Stock Code:2834

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Nine Months Ended September 30, 2023 and 2022

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

The independent auditors’ review report and the accompanying consolidated 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’ review report and consolidated financial statements, the Chinese version shall prevail.

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

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

台北市110615信義路5段7號68樓(台北101大樓) 電話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網址 Web home.kpmg/tw

Independent Auditors’ Review Report

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

Introduction

We have reviewed the accompanying consolidated balance sheets of Taiwan Business Bank, Ltd. and subsidiaries as of September 30, 2023 and 2022, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2023 and 2022, as well as the changes in equity and cash flows for the nine months ended September 30, 2023 and 2022, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Public Held Banks, the Regulations Governing the Preparation of Financial Reports by Securities Firms and International Accounting Standards (“ IASs” ) 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing of the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Taiwan Business Bank, Ltd. and subsidiaries as of September 30, 2023 and 2022, and of its consolidated financial performance for the three months and nine months ended September 30, 2023 and 2022, as well as its consolidated cash flows for the nine months ended September 30, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Public Held Banks, the Regulations Governing the Preparation of Financial Reports by Securities Firms and International Accounting Standards (“ IASs” ) 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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.

3-1

The engagement partners on the reviews resulting in this independent auditors’ review report are LEE, FENG HUI and TSAI, PEI JU.

KPMG

Taipei, Taiwan (Republic of China) November 2, 2023

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated statement of financial position, financial performance and its 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 review such consolidated financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ review report and the accompanying consolidated 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 consolidated financial statements, the Chinese version shall prevail.

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2023, December 31, 2022, and September 30, 2022

(Expressed in Thousands of New Taiwan Dollars)

September 30, 2023	December 31, 2022	December 31, 2022	September 30, 2022
Amount % $ 179,626,817 8 1,260,983 - 10,217,421 1 2,571,494 - 29,068,525 1 32,190 - 1,784,675,542 82 56,550,000 3 2,764,254 - 2,633,006 - 1,264,404 - 892,930 - 3,336,844 - 2,074,894,410 95 82,224,061 4 815,900 - 20,028,865 1 3,954,803 - 9,545,730 - (1,357,442) - 115,211,917 5 $ 2,190,106,327 100	Amount	%	Amount % 135,154,891 7 1,006,420 - 10,501,243 1 2,474,973 - 24,611,048 1 756,634 - 1,679,617,647 83 52,250,000 3 3,200,414 - 3,284,232 - 1,200,883 - 879,056 - 5,398,782 - 1,920,336,223 95 80,296,934 4 815,900 - 17,239,615 1 185,128 - 5,839,374 - (4,874,475) - 99,502,476 5 2,019,838,699 100
	194,966,177 1,131,025 9,925,525 2,462,991 21,493,131 1,101,015 1,673,580,263 52,250,000 2,910,581 2,676,102 1,239,919 879,056 3,763,082
	1,968,378,867

See accompanying notes to consolidated financial statements.

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2023 and 2022

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

For the nine months ended September 30 2023 2022 Amount % Amount % 36,483,256 151 22,871,902 110 (22,173,328) (92) (7,734,737) (37) 14,309,928 59 15,137,165 73 3,549,436 15 3,063,982 15 4,443,722 19 (225,852) (1) 1,234,660 5 1,462,641 7 131 - 665 - 274,102 1 987,068 5 (13,269) - 7,071 - (808) - (833) - 70,218 - 70,699 - 284,501 1 249,343 1 24,152,621 100 20,751,949 100 (2,215,048) (9) (1,604,071) (8) (7,321,178) (30) (6,856,107) (33) (949,255) (4) (922,288) (4) (3,659,920) (15) (2,879,724) (14) (11,930,353) (49) (10,658,119) (51) 10,007,220 42 8,489,759 41 1,638,331 7 1,399,858 7 8,368,889 35 7,089,901 34 3,229,733 13 (2,628,147) (13) - - - - 3,229,733 13 (2,628,147) (13) 727,540 3 1,989,805 10 (271,008) (1) (7,468,702) (36) 147,526 1 366,033 2 309,006 1 (5,844,930) (28) 3,538,739 14 (8,473,077) (41) 11,907,628 49 (1,383,176) (7) 1.02 0.86 1.01 0.86	For the nine months ended September 30 2023 2022 Amount % Amount % 36,483,256 151 22,871,902 110 (22,173,328) (92) (7,734,737) (37) 14,309,928 59 15,137,165 73 3,549,436 15 3,063,982 15 4,443,722 19 (225,852) (1) 1,234,660 5 1,462,641 7 131 - 665 - 274,102 1 987,068 5 (13,269) - 7,071 - (808) - (833) - 70,218 - 70,699 - 284,501 1 249,343 1 24,152,621 100 20,751,949 100 (2,215,048) (9) (1,604,071) (8) (7,321,178) (30) (6,856,107) (33) (949,255) (4) (922,288) (4) (3,659,920) (15) (2,879,724) (14) (11,930,353) (49) (10,658,119) (51) 10,007,220 42 8,489,759 41 1,638,331 7 1,399,858 7 8,368,889 35 7,089,901 34 3,229,733 13 (2,628,147) (13) - - - - 3,229,733 13 (2,628,147) (13) 727,540 3 1,989,805 10 (271,008) (1) (7,468,702) (36) 147,526 1 366,033 2 309,006 1 (5,844,930) (28) 3,538,739 14 (8,473,077) (41) 11,907,628 49 (1,383,176) (7) 1.02 0.86 1.01 0.86	For the nine months ended September 30 2023 2022 Amount % Amount % 36,483,256 151 22,871,902 110 (22,173,328) (92) (7,734,737) (37) 14,309,928 59 15,137,165 73 3,549,436 15 3,063,982 15 4,443,722 19 (225,852) (1) 1,234,660 5 1,462,641 7 131 - 665 - 274,102 1 987,068 5 (13,269) - 7,071 - (808) - (833) - 70,218 - 70,699 - 284,501 1 249,343 1 24,152,621 100 20,751,949 100 (2,215,048) (9) (1,604,071) (8) (7,321,178) (30) (6,856,107) (33) (949,255) (4) (922,288) (4) (3,659,920) (15) (2,879,724) (14) (11,930,353) (49) (10,658,119) (51) 10,007,220 42 8,489,759 41 1,638,331 7 1,399,858 7 8,368,889 35 7,089,901 34 3,229,733 13 (2,628,147) (13) - - - - 3,229,733 13 (2,628,147) (13) 727,540 3 1,989,805 10 (271,008) (1) (7,468,702) (36) 147,526 1 366,033 2 309,006 1 (5,844,930) (28) 3,538,739 14 (8,473,077) (41) 11,907,628 49 (1,383,176) (7) 1.02 0.86 1.01 0.86
2023	% 151 (92) 59 15 19 5 - 1 - - - 1 100 (9) (30) (4) (15) (49) 42 7 35 13 - 13 3 (1) 1 1 14 49 1.02 1.01	2022 Amount 22,871,902 (7,734,737) 15,137,165 3,063,982 (225,852) 1,462,641 665 987,068 7,071 (833) 70,699 249,343 20,751,949 (1,604,071) (6,856,107) (922,288) (2,879,724) (10,658,119) 8,489,759 1,399,858 7,089,901 (2,628,147) - (2,628,147) 1,989,805 (7,468,702) 366,033 (5,844,930) (8,473,077) (1,383,176)
Amount 36,483,256 (22,173,328) 14,309,928 3,549,436 4,443,722 1,234,660 131 274,102 (13,269) (808) 70,218 284,501 24,152,621 (2,215,048) (7,321,178) (949,255) (3,659,920) (11,930,353) 10,007,220 1,638,331 8,368,889 3,229,733 - 3,229,733 727,540 (271,008) 147,526 309,006 3,538,739 11,907,628

See accompanying notes to consolidated financial statements.

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Attributable to owners of parent

Share capital	Capital surplus		Retained earnings	Retained earnings		Other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) on financial assets measured at fair value through other comprehensive income	Other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) on financial assets measured at fair value through other comprehensive income	Total
Common stock		Legal reserve	Special reserve	Unappropriated retained earnings	Total	Exchange differences on translation of foreign financial statements
$ 77,431,952 - - - - - 2,864,982 - $ 80,296,934 $ 80,296,934 - - - - - - 1,927,127 - $ 82,224,061	815,900 - -	15,693,140 - -	185,128 - -	5,227,632 7,089,901 -	21,105,900 7,089,901 -	(1,807,265) - 1,591,844 1,591,844 - - - - (215,421) (597,833) - 582,032 582,032 - - - - - (15,801)	4,113,485 - (10,064,921) (10,064,921) - - - 1,292,382 (4,659,054) (3,171,842) - 2,956,707 2,956,707 - - - - (1,126,506) (1,341,641)	101,659,972 7,089,901 (8,473,077) (1,383,176) - (774,320) - - 99,502,476 104,107,258 8,368,889 3,538,739 11,907,628 - - (802,969) - - 115,211,917
	-	-	-	7,089,901	7,089,901
	- - - -	1,546,475 - - -	- - - -
	815,900	17,239,615	185,128
	815,900 - -	17,239,615 - -	185,128 - -
	-	-	-
	- - - - -	2,789,250 - - - -	- 3,769,675 - - -
	815,900	20,028,865	3,954,803

See accompanying notes to consolidated financial statements.

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Net income before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Provision for bad debt expense Net (gains) losses on financial assets or liabilities at fair value through profit or loss Interest expenses Net gain arising from derecognition of financial assets measured at amortised cost Interest income Net change in provisions for guarantee liabilities Net change in other provisions Share of loss of associates and joint ventures accounted for using equity method Loss on disposal of property and equipment Impairment loss (reversal of impairment loss) on financial assets Other items Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Decrease in due from the central bank and call loans to banks Increase (decrease) in financial assets at fair value through profit or loss Increase (decrease) in securities purchased under resell agreements Increase in receivables Increase in discounts and loans Decrease in other financial assets Increase in other assets Total changes in operating assets Changes in operating liabilities: (Decrease) increase in deposits from the central bank and banks Increase in financial liabilities at fair value through profit or loss Increase in notes and bonds issued under repurchase agreement Increase (decrease) in payable Increase in deposits and remittances Decrease in other financial liabilities Decrease in provisions for employee benefits Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Interest paid Income taxes paid Net Cash flows from operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortised cost Proceeds from repayments of financial assets at amortised cost Acquisition of investments accounted for using equity method Acquisition of property and equipment Proceeds from disposal of property and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets Net cash flows (used in) from investing activities Cash flows from (used in) financing activities: Increase (decrease) in due to the central bank and banks Proceeds from issuing bank notes payable Repayments of bank notes payable (Decrease) increase in guarantee deposits received Payment of lease liabilities Increase (decrease) in other liabilities Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the nine months ended September 30 2023 2022 $ 10,007,220 8,489,759 737,988 738,029 211,267 184,259 2,174,458 1,577,345 (755,743) 778,595 22,173,328 7,734,737 (131) (665) (36,483,256) (22,871,902) 52,831 (3,880) (11,679) 30,606 808 833 1,284 588 13,269 (7,071) (21) (3,805) (11,885,597) (11,842,331) 9,369,678 19,371,189 (36,499,480) 17,523,445 (6,616,862) 6,111,984 (1,249,413) (642,635) (40,547,557) (76,758,104) 10,329 4,567 (3,721,781) (5,720,648) (79,255,086) (40,110,202) (15,339,360) 32,614,576 167,468 1,364,115 108,503 414,280 2,226,331 (1,041,692) 111,095,279 10,960,825 (146,327) (1,164,880) (85,459) (165,151) 98,026,435 42,982,073 18,771,349 2,871,871 6,885,752 (8,970,460) 16,892,972 (480,701) 35,517,038 22,323,866 (17,953,238) (5,943,807) (2,474,659) (566,112) 31,982,113 15,333,246 (24,766,573) (11,034,427) (199,758,186) (161,576,822) 180,805,741 192,073,204 - (2,000) (414,772) (211,917) 58 72 94,905 (1,316,236) (229,740) (229,150) (44,268,567) 17,702,724 129,958 (49,255,170) 9,000,000 - (4,700,000) - (514,326) 3,748,393 (349,905) (327,301) 88,088 (1,089,984) 3,653,815 (46,924,062) 29,066 105,768 (8,603,573) (13,782,324) 49,260,262 39,444,032 $ 40,656,689 25,661,708
	2023 $ 10,007,220 737,988 211,267 2,174,458 (755,743) 22,173,328 (131) (36,483,256) 52,831 (11,679) 808 1,284 13,269 (21) (11,885,597) 9,369,678 (36,499,480) (6,616,862) (1,249,413) (40,547,557) 10,329 (3,721,781) (79,255,086) (15,339,360) 167,468 108,503 2,226,331 111,095,279 (146,327) (85,459) 98,026,435 18,771,349 6,885,752 16,892,972 35,517,038 (17,953,238) (2,474,659) 31,982,113 (24,766,573) (199,758,186) 180,805,741 - (414,772) 58 94,905 (229,740) (44,268,567) 129,958 9,000,000 (4,700,000) (514,326) (349,905) 88,088 3,653,815 29,066 (8,603,573) 49,260,262 $ 40,656,689

Cash flows from operating activities:
Net income before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense
Amortization expense
Provision for bad debt expense
Net (gains) losses on financial assets or liabilities at fair value through profit or loss
Interest expenses
Net gain arising from derecognition of financial assets measured at amortised cost
Interest income
Net change in provisions for guarantee liabilities
Net change in other provisions
Share of loss of associates and joint ventures accounted for using equity method
Loss on disposal of property and equipment
Impairment loss (reversal of impairment loss) on financial assets
Other items
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
Changes in operating assets:
Decrease in due from the central bank and call loans to banks
Increase (decrease) in financial assets at fair value through profit or loss
Increase (decrease) in securities purchased under resell agreements
Increase in receivables
Increase in discounts and loans
Decrease in other financial assets
Increase in other assets
Total changes in operating assets
Changes in operating liabilities:
(Decrease) increase in deposits from the central bank and banks
Increase in financial liabilities at fair value through profit or loss
Increase in notes and bonds issued under repurchase agreement
Increase (decrease) in payable
Increase in deposits and remittances
Decrease in other financial liabilities
Decrease in provisions for employee benefits
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow (outflow) generated from operations
Interest received
Interest paid
Income taxes paid
Net Cash flows from operating activities
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through other comprehensive income
Acquisition of financial assets at amortised cost
Proceeds from repayments of financial assets at amortised cost
Acquisition of investments accounted for using equity method
Acquisition of property and equipment
Proceeds from disposal of property and equipment
Decrease (increase) in refundable deposits
Acquisition of intangible assets
Net cash flows (used in) from investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in due to the central bank and banks
Proceeds from issuing bank notes payable
Repayments of bank notes payable
(Decrease) increase in guarantee deposits received
Payment of lease liabilities
Increase (decrease) in other liabilities
Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the nine months ended September 30
2023
2022
$ 10,007,220
8,489,759
737,988
738,029
211,267
184,259
2,174,458
1,577,345
(755,743)
778,595
22,173,328
7,734,737
(131)
(665)
(36,483,256)
(22,871,902)
52,831
(3,880)
(11,679)
30,606
808
833
1,284
588
13,269
(7,071)
(21)
(3,805)
(11,885,597)
(11,842,331)
9,369,678
19,371,189
(36,499,480)
17,523,445
(6,616,862)
6,111,984
(1,249,413)
(642,635)
(40,547,557)
(76,758,104)
10,329
4,567
(3,721,781)
(5,720,648)
(79,255,086)
(40,110,202)
(15,339,360)
32,614,576
167,468
1,364,115
108,503
414,280
2,226,331
(1,041,692)
111,095,279
10,960,825
(146,327)
(1,164,880)
(85,459)
(165,151)
98,026,435
42,982,073
18,771,349
2,871,871
6,885,752
(8,970,460)
16,892,972
(480,701)
35,517,038
22,323,866
(17,953,238)
(5,943,807)
(2,474,659)
(566,112)
31,982,113
15,333,246
(24,766,573)
(11,034,427)
(199,758,186)
(161,576,822)
180,805,741
192,073,204
-
(2,000)
(414,772)
(211,917)
58
72
94,905
(1,316,236)
(229,740)
(229,150)
(44,268,567)
17,702,724
129,958
(49,255,170)
9,000,000
-
(4,700,000)
-
(514,326)
3,748,393
(349,905)
(327,301)
88,088
(1,089,984)
3,653,815
(46,924,062)
29,066
105,768
(8,603,573)
(13,782,324)
49,260,262
39,444,032
$
40,656,689
25,661,708

2023
$ 10,007,220
737,988
211,267
2,174,458
(755,743)
22,173,328
(131)
(36,483,256)
52,831
(11,679)
808
1,284
13,269
(21)
(11,885,597)
9,369,678
(36,499,480)
(6,616,862)
(1,249,413)
(40,547,557)
10,329
(3,721,781)
(79,255,086)
(15,339,360)
167,468
108,503
2,226,331
111,095,279
(146,327)
(85,459)
98,026,435
18,771,349
6,885,752
16,892,972
35,517,038
(17,953,238)
(2,474,659)
31,982,113
(24,766,573)
(199,758,186)
180,805,741
-
(414,772)
58
94,905
(229,740)
(44,268,567)
129,958
9,000,000
(4,700,000)
(514,326)
(349,905)
88,088
3,653,815
29,066
(8,603,573)
49,260,262
$
40,656,689

See accompanying notes to consolidated financial statements.

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements September 30, 2023 and 2022

(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;
(c) International banking business; and
(d) Other relevant businesses as authorized by the relevant authority in-charge.

As of September 30, 2023, 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 16 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 September 30, 2023, December 31 and September 30, 2022, the Bank and subsidiaries has 5,677, 5,581 and 5,595 employees, respectively.

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

The consolidated financial statements were authorized for issuance by the board of directors on November 2, 2023.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Bank and subsidiaries has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2023:

●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

●Amendments to IAS 12 “ Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The Bank and subsidiaries has initially adopted the (following) new amendment, which do not have a significant impact on its consolidated financial statements, from May 23, 2023 ：

●Amendments to IAS 12 “International Tax Reform—Pillar Two Model Rules”
(b) The impact of IFRS issued by the FSC but not yet effective

The Bank and subsidiaries assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its consolidated financial statements:

●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IAS 1 “Non-current Liabilities with Covenants”
●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IAS 21 “Lack of Exchangeability”

(4) Summary of material accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Public Held Banks, the Regulations Governing the Preparation of Financial Reports by Securities Firms (hereinafter referred to as "the Regulations"), and IAS 34 “Interim Financial Reporting” endorsed and issued into effect by the FSC, and do not include all of the information required by the Regulations and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of annual consolidated financial statements.

Except as described below, the significant accounting policies adopted in the accompanying consolidated financial statements are the same as the consolidated financial statements as of and for the year ended December 31, 2022. Please refer to Note 4 of the consolidated financial statements as of and for the year ended December 31, 2022 for the detail disclosures of significant accounting policies.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Basis of consolidation

List of subsidiaries in the consolidated financial statements:

TBB International Leasing Co., Ltd. Taiwan Business Bank International Leasing Co., Ltd. TBB (Cambodia) Microfinance Institution Plc TBB Venture Capital Co., Ltd. TBB Consulting Co., Ltd.	Established location Main business scope	Shareholding (Holding %)	Shareholding (Holding %)
		September 30, 2023	December 31, 2022 September 30, 2022 100 100 100 100 100 100 100 100 100 100
	Taiwan Leasing business China Leasing business Cambodia Financial company Taiwan Investing business Taiwan Consulting business	100 100 100 100 100

(c) Income taxes

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of IAS 34 “Interim Financial Reporting”.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. Income tax expenses for the period and deferred income tax expenses are apportioned based on the proportion of expected income tax expenses for the year and deferred income tax expense. Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

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

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates, and assumptions 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.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 follows. Those assumptions and estimation have been updated to reflect the impact of economic uncertainty, such as natural disasters and inflation.

(a) Impairment losses on loans

The impairment of loans of the Bank and subsidiaries 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.

To evaluate the expected credit losses for 12-month and lifetime, the Bank and subsidiaries 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 and subsidiaries 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.

(b) Retirement benefit

The present value of the retirement benefit obligation is the actuarial result based on several assumptions. Any change of the assumptions may influence the carrying amount of the retirement benefit obligation.

The assumptions applied to determine net pension cost (revenue) include the discount rate. The Bank and subsidiaries determines the appropriate discount rate at the end of each year and apply it to calculate the present value of the future cash outflows which are to be paid to the retirement benefit obligation. To determine the appropriate discount rate, the Bank and subsidiaries should consider the interest rate of high-quality corporate bonds and government bonds. The currency of the retirement benefit shall be the same as that of the high-quality corporate bond or government bonds and the duration till maturity date shall comply with the duration of the related pension obligation. Other significant assumptions of retirement benefit obligation are based on the current market situation.

(c) Fair value of financial instruments

Financial instruments without active market or quoted market prices are measured using the valuation models or counterparty prices. When using the valuation model, all the inputs data are using the observable factors as much as possible and the inputs cannot be adjusted manually. In principle, the models used the factors can be long-term stably accessed in the market. In order to avoid the data source changed causing the gap of the financial report between the difference financial years, the models need to be adjusted and verified repeatedly to ensure the output can be measured the value of financial instruments properly.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash and cash equivalents
Petty cash and revolving funds Foreign currencies on hand Checks for clearing Due from other banks Total	September 30, 2023 $ 10,823,885 1,019,876 10,625,163 18,187,765 $ 40,656,689	December 31, 2022 14,042,641 988,995 11,029,785 23,198,841 49,260,262	September 30, 2022
			10,617,885 884,447 2,970,517 11,188,859
			25,661,708

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

Due from the Central Bank Deposits transferred to Central Bank Call loans to banks Trust fund indemnity reserve deposited Securities serving as trust fund indemnity reserve deposited Total	September 30, 2023 $ 88,298,930 52,586 50,840,318 120,000 (120,000) $ 139,191,834	December 31, 2022 85,208,065 39,664 63,310,015 110,000 (110,000) 148,557,744	September 30, 2022
			66,573,244 53,887 72,109,231 110,000 (110,000)
			138,736,362

As of September 30, 2023, December 31 and September 30, 2022, in accordance with the Banking Law and the Central Bank Law, the required reserve deposited by the Bank with the Central Bank amounted to $87,820,168, $84,763,295 and $66,136,238 of which $49,444,440, $47,637,794 and $46,176,086 respectively, were restricted and such restriction may only be lifted when the required reserve is adjusted to a lower amount.

