TBB — Interim / Quarterly Report 2019

Nov 15, 2019

Financial Review of 2019Q3

• This presentation is provided by Taiwan Business Bank Co., Ltd. ('TBB').The information contained within is not reviewed or reviewed by any accountant or any independent third party. Users should read this material in conjunction with all other public financial and operational information filed to the competent authorities by TBB. While we endeavor to provide accurate, complete and consistent information herein, TBB makes no guarantee or warranties as to the accuracy or correctness of all the material contained. After this presentation is released to the public, we undertake no obligation to update any relevant data to reflect any change hereafter.
• Users should also notice that this presentation may contain forward-looking statements. Statements that are not historical facts, including statements relating to the implementation of strategic initiatives, future business development and economic performance are forward-looking statements. By their nature, forward-looking statements involve uncertainties, risks, assumptions and other factors that could cause actual developments and results to differ materially from our statement in this presentation. These factors include, but not limited to, regulatory developments, competitive conditions, technological developments, general economic conditions and management changes.
• The information, statements or opinions in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. TBB and its affiliates representatives, no matter for their negligence or any other reasons, should not be liable for any loss or damages arising from the use of or interpretation by others of information contained within this presentation or any matter related to this document.

• TBB reported loan balance in 2019 Q3 was NT\$1,126 billion, grew 1.57% YoY; deposit balance in 2019 Q3 was NT\$1,428 billion, grew 1.97% YoY.
• The net interest spread for 2019 Q3 was 1.35% (+4bp YoY), the net interest margin (NIM) in 2019 Q3 was 0.96% (-0 bp YoY).
• As for asset quality, NPL ratio in 2019Q3 was 0.30%, decreased 4bp YoY; coverage ratio in 2019Q3 was 369.51%, increased by 22.77% YoY.

Financial Performance

2014	2015	2016	2017	2018	3Q19
		Asset	Liability

	2014	2015	2016	2017	2018	3Q19
Asset	1,392,391	1,475,892	1,498,729	1,584,094	1,619,040	1,704,564
Liability	1,329,653	1,408,233	1,427,859	1,508,276	1,534,187	1,610,300

	3Q18	4Q18	1Q19	2Q19	3Q19
Asset	1,617,545	1,619,040	1,681,815	1,709,267	1,704,564
Liability	1,533,940	1,534,187	1,593,980	1,621,428	1,610,300

(in NT mn)

	2014	2015	2016	2017	2018	3Q19
Equity	62,738	67,659	70,870	75,818	84,853	94,264
Common Stock	52,979	56,847	59,689	61,480	63,939	71,320
BVPS	11.84	11.90	11.87	12.33	13.27	13.22

	2014	2015	2016	2017	2018	3Q19
Net Income before tax	5,486	6,196	6,359	5,871	9,198	6,516
Net income	5,315	5,113	5,196	5,040	7,641	5,410
EPS before Tax (NTD)	1.04	1.09	1.07	0.95	1.44	0.96
EPS (NTD)	1.00	0.90	0.87	0.82	1.19	0.80
ROE before tax	9.14%	9.50%	9.18%	8.00%	11.45%	9.70%
ROA before tax	0.40%	0.43%	0.43%	0.38%	0.57%	0.52%
Employee productivity	1.13	1.24	1.28	1.15	1.75	1.21

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep
Monthly Net Income before Tax for 2019(Cumulated)	1,014	1,747	2,549	3,392	4,236	4,070	4,977	5,722	6,516
Monthly Net Income before Tax for 2018(Cumulated)	667	1,313	2,118	2,810	3,619	4,747	5,680	6,478	7,182

Monthly Net Income before Tax ( Individual)

Monthly Net Income before Tax ( Individual)

	Q1	Q2	Q3	Q4
Quarterly Net Income before Tax (Cumulated) for 2019	2,549	1,521	2,446
Quarterly Net Income before Tax (Cumulated) for 2018	2,118	2,628	2,435	2,017

Assets, Liabilities and Equity Breakdown

Note:% indicates the percentage of the total net income before tax.

