_2026-05-14_4962eae5-558d-4b5c-aa06-a74cfaef52e2.pdf

TAIWAN BUSINESS BANK LTD.

Table of contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditors' Responsibilities for the Audit of the Financial Statements

Notes to Readers

(English Translation of Financial Statements Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Statements of Changes in Equity

(English Translation of Financial Statements Originally Issued in Chinese)

TAIWAN BUSINESS BANK LTD.

Statements of Cash Flows

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(4) Summary of material accounting policies:

(a) Statement of compliance

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(ii) Foreign operations

(d) Cash and cash equivalents

(e) Financial instruments

(i) Financial assets

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

(b) Due from the Central Bank and call loans to banks

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

TAIWAN BUSINESS BANK LTD.

Notes to the Financial Statements

Change of depreciation

Accumulated impairment

TAIWAN BUSINESS BANK LTD.

TBB Audit Report / Information 2025