As of September 30, 2023, December 31 and September 30, 2022, the Bank’ s subsidiaries and overseas branches, in compliance with the Central Bank’ s reserve requirement set by local authorities, deposited $139,195, $134,809 and $135,084 and in reserve, of which $48,869, $52,137 and $66,702 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 September 30, 2023, December 31 and September 30, 2022, the required reserve with the Central Bank amounted to $339,567, $309,961 and $301,922 respectively, and its use was unrestricted.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of September 30, 2023, December 31 and September 30, 2022, 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 September 30, 2023, December 31 and September 30, 2022, the Bank deposited marketable securities of $120,000, $110,000 and $110,000 as trust fund reserves.

Financial assets at fair value through profit or loss, mandatorily measured at fair value : Derivative instruments not used for hedging: Foreign exchange forward contracts Currency swap contracts Foreign currency options-buy Stock index futures Interest rate swap Non-derivative financial assets Commercial paper Listed stocks Unlisted stocks Beneficiary certificates Financial debentures Total	September 30, 2023 $ 11,116 2,052,211 13,593 26,872 3,406 67,094,930 955,197 450,932 484,508 200,000 $ 71,292,765	December 31, 2022 27,271 1,088,827 17,813 26,860 5,896 30,907,810 752,713 471,554 414,370 200,000 33,913,114	September 30, 2022
			15,070 590,643 11,780 29,457 4,649 19,303,993 687,563 379,463 1,846,834 200,000
			23,069,452

Derivative financial instruments are used for hedging foreign exchange risk and interest rate risk arising from operating, financing and investing activities. The Bank and subsidiaries 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)

Currency swaps contract Interest rate swaps contract Option contract - buy Option contract - sell Forward foreign exchange contract	September 30, 2023 $ 219,054,975 12,919,551 1,373,768 1,373,768 1,825,377	December 31, 2022 September 30, 2022 260,470,257 259,941,727 12,665,622 12,257,936 1,229,230 1,195,010 1,229,230 1,195,010 2,786,130 3,074,450

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Securities purchased under resell agreements

Securities under resell agreements Face amount Resell period Range of resell interest rate Resell price	September 30, 2023 $ 7,414,755 7,437,000 2023.10.02~2023.10.23 1.35%~1.38% $ 7,421,381	December 31, 2022 797,893 800,000 2023.01.05 1.24% 798,576	September 30, 2022 1,719,290
			1,720,000
			2022.10.03~2022.10.14
			1.10%-1.15% 1,719,835

(e) Receivables, net

Interest receivable Acceptances receivable Accrued income Accounts receivable Spot exchange receivable-foreign currencies Refinancing guaranty deposits Guaranteed proceeds receivable from refinacing Credit cards accounts receivable Receivable price of securities purchased for customers Settlement price Installment receivables and leases Other receivables Sub-total Less: Allowance for bad debts Total	September 30, 2023 $ 5,061,027 1,027,961 515,728 1,386,360 4,992 276 230 1,195,534 198,053 - 1,662,739 294,822 11,347,722 (114,253) $ 11,233,469	December 31, 2022 4,123,259 791,284 140,805 1,262,213 9,096 1,505 1,158 1,098,733 179,159 - 1,320,741 233,198 9,161,151 (104,042) 9,057,109	September 30, 2022
			3,379,918 995,843 267,154 1,334,016 10,273 1,161 1,200 1,032,802 270,096 56,671 1,229,551 406,400
			8,985,085 (105,389)
			8,879,696

The outstanding contract amount of financial assets that have been written off and still have recourse as of September 30, 2023, December 31 and September 30, 2022 were $83,693,069, $85,659,528 and $85,747,768 respectively.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The change in allowance for bad debts was as follows:

Beginning balance Provision (reversal) Write-off Foreign exchange Ending balance	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 104,042 10,730 (610) 91 $ 114,253	2022
		118,111 (16,235) - 3,513 105,389

(f) Discounts and loans, net

Import/export bills negotiated Bills and notes discounted Overdrafts Secured 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 Sub-total Less: Adjustment of discount and premium Less: Allowance for bad debts Total	September 30, 2023 $ 188,031 496,430 29,304 1,679,329 170,207,478 217,375,912 3,033,318 187,720,132 307,472,415 36,170,645 531,279,904 1,803,680 1,457,456,578 (274,020) (18,688,482) $ 1,438,494,076	December 31, 2022 111,492 631,574 30,781 934,845 175,758,201 222,836,626 2,672,159 182,824,935 293,811,922 36,127,193 500,599,070 2,154,653 1,418,493,451 (302,470) (18,078,616) 1,400,112,365	September 30, 2022 191,332 605,846 32,699 1,350,552 175,851,480 216,794,726 2,549,457 178,790,300 293,263,029 33,995,245 489,480,598 2,249,025 1,395,154,289 (318,837) (17,416,469) 1,377,418,983

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The change in allowance for bad debts was as follows:

Beginning balance Provision Transfer out Write-off Write-off recovered Foreign exchange Ending balance	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 18,078,616 2,185,743 (8,988) (2,750,986) 1,166,556 17,541 $ 18,688,482	2022
		15,576,817 1,609,331 (16,323) (1,848,635) 2,020,472 74,807 17,416,469

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

Investment in debt instruments measured at fair value through other comprehensive income`：` Government bonds Corporate bonds Financial debentures Negotiable certificates of deposit Subtotal Investment in equity instruments measured at fair value through other comprehensive income`：` Listed stocks Unlisted stocks Real Estate Investment Trust Subtotal Total	September 30, 2023 $ 51,432,985 77,453,246 36,948,928 631,617 166,466,776 15,425,671 5,683,441 141,163 21,250,275 $ 187,717,051	December 31, 2022 48,754,854 60,445,796 32,639,581 - 141,840,231 12,676,936 5,337,461 145,782 18,160,179 160,000,410	September 30, 2022
			47,541,581 63,705,531 32,505,819 -
			143,752,931
			9,232,754 5,332,883 145,513 14,711,150 158,464,081

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

The Bank and subsidiaries 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 (q) for more details.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Bank and subsidiaries 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 and subsidiaries designated the investments shown above as equity instrument as at fair value through other comprehensive income; therefore, the Bank and subsidiaries recognized $670,591, $761,463, $1,234,455 and $1,457,705, respectively as dividend revenue for the three months and nine months ended September 30, 2023 and 2022.

In which, the disposal equity instruments were recognized $427,162, $514,145, $485,932 and $734,393 as dividend revenue for the three months and nine months ended September 30, 2023 and 2022.

The Bank and subsidiaries 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 $8,118,481, $7,329,011, $9,463,218 and $11,503,063. And gains (losses) on disposal are $656,659, $(664,856), $1,126,506 and $(1,292,382) for the three months and nine months ended September 30, 2023 and 2022. Therefore, accumulated gains on disposal were transferred from other equity to retained earnings.

(iii) Please refer to Note 6(ap) for the credit risk (including the impairment in debt instruments) and market risk information.
(iv) The Bank and subsidiaries assessed the impairment of financial assets measured at fair value through other comprehensive income as of September 30, 2023 and 2022. The changes in allowance for credit losses attribute to the financial assets were as follows:

Beginning balance Provision Foreign exchange Ending balance	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 90,852 7,737 920 $ 99,509	2022
		87,792 4,488 2,069
		94,349

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Investment in debt instruments at amortized cost

Certificates of deposit with the Central Bank Government bonds Corporate bonds Financial debentures Negotiable certificates of deposit Subtotal Less: Accumulated impairment Total	September 30, 2023 $ 198,240,000 29,571,137 13,030,050 14,892,710 67,799 255,801,696 (80,624) $ 255,721,072	December 31, 2022 195,595,000 24,370,304 7,481,434 9,337,858 64,523 236,849,119 (74,872) 236,774,247	September 30, 2022
			206,880,000 23,363,755 5,808,774 12,508,316 66,822
			248,627,667 (76,698)
			248,550,969

The Bank and subsidiaries 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(ap) for credit risk.

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

Reserve for provisional seizure by the court, international card payment reserve, trust claim reserve and operating guaranty funds Overseas branches required reserve of overdraft guarantee Daylight overdraft guarantee (Certificates of deposit with the Central Bank) Guarantee for borrowing US dollars Guarantee for borrowing JPY dollars Sponsorship of Treasury Affairs Total	September 30, 2023 $ 1,022,100 67,799 2,000,000 29,000,000 200,000 - $ 32,289,899	December 31, 2022 854,500 64,523 2,000,000 29,000,000 200,000 20,000,000 52,119,023	September 30, 2022
			885,900 66,822 2,000,000 29,000,000 200,000 20,000,000
			52,152,722

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) The Bank and subsidiaries assessed the impairment of investment in debt instruments at amortized cost as of September 30, 2023 and 2022. The changes in allowance for credit losses attribute to these financial assets were as follows:

attribute to these financial assets were as follows:
Beginning balance Provision (reversal) Foreign exchange Ending balance	For the nine months ended September 30,
	2023 $ 74,872 5,532 220 $ 80,624	2022
		87,478 (11,559) 779
		76,698

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

For the three months ended September 30, 2023 The carrying amount at the date of derecognition Gain (Loss) on disposal $ 5,057 53 For the three months ended September 30, 2022 The carrying amount at the date of derecognition Gain (Loss) on disposal $ 22,211 155	For the nine months ended September 30, 2023	For the nine months ended September 30, 2023
	The carrying amount at the date of derecognition Gain (Loss) on disposal 12,136 131 For the nine months ended September 30, 2022	Gain (Loss) on disposal
		131
The carrying amount at the date of derecognition $ 22,211	The carrying amount at the date of derecognition 79,584	Gain (Loss) on disposal
		665

For the three months and nine months ended September 30, 2023 and 2022, it is due to the advanced redemption of the issuer.

(i) Investments accounted for using equity method
(i) Associates

The Bank and subsidiaries had significant influence on Media Talk Consultants Co., Ltd. by investing 2 million dollars on December 22, 2021 and holding 20% equity on it. The establishment registration was completed on January 19, 2022. In addition, since Media Fund 1, which was planned to be raised, was not as well funded as expected and the accumulated losses of Media Talk Consultants Co., Ltd. had exceeded 70% of the paid-in capital at the end of 2022, it has ceased its operation with effect from May 1, 2023, after prudent assessment.

The Bank and subsidiaries’ financial information for investments accounted for using the equity method are individually insignificant was as follows ：

Carrying amount of individually insignificant associates’ equity	September 30, 2023 $ -	December 31, 2022 808	September 30, 2022
			1,167

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Attributable to the Bank and subsidiaries: Net income Total comprehensive income	For the three months ended September 30, 2023 2022 $ - (610) $ - (610)	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ - $ -	2023 (808) (808)	2022 (833) (833)

(ii) Guarantee

As of September 30, 2023, the Bank and subsidiaries did not provide any investments accounted for using the equity method as collateral for its loans.

(j) Other financial assets, net

Overdue receivable Less: Allowance for bad debts, overdue receivable Total	September 30, 2023 $ 20,699 (12,088) $ 8,611	December 31, 2022 58,786 (48,471) 10,315	September 30, 2022 81,366 (57,176) 24,190

The change in allowance for bad debts was as follows:

Beginning balance Reversal Transfer in Write-off Written-off recovered Ending balance	For the nine months ended September 30, 2023 2022 $ 48,471 51,392 (17,614) (16,138) 8,988 16,323 (42,989) (8,680) 15,232 14,279 $ 12,088 57,176
	2023 $ 48,471 (17,614) 8,988 (42,989) 15,232 $ 12,088

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Property and equipment, net

September 30, 2023	Cost $ 6,746,952 8,127,756 2,711,143 264,166 664,923 205,129 53,832 276,499 $ 19,050,400 Cost $ 6,743,535 8,116,339 2,696,721 272,344 658,114 205,430 20,225 130,457 $ 18,843,165 Cost $ 6,743,535 8,067,437 2,748,573 273,012 655,393 206,066 30,078 114,146 $ 18,838,240	Revaluation increment 2,984,621 31,184 - - - - - - 3,015,805 Revaluation increment 2,986,161 31,184 - - - - - - 3,017,345 Revaluation increment 2,986,161 31,184 - - - - - - 3,017,345	Accumulated depreciation - 4,932,878 2,107,734 226,079 562,283 124,738 - - 7,953,712 Accumulated depreciation - 4,790,018 2,012,107 230,440 557,596 119,731 - - 7,709,892 Accumulated depreciation - 4,741,181 2,025,354 229,356 556,471 111,378 - - 7,663,740	Accumulated impairment 14,031 14,754 - - - - - - 28,785 Accumulated impairment 14,031 14,754 - - - - - - 28,785 Accumulated impairment 14,031 14,754 - - - - - - 28,785	Total 9,717,542 3,211,308 603,409 38,087 102,640 80,391 53,832 276,499
Land Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Leasehold improvements Construction in progress Prepayment for equipment Total December 31, 2022
					14,083,708
					Total 9,715,665 3,342,751 684,614 41,904 100,518 85,699 20,225 130,457
Land Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Leasehold improvements Construction in progress Prepayment for equipment Total September 30, 2022
					14,121,833
					Total 9,715,665 3,342,686 723,219 43,656 98,922 94,688 30,078 114,146
Land Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Leasehold improvements Construction in progress Prepayment for equipment Total
					14,163,060

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Change of cost

Land Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Leasehold improvements Construction in progress Prepayment for equipment Total Land Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Leasehold improvements Construction in progress Prepayment for equipment Total	January 1, 2023 $ 9,729,696 8,147,523 2,696,721 272,344 658,114 205,430 20,225 130,457 $ 21,860,510 January 1, 2022 $ 9,729,696 8,049,138 2,393,432 272,502 647,036 162,953 40,547 573,971 $ 21,869,275	Increase 3,417 11,417 126,636 5,459 23,660 20,289 34,807 231,472 457,157 Increase - 49,483 416,054 6,074 13,704 41,828 25,814 26,664 579,621	Decrease 1,540 - 114,545 14,105 17,730 20,777 1,200 86,054 255,951 Decrease - - 70,319 6,540 9,228 1,389 36,283 486,998 610,757	Foreign Exchange - - 2,331 468 879 187 - 624 4,489 Foreign Exchange - - 9,406 976 3,881 2,674 - 509 17,446	September 30, 2023
					9,731,573 8,158,940 2,711,143 264,166 664,923 205,129 53,832 276,499
					22,066,205
					September 30, 2022 9,729,696 8,098,621 2,748,573 273,012 655,393 206,066 30,078 114,146
					21,855,585

Change of depreciation

Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Leasehold improvements Total Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Leasehold improvements Total	January 1, 2023 $ 4,790,018 2,012,107 230,440 557,596 119,731 $ 7,709,892 January 1, 2022 $ 4,592,658 1,865,901 225,193 539,601 83,416 $ 7,306,769	Increase 142,860 206,909 9,422 21,791 26,121 407,103 Increase 148,523 221,402 9,958 22,940 28,119 430,942	Decrease - 113,372 14,075 17,591 20,777 165,815 Decrease - 69,793 6,500 9,134 1,389 86,816	Foreign Exchange - 2,090 292 487 (337) 2,532 Foreign Exchange - 7,844 705 3,064 1,232 12,845	September 30, 2023 4,932,878 2,107,734 226,079 562,283 124,738
					7,953,712
					September 30, 2022 4,741,181 2,025,354 229,356 556,471 111,378
					7,663,740

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Accumulated impairment

Land Buildings Total Land Buildings Total	January 1, 2023 $ 14,031 14,754 $ 28,785 January 1, 2022 $ 14,031 14,754 $ 28,785	Increase - - - Increase - - -	Decrease - - - Decrease - - -	Foreign Exchange - - - Foreign Exchange - - -	September 30, 2023 14,031 14,754
					28,785
					September 30, 2022 14,031 14,754
					28,785

When the Bank and subsidiaries 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.

As of September 30, 2023, 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 September 30, 2023, December 31 and September 30, 2022, land which was occupied all amounted to $5,496. 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.

(l) Right-of-use assets

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

September 30, 2023	Cost $ 1,982,606 26,178 89,264 13,000 $ 2,111,048 Cost $ 1,857,074 26,497 77,477 12,403 $ 1,973,451	Accumulated depreciation 798,096 26,162 39,725 6,334 870,317 Accumulated depreciation 706,516 26,408 22,728 5,206 760,858	Accumulated impairment - - - - - Accumulated impairment - - - - -	Total 1,184,510 16 49,539 6,666
Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Total December 31, 2022
				1,240,731
				Total 1,150,558 89 54,749 7,197
Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Total
				1,212,593

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2022	Cost $ 1,802,834 26,497 61,425 11,997 $ 1,902,753	Accumulated depreciation 667,683 26,327 19,865 4,943 718,818	Accumulated impairment - - - - -	Total 1,135,151 170 41,560 7,054
Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Total
				1,183,935

Change of cost

Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Total Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Total	January 1, 2023 $ 1,857,074 26,497 77,477 12,403 $ 1,973,451 January 1, 2022 $ 1,795,803 27,842 74,819 10,337 $ 1,908,801	Increase 335,765 - 13,353 2,756 351,874 Increase 485,938 - 35,483 2,147 523,568	Decrease 224,550 319 1,733 2,159 228,761 Decrease 488,246 1,345 49,246 487 539,324	Foreign Exchange 14,317 - 167 - 14,484 Foreign Exchange 9,339 - 369 - 9,708	September 30, 2023 1,982,606 26,178 89,264 13,000
					2,111,048
					September 30, 2022 1,802,834 26,497 61,425 11,997
					1,902,753

Change of depreciation

Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Total Buildings Machinery and equipment Transportation equipment Miscellaneous equipment Total	January 1, 2023 $ 706,516 26,408 22,728 5,206 $ 760,858 January 1, 2022 $ 683,580 27,272 45,301 3,353 $ 759,506	Increase 309,912 73 18,692 2,317 330,994 Increase 289,289 396 16,786 1,961 308,432	Decrease 224,546 319 1,741 1,189 227,795 Decrease 313,179 1,341 42,468 371 357,359	Foreign Exchange 6,214 - 46 - 6,260 Foreign Exchange 7,993 - 246 - 8,239	September 30, 2023 798,096 26,162 39,725 6,334
					870,317
					September 30, 2022 667,683 26,327 19,865 4,943
					718,818

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Other assets, net

Office supplies Prepayments Operating guarantee deposits and settlement fund Guarantee deposits paid Deferred assets Temporary payments and suspense accounts Proceeds of settlement and margin trading Other assets Total	September 30, 2023 $ 29,245 10,270,826 33,631 2,546,641 293 7,070,697 317 185,452 $ 20,137,102	December 31, 2022 29,019 8,168,184 31,753 2,641,545 128 4,675,748 60,139 176,432 15,782,948	September 30, 2022
			28,932 4,859,984 31,753 1,730,641 131 12,185,612 95,802 141,145
			19,074,000

(n) Deposits from the Central Bank and banks

Deposits from the Central Bank Due from the Central Bank Deposits from banks Call loans from banks Overdrafts on banks Deposits transferred from Chunghwa Post Co., Ltd. Total	September 30, 2023 $ 263,477 15,496,800 619,227 27,902,131 530,637 134,814,545 $ 179,626,817	December 31, 2022 232,262 14,133,500 705,261 31,549,533 1,084,076 147,261,545 194,966,177	September 30, 2022
			198,934 14,637,200 611,973 26,915,439 529,800 92,261,545
			135,154,891

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Due to the Central Bank and banks

Agricultural Bank of Taiwan Mega International Commercial Bank First Commercial Bank Bank of Kaohsiung Co.,Ltd. (OBU) Sunny Commercial Bank (OBU) First Commercial Bank Chang Hwa Commercial Bank ,Ltd. (OBU) Total Unused credit lines			September 30, 2023
	Currency TWD TWD TWD USD USD USD USD	Interest Rate 1.584% 1.750% 1.750%~1.875% 7.240% 6.329%~6.629% 7.20% 7.130%	Maturity Date 2024.10.13 2024.09.15 2023.10.25~2024.02.08 2026.06.10 2024.07.05 2023.11.18 2024.04.27	Original Amount NTD Amount 350,000 $ 350,000 30,000 30,000 90,000 90,000 2,500 80,713 20,000 645,700 1,000 32,285 1,000 32,285 $ 1,260,983 $ 1,732,790

Agricultural Bank of Taiwan First Commercial Bank Bank of Kaohsiung Co., Ltd. (OBU) Sunny Commercial Bank (OBU) KGI Commercial Bank Co., Ltd. (OBU) Bank of Panshin Total Unused credit lines			December 31, 2022
	Currency TWD TWD USD USD USD USD	Interest Rate 1.332% 1.450%~1.575% 5.50% 5.642%~5.887% 5.326%~6.261% 6.60%	Maturity Date 2023.10.13 2023.2.16~2023.4.25 2023.6.10 2023.8.4~2023.8.26 2023.1.10~2023.4.7 2023.5.10~2023.8.18	Original Amount NTD Amount 100,000 $ 100,000 140,000 140,000 10,000 307,250 9,000 276,525 7,000 215,075 3,000 92,175 $ 1,131,025 $ 1,447,949