2014	2015	2016	2017	2018	3Q19

In NTD mn

	2014	2015	2016	2017	2018	3Q19
Net Income	18,994	20,162	20,657	20,863	23,027	17,940
Operating Expense	10,970	11,557	11,793	11,963	13,034	9,496
Percentage	57.76%	57.32%	57.09%	57.34%	56.60%	52.93%

Operating Expense Ratio( Quarterly, Cumulated)

3Q18 4Q18 1Q19 2Q19 3Q19

	3Q18	4Q18	1Q19	2Q19	3Q19
Net Income ( Cumulated)	17,472	23,027	6,100	12,046	17,940
Operating Expense ( Cumulated)	9,616	13,034	3,131	6,300	9,496
Percentage	55.04%	56.60%	51.33%	52.30%	52.93%

	2014	2015	2016	2017	2018	3Q19
Deposit	1,137,997	1,198,627	1,259,305	1,310,328	1,388,764	1,428,118
Loan	954,361	1,012,708	1,010,824	1,063,179	1,101,759	1,125,903
FX volume (in USD mn )	62,204	65,106	63,257	70,846	69,688	42,663

Loans to Small and Medium Enterprises

(in NT 100mn)

	2014	2015	2016	2017	2018	3Q19
Loans to Small and Medium Enterprises	4,316.60	4,579.10	4,328.30	4,675.70	4,990.40	5,186.94
Account for total loans	46.12%	48.58%	44.46%	45.42%	50.50%	50.68%

Net Interest Spread and NIM

						%
	2014	2015	2016	2017	2018	3Q19
Net Interest Spread	1.37	1.35	1.32	1.29	1.33	1.35
NTD Spread	1.37	1.33	1.26	1.23	1.24	1.28
FCY Spread	1.50	1.53	1.90	1.99	2.28	2.19
NIM	1.06	1.04	0.97	0.97	0.97	0.96

	2014	2015	2016	2017	2018	3Q19
NPL	4,618	4,905	4,520	3,712	3,308	3,424
NPL Ratio	0.46%	0.48%	0.43%	0.33%	0.30%	0.30%
Allowance for bad debts	10,934	11,342	12,550	12,158	13,034	12,651
Coverage Ratio	236.78%	231.22%	277.63%	327.57%	394.08%	369.51%
Bad Loans Write-offs	3,044	3,095	2,884	3,950	2,659	2,520

	3Q18	4Q18	1Q19	2Q19	3Q19
NPL	3,708	3,308	3,944	3,428	3,424
NPL Ratio	0.34%	0.30%	0.35%	0.30%	0.30%
Allowance for bad debts	12,858	13,034	12,815	13,284	12,651
Coverage Ratio	346.74%	394.08%	324.95%	387.48%	369.51%
Bad Loans Write-offs	2,075	2,659	868	1,356	2,520

	2014	2015	2016	2017	2018	2019Q3
BIS (%)	10.54	11.24	11.91	12.27	12.70	12.94
Tier1 Ratio(%)	8.20	8.84	9.59	9.51	9.60	9.65
CET1 Ratio(%)	7.88	7.98	7.91	7.98	8.21	8.41

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Corporate Social Responsibility

Kaohsiung City Qishan District Sugar Refinery Community Development Association Miaoli Sanyi Shuangtan Community Development Association Chiayi County Budai Township Donggang Community Development Association Nantou County Zhongyu Township Longyan Forest Welfare Association Yunlin County Shuilin Township Qiongpu Community Development Association Pingtung County Changzhi Township De-Xie Community Development Association Chiayi County Zhongpu Township Shenkeng Community Development Association, Hualien County Hualien City Minsheng Community Development Association Taipei Neihu District HuBin Community Development Kinmen County Lieyu Township Shangchyi Association ( Coming soon) Village Qingqi Community Development Association

Taiwan Index Plus Corporation	Top 5% of Corporate Governance Evaluation of Listed Company
FSC, Taiwan	• Excellent Bank Award of Property Trust Assessment for Senior Citizens and People with Disabilities in the Trust Industry • Program to Encourage Lending by Domestic Banks to Small and Medium Enterprises( Team A) - Superior award • Program to Encourage Lending by Domestic Banks to Key Innovative Industries( Team A) - Superior award • Special Award for Balanced Regional Development • Special Award for Defense Industry. • Special Award for Circular Economy Industry.
Ministry of Economic Affairs	Managers and Banks outstanding in implementing guarantee Financing: •Credit Guarantee Partner Award • Direct Guarantee Performance Award • Policy Promotion Award

Taiwan Ratings

Taiwan Ratings	Long term	Short term	Outlook
2017	twAA-	twA-1+	Stable
2018	twAA-	twA-1+	Stable
2019	twAA-	twA-1+	Stable

S&P

S&P	Long term	Short term	Outlook
2017	BBB+	A-2	Stable
2018	BBB+	A-2	Stable
2019	BBB+	A-2	Stable