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2022 Currency Interest Rate Maturity Date Original Amount NTD Amount First Commercial Bank TWD 1.115%-1.24% 2023.2.16 20,000 $ 20,000 Bank of Kaohsiung Co., Ltd. (OBU) USD 3.955% 2023.6.10 10,000 318,200 Sunny Commercial Bank (OBU) USD 4.053%-4.584% 2022.08.04~2023.08.26 10,000 318,200 KGI Commercial Bank Co., Ltd. (OBU) USD 3.89%-4.6% 2023.01.10~2023.06.02 8,000 254,560 Bank of Panshin USD 4.39%-4.5% 2023.05.10-2023.08.18 3,000 95,460 Total $ 1,006,420 Unused credit lines $ 1,474,396 Financial liabilities at fair value through profit or loss September 30, 2023 December 31, 2022 September 30, 2022 Financial liabilities designated at fair value through profit or loss`：` Financial debentures $ 9,870,309 9,367,595 9,579,939 Financial liabilities held for trading`：` Derivative instruments not used for hedging Foreign exchange forward contracts 26,696 10,932 116,998 Currency swap contracts 304,906 524,421 788,587 Foreign currency option-sell 13,642 17,864 11,865 Interest rate contract 1,868 4,713 3,854 Total $ 10,217,421 9,925,525 10,501,243			September 30, 2022
					9,579,939 116,998 788,587 11,865 3,854
					10,501,243

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

Please refer to 6(t) 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 September 30, 2023, December 31 and September 30, 2022.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Notes and bonds issued under repurchase agreement

Assets	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023
	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	$ 2,785,431	2,571,494	2,579,532	Prior to July 1, 2024

Assets	December 31, 2022
	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	$ 2,616,634	2,462,991	2,472,765	Prior to July 1, 2024

Assets	September 30, 2022
	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	$ 2,631,083	2,474,973	2,483,792	Prior to July 1, 2024

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Payables

Accrued interest Accounts payable Acceptances Accrued expenses Collection payable Deposits received from securities borrowers Guaranteed price deposits received from securities borrowers Spot exchange payable, foreign currencies Other payables Prices payable of securities sold for customers Dividends payable Settlement payable Other Total Deposits and remittances Savings deposits Time deposits Demand deposits Checking account deposits Remittances Total	September 30, 2023 $ 8,642,742 10,646,378 1,056,508 3,586,613 3,215,218 57,123 67,281 7,983 787,918 98,320 805,690 92,229 4,522 $ 29,068,525 September 30, 2023 $ 758,412,480 541,740,754 458,762,494 25,512,397 247,417 $ 1,784,675,542	December 31, 2022 4,435,668 11,042,992 802,824 3,277,743 676,888 116,196 108,289 13,625 834,692 137,155 2,724 40,444 3,891 21,493,131 December 31, 2022 737,659,280 436,771,576 465,429,114 33,292,182 428,111 1,673,580,263	September 30, 2022
			4,249,910 2,984,166 1,012,420 2,878,896 12,057,335 103,705 113,998 10,222 874,533 318,472 2,725 - 4,666
			24,611,048
			September 30, 2022
			722,457,825 469,418,587 465,403,251 21,817,668 520,316
			1,679,617,647

(s) Deposits and remittances

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Bank notes payable

Bonds		T	erms of Transactions		Bond Is	sued
	Issue date	Maturity date	Interest Rate & repayment	Type		Amount
2015-2A 2015-2B 2016-2 2017-1A 2017-1B 2017-1C 2017-2 2018-2 2019-1A 2019-1B 2020-1 2020-2	08/31/2015 08/31/2015 12/20/2016 03/28/2017 03/28/2017 03/28/2017 05/23/2017 08/20/2018 03/21/2019 03/21/2019 03/25/2020 08/13/2020	08/31/2023 08/31/2025 12/20/2023 03/28/2024 03/28/2025 03/28/2027 05/23/2027 08/20/2028 03/21/2026 03/21/2029 03/25/2030 None	The debentures bear an annual interest rate of 2.05%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity. 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. The debentures bear an annual interest rate of 1.40%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity. The debentures bear an annual interest rate of 1.50%. Simple interest is accrued and paid annually. The principal will be repaid in full at maturity. 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. 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. 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. 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. 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. 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. 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. 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 .	Unsecured subordinated long-term financial debentures `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` Perpetual non- accumulated subordinated financial debentures	September 30, 2023 $ - 300,000 2,700,000 390,000 250,000 3,360,000 1,300,000 5,450,000 1,000,000 4,800,000 10,000,000 10,000,000	December 31, 2022 September 30, 2022 4,700,000 4,700,000 300,000 300,000 2,700,000 2,700,000 390,000 390,000 250,000 250,000 3,360,000 3,360,000 1,300,000 1,300,000 5,450,000 5,450,000 1,000,000 1,000,000 4,800,000 4,800,000 10,000,000 10,000,000 10,000,000 10,000,000

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Bonds		T	erms of Transactions		Bond I	ssued
	Issue date	Maturity date	Interest Rate & repayment	Type		Amount
2021-1 2023-1 2023-2	11/17/2021 06/20/2023 09/27/2023	None 06/20/2030 09/27/2025	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 . 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. 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.	Perpetual non- accumulated subordinated financial debentures Unsecured subordinated long-term financial debentures Unsecured senior financial debentures	September 30, 2023 $ 8,000,000 8,000,000 1,000,000 $ 56,550,000	December 31, 2022 8,000,000 - - 52,250,000	September 30, 2022
							8,000,000 - -
							52,250,000

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		T	erms of Transactions		Bond I	ssued
	Issue date	Maturity date	Interest Rate & repayment	Type		Amount
2017-3 2018-3	10/27/2017 09/27/2018	10/27/2047 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. 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 `〞` Valuation adjustment	September 30, 2023 $ 3,874,200 5,811,300 184,809 $ 9,870,309	December 31, 2022 3,687,000 5,530,500 150,095 9,367,595	September 30, 2022
							3,818,400 5,727,600 33,939
							9,579,939

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Fair value of corporate bonds Fair value increase not attributable to changes in market conditions that give rise to market risk Difference between the carrying value and the amount payable at the end of the contract term Other financial liabilities Cumulative earnings on appropriated loans fund	September 30, 2023 $ 9,870,309 301,388 184,809 September 30, 2023 $ 2,764,254	December 31, 2022 9,367,595 170,133 150,095 December 31, 2022 2,910,581	September 30, 2022
			9,579,939 248,230 33,939 September 30, 2022
			3,200,414

(u) Other financial liabilities

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.

(v) Provisions

Provision for guarantee liabilities Provision for loan commitments Indeterminate indemnity provisions Provision for employee benefits Total	September 30, 2023 $ 290,054 89,059 75,181 2,178,712 $ 2,633,006	December 31, 2022 237,076 100,236 74,619 2,264,171 2,676,102	September 30, 2022
			254,800 103,861 73,181 2,852,390
			3,284,232

Change of provision

Provision for guarantee liabilities Provision for loan commitments Indeterminate indemnity provisions Provision for employee benefits Total	January 1, 2023 $ 237,076 100,236 74,619 2,264,171 $ 2,676,102	Increase 52,831 - 562 150,710 204,103	Decrease - 12,241 - 191,537 203,778	Use - - - 44,632 44,632	Foreign exchange 147 1,064 - - 1,211	September 30, 2023
						290,054 89,059 75,181 2,178,712
						2,633,006

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Provision for guarantee liabilities Provision for loan commitments Indeterminate indemnity provisions Provision for employee benefits Total	January 1, 2022 $ 258,065 71,423 73,181 3,017,541 $ 3,420,210	Increase - 30,606 - 158,815 189,421	Decrease 3,880 - - 280,420 284,300	Use - - - 43,546 43,546	Foreign exchange 615 1,832 - - 2,447	September 30, 2022
						254,800 103,861 73,181 2,852,390
						3,284,232

Please refer to Note 6(aa) for the information with regard to provision for employee benefits shown above.

(w) Lease liabilities

Lease liabilities as follows:

Less than one year More than one year	September 30, 2023 $ 374,636 $ 889,768	December 31, 2022 387,320 852,599	September 30, 2022
			387,173
			813,710

The amounts recognized in profit or loss were as follows:

For the three months ended September 30, 2023 2022 $ 4,283 4,302 $ 5,142 4,739 $ 4,650 4,113	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 4,283 $ 5,142 $ 4,650	2023 13,016 13,527 12,744	2022
		12,453
		12,406
		11,621

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

Total cash outflow for leases	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 376,176	2022
		351,328

(i) Real estate leases

The Bank and subsidiaries 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 and subsidiaries 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.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

The Bank and subsidiaries leased machinery and transportation equipment with lease terms of one to four years. In some cases, the Bank and subsidiaries 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 and subsidiaries has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short term.

(x) Other liabilities

Advance interest receipts Unearned revenue Other advance receipts Guarantee deposits received Others Total	September 30, 2023 $ 4,735 393,876 56,622 2,858,449 23,162 $ 3,336,844	December 31, 2022 6,396 315,153 62,411 3,372,775 6,347 3,763,082	September 30, 2022
			5,680 298,286 71,354 5,016,621 6,841
			5,398,782

(y) Equity

(i) Common stock

As of September 30, 2023, December 31 and September 30, 2022, the Bank’ s authorized capital were all $100,000,000, and the paid-in capital for common shares of the Bank were $82,224,061, $80,296,934 and $80,296,934, respectively, with a par value of $10 per share. The outstanding shares were 8,222,406, 8,029,693 and 8,029,693 thousand shares, respectively.

Pursuant to the resolution approved by the regular stockholders’ meeting of the Bank on June 16, 2023, the Bank increased its capital from the retained earnings by $1,927,127 and issued 192,713 thousand shares. The capital increase has been approved by the Financial Supervisory Commission and came into effect on August 16, 2023. The base date of the capital increase was September 8, 2023. The Bank has completed the alternation of registered capital amount on September 27, 2023.

Pursuant to the resolution approved by the regular stockholders’ meeting of the Bank on June 17, 2022, the Bank increased its capital from the retained earnings by $2,864,982 and issued 286,498 thousand shares. The capital increase has been approved by the Financial Supervisory Commission and came into effect on July 12, 2022. The base date of the capital increase was August 8, 2022. The Bank has completed the alteration of the registered capital amount on August 26, 2022.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Capital surplus

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

Additional paid-in capital	September 30, 2023 $ 815,900	December 31, 2022 815,900	September 30, 2022
			815,900

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.

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.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

On June 16, 2023 and June 17, 2022, the shareholder's meetings resolved to distribute the 2022 and 2021 earnings, respectively. The earnings were appropriated as follows:

Dividends to common shareholders Stock dividends Cash dividends Total	2022 Distribution rate (NT dollar) Amount $ 0.24 1,927,127 0.10 802,969 $ 2,730,096	2021	2021
		Distribution rate (NT dollar) 0.37 0.10	Amount
			2,864,982 774,320
			3,639,302

(iv) Other equity interest

January 1, 2023 Share of other comprehensive income of associates and joint ventures accounted for using equity method Investment in financial assets measured at fair value through other comprehensive income -Unrealized amount -Realized amount Foreign currency translation difference`－`Exchange difference Disposal of investments in equity instruments measured at fair value through other comprehensive income September 30, 2023 January 1, 2022 Share of other comprehensive income of associates and joint ventures accounted for using equity method Investment in financial assets measured at fair value through other comprehensive income -Unrealized amount -Realized amount Foreign currency translation difference`－`Exchange difference Disposal of investments in equity instruments measured at fair value through other comprehensive income September 30, 2022	Unrealized gains from financial assets measured at fair value through other comprehensive income $ (3,171,842) (88) 2,957,000 (205) - (1,126,506) $ (1,341,641) $ 4,113,485 (2,803) (10,057,182) (4,936) - 1,292,382 $ (4,659,054)	Exchange differences on translation of foreign financial statements (597,833) 280 - - 581,752 - (15,801) (1,807,265) 20,701 - - 1,571,143 - (215,421)	Total (3,769,675) 192 2,957,000 (205) 581,752 (1,126,506) (1,357,442) 2,306,220 17,898 (10,057,182) (4,936) 1,571,143 1,292,382 (4,874,475)

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(z) Income taxes

(i) The income tax expenses were as follows:

For the three months ended September 30,
2023
2022
Current tax expense
Current period
$ 582,110
763,759
Adjustment for prior
period
-
-
Additional surtax on
undistributed retained
earnings
-
-
Income Basic Tax
3,753
-
585,863
763,759
Deferred tax expense
Origination and
reversal of temporary
different
(180,480)
(275,390)
Changes in
unrecognized
deductible temporary
different
880
-
Income tax expenses
$
406,263
488,369

For the nine months ended September 30,
2023
2022
1,667,666
1,599,629
60,929
5,401
1,949
-
15,024
-
1,745,568
1,605,030
(110,056)
(205,172)
2,819
-
1,638,331
1,399,858

2023
1,667,666
60,929
1,949
15,024
1,745,568
(110,056)
2,819
1,638,331

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

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements Losses on debt instruments at fair value through other comprehensive income Total	For the three months ended September 30, 2023 2022 $ 121,201 201,893 785 (4,780) $ 121,986 197,113	For the nine months ended September 30, 2023 2022 145,508 397,961 2,018 (31,928) 147,526 366,033
	2023 $ 121,201 785 $ 121,986	2023 145,508 2,018 147,526

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Uncertainty over income tax treatments

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

(iv) The Bank’s income tax returns through 2017, 2019 and 2021 have been assessed by the Tax Authority.
(v) The income tax returns of the subsidiaries TBB Venture Capital Co., Ltd., TBB Consulting Co., Ltd., and TBB International Leasing Co., Ltd. have been assessed until 2021 by the Tax Authority.

(aa) Provision for employee benefit

As of September 30, 2023, December 31 and September 30, 2022, the balance of provision for employee benefit of the Bank and subsidiaries was as follows:

Defined benefit plan Employee deposits with favorable rate	September 30, 2023 $ 1,096,471 1,082,241 $ 2,178,712	December 31, 2022 1,211,918 1,052,253 2,264,171	September 30, 2022
			1,771,098 1,081,292
			2,852,390

(i) Defined benefit plan

In 2022, there is apparently no evidence of any material market volatility, material curtailment, reimbursement and settlement or other material one-time events. Therefore, the pension cost for the interim periods are assessed and discovered at the actuarial costs that were determined on December 31, 2022 and 2021 by the Bank and subsidiaries.

The Bank and subsidiaries recognized the expenses amounting to $40,245, $42,959, $120,766 and $128,872 for the three months and nine months ended September 30, 2023 and 2022, respectively.

(ii) Defined contribution plan

The pension costs incurred from the contributions to the Bureau of the Labor Insurance, oversea branches, and local authorities responsible for the Bank’s subsidiaries amounted to $46,325, $42,860, $138,311 and $127,190 for the three months and nine months ended September 30, 2023 and 2022, respectively.

(iii) Employee deposit with favorable rate

In 2022, there is apparently no evidence of any material market volatility, material curtailment, reimbursement and settlement or other material one-time events. Therefore, the interest cost for the interim periods are assessed and disclosed at the actuarial costs that were determined on December 31, 2022 and 2021 by the Bank and subsidiaries.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Bank and subsidiaries recognized expenses amounting to $64,269, $64,043, $192,292 and $190,768 for the three months and nine months ended September 30, 2023 and 2022, respectively.

(ab) Earnings per share

For the three months ended September 30, 2023 2022 $ 2,166,532 2,929,257 8,222,406 8,222,406 $ 0.26 0.36 27,358 14,947 8,249,764 8,237,353 $ 0.26 0.36	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 2,166,532 8,222,406 $ 0.26 27,358 8,249,764 $ 0.26	2023 8,368,889 8,222,406 1.02 59,432 8,281,838 1.01	2022
		7,089,901
		8,222,406
		0.86
		38,880
		8,261,286
		0.86

Note 1: The earnings per share for the three months and nine months ended September 30, 2022 has applied retrospective adjustments.

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

(ac) Employees and directors' remuneration

In accordance with the articles of incorporation the Bank should contribute 1% to 6% of the profit as employee compensation and less than 0.6% as directors' remuneration when there is profit for the year. However, if the Bank has accumulated deficits, the profit should be reserved to offset the deficit.

For the three months and nine months ended September 30, 2023 and 2022, the estimated employee remuneration were $361,125, $218,102, $784,497 and $478,411, and the estimated directors' remuneration were $27,614, $20,972, $65,459 and $49,079, 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.

For the years ended December 31, 2022 and 2021, the employees' remuneration was accrued at $451,457 and $371,068 and the directors' remuneration was accrued at $75,243 and $37,107, respectively.

There is no difference with actual distribution for 2022 and 2021 remuneration. The information is available at the Market Observation Post System website.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ad) Net interest revenue

For the three months ended September 30, 2023 2022 $ 3,479,591 2,275,216 6,562,462 5,146,890 1,394 1,391 6,855 3,495 9,589 4,832 524,459 338,224 120,744 56,856 366,367 341,546 1,302,665 714,548 8,623 8,851 42,685 41,971 24,054 6,084 62,539 29,755 96,287 88,947 12,608,314 9,058,606 7,098,142 3,188,338 329 473 570,149 332,271 225,494 191,546 12,746 2,833 37,603 25,802 7,944,463 3,741,263 $ 4,663,851 5,317,343	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 3,479,591 6,562,462 1,394 6,855 9,589 524,459 120,744 366,367 1,302,665 8,623 42,685 24,054 62,539 96,287 12,608,314 7,098,142 329 570,149 225,494 12,746 37,603 7,944,463 $ 4,663,851	2023 9,731,438 18,974,976 4,899 19,009 25,663 1,526,164 346,875 1,595,632 3,366,517 25,931 347,160 60,385 159,961 298,646 36,483,256 19,929,623 538 1,504,848 607,215 25,714 105,390 22,173,328 14,309,928	2022
		5,281,649 13,571,062 2,944 9,923 9,655 816,482 120,852 689,260 1,846,120 26,673 172,488 24,293 76,189 224,312
		22,871,902
		6,624,559 1,438 470,233 568,391 4,977 65,139
		7,734,737
		15,137,165

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ae) Net service fee revenue

For the three months ended September 30, 2023 2022 $ 16,629 16,242 10,290 11,203 2,330 2,935 2,326 2,587 634 194 679 237 143,070 122,214 69,592 61,126 7,030 7,391 28,061 26,669 40,739 27,303 696,713 432,589 49,428 47,595 19,245 20,731 982 921 243,558 209,681 49,183 53,560 1,380,489 1,043,178 7,125 7,120 50,182 45,287 476 236 340 396 30,112 16,139 2,166 2,096 1,242 1,355 15,763 14,104 984 1,948 - 7 5,846 5,738 114,236 94,426 $ 1,266,253 948,752	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 16,629 10,290 2,330 2,326 634 679 143,070 69,592 7,030 28,061 40,739 696,713 49,428 19,245 982 243,558 49,183 1,380,489 7,125 50,182 476 340 30,112 2,166 1,242 15,763 984 - 5,846 114,236 $ 1,266,253	2023 48,610 30,993 7,527 6,059 1,662 1,849 384,841 197,604 19,817 82,887 122,422 1,970,108 145,294 57,277 2,307 652,825 157,599 3,889,681 23,337 143,018 1,212 1,019 88,221 6,149 3,660 45,565 10,018 1 18,045 340,245 3,549,436	2022
		47,627 36,661 9,943 7,209 870 1,009 463,908 184,128 27,053 81,648 76,176 1,161,322 151,977 63,758 2,198 655,202 375,598
		3,346,287
		21,823 131,644 596 1,187 49,146 6,592 4,135 45,165 4,813 27 17,177
		282,305
		3,063,982

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Valuation gains (losses): Corporate bonds Financial debentures Listed stocks and emerging stocks Unlisted stocks Beneficiary certificates Private fund Commercial paper Derivative financial instruments Subtotal Disposal gains (losses): Corporate bonds Financial debentures Listed stocks and emerging stocks Unlisted stocks Beneficiary certificates Commercial paper Derivative financial instruments Subtotal Dividend revenue Interest income Total	For the three months ended September 30, 2023 2022 $ - - (356,407) (309,179) (153,335) 62,773 17,184 40,170 (1,981) 3,448 (2,921) 14,643 (3,796) 8,299 551,069 1,156 49,813 (178,690) - - - - 28,157 (12,896) - - 2,296 (5,821) (531) 352 1,024,202 408,655 1,054,124 390,290 12,381 6,325 235,803 45,240 $ 1,352,121 263,165	For the nine months ended September 30, 2023 2022 - (5,636) (346,107) (326,185) 25,117 143,000 (42,251) 83,060 1,473 (4,562) (11,186) 3,796 (21,663) 9,456 1,150,360 (681,524) 755,743 (778,595) - 6,437 - (4,097) 174,696 (34,902) (17,017) (270) 6,202 (23,173) (99) (3,196) 2,889,921 476,028 3,053,703 416,827 28,397 14,603 605,879 121,313 4,443,722 (225,852)
	2023 $ - (356,407) (153,335) 17,184 (1,981) (2,921) (3,796) 551,069 49,813 - - 28,157 - 2,296 (531) 1,024,202 1,054,124 12,381 235,803 $ 1,352,121	2023 - (346,107) 25,117 (42,251) 1,473 (11,186) (21,663) 1,150,360 755,743 - - 174,696 (17,017) 6,202 (99) 2,889,921 3,053,703 28,397 605,879 4,443,722

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

Gain on disposal of government bonds Gain on disposal of corporate bonds Loss on disposal of financial debentures Dividend revenue Total	For the three months ended September 30, 2023 2022 $ - 276 61 120 - (72) 670,591 761,463 $ 670,652 761,787	For the nine months ended September 30, 2023 2022 - 4,480 205 626 - (170) 1,234,455 1,457,705 1,234,660 1,462,641
	2023 $ - 61 - 670,591 $ 670,652	2023 - 205 - 1,234,455 1,234,660

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Investment in debt instrument measured at fair value through other comprehensive income Investment in debt instrument measured at amortized cost Total	For the three months ended September 30, 2023 2022 $ 2,164 1,345 (3,340) 4,102 $ (1,176) 5,447	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 2,164 (3,340) $ (1,176)	2023 (7,737) (5,532) (13,269)	2022
			(4,488) 11,559 7,071

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

Investment income - Media Talk Consulting Co., Ltd.	For the three months ended September 30, 2023 2022 $ - (610)	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ -	2023 (808)	2022 (833)

(aj) Net other revenue other than interest income

Rental revenue of operating assets Rental expense of operating assets Loss on disposal and retirement of property and equipment Loss of account error Gold deposit book Other operating expense Other miscellaneous income Total	For the three months ended September 30, 2023 2022 $ 2,440 2,026 - - (655) (287) (21) (29) 250 641 (2,267) (9,809) 8,609 13,917 $ 8,356 6,459	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 2,440 - (655) (21) 250 (2,267) 8,609 $ 8,356	2023 7,535 (435) (1,284) (109) 1,197 (32,970) 96,284 70,218	2022
			6,157 (385) (588) (71) 2,213 (28,878) 92,251 70,699

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

Discounted and loans Call loans to banks Receivables and other financial assets Subtotal Provisions for guarantee liabilities Provisions for loan commitments Total	For the three months ended September 30, 2023 2022 $ 1,371,535 679,517 (1,216) (7,677) (438) (14,183) 1,369,881 657,657 22,014 (9,870) (6,360) (9,175) $ 1,385,535 638,612	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 1,371,535 (1,216) (438) 1,369,881 22,014 (6,360) $ 1,385,535	2023 2,185,743 (4,401) (6,884) 2,174,458 52,831 (12,241) 2,215,048	2022
			1,609,331 387 (32,373) 1,577,345 (3,880) 30,606 1,604,071

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(al) Employee benefits expenses

Employee benefits expenses
Salary expense Labor and health insurance Pension expense Directors' remuneration Other employee benefits Total	For the three months ended September 30, 2023 2022 $ 2,173,422 2,029,799 139,720 134,972 86,417 85,706 31,541 24,711 169,602 168,639 $ 2,600,702 2,443,827	For the nine months ended September 30,
	2023 $ 2,173,422 139,720 86,417 31,541 169,602 $ 2,600,702	2023 6,044,322 430,656 258,572 76,889 510,739 7,321,178	2022
			5,626,616 406,862 255,609 60,371 506,649
			6,856,107

(am) Depreciation and amortization expense

For the three months ended September 30, 2023 2022 $ 135,112 136,429 110,160 103,762 72,666 64,775 47 37 $ 317,985 305,003	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 135,112 110,160 72,666 47 $ 317,985	2023 406,994 330,994 211,212 55 949,255	2022
		429,597 308,432 184,215 44
		922,288

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(an) Other general and administrative expense

For the three months ended September 30, 2023 2022 $ 3 26 32,604 29,839 86,320 59,022 10,728 8,305 129,136 50,981 149,787 54,146 97,729 93,661 69,083 61,951 36,525 34,693 9,792 8,852 522,243 414,251 178,868 158,735 15,592 10,997 14,997 15,246 21,294 19,950 $ 1,374,701 1,020,655	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 3 32,604 86,320 10,728 129,136 149,787 97,729 69,083 36,525 9,792 522,243 178,868 15,592 14,997 21,294 $ 1,374,701	2023 261 69,756 210,746 26,298 238,965 301,668 321,772 191,455 106,805 26,271 1,515,961 510,000 38,170 47,128 54,664 3,659,920	2022
		30 65,145 183,131 19,939 137,817 183,648 281,833 167,856 86,784 24,027 1,132,747 461,434 33,683 49,604 52,046
		2,879,724

(ao) 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 and subsidiaries 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. AND SUBSIDIARIES Notes to the Consolidated 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 and the beneficiary certificates, government bonds and the derivative financial instruments with public quote inactive market processed by the Bank and subsidiaries 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 with lower trade volume such as government bonds, corporate bonds, financial debentures, convertible corporate bonds and derivative instruments, including financial debentures the Bank and subsidiaries issued are 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 their fair market value cannot be directly calculated. The equity instruments with no active market which the Bank and subsidiaries invested are Level 3.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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		September	30, 2023
	Total $ 1,406,129 200,000 67,579,438 21,109,112 165,835,159 772,780 9,870,309 2,107,198 347,112	Level 1 955,197 - 298,265 15,425,671 95,578,625 141,163 - 26,872 -	Level 2 Level 3 - 450,932 200,000 - 67,094,930 186,243 - 5,683,441 70,256,534 - 631,617 - 9,870,309 - 2,080,326 - 347,112 -
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 Security Investments Bond Investments Others Financial assets at fair value through other comprehensive income Security Investments Bond Investments Others Financial liabilities at fair value through profit or loss Financial liabilities designated at fair value through profit or loss Derivative financial assets and liabilities
Assets: Financial assets at fair value through profit or loss Liabilities: Financial liabilities at fair value through profit or loss

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Assets and Liabilities	December 31, 2022	December 31, 2022
	Level 1 752,713 - 250,691 12,676,936 91,536,068 145,782 - 26,860 -	Level 2 Level 3 - 471,554 200,000 - 30,907,810 163,679 - 5,337,461 50,304,163 - - - 9,367,595 - 1,139,807 - 557,930 -
Instruments measured at fair value on a recurring basis
Non-derivative financial assets and liabilities:

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Assets and Liabilities	September	30, 2022
	Level 1 687,563 - 1,679,319 9,232,754 93,730,674 145,513 - 29,457 -	Level 2 Level 3 - 379,463 200,000 - 19,303,993 167,515 - 5,332,883 50,022,257 - - - 9,579,939 - 622,142 - 921,304 -
Instruments measured at fair value on a recurring basis
Non-derivative financial assets and liabilities:

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. AND SUBSIDIARIES Notes to the Consolidated 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 and subsidiaries adopted that refers to quoted prices provided by financial institutions. Ask (bid) is used to evaluate the selling (buying) position by the Bank and subsidiaries 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 and subsidiaries, assuming that the contract will be terminated on the balance sheet date. The Bank and subsidiaries 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 and subsidiaries 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 after careful assessment, and appropriately adjusted according to the current market situation.

ii) Credit risk value adjustment

The Bank and subsidiaries’ 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 and subsidiaries may not be received or paid full market value of trading possibilities.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Bank and subsidiaries 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 and subsidiaries 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

There were no transfers between Level 1 and 2 for the nine months ended September 30, 2023 and 2022.

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 th	For th	e nine months en	ded September 30, 2023	ded September 30, 2023
	Beginning balance	Valuation profit and loss		Incr	ease	Decr	ease Transfer out from Level 3 Ending balance 33,465 637,175 - 5,683,441
		Recognized in profit or loss	Recognized in other comprehensive income	Purchase or issue	Transfer into Level 3	Sale Disposition or Settlement
Financial assets at fair value through profit or loss Investments in equity instruments measured at fair value through other comprehensive income	$ 635,233 5,337,461	(53,437) -	- 345,980	118,731 -	- -	29,887 -

Name		For th	For th	e nine months en	ded September 30, 2022	ded September 30, 2022
	Beginning balance	Valuation profit and loss		Incr	ease	Decr	ease Transfer out from Level 3 (Note) Ending balance 93,484 546,978 - 5,332,883
		Recognized in profit or loss	Recognized in other comprehensive income	Purchase or issue	Transfer into Level 3	Sale Disposition or Settlement
Financial assets at fair value through profit or loss Investments in equity instruments measured at fair value through other comprehensive income	$ 508,481 4,974,579	86,857 -	- 358,304	139,380 -	- -	94,256 -

Note: The invested stock is registered in the emerging market. Therefore, the measurement of fair value was transferred out from Level 3.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

f) Profit and loss information of Level 3

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

Recognized on profit and loss (reported as
unrealized gain (loss) from investments
instruments measured at fair value through
profit and loss)
Recognized on other comprehensive income
(reported as unrealized gain (loss) from
investments instruments measured at fair
value through other comprehensive income)
Recognized on profit and loss (reported as
unrealized gain (loss) from investments
instruments measured at fair value through
profit and loss)
Recognized on other comprehensive income
(reported as unrealized gain (loss) from
investments instruments measured at fair
value through other comprehensive income)

For the nine months ended September 30,

2023
2022
$ (78,492)
86,497
345,980
358,304
For the three months ended September 30,

2023
2022
$ (10,793)
54,813
169,675
(379,701)

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Bank and subsidiaries’ 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 :

Financial asset at fair value through profit or loss Private fund Unlisted stocks Financial assets at fair value through other comprehensive income Unlisted stocks Financial assets at fair value through profit or loss Private fund Unlisted stocks Financial assets at fair value through other comprehensive income Unlisted stocks			September 30, 2023
	fair value $ 186,243 450,932 5,683,441	valuation methods assets approach market approach market approach assets approach income approach income approach	significant unobservable inputs liquidity discount liquidity discount liquidity discount sustainable growth rate cost of equity December 31, 2022	range inter-relationship between significant unobservable inputs and fair value measurement 0.00%~10.00% The higher market liquidity discount, the lower fair value. 0.00%~42.74% The higher market liquidity discount, the lower fair value. 11.94%~29.61% The higher market liquidity discount, the lower fair value. 0.00%~1.53% The higher sustainable growth rate, the higher fair value. 10.53%~12.17% The higher rate of cost of equity, the lower fair value.
	fair value $ 163,679 471,554 5,337,461	valuation methods assets approach market approach market approach assets approach income approach income approach	significant unobservable inputs liquidity discount liquidity discount liquidity discount sustainable growth rate cost of equity	range inter-relationship between significant unobservable inputs and fair value measurement 0.00%~10.00% The higher market liquidity discount, the lower fair value. 0.00%~36.67% The higher market liquidity discount, the lower fair value. 8.62%~29.95% The higher market liquidity discount, the lower fair value. 0.00%~1.55% The higher sustainable growth rate, the higher fair value. 10.96%~12.68% The higher rate of cost of equity, the lower fair value.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets at fair value through profit or loss Private fund Unlisted stocks Financial assets at fair value through other comprehensive income Unlisted stocks			September 30, 2022
	fair value $ 167,515 379,463 5,332,883	valuation methods assets approach market approach market approach assets approach income approach income approach	significant unobservable inputs liquidity discount liquidity discount liquidity discount sustainable growth rate cost of equity	range inter-relationship between significant unobservable inputs and fair value measurement 0.00%~10.00% The higher market liquidity discount, the lower fair value. 0.00%~36.67% The higher market liquidity discount, the lower fair value. 8.69%~34.45% The higher market liquidity discount, the lower fair value. 0.00%~1.49% The higher sustainable growth rate, the higher fair value. 10.74%~12.46% 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 and subsidiaries 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 income if using alternative assumptions and inputs:

i) Assets approach/ Market approach

The evaluation methods of Level 3 financial instruments of the Bank and subsidiaries 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 income is as follows:

September 30, 2023 Financial assets at fair value through profit or loss Unlisted stocks and private fund Financial assets at fair value through other comprehensive income Unlisted stocks	the effects to the net income and other comprehensive income Favorable changes (-5%) Unfavorable changes (+5%) $ 38,363 (38,363) 330,769 (330,769)

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2022 Financial assets at fair value through profit or loss Unlisted stocks and private fund Financial assets at fair value through other comprehensive income Unlisted stocks September 30, 2022 Financial assets at fair value through profit or loss Unlisted stocks and private fund Financial assets at fair value through other comprehensive income Unlisted stocks	the effects to the net income and other comprehensive income Favorable changes (-5%) Unfavorable changes (+5%) $ 36,225 (36,225) 309,605 (309,605) the effects to the net income and other comprehensive income Favorable changes (-5%) Unfavorable changes (+5%) $ 32,109 (32,109) 308,311 (308,311)

ii) Income approach

Adopting the income approach to evaluate Level 3 financial instruments of the Bank and subsidiaries. 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

September 30, 2023 Financial assets at fair value through other comprehensive income Unlisted stocks	the effects to other comprehensive income Favorable changes (+0.3%) Unfavorable changes (-0.3%) $ 3,301 (3,107)

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2022
Financial assets at fair value through other
comprehensive income
Unlisted stocks
September 30, 2022
Financial assets at fair value through other
comprehensive income
Unlisted stocks
2.
cost of equity
September 30, 2023
Financial assets at fair value through other
comprehensive income
Unlisted stocks
December 31, 2022
Financial assets at fair value through other
comprehensive income
Unlisted stocks
September 30, 2022
Financial assets at fair value through other
comprehensive income
Unlisted stocks

the effects to other comprehensive
income
Favorable
changes (+0.3%)
Unfavorable
changes (-0.3%)
$ 2,975
(2,781)
the effects to other comprehensive
income
Favorable
changes (+0.3%)
Unfavorable
changes (-0.3%)
$ 3,104
(2,911)
the effects to other comprehensive
income
Favorable
changes (-3%)
Unfavorable
changes (+3%)
$ 69,439
(33,145)
the effects to other comprehensive
income
Favorable
changes (-3%)
Unfavorable
changes (+3%)
$ 61,250
(30,146)
the effects to other comprehensive
income
Favorable
changes (-3%)
Unfavorable
changes (+3%)
$ 64,225
(31,246)

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 and subsidiaries. Except those items, others' fair value is reasonably approximate value, the Bank and subsidiaries does not disclosure their fair value.

Debt instruments measured at amortized cost Debt instruments measured at amortized cost Debt instruments measured at amortized cost	September	30, 2023
	Book value $ 255,721,072 December	Fair value
		255,346,140 31, 2022
	Book value $ 236,774,247 September	Fair value
		236,657,427 30, 2022
	Book value $ 248,550,969	Fair value
		248,094,896

b) The fair value hierarchy of information

Assets and Liabilities		September	30, 2023
	Total $ 255,346,140	Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) 42,095,086 213,251,054 - December 31, 2022
Debt instruments measured at amortized cost Assets and Liabilities
	Total $ 236,657,427	Quoted prices in active markets for identical assets (Level 1) 31,336,817 September	Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) 205,320,610 - 30, 2022
Debt instruments measured at amortized cost Assets and Liabilities
	Total $ 248,094,896	Quoted prices in active markets for identical assets (Level 1) 28,001,504	Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) 220,093,392 -
Debt instruments measured at amortized cost

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

c) Valuation techniques

Methods and assumptions used by the Bank and subsidiaries 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.
iv) 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.
v) Bank debentures payable: The bank debentures payable, issued by the Bank and subsidiaries, 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. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ap) 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 and subsidiaries’ 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. AND SUBSIDIARIES Notes to the Consolidated 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 nonperforming 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. AND SUBSIDIARIES Notes to the Consolidated 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. AND SUBSIDIARIES Notes to the Consolidated 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 and subsidiaries 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 and subsidiaries 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 and subsidiaries conduct 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. AND SUBSIDIARIES Notes to the Consolidated 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 and subsidiaries 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 and subsidiaries 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. AND SUBSIDIARIES Notes to the Consolidated 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. AND SUBSIDIARIES Notes to the Consolidated 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 and subsidiaries, 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 and subsidiaries 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. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

In order to assess the expected credit losses of credit assets, the Bank and subsidiaries 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	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 and subsidiaries 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 and subsidiaries shall measure the allowance for impairment using the lifetime expected credit losses.

In order to measure expected credit losses, the Bank and subsidiaries 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. AND SUBSIDIARIES Notes to the Consolidated 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 and subsidiaries 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 and subsidiaries 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 and subsidiaries 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 and subsidiaries 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), Taiwan's real consumer price index (Not seasonally adjusted) and Taiwan's annual growth in retail sales 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 and subsidiaries 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 forwardlooking information while evaluating the credit ratings, which the Bank and subsidiaries considered to be appropriate after its assessment, the credit ratings will be included in the Bank and subsidiaries’ assessment of related expected credit losses.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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 devaluate 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.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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)

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

September 30, 2023 Impairment financial assets`：` Receivables Accounts receivables Interest receivable Discounts and loans Overdue receivable Total impairment financial assets December 31, 2022 Impairment financial assets`：` Receivables Accounts receivables Interest receivable Discounts and loans Overdue receivable Total impairment financial assets	Carrying amount $ 118,072 52,128 21,484,057 20,699 $ 21,674,956 Carrying amount $ 75,222 42,578 20,309,083 58,786 $ 20,485,669	Allowance impairment 14,087 11,507 4,625,205 11,478 4,662,277 Allowance impairment 10,034 7,050 4,784,155 15,898 4,817,137	Exposure (measured at amortized cost) 103,985 40,621 16,858,852 9,221 17,012,679 Exposure (measured at amortized cost) 65,188 35,528 15,524,928 42,888 15,668,532	Value of collateral
				111,714 - 22,319,207 -
				22,430,921
				Value of collateral
				73,243 - 22,707,890 -
				22,781,133

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2022 Impairment financial assets`：` Receivables Acceptances receivables Interest receivable Discounts and loans Overdue receivable Total impairment financial assets	Carrying amount $ 70,069 34,446 19,169,929 81,366 $ 19,355,810	Allowance impairment 2,377 7,006 4,495,265 23,095 4,527,743	Exposure (measured at amortized cost) 67,692 27,440 14,674,664 58,271 14,828,067	Value of collateral
				70,069 - 21,879,820 - 21,949,889

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

11) Credit risk concentration

The Bank and subsidiaries 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:

a) By industry

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

Industry	September 30	, 2023 % % 62.18 % 1.63 % 3.31 % 0.18 % 25.63 % 0.55 % 6.39 % 0.13 % 100.00	December 31	, 2022 % % 63.09 % 0.45 % 4.98 % 0.21 % 24.40 % 0.49 % 6.14 % 0.24 % 100.00	September 30, 2022	September 30, 2022
	Amount $ 906,307,932 23,773,869 48,185,000 2,708,235 373,488,542 7,944,321 93,187,683 1,860,996 $ 1,457,456,578		Amount 894,970,270 6,415,252 70,682,095 2,919,516 346,079,715 6,899,993 87,153,772 3,372,838 1,418,493,451		Amount 860,236,074 4,230,770 72,698,095 2,887,998 335,593,289 6,638,510 109,309,378 3,560,175 1,395,154,289	% % 61.66 % 0.30 % 5.21 % 0.21 % 24.05 % 0.48 % 7.83 % 0.26 % 100.00
Private business Public business Government institution Nonprofit organization Individual Foreign financial institution Foreign non-financial institution Foreign individual Total

b) By geographic area

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

Area	September 30	, 2023 % % 92.93 % 7.07 % 100.00	December 31	, 2022 % % 93.13 % 6.87 % 100.00	September 30, 2022	September 30, 2022
	Amount $ 1,354,463,578 102,993,000 $ 1,457,456,578		Amount 1,321,066,848 97,426,603 1,418,493,451		Amount 1,275,646,226 119,508,063 1,395,154,289	% % 91.43 % 8.57 % 100.00
Domestic Foreign Total

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

c) By collateral

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

Collateral	September 30	, 2023 % % 18.05 % 0.59 % 1.44 % 62.54 % 0.98 % 0.15 % 15.62 % 0.63 % 100.00	December 31	, 2022 % % 19.16 % 0.63 % 1.63 % 61.93 % 1.12 % 0.17 % 14.71 % 0.65 % 100.00	September 30, 2022	September 30, 2022
	Amount $ 263,054,382 8,593,613 20,983,452 911,578,048 14,252,623 2,210,836 227,635,209 9,148,415 $ 1,457,456,578		Amount 271,796,900 8,846,336 23,134,859 878,535,410 15,849,874 2,414,280 208,721,552 9,194,240 1,418,493,451		Amount 271,570,527 8,304,707 20,099,203 860,258,990 15,529,115 2,420,432 208,581,801 8,389,514 1,395,154,289	% % 19.47 % 0.60 % 1.44 % 61.66 % 1.11 % 0.17 % 14.95 % 0.60 % 100.00
Unsecured Stocks Bonds Real estate Chattel Notes receivable Guarantees Others Total

  - 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 and subsidiaries, not the discounted value of the signed contract.

12) Maximum credit risk exposure
a) The maximum credit exposure of the assets in the consolidated financial statement is approximately the book value when not considering collaterals or other credit enhancement instruments. The maximum credit exposure off the consolidated 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	Maximum credit risk exposure	Maximum credit risk exposure
	September 30, 2023 $ 107,124,453 17,981,514 9,187,202 27,913,672 $ 162,206,841	December 31, 2022 64,987,007 18,839,955 8,129,149 22,056,496 114,012,607	September 30, 2022
Issued and irrevocable loan commitments Irrevocable credit card loan commitments Letters of credit issued yet unused Various guarantee proceeds Total			74,862,228 19,226,826 10,143,955 24,064,589
			128,297,598

The Management of the Bank and subsidiaries 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. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

b) The credit quality analyses of the financial assets

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

September 30, 2023	12-month ECL	12-month ECL	12-month ECL	12-month ECL	12-month ECL	12-month ECL	12-month ECL	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	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	$ 386,536	220,179	177,937	16	3,455	401,837	1,189,960	1,117	1,731	2,577	-	148	1	5,574	-	1,049	1,194,485
Acceptances receivable	431,934	513,247	45,998	1,945	-	34,837	1,027,961	-	-	-	-	-	-	-	-	10,279	1,017,682
Other receivables	550,093	2,416,910	649,780	59,820	31,754	3,934,918	7,643,275	4,520	3,012	3,456	778	1,526	105,640	118,932	170,200	102,925	7,829,482
Discounts and loans
Private banking	147,625,866	140,852,925	70,888,674	3,419,174	1,025,571	5,912,588	369,724,798	1,071,446	112,772	292,378	17,949	82,049	23,659	1,600,253	4,024,487	4,557,469	370,792,069
Corporate banking	278,491,518	377,592,407	250,967,127	42,633,945	15,976,735	95,190,923	1,060,852,655	179,300	1,082,059	677,868	387,832	354,133	1,113,623	3,794,815	17,459,570	14,131,013	1,067,976,027
Other financial assets
Overdue receivable	-	-	-	-	-	-	-	-	-	-	-	-	-	-	20,699	12,088	8,611
Total	$ 427,485,947	521,595,668	322,729,516	46,114,900	17,037,515	105,475,103	1,440,438,649	1,256,383	1,199,574	976,279	406,559	437,856	1,242,923	5,519,574	21,674,956	18,814,823	1,448,818,356
Guarantee and commitments	$ 30,884,566	14,458,776	7,869,097	410,669	247,418	108,045,532	161,916,058	2,787	152,468	165	-	1,366	-	156,786	133,997	379,113	161,827,728

December 31, 2022	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	$ 426,421	227,850	196,313	79	4,913	238,053	1,093,629	1,688	1,452	1,618	-	326	20	5,104	-	569	1,098,164
Acceptances receivable	375,279	232,317	119,969	25,670	-	38,049	791,284	-	-	-	-	-	-	-	-	7,913	783,371
Other receivables	401,011	1,898,488	493,641	35,741	24,719	3,526,312	6,379,912	408	945	1,952	897	2,387	149,816	156,405	117,800	95,560	6,558,557
Discounts and loans
Private banking	130,698,330	132,157,479	70,280,524	3,199,945	1,062,127	6,962,188	344,360,593	56,031	137,190	252,638	22,912	111,432	36,101	616,304	4,475,656	4,181,307	345,271,246
Corporate banking	245,799,786	365,067,368	272,870,989	26,218,577	15,363,104	125,044,694	1,050,364,518	288,453	355,127	556,056	930,623	562,350	150,344	2,842,953	15,833,427	13,897,309	1,055,143,589
Other financial assets
Overdue receivable	-	-	-	-	-	-	-	-	-	-	-	-	-	-	58,786	48,471	10,315
Total	$ 377,700,827	499,583,502	343,961,436	29,480,012	16,454,863	135,809,296	1,402,989,936	346,580	494,714	812,264	954,432	676,495	336,281	3,620,766	20,485,669	18,231,129	1,408,865,242
Guarantee and commitments	$ 26,669,887	15,125,762	5,916,207	174,424	45,746	65,833,294	113,765,320	43,098	11,091	421	-	98	-	54,708	192,579	337,312	113,675,295

September 30, 2022	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	$ 358,844	203,191	200,029	107	5,664	261,910	1,029,745	451	922	1,330	-	334	20	3,057	-	556	1,032,246
Acceptances receivable	352,500	466,614	132,108	10,875	-	33,746	995,843	-	-	-	-	-	-	-	-	9,959	985,884
Other receivables	315,955	1,798,912	503,716	30,915	28,248	3,175,800	5,853,546	223	788	1,780	527	2,125	172,196	177,639	104,515	94,874	6,040,826
Discounts and loans
Private banking	124,981,248	127,554,392	70,116,247	3,061,828	1,120,629	7,174,051	334,008,395	26,188	146,917	287,755	23,296	146,283	22,949	653,388	4,491,681	3,909,848	335,243,616
Corporate banking	222,004,355	358,615,430	286,823,231	27,334,322	14,149,775	129,733,623	1,038,660,736	211,120	234,269	500,827	928,813	500,294	286,518	2,661,841	14,678,248	13,506,621	1,042,494,204
Other financial assets
Overdue receivable	-	-	-	-	-	-	-	-	-	-	-	-	-	-	81,366	57,176	24,190
Total	$ 348,012,902	488,638,539	357,775,331	30,438,047	15,304,316	140,379,130	1,380,548,265	237,982	382,896	791,692	952,636	649,036	481,683	3,495,925	19,355,810	17,579,034	1,385,820,966
Guarantee and commitments	$ 28,660,096	16,017,038	7,266,132	382,251	38,310	75,767,533	128,131,360	16,209	9,760	102	-	2,733	-	28,804	137,434	358,661	127,938,937

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

ii) Debt instruments

September 30, 2023	12-month ECL	12-month ECL	12-month ECL	12-month ECL	12-month ECL	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	Lifetime ECL`－`not impaired	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(Note)
Investment in debt instruments measured at fair value through other comprehensive income
Overseas bonds	$ 70,256,533	-	-	-	70,256,533	-	-	-	-	-	-	70,256,533	20,021
NT bonds	95,578,626	-	-	-	95,578,626	-	-	-	-	-	-	95,578,626	79,247
Negotiable certificates of deposit	631,617	-	-	-	631,617	-	-	-	-	-	-	631,617	241
Investment in debt instruments at amortized cost
Overseas bonds	21,727,401	-	-	-	21,727,401	-	-	-	-	-	-	21,727,401	4,074
NT bonds	35,766,496	-	-	-	35,766,496	-	-	-	-	-	-	35,766,496	17,982
Certificates of deposit with the Central Bank	198,240,000	-	-	-	198,240,000	-	-	-	-	-	-	198,240,000	58,543
Negotiable certificates of deposit	67,799	-	-	-	67,799	-	-	-	-	-	-	67,799	25
Total	$ 422,268,472	-	-	-	422,268,472	-	-	-	-	-	-	422,268,472	180,133

December 31, 2022	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(Note)
Investment in debt instruments measured at fair value through other comprehensive income
Overseas bonds	$ 50,304,163	-	-	-	50,304,163	-	-	-	-	-	-	50,304,163	15,793
NT bonds	91,536,068	-	-	-	91,536,068	-	-	-	-	-	-	91,536,068	75,059
Investment in debt instruments at amortized cost
Overseas bonds	10,420,185	-	-	-	10,420,185	-	-	-	-	-	-	10,420,185	3,247
NT bonds	30,769,411	-	-	-	30,769,411	-	-	-	-	-	-	30,769,411	13,846
Certificates of deposit with the Central Bank	195,595,000	-	-	-	195,595,000	-	-	-	-	-	-	195,595,000	57,763
Negotiable certificates of deposit	64,523	-	-	-	64,523	-	-	-	-	-	-	64,523	16
Total	$ 378,689,350	-	-	-	378,689,350	-	-	-	-	-	-	378,689,350	165,724

September 30, 2022	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(Note)
Investment in debt instruments measured at fair value through other comprehensive income
Overseas bonds	$ 50,022,257	-	-	-	50,022,257	-	-	-	-	-	-	50,022,257	16,531
NT bonds	93,730,674	-	-	-	93,730,674	-	-	-	-	-	-	93,730,674	77,818
Investment in debt instruments at amortized cost
Overseas bonds	12,850,958	-	-	-	12,850,958	-	-	-	-	-	-	12,850,958	4,362
NT bonds	28,829,887	-	-	-	28,829,887	-	-	-	-	-	-	28,829,887	11,224
Certificates of deposit with the Central Bank	206,880,000	-	-	-	206,880,000	-	-	-	-	-	-	206,880,000	61,095
Negotiable certificates of deposit	66,822	-	-	-	66,822	-	-	-	-	-	-	66,822	17
Total	$ 392,380,598	-	-	-	392,380,598	-	-	-	-	-	-	392,380,598	171,047

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. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

September 30, 2023	Maximum credit risk exposure $ 200,000 67,094,930 955,197 450,932 484,508 2,107,198 Maximum credit risk exposure $ 200,000 30,907,810 752,713 471,554 414,370 1,166,667 Maximum credit risk exposure $ 200,000 19,303,993 687,563 379,463 1,846,834 651,599	Collateral Enhancement of other credit - - - - - - - - - - 2,136,890 793,612 Collateral Enhancement of other credit - - - - - - - - - - 2,527,996 727,720 Collateral Enhancement of other credit - - - - - - - - - - 4,293,627 670,305
Financial assets at fair value through profit or loss `－`Debt investments `－`Commercial paper `－`Listed stocks `－`Unlisted stocks `－`Beneficiary certificates `－`Derivative instrument December 31, 2022
Financial assets at fair value through profit or loss `－`Debt investments `－`Commercial paper `－`Listed stocks `－`Unlisted stocks `－`Beneficiary certificates `－`Derivative instruments September 30, 2022
Financial assets at fair value through profit or loss `－`Debit investments `－`Commercial paper `－`Listed stocks `－`Unlisted stocks `－`Beneficiary certificates `－`Derivative instrument

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

13) Changes in the expected credit losses of the Bank and subsidiaries
a) Receivables

	For	the nine months	ended September 30, 2023	ended September 30, 2023	Total
12-month ECL $ 29,630 230 (42) (68) (12,631) 25,742 (3,987) - $ 38,874	Lifetime ECL`－`not impaired 10,712 (32) 55 (55) (83) 180 (3,288) - 7,489	Lifetime ECL`－` impaired 17,084 (198) (13) 123 (4,219) 6,549 6,268 - 25,594	Impaired (IFRS9) 57,426 - - - (16,933) 32,471 (1,007) - 71,957	Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 46,616 - - - - - - (4,320) 42,296
					104,042 - - - (16,933) 32,471 (1,007) (4,320)
					114,253

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	For	the nine months	ended September 30, 2022	ended September 30, 2022	Total
12-month ECL $ 31,774 136 (6) (16) (13,946) 11,627 7,086 - $ 36,655	Lifetime ECL`－`not impaired 6,068 (41) 18 (13) (85) 118 6,119 - 12,184	Lifetime ECL`－` impaired 28,695 (95) (12) 29 (2,940) 3,662 (19,956) - 9,383	Impaired (IFRS9) 66,537 - - - (16,971) 15,407 (6,751) - 58,222	Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 51,574 - - - - - - (4,407) 47,167
					118,111 - - - (16,971) 15,407 (6,751) (4,407)
					105,389

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

b) Discounts and loans

	For	the nine months	ended September 30, 2023	ended September 30, 2023	Total
12-month ECL $ 5,882,540 126,829 (22,637) (34,726) (2,351,959) 2,073,350 - (761,146) - $ 4,912,251	Lifetime ECL`－`not impaired 138,138 (12,621) 30,348 (13,874) (89,501) 5,016 - 286,021 - 343,527	Lifetime ECL`－` impaired 4,784,155 (114,208) (7,711) 48,600 (694,705) 176,334 (2,721,628) 3,154,368 - 4,625,205	Impaired (IFRS9) 10,804,833 - - - (3,136,165) 2,254,700 (2,721,628) 2,679,243 - 9,880,983	Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 7,273,783 - - - - - - - 1,533,716 8,807,499
					18,078,616 - - - (3,136,165) 2,254,700 (2,721,628) 2,679,243 1,533,716
					18,688,482

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	For	the nine months	ended September 30, 2022	ended September 30, 2022	Total
12-month ECL $ 4,166,467 178,003 (8,296) (15,340) (1,879,165) 2,585,163 - 770,109 - $ 5,796,941	Lifetime ECL`－`not impaired 129,977 (51,528) 21,802 (4,235) (62,071) 9,403 - 84,752 - 128,100	Lifetime ECL`－` impaired 3,635,336 (126,475) (13,506) 19,575 (633,481) 258,293 (1,782,422) 3,137,945 - 4,495,265	Impaired (IFRS9) 7,931,780 - - - (2,574,717) 2,852,859 (1,782,422) 3,992,806 - 10,420,306	Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 7,645,037 - - - - - - - (648,874) 6,996,163
					15,576,817 - - - (2,574,717) 2,852,859 (1,782,422) 3,992,806 (648,874)
					17,416,469

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

c) Other financial assets

	For	the nine months	ended September 30, 2023	ended September 30, 2023	Total
12-month ECL $ - - - - - - $ -	Lifetime ECL`－`not impaired - - - - - - - For	Lifetime ECL`－` impaired 15,898 (10) 7,131 (43,049) 31,508 - 11,478 the nine months	Impaired (IFRS9) Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 15,898 32,573 (10) - 7,131 - (43,049) - 31,508 - - (31,963) 11,478 610 ended September 30, 2022
					48,471 (10) 7,131 (43,049) 31,508 (31,963)
					12,088
					Total
	Lifetime ECL`－`not impaired - - - - - - -	Lifetime ECL`－` impaired 25,545 (5) 6,252 (8,680) (17) - 23,095	Impaired (IFRS9) 25,545 (5) 6,252 (8,680) (17) - 23,095	Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 25,847 - - - - 8,234 34,081
					51,392 (5) 6,252 (8,680) (17) 8,234
					57,176

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

d) Guarantee and commitments

	For	the nine months	ended September 30, 2023	ended September 30, 2023	Total
12-month ECL $ 178,812 28 (65,813) 75,662 (31,303) - $ 157,386	Lifetime ECL`－`not impaired 57 (28) (25) 1,090 - - 1,094 For	Lifetime ECL`－` impaired 61,625 - (5,986) 29 (12,761) - 42,907 the nine months	Impaired (IFRS9) Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 240,494 96,818 - - (71,824) - 76,781 - (44,064) - - 80,908 201,387 177,726 ended September 30, 2022
					337,312 - (71,824) 76,781 (44,064) 80,908
					379,113
					Total
	Lifetime ECL`－`not impaired 69 - 46 - (81) 58 - - 92	Lifetime ECL`－` impaired 6,786 (2,005) - 456 (2,854) - 53,096 - 55,479	Impaired (IFRS9) 156,209 - - - (70,195) 83,229 74,420 - 243,663	Impairment difference of "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non- Performing and Non- Accrual Loans" 173,279 - - - - - - (58,281) 114,998
					329,488 - - - (70,195) 83,229 74,420 (58,281)
					358,661

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

e) Debts investments

For the nine months ended September 30, 2023

	For the nine months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,	2023
Beginning balance Additions Derecognition Other changes Ending balance Beginning balance Additions Derecognition Other changes Ending balance	12-month ECL Lifetime ECL `－`not impaired Lifetime ECL `－`impaired $ 165,724 - - 80,960 - - (66,211) - - (340) - - $ 180,133 - - For the nine months ended September 30,			Total 165,724 80,960 (66,211) (340) 180,133 2022 Total 175,270 58,864 (64,554) 1,467 171,047
	12-month ECL $ 175,270 58,864 (64,554) 1,467 $ 171,047	Lifetime ECL `－`not impaired - - - - -	Lifetime ECL `－`impaired - - - - -

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. AND SUBSIDIARIES Notes to the Consolidated 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. AND SUBSIDIARIES Notes to the Consolidated 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 nonderivative financial liability
a) Financial assets possessed for managing liquidity risk

The Bank and subsidiaries 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. AND SUBSIDIARIES Notes to the Consolidated 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 and subsidiaries 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.

Major matured cash outflow Deposits from the Central Bank and banks Overdrafts on banks Call loans from the Central Bank and banks Due to the Central Bank and banks Financial liabilities designated at fair value through profit or loss Notes and bonds issued under repurchase agreement Interest payable Deposits transferred from Chunghwa Post Co., Ltd. Demand deposits Time deposits Remittance Bank notes payable Cumulative earnings on appropriated loan fund Lease liabilities Major matured cash outflow Deposits from the Central Bank and banks Overdrafts on banks Call loans from the Central Bank and banks Due to the Central Bank and banks Financial liabilities designated at fair value through profit or loss Notes and bonds issued under repurchase agreement Interest payable Deposits transferred from Chunghwa Post Co., Ltd. Demand deposits Time deposits Remittance Bank notes payable Cumulative earnings on appropriated loan fund Lease liabilities			September 30, 2023	September 30, 2023
	0-30 days $ 1,128,235,413 882,704 530,637 34,406,859 90,000 - 1,270,765 1,588,127 18,400,000 940,680,947 130,084,496 247,417 - 2,750 50,711	31-90 days 244,712,657 - - 8,992,072 32,285 - 595,184 3,225,313 34,505,210 - 194,603,760 - 2,700,000 4,170 54,663	91 days-1 year 1-5 years 563,263,181 58,483,198 - - - - - - 707,985 430,713 - - 705,545 - 3,713,726 115,537 81,909,335 - - - 475,487,328 43,567,012 - - 390,000 12,660,000 80,000 1,009,330 269,262 700,606 December 31, 2022		Over 5 years Total 52,532,096 2,047,226,545 - 882,704 - 530,637 - 43,398,931 - 1,260,983 9,870,309 9,870,309 - 2,571,494 39 8,642,742 - 134,814,545 - 940,680,947 4,582 843,747,178 - 247,417 40,800,000 56,550,000 1,668,004 2,764,254 189,162 1,264,404
	0-30 days $ 1,097,763,808 937,523 1,084,076 27,012,375 92,175 - 458,662 317,254 9,820,000 954,030,572 103,528,154 428,111 - 2,250 52,656	31-90 days 221,732,162 - - 18,670,658 111,450 - 157,550 1,288,484 21,196,335 - 180,237,487 - - 3,750 66,448	91 days-1 year 480,666,633 - - - 927,400 - 1,292,066 2,711,772 75,185,210 - 392,763,469 - 7,400,000 118,500 268,216	1-5 years 92,838,661 - - - - - 554,713 118,148 41,060,000 - 42,587,346 - 6,600,000 1,198,580 719,874	Over 5 years Total 49,342,955 1,942,344,219 - 937,523 - 1,084,076 - 45,683,033 - 1,131,025 9,367,595 9,367,595 - 2,462,991 10 4,435,668 - 147,261,545 - 954,030,572 5,124 719,121,580 - 428,111 38,250,000 52,250,000 1,587,501 2,910,581 132,725 1,239,919

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Major matured cash outflow Deposits from the Central Bank and banks Overdrafts on banks Call loans from the Central Bank and banks Due to the Central Bank and banks Financial liabilities designated at fair value through profit or loss Notes and bonds issued under repurchase agreement Interest payable Deposits transferred from Chunghwa Post Co., Ltd. Demand deposits Time deposits Remittance Bank notes payable Cumulative earnings on appropriated loan fund Lease liabilities			September 30, 2022	September 30, 2022
	0-30 days $ 1,108,184,295 810,907 529,800 26,813,581 - - 473,079 732,256 11,520,000 935,195,104 131,534,344 520,316 - 5,500 49,408	31-90 days 222,773,412 - - 12,955,832 - - 622,838 1,420,799 17,445,210 - 190,264,817 - - 7,500 56,416	91 days-1 year 433,150,068 - - 1,783,226 1,006,420 - 827,278 1,984,767 53,296,335 - 369,166,523 - 4,700,000 104,170 281,349	1-5 years 74,871,234 - - - - - 551,778 112,071 10,000,000 - 52,929,355 - 9,300,000 1,276,670 701,360	Over 5 years Total 49,756,068 1,888,735,077 - 810,907 - 529,800 - 41,552,639 - 1,006,420 9,579,939 9,579,939 - 2,474,973 17 4,249,910 - 92,261,545 - 935,195,104 7,188 743,902,227 - 520,316 38,250,000 52,250,000 1,806,574 3,200,414 112,350 1,200,883

4) Derivative financial liabilities maturity analysis
a) Derivative financial instruments settled by net amount

The derivative instruments of the Bank and subsidiaries 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 consolidated financial statement. As of September 30, 2023, December 31 and September 30, 2022, maturity analysis for the derivative financial liabilities settled by net amount is as follows:

		September	30, 2023
0-30 days $ 1,142	31-90 days 3,612	91-180 days 3,070	181 days to 1 year 392	Over 1 year -	Total
					8,216

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

==> picture [436 x 162] intentionally omitted <==

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

December 31, 2022
181 days Over
0-30 days 31-90 days 91-180 days to 1 year 1 year Total
Derivative financial
liabilities at fair value
through profit or loss
－ Foreign exchange $ - 825 225 - - 1,050
derivative instrument
September 30, 2022
181 days Over
0-30 days 31-90 days 91-180 days to 1 year 1 year Total
Derivative financial
liabilities at fair value
through profit or loss
－ Foreign exchange $ 820 2,280 4,110 2,489 - 9,699
derivative instrument
----- End of picture text -----

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 and subsidiaries whose possession are settled by gross amount based on the remaining days from the consolidated 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 consolidated financial statement.

The maturity analysis for derivative financial liabilities settled by gross amount is as follows:

September 30, 2023 Derivative financial instruments at fair value through profit or loss `－`Foreign exchange derivative instruments `－`Cash outflow `－`Cash inflow `－`Interest rate derivative instrument `－`Cash outflow `－`Cash inflow Total cash outflow Total cash inflow Net cash flow	0-30 days $ 41,502,616 40,913,100 - - 41,502,616 40,913,100 $ 589,516	31-90 days 34,975,801 33,301,855 1,174 2,235 34,976,975 33,304,090 1,672,885	91-180 days 14,549,137 13,984,526 587 791 14,549,724 13,985,317 564,407	181 days to 1 year 2,630,455 2,503,068 587 777 2,631,042 2,503,845 127,197	Over 1 year 32,285 33,000 - - 32,285 33,000 (715)	Total 93,690,294 90,735,549 2,348 3,803
						93,692,642
						90,739,352
						2,953,290

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2022 Derivative financial instruments at fair value through profit or loss `－`Foreign exchange derivative instruments `－`Cash outflow `－`Cash inflow `－`Interest rate derivative instrument `－`Cash outflow `－`Cash inflow Total cash outflow Total cash inflow Net cash flow September 30, 2022 Derivative financial instruments at fair value through profit or loss `－`Foreign exchange derivative instruments `－`Cash outflow `－`Cash inflow `－`Interest rate derivative instrument `－`Cash outflow `－`Cash inflow Total cash outflow Total cash inflow Net cash flow	0-30 days $ 25,782,525 27,862,886 - - 25,782,525 27,862,886 $ (2,080,361) 0-30 days $ 5,437,634 4,867,089 - - 5,437,634 4,867,089 $ 570,545	31-90 days 45,415,630 48,002,551 1,168 2,021 45,416,798 48,004,572 (2,587,774) 31-90 days 25,925,358 28,234,148 1,174 1,430 25,926,532 28,235,578 (2,309,046)	91-180 days 11,979,083 12,577,650 587 724 11,979,670 12,578,374 (598,704) 91-180 days 58,563,208 66,803,277 1,168 1,295 58,564,376 66,804,572 (8,240,196)	181 days to 1 year 3,463,765 3,500,326 2,955 3,742 3,466,720 3,504,068 (37,348) 181 days to 1 year 5,856,751 6,564,332 2,368 2,945 5,859,119 6,567,277 (708,158)	Over 1 year - - 1,174 1,568 1,174 1,568 (394) Over 1 year - - 2,349 3,089 2,349 3,089 (740)	Total 86,641,003 91,943,413 5,884 8,055
						86,646,887
						91,951,468
						(5,304,581)
						Total 95,782,951 106,468,846 7,059 8,759
						95,790,010
						106,477,605
						(10,687,595)

5) Maturity analysis of off-balance sheet items

September 30, 2023 Issued and irrevocable loan commitments Irrevocable credit card loan commitments Letters of credit issued yet unused Other guarantees Total	0-30 days $ 15,000 504 2,636,282 3,289,468 $ 5,941,254		31-90 days		91-180 days		181 days to 1 year		Over 1 year 56,036,649 16,301,448 1,574 18,742,435 91,082,106	Total 107,124,453 17,981,514 9,187,202 27,913,672
			990,548 225,620 5,649,332 1,719,430 8,584,930		2,179,998 441,605 618,156 1,988,967 5,228,726		47,902,258 1,012,337 281,858 2,173,372 51,369,825
										162,206,841

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

31-90 days	91-180 days	181 days to 1 year	Total 64,987,007 18,839,955 8,129,149 22,056,496
512,056 34,225 4,985,416 1,001,432 6,533,129 31-90 days	22,218,395 55,553 716,174 656,793 23,646,915 91-180 days	4,683,018 316,313 356,064 2,337,749 7,693,144 181 days to 1 year
			114,012,607
			Total 74,862,228 19,226,826 10,143,955 24,064,589
934,938 45,688 5,893,700 2,413,443 9,287,769	2,532,268 52,847 915,924 1,212,362 4,713,401	29,007,334 125,817 773,026 2,303,605 32,209,782
			128,297,598

6) Maturity analysis of lease contract commitments

The Bank and subsidiaries only has operating lease contract, operating lease commitment refers to, when the Bank and subsidiaries 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 and subsidiaries operating lease contract commitments:

September 30, 2023 Operating lease income (lessor) December 31, 2022 Operating lease income (lessor) September 30, 2022 Operating lease income (lessor)	Below 1 year $ 1,939 Below 1 year $ 1,027 Below 1 year $ 1,477	1-5 years 1,619 1-5 years 1,389 1-5 years 1,508	Over 5 years Total - 3,558 Over 5 years Total - 2,416 Over 5 years Total - 2,985

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

September 30, 2023 Machinery and equipment Transportation equipment Right-of-use assets Miscellaneous equipment Total	Below 1 year $ 1,279,778 408 58 9,174 $ 1,289,418	1-5 years - - - - -	Over 5 years - - - - -	Total
				1,279,778 408 58 9,174
				1,289,418

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2022 Machinery and equipment Transportation equipment Right-of-use assets Miscellaneous equipment Total September 30, 2022 Machinery and equipment Transportation equipment Right-of-use assets Miscellaneous equipment Total	Below 1 year $ 1,496,409 2,098 620 1,024 $ 1,500,151 Below 1 year $ 1,408,230 250 134 1,628 $ 1,410,242	1-5 years - - 85 - 85 1-5 years - - 82 - 82	Over 5 years - - - - - Over 5 years - - - - -	Total
				1,496,409 2,098 705 1,024
				1,500,236
				Total
				1,408,230 250 216 1,628
				1,410,324

(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.

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.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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.
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.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 evaluated 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. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

v) Process of foreign exchange risk management
1. 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 and subsidiaries conducts deal with simple type financial products. For complex financial products, the Bank and subsidiaries 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.
2. Monitoring and report
  - a. When the evaluation loss of non-commercial foreign exchange transactions is over the limit, the trade units shall execute a stoplimit 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)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  2. 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 additional, the trade units shall choose investment target prudently through analyzing the issuers’ credit, financial status, country risks and interest rate trends.

(Continued)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

v) Process of interest rate risk management
1. Identification and measurement
  - a. The risk management department establish risk factor charts base 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.
2. 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 base 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)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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) September 30, 2023

Currency USD JPY AUD CNY ZAR	Foreign currency amount (in thousands) NT$ amount $ 363,622 11,739,536 1,950,436 421,489 15,772 324,430 26,705 117,822 55,141 92,747

Significant net positions of foreign currencies (Market risk)	Significant net positions of foreign currencies (Market risk)
December 31, 2022
Currency USD JPY AUD ZAR EUR	Foreign currency amount (in thousands) NT$ amount $ 504,348 15,496,092 2,069,083 480,234 14,865 308,895 46,223 83,617 809 26,503

Significant net positions of foreign currencies (Market risk)	Significant net positions of foreign currencies (Market risk)
September 30, 2022
Currency USD JPY AUD CNY HKD	Foreign currency amount (in thousands) NT$ amount $ 512,314 16,301,831 2,194,188 482,721 13,748 284,171 50,254 224,334 9,588 38,860

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)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

ii) Assets and liabilities of foreign currency

	September 30, 2023	September 30, 2023
Currency	Monetary financial assets Foreign currency amount (in thousands) Spot rate NTD amount $ 14,355,900 32.2850 463,480,215 5,261,260 20.5700 108,224,118 8,673,186 4.4120 38,266,095 121,917,895 0.2161 26,346,457 5,176,006 4.1250 21,351,025 481,366 33.9400 16,337,562 4,563,953 1.6820 7,676,569 44,248 39.2200 1,735,407 29,912 19.1900 574,011 14,951 23.9400 357,927 6,088 23.5400 143,312 3,850 35.0650 135,000 - - 117,273		Monetary financial liabilities
	Foreign currency amount (in thousands) $ 14,355,900 5,261,260 8,673,186 121,917,895 5,176,006 481,366 4,563,953 44,248 29,912 14,951 6,088 3,850 -	Spot rate 32.2850 20.5700 4.4120 0.2161 4.1250 33.9400 1.6820 39.2200 19.1900 23.9400 23.5400 35.0650 -	Foreign currency amount (in thousands) 13,988,734 5,153,130 8,457,712 120,384,039 4,675,334 481,517 4,564,255 44,199 29,899 14,709 6,048 3,911 -	Spot rate NTD amount 32.2850 451,626,293 20.5700 105,999,884 4.4120 37,315,427 0.2161 26,014,991 4.1250 19,285,753 33.9400 16,342,687 1.6820 7,677,077 39.2200 1,733,485 19.1900 573,762 23.9400 352,133 23.5400 142,370 35.0650 137,139 - 122,275
USD AUD CNY JPY HKD EUR ZAR GBP NZD CAD SGD CHF Others (Note)

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

	December 31, 2022	December 31, 2022
Currency	Monetary financial assets Foreign currency amount (in thousands) Spot rate NTD amount $ 15,838,292 30.7250 486,631,513 4,985,648 20.7800 103,601,765 11,948,387 4.4110 52,704,337 184,707,477 0.2321 42,870,605 5,771,939 3.9400 22,741,440 352,406 32.7600 11,544,821 4,251,194 1.8090 7,690,410 45,244 37.0700 1,677,195 34,139 19.4500 664,004 14,564 22.6800 330,312 7,992 22.8700 182,777 34,420 2.9400 101,195 - - 114,540 Non-monetary financial assets Foreign currency amount (in thousands) Spot rate NTD amount 974 30.7250 29,926		Monetary financial liabilities
			Foreign currency amount (in thousands) Spot rate NTD amount 15,291,888 30.7250 469,843,260 4,890,551 20.7800 101,625,650 11,749,698 4.4110 51,827,917 183,141,677 0.2321 42,507,183 5,348,671 3.9400 21,073,764 352,361 32.7600 11,543,346 4,249,572 1.8090 7,687,476 45,236 37.0700 1,676,899 34,124 19.4500 663,712 14,475 22.6800 328,293 7,969 22.8700 182,251 34,431 2.9400 101,227 - - 119,278 Non-monetary financial liabilities
USD AUD CNY JPY HKD EUR ZAR GBP NZD CAD SGD SEK Others (Note) Currency
	Foreign currency amount (in thousands) 974	Spot rate 30.7250	Foreign currency amount (in thousands) -	Spot rate NTD amount - -
USD

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

(Continued)

100

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	September 30, 2022	September 30, 2022
Currency	Monetary financial assets Foreign currency amount (in thousands) Spot rate NTD amount $ 15,551,994 31.8200 494,864,459 5,696,831 20.6700 117,753,497 11,298,322 4.4640 50,435,712 104,027,688 0.2200 22,886,091 5,329,947 4.0530 21,602,275 423,023 31.2200 13,206,778 3,840,933 1.7690 6,794,610 33,259 35.4900 1,180,362 29,182 18.2100 531,404 14,874 23.2400 345,672 9,760 22.2000 216,672 - 2.8500 - - - 210,690 Non-monetary financial assets Foreign currency amount (in thousands) Spot rate NTD amount 985 31.8200 31,343		Monetary financial liabilities
			Foreign currency amount (in thousands) Spot rate NTD amount 15,036,743 31.8200 478,469,170 5,606,191 20.6700 115,879,968 11,097,204 4.4640 49,537,919 102,651,327 0.2200 22,583,292 4,932,287 4.0530 19,990,559 423,105 31.2200 13,209,338 3,837,609 1.7690 6,788,730 33,376 35.4900 1,184,514 29,103 18.2100 529,966 14,869 23.2400 345,556 9,693 22.2000 215,185 35,381 2.8500 100,836 - - 104,056 Non-monetary financial liabilities
USD AUD CNY JPY HKD EUR ZAR GBP NZD CAD SGD SEK Others (Note) Currency
	Foreign currency amount (in thousands) 985	Spot rate 31.8200	Foreign currency amount (in thousands) -	Spot rate NTD amount - -
USD

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

(Continued)

101

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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%.

	September 30, 2023	September 30, 2023	September 30, 2023
Depreciate	by 1% Equity (71,208) (26,650) (23,269) (3,394) - - - - - - - - - - (124,521)	Appreciate by 1%
Income $ 16,735 4,438 3,192 29 (25) (14) 4 17 21 (42) 33 54 (10) (57,072) $ (32,640)		Income (16,735) (4,438) (3,192) (29) 25 14 (4) (17) (21) 42 (33) (54) 10 57,072 32,640	Equity
			71,208 26,650 23,269 3,394 - - - - - - - - - -
			124,521

Currency USD AUD HKD JPY GBP SGD ZAR CHF CAD THB EUR NZD CNY Total		December 31, 2022	December 31, 2022	December 31, 2022
	Depreciate	by 1% Equity (63,299) (23,440) (19,240) (3,450) - - - - - - - - - (109,429)	Appreciate by 1% Income Equity 44,000 63,299 (4,060) 23,440 (3,029) 19,240 161 3,450 15 - 9 - 31 - (51) - 5 - 4 - 37 - 10 - 55,663 - 92,795 109,429
	Income $ (44,000) 4,060 3,029 (161) (15) (9) (31) 51 (5) (4) (37) (10) (55,663) $ (92,795)			Equity 63,299 23,440 19,240 3,450 - - - - - - - - - 109,429

(Continued)

102

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	September 30, 2022	September 30, 2022	September 30, 2022
Depreciate	by 1% Equity (64,233) (22,637) (18,916) (3,097) - - - - - - - - - - (108,883)	Appreciate by 1%
Income $ (38,088) 4,128 3,125 50 22 (19) (60) 34 (128) 14 36 22 (21) (56,000) $ (86,885)		Income 38,088 (4,128) (3,125) (50) (22) 19 60 (34) 128 (14) (36) (22) 21 56,000 86,885	Equity 64,233 22,637 18,916 3,097 - - - - - - - - - -
			108,883

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).

September 30, 2023	September 30, 2023	September 30, 2023
Interest rate increases by 1 bp Income Equity $ (1,288) (2,258) - (56,125) - (25,052) - (141) - (250) - (191) - (1,223) - (121) $ (1,288) (85,361)	Interest rate decreases by 1 bp
Income $ (1,288) - - - - - - - $ (1,288)	Income 1,288 - - - - - - - 1,288	Equity 2,258 56,125 25,052 141 250 191 1,223 121
		85,361

(Continued)

103

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2022	December 31, 2022	December 31, 2022
Interest rate increases by 1 bp Interest rate decreases by 1 bp Income Equity Income Equity $ (512) (2,661) 512 2,661 - (46,200) - 46,200 - (3,993) - 3,993 - (364) - 364 - (70) - 70 - (1,335) - 1,335 - (161) - 161 $ (512) (54,784) 512 54,784 September 30, 2022	Interest rate decreases by 1 bp
Income $ (512) - - - - - - $ (512)		Equity 2,661 46,200 3,993 364 70 1,335 161
		54,784

	Interest rate decreases by 1 bp
	Income 267 - - - - - - 267	Equity 2,742 47,455 14,184 632 65 1,721 173
		66,972

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

Scenario Interest rate increases by 100 bp Interest rate decreases by 100 bp Scenario Interest rate increases by 100 bp Interest rate decreases by 100 bp		September 30, 2023 in 1 year Effect on EVE USD TWD USD (29,440) (4,079,430) (126,993) 28,206 11,330,741 111,035 December 31, 2022 in 1 year Effect on EVE USD TWD USD (24,074) (5,148,928) (58,960) 22,469 13,788,825 27,772
	Effect on NII
	TWD 4,367,982 (4,660,748)
	Effect on NII	in 1 year USD (24,074) 22,469
	TWD 3,962,492 (4,598,328)

(Continued)

104

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Scenario Interest rate increases by 100 bp Interest rate decreases by 100 bp		September 30, 2022 in 1 year Effect on EVE USD TWD USD (21,508) (5,021,549) (53,024) 11,882 12,378,220 14,778
	Effect on NII	in 1 year USD (21,508) 11,882
	TWD 4,132,410 (5,310,906)

9) Managing interest rate benchmark reform

The Bank and subsidiaries completed its transition to alternative benchmark rates, the interest rate benchmark reform (IBOR reform), during the interim period. The Bank and subsidiaries' remaining IBOR exposures as of December 31, 2022 – loans and debt securities indexed to US dollar London Inter-bank Offered Rate – have been automatically switched to other alternative rates in accordance with fallback clauses.

10) 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%.

Change Equity security price increases by 1 % Equity security price decreases by 1 % Change Equity security price increases by 1 % Equity security price decreases by 1 % Change Equity security price increases by 1 % Equity security price decreases by 1 %	Currency TWD TWD Currency TWD USD TWD USD Currency TWD USD TWD USD		September 30, 2023
			Income Equity 5,845 - (5,845) - December 31, 2022

			Income Equity 3,359 - 10 - (3,359) - (10) - September 30, 2022

			Income Equity 17,497 - 10 - (17,497) - (10) -

(Continued)

105

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

b) Value at Risk of equity security

Value at Risk	From Oct 1, 2022 to Sep 30, 2023	From Oct 1, 2022 to Sep 30, 2023	From Oct 1, 2022 to Sep 30, 2023
	Average	Maximum	Minimum
Equity security risk	8,987	17,827	2,716

Value at Risk	For the year ended December 31, 2022
	Average	Maximum	Minimum
Equity security risk	5,038	13,963	1,399

Value at Risk	From Oct 1, 2021 to Sep 30, 2022
	Average	Maximum	Minimum
Equity security risk	5,428	13,963	1,399

(vi) Transferred financial assets that are not fully derecognized

The transactions, relating to transferred financial assets not qualifying for full derecognition, the Bank and subsidiaries 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 and subsidiaries’ obligation to repurchase the transferred assets for a fixed price at a future date is recognized under liability, for these transactions, the Bank and subsidiaries cannot use, sell or pledge those transferred financial assets in availability period, the Bank and subsidiaries has interest rate risk and credit risk, the said transferred assets are not fully derecognized.

As of September 30, 2023, December 31 and September 30, 2022, there were not any financial assets of the Bank that are not fully derecognized.

(vii) Offsetting financial assets and financial liabilities

The Bank and subsidiaries 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:

			September 30, 2023	September 30, 2023
	Financial assets un	d	er offsetting or general agreement of ne		t	amount settlement	o	r 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 balance	s s	et off in the heet (d) Cash collateral received 2,136,890
						Financial instruments (Note)
Derivative financial instruments	$ 1,172,372		-	1,172,372		793,612

(Continued)

106

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

				September 30, 2023	September 30, 2023	September 30, 2023					Net amount (e)=(c)-(d) (2,198,188)
F	inancial liabilities u		n	der offsetting or general agreement of n			e	t amount settlemen	t	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 balance	s s	et off in the heet (d) Cash collateral pledged 2,336,437
								Financial instrument (Note)
Derivative financial instruments	$ 138,249			- D	e	138,249 cember 31, 2022		-
											Net amount (e)=(c)-(d) (2,704,621)
		Financial assets un	d	er offsetting or general agreement of ne			t	amount settlement	o	r 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 balance	set off in the sheet(d) Cash collateral received 2,527,996
							i	Financial nstruments (Note)
Derivative financial instruments	$ 551,095			- D	e	551,095 cember 31, 2022		727,720
											Net amount (e)=(c)-(d) (2,192,753)
F	i	nancial liabilities u	n	der offsetting or general agreement of n			e	t amount settlemen	t	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 balance	set off in the sheet(d) Cash collateral pledged 2,422,569
								Financial instruments (Note)
Derivative financial instruments	$ 229,816							-
											Net amount (e)=(c)-(d) (4,713,744)
		Financial assets un	d	er offsetting or general agreement of ne			t	amount settlement	o	r 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 balance	s s	et off in the heet (d) Cash collateral received 4,293,627
								Financial instruments (Note)
Derivative financial instruments	$ 250,188							670,305
											Net amount (e)=(c)-(d) (1,080,939)
F	i	nancial liabilities u	n	der offsetting or general agreement of n			e	t amount settlemen	t	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 balance	s s	et off in the heet (d) Cash collateral pledged 1,522,902
								Financial instruments (Note)
Derivative financial instruments	$ 441,963			-		441,963		-

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

(Continued)

107

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(aq) 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.
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.

(Continued)

108

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Bank and subsidiaries’ investing and financing activities which did not affect the current cash flow for the nine months ended September 30, 2023 and 2022 were carried out to acquire right-ofuse assets under leases. Please refer to Note 6(l).

Reconciliation of liabilities arising from financing activities were as follows:

Non-cash changes Foreign exchange rate movement Fair value changes Other changes 468,000 34,714 - - - - 10,479 - 363,911 478,479 34,714 363,911	Non-cash changes Foreign exchange rate movement Fair value changes Other changes 468,000 34,714 - - - - 10,479 - 363,911 478,479 34,714 363,911	September 30, 2023 9,870,309 56,550,000 1,264,404
Foreign exchange rate movement 468,000 - 10,479 478,479	Fair value changes 34,714 - - 34,714
		67,684,713

Non-cash changes Foreign exchange rate movement Fair value changes Other changes 1,249,500 36,709 - - - - 36,289 - 342,439 1,285,789 36,709 342,439	Non-cash changes Foreign exchange rate movement Fair value changes Other changes 1,249,500 36,709 - - - - 36,289 - 342,439 1,285,789 36,709 342,439	September 30, 2022 9,579,939 52,250,000 1,200,883
Foreign exchange rate movement 1,249,500 - 36,289 1,285,789	Fair value changes 36,709 - - 36,709
		63,030,822

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

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

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

(Continued)

109

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Private fund Asset securitization product Total	September 30, 2023 $ 186,243 524,708 $ 710,951	December 31, 2022 163,679 560,023 723,702	September 30, 2022
			167,515 589,096
			756,611

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

Assets held by the Bank and subsidiaries	September 30, 2023 $ 186,243 447,995 76,713 $ 710,951	December 31, 2022 163,679 475,485 84,538 723,702	September 30, 2022
Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Investments in debt instruments at amortized cost Total			167,515 496,873 92,223
			756,611

The maximum amount of risk exposure to the Bank and subsidiaries endures to a loss incurred from special purpose entities that is not included in consolidated financial reports is the carrying amount of interests held by the Bank and subsidiaries.

(iv) As of September 30, 2023, December 31 and September 30, 2022, the Bank and subsidiaries has not provided any financial support to its special purpose entities that is not included in consolidated financial reports.

(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 consolidated financial statements.

Name of related party

Bank of Taiwan Ministry of Finance, R.O.C

National Development Fund, Executive Yuan

Taiwan Business Bank Guild

Small and Medium Enterprise Credit Guarantee Fund of Taiwan

Relationship with the Bank and subsidiaries

Corporate director of the Bank Corporate director of the Bank Corporate director of the Bank

Corporate director of the Bank Substantive related parties

(Continued)

110

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of related party	Relationship with the Bank and subsidiaries
TBB No. 1 Venture Capital Limited	Substantive related parties
Partnership (Note)
Media Talk Consulting Co., Ltd. (Note)	Associates
Others	Management and other related parties of the Bank

Note : Become a related party commencing from the first quarter of 2022.

(b) Significant transactions with related parties
(i) Due from banks

Bank of Taiwan Bank of Taiwan Bank of Taiwan	September 30, 2023	September 30, 2023
	Amount % $ 165,045 0.91 December 31, 2022	%
		0.91
		%
		0.71

Interest rates are the same as those with regular clients.

(ii) Call loans to banks

			September 30,	September 30,	December 31,	September 30,
				2023	2022	2022
Bank of Taiwan			$	-	-	-
					Interest Income
				For the three	For the nine
				months ended	months ended
				September 30,	September 30,	Annual
	Highest balance			2023	2023	interest rate
Bank of Taiwan	$	1,597,725		761	5,359	1.24%~5.50%
					Interest income
				For the three	For the nine
				months ended	months ended
				September 30,	September 30,	Annual
	Highest balance			2022	2022	interest rate
Bank of Taiwan	$	686,183		28	392	0.13%~2.53%

Interest rates are the same as those with regular clients.

(Continued)

111

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Call loans from banks

September 30, December 31, September 30, 2023 2022 2022 Bank of Taiwan $ 2,582,800 1,786,360 4,264,850 Interest Expense For the three For the nine months ended months ended September 30, September 30, Annual Highest balance 2023 2023 interest rate Bank of Taiwan $ 18,383,250 35,633 116,126 0.68%~5.75% Interest Expense For the three For the nine months ended months ended September 30, September 30, Annual Highest balance 2022 2022 interest rate Bank of Taiwan $ 9,434,791 24,539 41,038 0.04%~5.00%

Interest rates are the same as those with regular clients.

(iv) Deposits

Others Others Others	September 30, 2023	September 30, 2023
	Amount % $ 2,030,127 0.11 December 31, 2022	%
		0.11
		%
		0.11

Interest rates are the same as those with regular clients.

(v) Credit

Credit	Credit	Credit	Credit	Credit	Credit	Credit	Credit
September 30, 2023
Category	Number of clients or name of relatedparty	Highest balance	Ending balance	Performing situations		Collaterals	Transaction terms are different to regular clients
				Performing loan	Non-performing Loans
Employee consumer loans	39	14,403	11,591	11,591	-	none	none
Self-use home mortgages loans	117	554,182	489,791	489,791	-	real estate	none
Others	Natural person	605,165	511,869	511,869	-	real estate	none

(Continued)

112

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
Category	Number of clients or name of relatedparty	Highest balance	Ending balance	Performing situations		Collaterals	Transaction terms are different to regular clients
				Performing loan	Non-performing Loans
Employee consumer loans	46	18,311	14,727	14,727	-	none	none
Self-use home mortgages loans	127	557,503	511,280	511,280	-	real estate	none
Others	Natural person	617,163	590,656	590,656	-	real estate	none

September 30, 2022
Category	Number of clients or name of relatedparty	Highest balance	Ending balance	Performing situations		Collaterals	Transaction terms are different to regular clients
				Performing loan	Non-performing Loans
Employee consumer loans	42	16,350	13,345	13,345	-	none	none
Self-use home mortgages loans	117	474,569	437,924	437,924	-	real estate	none
Others	Natural person	566,150	547,229	547,229	-	real estate	none

(vi) Donation:

Small and Medium Enterprise Credit Guarantee Fund of Taiwan Taiwan Business Bank Guild Total	For the three months ended September 30, 2023 2022 $ 90,339 79,632 - - $ 90,339 79,632	For the nine months ended September 30,	For the nine months ended September 30,
	2023 $ 90,339 - $ 90,339	2023 271,022 4,200 275,222	2022
			238,898 2,500 241,398

(vii) Guarantees: None.

(viii) Service fees: None.

(ix) Rental revenue: None.

(x) Derivatives financial instrument transactions: None.

(xi) Sales of Non–Performing Loans Transactions: None.

(xii) Unearned revenue:

TBB No. 1 Venture Capital Limited Partnership	September 30, 2023 $ 4,262	December 31, 2022 -	September 30, 2022
			4,297

(Continued)

113

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(xiii) Other revenue:

For the three months ended September 30, 2023 2022 $ 4,262 4,297 - - $ 4,262 4,297	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 4,262 - $ 4,262	2023 12,786 10 12,796	2022
		12,657 -
		12,657

(c) Major management salary information

For the three months ended September 30 2023 2022 $ 44,231 37,211 576 605 $ 44,807 37,816	For the nine months ended September 30,	For the nine months ended September 30,
2023 $ 44,231 576 $ 44,807	2023 118,429 1,874 120,303	2022
		98,230 1,802
		100,032

(8) Pledged assets:

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

(9) Commitments and contingencies:

(a) Significant commitments and contingencies were as follows:

Marketable securities held for custody Bills collected for others Bills lent for others Guarantees and letters of credit Trust liabilities Items held for custody Registered government bonds for sale Registered short-term bills for sale Guarantee notes payable	September 30, 2023 $ 8,349,715 39,181,900 47,750,369 37,100,874 225,735,038 725,982 67,218,200 2,628,488 32,222,100	December 31, 2022 September 30, 2022 8,659,768 8,823,960 43,238,126 45,073,244 49,785,210 50,018,910 30,185,645 34,208,544 218,150,077 223,136,084 901,998 978,257 66,327,700 66,311,200 4,290,113 4,564,928 54,054,530 52,085,900

(b) Unrecognized contractual commitments:

As of September 30, 2023, December 31 and September 30, 2022, major constructions in progress and purchases amounted to $1,024,895, $1,018,993 and $805,720 respectively, of which $740,684, $911,848 and $694,794 respectively, remained unpaid.

(Continued)

114

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) In 1996, the Bank’ s World Trade Center Branch was sued for handling a letter of credit export collection from Chin Seen Industrial Co., 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, suffered a loss thereon. In November 1998, I.C.C.I. initiated a case with the Court of Commerce of Brussels in Belgium, requested the L/C opening bank (Banque Bruxelles Lambert, or BBL) and the Bank to jointly pay compensation of USD$7,830 thousand plus interest, losses, and expenses for the L/C. On August 31, 2005, the Court of Commerce of Brussels rendered its judgment which the Bank has to make compensation of USD$7,674 thousand plus interest to I.C.C.I.. 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 which I.C.C.I and the Bank are both responsible for the offense. Furthermore, on November 16, 2011, the judgment of the court indicated that the Bank should be responsible for 90% of the negligence proportion. In terms of the judgment of the court of the second instance, the Bank has filed an appeal on November 3, 2011. On February 6, 2013, the court overruled the Bank’ s appeal and the Bank lost the case. However, the Bank and I.C.C.I couldn't reach an agreement on the exchange rate and the calculation of the compensation. In October 2016, I.C.C.I initiated a case with the Court of Frankfurt in Germany, applied for seizing the Bank account in Germany, and the Bank lodged guaranty money of EUR $13,200 thousand to the court to rescind the order for attachment.

In July 2017, I.C.C.I applied for compulsory execution to the guaranty money, the court has transferred the guaranty money to I.C.C.I. The Bank then filed a lawsuit objecting to the debt through the attorney. The case was dismissed by the Court of Frankfurt in November 2018, and remanded back to trial court in November 2019 after the Bank's appeal was granted by the High Court of Frankfurt. I.C.C.I. has filed a statement of grounds for objection to the Federal Supreme Court of Justice on March 16, 2019. And request to revoke the "Return of the Judgment of the Frankfurt High Court". The Bank has appointed a lawyer to act as an attorney in the Federal Supreme Court of Justice and filed a defense against I.C.C.I. of objections. The case 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. On August 23, 2023, the Frankfurt District Court ruled that the bank won the case in the first instance. I.C.C.I. Company must pay the Bank EUR$1,046 thousand plus interest since November 17, 2017. I.C.C.I. Company appealed on September 25, 2023. 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 USD$1,130 thousand in compensation and held the Bank as jointly liable, and by I.C.C.I, which demanded the Bank to pay USD$20,060 thousand less its reimbursed amount to make a security deposit of EUR$14,000 thousand. The Bank has engaged local attorneys to represent itself in court. The Court of Congo will merge the two cases for court. In April 2021, the translation of judgement from the Court of Congo, judging that the Bank should pay around EUR$20,060 thousand for I.C.C.I. Also, I.C.C.I must compensate Star Marine for USD$1,130 thousand as well as make a security deposit of EUR$14,000 thousand in the domestic bank in Congo. According to the statement of plaintiff and considering that I.C.C.I has already received about EUR$14,860 thousand, an addition of $75,181 has been provision for lawsuit in 2021. Please refer to Note 6(v) for more details. As of September 30, 2023, the Bank has accrued the compensation of $259,635 and EUR$9,660 thousand.

(10) Losses from disasters: None

(11) Subsequent Events: None

(Continued)

115

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(12) Others:

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

Items	Month/Year	Month/Year	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023
			Non-performing loans (Note1)	Total loans	Non-performing loan ratio (Note2)	Allowance for credit losses	Coverage ratio (Note3)
Corporate finance	Secured		1,562,424	733,836,885	0.21 %	9,264,515	592.96 %
	Unsecured		633,711	362,371,183	0.17 %	4,866,498	767.94 %
Consumer finance	Residence mortgages(Note 4)		199,205	197,084,377	0.10 %	2,480,789	1,245.34 %
	Cash cards		-	-	- %	-	- %
	Microcredit(Note 5)		4,105	276,239	1.49 %	6,482	157.90 %
	Others (Note 6)	Secured	150,560	150,651,797	0.10 %	1,897,400	1,260.23 %
		Unsecured	19,388	13,236,097	0.15 %	172,798	891.26 %
Total loan busin	ess		2,569,393	1,457,456,578	0.18 %	18,688,482	727.35 %
			Overdue receivables	Total receivables	Delinquency ratio	Allowance for credit losses	Coverage ratio
Credit cards bus	iness		400	1,215,487	0.03 %	12,390	3,097.50 %
Account receiva (Note 7)	ble factoring-without recourse		-	-	- %	-	- %

Items	Month/Year		December 31, 2022
			Non-performing loans (Note1)	Total loans	Non-performing loan ratio (Note2)	Allowance for credit losses	Coverage ratio (Note3)
Corporate finance	Secured		1,602,465	713,092,812	0.22 %	8,945,106	558.21 %
	Unsecured		691,641	372,391,080	0.19 %	4,952,203	716.01 %
Consumer finance	Residence mortgages(Note 4)		187,800	170,335,261	0.11 %	2,130,940	1,134.69 %
	Cash cards		-	-	- %	-	- %
	Microcredit(Note 5)		4,802	325,663	1.47 %	7,370	153.48 %
	Others (Note 6)	Secured	266,055	149,120,110	0.18 %	1,868,990	702.48 %
		Unsecured	14,614	13,228,525	0.11 %	174,007	1,190.69 %
total loan busine	ss		2,767,377	1,418,493,451	0.20 %	18,078,616	653.28 %
			Overdue receivables	Total receivables	Delinquency ratio	Allowance for credit losses	Coverage ratio
Credit cards bus	iness		437	1,122,771	0.04 %	14,292	3,270.48 %
Account receiva (Note 7)	ble factoring-without recourse		-	-	- %	-	- %

(Continued)

116

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Items	Month/Year	Month/Year	September 30, 2022	September 30, 2022	September 30, 2022	September 30, 2022	September 30, 2022
			Non-performing loans (Note1)	Total loans	Non-performing loan ratio (Note2)	Allowance for credit losses	Coverage ratio (Note3)
Corporate finance	Secured		1,450,475	705,330,178	0.21 %	8,503,201	586.24 %
	Unsecured		810,816	367,530,123	0.22 %	5,003,420	617.08 %
Consumer finance	Residence mortgages(Note 4)		197,330	160,588,873	0.12 %	1,938,763	982.50 %
	Cash cards		-	-	- %	-	- %
	Microcredit(Note 5)		6,196	348,606	1.78 %	8,790	141.87 %
	Others (Note 6)	Secured	318,971	148,229,040	0.22 %	1,787,519	560.40 %
		Unsecured	27,609	13,127,469	0.21 %	174,776	633.04 %
Total loan busin	ess		2,811,397	1,395,154,289	0.20 %	17,416,469	619.50 %
			Overdue receivables	Total receivables	Delinquency ratio	Allowance for credit losses	Coverage ratio
Credit cards bus	iness		1,265	1,058,565	0.12 %	15,379	1,215.73 %
Account receiva (Note 7)	ble factoring-without recourse		-	-	- %	-	- %

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.
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.

(Continued)

117

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Overdue loans and receivables exempted from reporting

September 30, 2023	September 30, 2023	December	31, 2022	September 30, 2022	September 30, 2022
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	Loans may be exempted from reporting as a non-performing loan	Receivables may be exempted from reporting as overdue receivables
	858 18,694 19,552	258 54,109 54,367	1,112 22,489 23,601	287 49,966 50,253	1,211 23,286
					24,497

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.”
(ii) Concentration of credit extensions

Concentration of credit extensions	Concentration of credit extensions	Concentration of credit extensions	Concentration of credit extensions
September 30, 2023
Ranking	Group enterprise	Credit amount	Credit amount to equity ratio (%)
1	A company. (Railway transportation)	20,228,474	% 17.56
2	B group. (Real estate for sale and rental with own or leased property)	16,752,808	% 14.54
3	C group. (Steel rolling and extruding)	9,513,042	% 8.26
4	D group. (Other holding)	9,077,794	% 7.88
5	E group. (Liquid crystal panel and components manufacturing)	7,450,819	% 6.47
6	F group. (Real estate development)	7,330,243	% 6.36
7	G group. (Real estate development)	6,660,528	% 5.78
8	H group. (Computers manufacturing)	6,374,002	% 5.53
9	I group. (Financial leasing)	6,273,362	% 5.45
10	J group. (Real estate development)	6,202,049	% 5.38

(Continued)

118

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
Ranking	Group enterprise	Credit amount	Credit amount to equity ratio (%)
1	A company. (Railway transportation)	21,202,474	% 20.37
2	B group. (Real estate for sale and rental with own or leased property)	16,381,315	% 15.74
3	D group. (Other holding)	9,788,164	% 9.40
4	F group. (Real estate development)	8,982,725	% 8.63
5	C group. (Steel rolling and extruding)	8,715,755	% 8.37
6	H group. (Computers manufacturing)	6,523,340	% 6.27
7	G group. (Real estate development)	6,261,408	% 6.01
8	J group. (Real estate development)	6,027,170	% 5.79
9	E group. (Liquid crystal panel and components manufacturing)	5,531,674	% 5.31
10	I group. (Financial leasing)	4,565,169	% 4.39

September 30, 2022	September 30, 2022	September 30, 2022	September 30, 2022
Ranking	Group enterprise	Credit amount	Credit amount to equity ratio (%)
1	A company. (Railway transportation)	21,202,474	% 21.31
2	B group. (Real estate for sale and rental with own or leased property)	14,941,775	% 15.02
3	D group. (Other holding)	9,029,266	% 9.07
4	F group. (Real estate development)	8,997,725	% 9.04
5	C group. (Steel rolling and extruding)	8,776,513	% 8.82
6	H group. (Computers manufacturing)	6,640,502	% 6.67
7	J group. (Real estate development)	6,492,543	% 6.53
8	G group. (Real estate development)	6,155,650	% 6.19
9	I group. (Financial Leasing)	5,268,235	% 5.29
10	E group. (Liquid crystal panel and components manufacturing)	4,516,636	% 4.54

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)

119

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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 : %

September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 1,558,399,496	51,733,601	48,076,949	125,384,924	1,783,594,970
Interest rate-sensitive liabilities	1,359,388,997	72,946,226	90,115,745	60,135,566	1,582,586,534
Interest rate sensitivity gap	199,010,499	(21,212,625)	(42,038,796)	65,249,358	201,008,436
Net worth					115,211,917
Ratio of interest rate-sensitive assets to liabilities (%)					112.70
Ratio of interest rate-sensitive gap to net worth (%)					174.47

December 31, 2022
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 1,464,207,488	24,207,477	42,324,132	136,449,514	1,667,188,611
Interest rate-sensitive liabilities	1,333,797,410	31,475,346	65,933,051	49,486,811	1,480,692,618
Interest rate sensitivity gap	130,410,078	(7,267,869)	(23,608,919)	86,962,703	186,495,993
Net worth					104,107,258
Ratio of interest rate-sensitive assets to liabilities (%)					112.60
Ratio of interest rate-sensitive gap to net worth (%)					179.14

September 30, 2022
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 1,419,931,860	36,238,915	39,351,211	141,318,971	1,636,840,957
Interest rate-sensitive liabilities	1,278,289,011	44,550,295	62,309,511	52,285,803	1,437,434,620
Interest rate sensitivity gap	141,642,849	(8,311,380)	(22,958,300)	89,033,168	199,406,337
Net worth					99,502,476
Ratio of interest rate-sensitive assets to liabilities (%)					113.87
Ratio of interest rate-sensitive gap to net worth (%)					200.40

(Continued)

120

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Unit : In Thousands of US Dollars, %

September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 4,059,233	387,893	93,824	1,960,978	6,501,928
Interest rate-sensitive liabilities	7,190,624	1,615,858	2,135,187	220	10,941,889
Interest rate sensitivity gap	(3,131,391)	(1,227,965)	(2,041,363)	1,960,758	(4,439,961)
Net worth					3,568,590
Ratio of interest rate-sensitive assets to liabilities (%)					59.42
Ratio of interest rate-sensitive gap to net worth (%)					(124.42)

December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 5,161,097	219,595	116,768	993,718	6,491,178
Interest rate-sensitive liabilities	7,302,641	1,388,445	2,402,052	1,139	11,094,277
Interest rate sensitivity gap	(2,141,544)	(1,168,850)	(2,285,284)	992,579	(4,603,099)
Net worth					3,388,357
Ratio of interest rate-sensitive assets to liabilities (%)					58.51
Ratio of interest rate-sensitive gap to net worth (%)					(135.85)

September 30, 2022
Item	1~90 days	91~180 days	181days~1year	over 1 year	total
Interest rate-sensitive assets	$ 5,489,259	248,092	71,197	943,684	6,752,232
Interest rate-sensitive liabilities	7,750,881	941,573	2,130,585	3,852	10,826,891
Interest rate sensitivity gap	(2,261,622)	(693,481)	(2,059,388)	939,832	(4,074,659)
Net worth					3,127,042
Ratio of interest rate-sensitive assets to liabilities (%)					62.37
Ratio of interest rate-sensitive gap to net worth (%)					(130.30)

(Continued)

121

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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).

(iv) Profitability

Unit: %

			Unit: %
Item		September 30, 2023	September 30, 2022
The ratio of return on assets	Before income tax	0.47	0.42
	After income tax	0.39	0.35
The ratio of return on equity	Before income tax	9.13	8.44
	After income tax	7.63	7.05
Net income ratio		34.65	34.16

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

		September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023
	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	$ 1,899,870,602	220,690,950	201,618,018	168,403,452	182,898,091	171,306,718	954,953,373
Major maturity capital outflow	2,351,188,300	62,011,010	104,133,821	250,504,969	316,412,085	427,358,410	1,190,768,005
Gap	(451,317,698)	158,679,940	97,484,197	(82,101,517)	(133,513,994)	(256,051,692)	(235,814,632)

(Continued)

122

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Note: Listed amounts are denominated in New Taiwan dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow $449,702,589.

		December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
	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	$ 1,798,278,148	171,214,261	167,605,412	186,953,929	204,957,223	152,184,634	915,362,689
Major maturity capital outflow	2,201,577,109	79,002,934	115,025,374	262,893,103	184,927,959	384,673,313	1,175,054,426
Gap	(403,298,961)	92,211,327	52,580,038	(75,939,174)	20,029,264	(232,488,679)	(259,691,737)

Note: Listed amounts are denominated in New Taiwan dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow $390,839,630.

		September 30, 2022	September 30, 2022	September 30, 2022	September 30, 2022	September 30, 2022	September 30, 2022
	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	$ 1,740,420,017	122,635,281	166,776,516	192,166,781	199,701,007	150,293,541	908,846,891
Major maturity capital outflow	2,137,521,910	53,152,832	134,510,227	236,574,590	252,914,115	339,722,365	1,120,647,781
Gap	(397,101,893)	69,482,449	32,266,289	(44,407,809)	(53,213,108)	(189,428,824)	(211,800,890)

Note: Listed amounts are denominated in New Taiwan dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow $393,074,281.

2) Maturity analysis in US dollars

Unit : In Thousands of US Dollars

		September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023	September 30, 2023
	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	$ 14,882,831	2,709,520	2,781,360	2,122,793	2,592,689	4,676,469
Major maturity capital outflow	15,910,917	4,602,537	3,619,090	2,235,985	2,837,580	2,615,725
Gap	(1,028,086)	(1,893,017)	(837,730)	(113,192)	(244,891)	2,060,744

Note: Listed amounts are denominated in US dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow USD $912,346.

(Continued)

123

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
	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	$ 16,353,649	5,107,519	4,629,214	1,287,440	1,713,177	3,616,299
Major maturity capital outflow	17,155,496	3,645,117	4,045,473	2,484,679	3,910,394	3,069,833
Gap	(801,847)	1,462,402	583,741	(1,197,239)	(2,197,217)	546,466

Note: Listed amounts are denominated in US dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow USD $912,002.

	$912,002.
		September 30, 2022
	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	$ 16,008,504	4,609,724	3,351,178	2,404,391	2,031,320	3,611,891
Major maturity capital outflow	16,823,197	3,540,905	3,783,898	2,278,778	3,913,854	3,305,762
Gap	(814,693)	1,068,819	(432,720)	125,613	(1,882,534)	306,129

Note: Listed amounts are denominated in US dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow USD $903,079.

(Continued)

124

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:
(i) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 10% of the capital stock: None.
(ii) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 10% of the capital stock: None.
(iii) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 10% of the capital stock: None.
(iv) Service charge discounts on transactions with related parties in an aggregate amount of NT$5 million or more: None.
(v) Receivables from related parties with amounts exceeding the lower of NT$300 million or 10% of the capital stock: None.
(vi) Information on NPL disposal transaction: None.
(vii) Types of securitization instruments approved to be issued pursuant to financial assets securitization rules or real estate securitization rules and other relevant information: None.

(viii) Business relationships and significant intercompany transactions:

No (Note 1)	Trader	Counterparty	Relationship (Note 2)	Transaction status for the nine months ended September 30, 2023	Transaction status for the nine months ended September 30, 2023	Transaction status for the nine months ended September 30, 2023	Transaction status for the nine months ended September 30, 2023
				Account	Amount	Terms	Percentage accounted for consolidated net revenue or total assets
0	Taiwan Business Bank, Ltd.	TBB International Leasing Co., Ltd.	1	Deposits and remittances	53,747	No difference with non- related parties	- %
1	TBB International Leasing Co., Ltd.	Taiwan Business Bank, Ltd.	2	Right-of-use assets	3,813	No difference with non- related parties	- %
1	TBB International Leasing Co., Ltd.	Taiwan Business Bank, Ltd.	2	Lease liabilities	3,828	No difference with non- related parties	- %
0	Taiwan Business Bank, Ltd.	TBB International Leasing Co., Ltd.	1	Net revenue other than interest	613	No difference with non- related parties	- %
0	Taiwan Business Bank, Ltd.	TBB Venture Capital Co., Ltd.	1	Deposits and remittances	109,341	No difference with non- related parties	- %
2	TBB Venture Capital Co., Ltd.	Taiwan Business Bank, Ltd.	2	Right-of-use assets	520	No difference with non- related parties	- %
2	TBB Venture Capital Co., Ltd.	Taiwan Business Bank, Ltd.	2	Lease liabilities	527	No difference with non- related parties	- %
0	Taiwan Business Bank, Ltd.	TBB Venture Capital Co., Ltd.	1	Net revenue other than interest	131	No difference with non- related parties	- %
0	Taiwan Business Bank, Ltd.	Taiwan Business Bank International Leasing Co., Ltd.	1	Deposits and remittances	113,201	No difference with non- related parties	0.01 %
0	Taiwan Business Bank, Ltd.	TBB Consulting Co., Ltd.	1	Deposits and remittances	63,461	No difference with non- related parties	- %
0	Taiwan Business Bank, Ltd.	TBB Consulting Co., Ltd.	1	Net revenue other than interest	729	No difference with non- related parties	- %
3	TBB Consulting Co., Ltd.	Taiwan Business Bank, Ltd.	2	Right-to-use assets	2,905	No difference with non- related parties	- %
3	TBB Consulting Co., Ltd.	Taiwan Business Bank, Ltd.	2	Lease liabilities	2,936	No difference with non- related parties	- %
2	TBB Venture Capital Co., Ltd.	TBB Consulting Co., Ltd.	3	Business expenses	21,715	No difference with non- related parties	- %

Note: 1. The meaning of the number is as follows.

(1) Zero stands for the parent company

(2) Subsidiaries are numbered in a sequence of Arabic numerals from 1 based on company category.

There are three kinds of relationships with counterparty

(1) Parent company to subsidiary

(2) Subsidiary to parent company

(3) Between subsidiaries

(ix) Other significant transactions that may have substantial influence upon the decisions made by financial report users: None.

(Continued)

125

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 B	The cross holding of the B	ank and its related parties	ank and its related parties	Note
						Number of shares	Number of proforma shares	Total
								Number of shares	Shareholding ratio
TBB International Leasing Co., Ltd.	Taiwan	Leasing business	100.00 %	1,548,244	38,557	150,000	-	150,000	100.00 %	Already written-off when preparing the consolidated financial statements
TBB (Cambodia) Microfinance Institution Plc	Cambodia	SMEs and personal finance business	100.00 %	661,859	5,337	20	-	20	100.00 %	`〞`
TBB Venture Capital Co., Ltd.	Taiwan	Investing business	100.00 %	1,366,474	108,050	123,211	-	123,211	100.00 %	`〞`
TBB Consulting Co., Ltd.	Taiwan	Consulting business	100.00 %	61,925	7,112	5,000	-	5,000	100.00 %	`〞`
Media Talk Consulting Co., Ltd.	Taiwan	Investing cultural and creative business	20.00 %	-	(808)	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	Guarantee	Limited amount for individual object	Total limited amount for loan
													Name	Value
1	TBB International Leasing Co., Ltd.	Hsin Chuan Construction Co., Ltd.	Financial receivables	No	104,430	37,724	100,000	2%-10%	2	-	To the lender for buying goods	377	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Xi Quan Restaurant Co., Ltd	Financial receivables	No	98,957	82,445	100,000	2%-10%	2	-	To the lender for buying goods	824	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Acon-Holding INC.	Financial receivables	No	60,000	15,112	30,000	2%-10%	2	-	To the lender for buying goods	151	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Maw Shing Top Co., Ltd.	Financial receivables	No	24,616	13,282	30,000	2%-10%	2	-	To the lender for buying goods	133	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Yu Ding Investment Co., Ltd	Financial receivables	No	46,989	22,409	50,000	2%-10%	2	-	To the lender for buying goods	224	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Chaishan Foods Co., Ltd.	Financial receivables	No	50,000	16,958	50,000	2%-10%	2	-	To the lender for buying goods	170	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Chao-Chi Property Management Consulting Co.,Ltd	Financial receivables	No	23,835	12,559	15,000	2%-10%	2	-	To the lender for buying goods	126	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Tai Chang Fiber Co., Ltd	Financial receivables	No	23,851	12,562	15,000	2%-10%	2	-	To the lender for buying goods	126	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Risingsun Wide Food Corp.	Financial receivables	No	27,439	-	30,000	2%-10%	2	-	To the lender for buying goods	-	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Yu Cheng Precision Industry Co.,Ltd.	Financial receivables	No	8,054	-	12,000	2%-10%	2	-	To the lender for buying goods	-	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Jiou Chang Motor Co., Ltd.	Financial receivables	No	9,188	2,552	10,000	2%-10%	2	-	To the lender for buying goods	26	None	-	379,101	1,516,403

(Continued)

126

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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	Guarantee	Limited amount for individual object	Total limited amount for loan
													Name	Value
1	TBB International Leasing Co., Ltd.	Liang-wei Tobacco & Liquor Co., Ltd.	Financial receivables	No	9,188	2,554	10,000	2%-10%	2	-	To the lender for buying goods	26	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	JIA HO FOOD CO., LTD.	Financial receivables	No	19,044	7,146	20,000	2%-10%	2	-	To the lender for buying goods	71	None	-	379,101	1,516,403
1	TBB International Leasing Co., Ltd.	Cheng Mao Enterprise Co., Ltd.	Financial receivables	No	8,000	8,000	8,000	2%-10%	2	-	To the lender for buying goods	80	None	-	379,101	1,516,403
1	TBB International Leasing Co.,Ltd.	Chao-Yang International Co., Ltd.	Financial receivables	No	30,115	20,000	20,000	2%-10%	2	-	To the lender for buying goods	200	None	-	379,101	1,516,403

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

(iv) Acquisition of securities:

Company acquired	Type and name of the security	Relationship with the security issuer	Account	At the end of the period	At the end of the period	At the end of the period	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	-	980,629	100.00 %	980,629	The transaction has been written off when preparing the consolidated financial statements.
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	-	100,000	- %	100,000	`〞`
TBB Venture Capital Co., Ltd.	Energenesis Biomedical Co., Ltd.	-	Financial assets at fair value through profit or loss	220	13,200	0.29 %	13,200	Listed Stocks
TBB Venture Capital Co., Ltd.	Powerchip Semiconductor Manufacturing Corporation	-	Financial assets at fair value through profit or loss	250	6,638	0.01 %	6,638	`〞`
TBB Venture Capital Co., Ltd.	Lungteh Shipbuilding Co., Ltd.	-	Financial assets at fair value through profit or loss	748	73,648	0.69 %	73,648	`〞`
TBB Venture Capital Co., Ltd.	Evergreen Aviation Technologies Corporation	-	Financial assets at fair value through profit or loss	13	1,378	- %	1,378	`〞`
TBB Venture Capital Co., Ltd.	Tigerair Taiwan Co., Ltd.	-	Financial assets at fair value through profit or loss	836	25,216	0.19 %	25,216	`〞`
TBB Venture Capital Co., Ltd.	Eir Genix, Inc.	-	Financial assets at fair value through profit or loss	845	82,388	0.28 %	82,388	OTC Stocks
TBB Venture Capital Co., Ltd.	Chenfull Precision Co., Ltd.	-	Financial assets at fair value through profit or loss	180	21,150	0.30 %	21,150	`〞`

(Continued)

127

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Company acquired	Type and name of the security	Relationship with the security issuer	Account	At the end of the period	At the end of the period	At the end of the period	At the end of the period	Note
				Number of shares	Carrying amount	Share proportion	Market price
TBB Venture Capital Co., Ltd.	Ping Ho Environmental Technology Co., Ltd.	-	Financial assets at fair value through profit or loss	130	7,683	0.45 %	7,683	Emerging Stocks
TBB Venture Capital Co., Ltd.	Handa Pharmaceuticals, Inc.	-	Financial assets at fair value through profit or loss	1,470	225,576	1.05 %	225,576	`〞`
TBB Venture Capital Co., Ltd.	Locus Cell Co., Ltd.	-	Financial assets at fair value through profit or loss	1,341	45,192	0.67 %	45,192	`〞`
TBB Venture Capital Co., Ltd.	Starlux Airlines Co., Ltd.	-	Financial assets at fair value through profit or loss	4,763	111,933	0.23 %	111,933	`〞`
TBB Venture Capital Co., Ltd.	TFBS Bioscience, Inc.	-	Financial assets at fair value through profit or loss	260	14,274	0.78 %	14,274	`〞`
TBB Venture Capital Co., Ltd.	Iovtec Co., Ltd.	-	Financial assets at fair value through profit or loss	485	40,659	2.93 %	40,659	`〞`
TBB Venture Capital Co., Ltd.	Song Chuan Precision Co., Ltd.	-	Financial assets at fair value through profit or loss	665	66,496	1.02 %	66,496	Unlisted Stocks
TBB Venture Capital Co., Ltd.	Techplasma Technology Co., Ltd.	-	Financial assets at fair value through profit or loss	944	47,184	2.84 %	47,184	`〞`
TBB Venture Capital Co., Ltd.	Hephas Energy Co., Ltd.	-	Financial assets at fair value through profit or loss	816	57,153	2.96 %	57,153	`〞`
TBB Venture Capital Co., Ltd.	Ren Chin Electric Conductor Co., Ltd.	-	Financial assets at fair value through profit or loss	250	5,560	2.61 %	5,560	`〞`
TBB Venture Capital Co., Ltd.	Manford Machinery Co.,Ltd.	-	Financial assets at fair value through profit or loss	1,195	25,430	2.99 %	25,430	`〞`
TBB Venture Capital Co., Ltd.	Yuh Shan Enviromental Engineering Co., Ltd.	-	Financial assets at fair value through profit or loss	562	19,662	1.94 %	19,662	`〞`
TBB Venture Capital Co., Ltd.	e-Formula Technologies,Inc.	-	Financial assets at fair value through profit or loss	600	12,582	2.76 %	12,582	`〞`
TBB Venture Capital Co., Ltd.	Han-win Technology Co.,Ltd	-	Financial assets at fair value through profit or loss	453	4,972	2.20 %	4,972	`〞`
TBB Venture Capital Co., Ltd.	Ina Energy Corporation	-	Financial assets at fair value through profit or loss	2,000	40,500	0.99 %	40,500	`〞`
TBB Venture Capital Co., Ltd.	Amazing Cool Technology Corporation.	-	Financial assets at fair value through profit or loss	390	4,516	2.79 %	4,516	`〞`
TBB Venture Capital Co., Ltd.	Long-Shun Green Energy Technology Ltd.	-	Financial assets at fair value through profit or loss	1,045	41,800	2.99 %	41,800	`〞`
TBB Venture Capital Co., Ltd.	Gamamobi Taiwan Co.,Ltd.	-	Financial assets at fair value through profit or loss	200	-	1.00 %	-	`〞`
TBB Venture Capital Co., Ltd.	Toyo Automation Co.,Ltd.	-	Financial assets at fair value through profit or loss	263	19,835	0.95 %	19,835	`〞`
TBB Venture Capital Co., Ltd.	aetherAI Co., Ltd.	-	Financial assets at fair value through profit or loss	400	10,000	0.66 %	10,000	`〞`
TBB Venture Capital Co., Ltd.	Quants AI Inc.	-	Financial assets at fair value through profit or loss	1,600	11,424	8.89 %	11,424	`〞`
TBB Venture Capital Co., Ltd.	Honley Auto. Parts Co., Ltd.	-	Financial assets at fair value through profit or loss	3,000	14,820	2.95 %	14,820	`〞`
TBB Venture Capital Co., Ltd.	Cuumed Catheter Medical Co., Ltd.	-	Financial assets at fair value through profit or loss	600	21,000	1.53 %	21,000	`〞`
TBB Venture Capital Co., Ltd.	AnnJi Pharmaceutical Co. Ltd.	-	Financial assets at fair value through profit or loss	400	12,000	0.45 %	12,000	`〞`
TBB Venture Capital Co., Ltd.	GoodLinker Co., Ltd.	-	Financial assets at fair value through profit or loss	100	787	2.86 %	787	`〞`

(Continued)

128

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Company acquired	Type and name of the security	Relationship with the security issuer	Account	At the end of the period	At the end of the period	At the end of the period	At the end of the period	Note
				Number of shares	Carrying amount	Share proportion	Market price
TBB Venture Capital Co., Ltd.	Yiyi Pictures Co Ltd.	-	Financial assets at fair value through profit or loss	9	2,688	2.94 %	2,688	Unlisted Stocks
TBB Venture Capital Co., Ltd.	Inbound Asia Co., Ltd.	-	Financial assets at fair value through profit or loss	83	2,096	0.49 %	2,096	`〞`
TBB Venture Capital Co., Ltd.	Asia Hydrogen Energy Corporation	-	Financial assets at fair value through profit or loss	132	1,216	1.98 %	1,216	`〞`
TBB Venture Capital Co., Ltd.	Longwalk social enterprise, Co., Ltd.	-	Financial assets at fair value through profit or loss	120	436	12.77 %	436	`〞`
TBB Venture Capital Co., Ltd.	Carpost Co., Ltd.	-	Financial assets at fair value through profit or loss	330	4,412	2.84 %	4,412	`〞`
TBB Venture Capital Co., Ltd.	Rising FinTech Corp.	-	Financial assets at fair value through profit or loss	38	3,000	2.29 %	3,000	`〞`
TBB Venture Capital Co., Ltd.	Maxima Biotech Inc.	-	Financial assets at fair value through profit or loss	225	4,950	0.96 %	4,950	`〞`
TBB Venture Capital Co., Ltd.	Taiwania Buffalo III Biotechnology Venture Capital LLP.	-	Financial assets at fair value through profit or loss	-	52,881	4.57 %	52,881	Private Fund
TBB Venture Capital Co., Ltd.	Ju He Venture Capital LLP.	-	Financial assets at fair value through profit or loss	-	24,826	2.46 %	24,826	`〞`
TBB Venture Capital Co., Ltd.	TBB No.1 Venture Capital Limited Partnership	-	Financial assets at fair value through profit or loss	-	12,977	1.12 %	12,977	`〞`
TBB Venture Capital Co., Ltd.	Outstanding Capital Limited Partnership	-	Financial assets at fair value through profit or loss	-	8,667	4.86 %	8,667	`〞`
TBB Venture Capital Co., Ltd.	Pinkoi Inc.	-	Financial assets at fair value through profit or loss	93	16,416	0.53 %	16,416	Unlisted Stocks
TBB Venture Capital Co., Ltd.	Jia Da International Development Co., Ltd.	-	Financial assets at fair value through other comprehensive income	2,919	29,719	8.52 %	29,719	`〞`
TBB Venture Capital Co., Ltd.	Media Talk Consulting Co., Ltd.	Associates	Investment under equity method	200	-	20.00 %	-
TBB Consulting Co., Ltd.	TBB No.1 Venture Limited Partnership	-	Financial assets at fair value through profit or loss	-	1,298	0.11 %	1,298	Private Fund

(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.

(Continued)

129

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Information on investments in Mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

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	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 (Notes 2 and 4)	Ending carrying value of investment	Accumulated inward remittance of earnings as of the end of period
					Transferred out	Recovered
Taiwan Business Bank , Ltd. Shanghai branch	Banking business	3,910,537 (CNY800 million) (Operating capital)	(3)	3,910,537 (CNY800 million)	-	-	3,910,537 (CNY800 million)	-	Shanghai branch of the Bank, not an investee company	Note 4	4,596,039	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	4,373,324	"
Taiwan Business Bank International Leasing Co., Ltd.	Leasing business	838,305 (CNY170 million) (Operating capital)	(1)	838,305 (CNY170 million)	-	-	838,305 (CNY170 million)	26,451 2 (c)	100%	26,451 2 (c)	980,629	"

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 oversea 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)	69,127,150

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

(d) Information of major shareholders:

Information of major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Bank of Taiwan	1,333,153,090	% 16.21
National Development Fund, Executive Yuan	482,381,505	% 5.87

(Continued)

130

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information:

(a) General information

The chief operating decision maker is the general manager of the Bank and subsidiaries who is in charge of all major projects' approval, budget review and performance measurement. In order to express operating activities legitimately, the reportable segments of the Bank are Bank segment, Securities segment, Trust segment, Insurance agency segment and Others. Securities segment, Trust segment, Insurance agency segment and Other segments don't meet the quantitative thresholds, therefore regarded as the same reporting segment. The main operations of the banking segment are engaged in the deposits, remittance and loans in New Taiwanese Dollars or foreign currencies, as well as securities investments. The major operating activities of securities segment are securities brokerage, financing, ancillary business of futures trading and providing clients a platform for securities investment. The trust segment mainly provides customers relevant financial services, including securities under writing, custodian bank service, new type trust business and specific trust funds investing in domestic or foreign securities. Insurance agency segment primarily provides life and property insurance products to clients. Other segments include all the business of subsidiaries, which main operations are leasing, financing, consulting, and venture capital. The profit or loss of the operating segments of the Bank and subsidiaries is measured by income from continuing operation before tax. The reported amount is consistent with the financial statements which were provided to the chief operating decision maker in order to use it as the base of resource allocation and performance measurement.

(b) Segment information

For the three months ended September 30, 2023 Net interest revenue Net revenue other than interest Net revenue Bad debt expense, commitment and guarantee liability provision Operating expenses Income from continuing operation before tax	Banking Segment $ 4,589,502 2,659,023 7,248,525 (1,374,879) (4,104,968) $ 1,768,678	Securities, Trust, Insurance agent and Others 74,349 866,369 940,718 (10,656) (195,787) 734,275	Adjustment and Elimination - 62,475 62,475 - 7,367 69,842	Total 4,663,851 3,587,867 8,251,718 (1,385,535) (4,293,388) 2,572,795

(Continued)

131

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended September 30, 2022 Net interest revenue Net revenue other than interest Net revenue Bad debt expense, commitment and guarantee liability provision Operating expenses Income from continuing operation before tax For the nine months ended September 30, 2023 Net interest revenue Net revenue other than interest Net revenue Bad debt expense, commitment and guarantee liability provision Operating expenses Income from continuing operation before tax Total assets Total liabilities For the nine months ended September 30, 2022	Banking Segment $ 5,242,500 1,896,707 7,139,207 (639,318) (3,600,068) $ 2,899,821 Banking Segment $ 14,096,962 7,268,991 21,365,953 (2,204,243) (11,369,579) $ 7,792,131 $ 2,176,256,057 $ 2,064,195,036 Banking Segment $ 14,901,460 3,841,897 18,743,357 (1,626,908) (10,156,859) $ 6,959,590 $ 2,006,443,412 $ 1,909,828,799	Securities, Trust, Insurance agent and Others 74,843 741,939 816,782 706 (175,051) 642,437 Securities, Trust, Insurance agent and Others 212,966 2,754,473 2,967,439 (10,805) (582,489) 2,374,145 17,858,316 11,068,918 Securities, Trust, Insurance agent and Others 235,705 2,085,162 2,320,867 22,837 (517,372) 1,826,332 17,314,317 10,919,064	Adjustment and Elimination - (130,266) (130,266) - 5,634 (124,632) Adjustment and Elimination - (180,771) (180,771) - 21,715 (159,056) (4,008,046) (369,544) Adjustment and Elimination - (312,275) (312,275) - 16,112 (296,163) (3,919,030) (411,640)	Total 5,317,343 2,508,380 7,825,723 (638,612) (3,769,485) 3,417,626 Total 14,309,928 9,842,693 24,152,621 (2,215,048) (11,930,353) 10,007,220 2,190,106,327 2,074,894,410 Total 15,137,165 5,614,784 20,751,949 (1,604,071) (10,658,119) 8,489,759 2,019,838,699 1,920,336,223
Net interest revenue Net revenue other than interest Net revenue Bad debt expense, commitment and guarantee liability provision Operating expenses Income from continuing operation before tax Total assets Total liabilities

No single customer represents 10% or more of the Bank and subsidiaries’ operating revenue. Therefore, no disclosure of major customer information is required.

132

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Balance Sheets of Security Division

September 30, 2023, December 31, 2022 and September 30, 2022

(Expressed in Thousands of New Taiwan Dollars)

Assets Current Assets`：` 113200 Current financial assets at fair value through other comprehensive income 114030 Margin loans receivable 114040 Refinancing margin 114050 Refinancing collateral receivable 114130 Accounts receivable 119000 Other current assets Total current assets Non-current Assets`：` 123200 Non-current financial assets at fair value through other comprehensive income 123300 Non-current financial assets at amortized cost 125000 Property and equipment, net 127000 Intangible assets 129000 Other non-current assets Total non-current assets Total assets	September 30, 2023 Amount `％` $ 300,355 3 3,002,985 32 276 - 230 - 270,016 3 8,181 - 3,582,043 38 5,440,704 58 298,921 3 23,866 - 10,850 - 34,326 1 5,808,667 62 $ 9,390,710 100	December 31, 2022 Amount `％` 651,983 7 2,645,176 28 1,505 - 1,158 - 262,501 4 68,288 1 3,630,611 40 5,408,506 57 298,840 3 26,263 - 11,282 - 32,709 - 5,777,600 60 9,408,211 100	September 30, 2022
			Amount `％` 349,304 4 2,523,669 27 1,161 - 1,200 - 405,865 5 104,363 1 3,385,562 37 5,639,850 60 298,815 3 23,274 - 12,396 - 32,742 - 6,007,077 63 9,392,639 100

Liabilities and equity Current Liabilities`：` 214010 Liabilities for bonds with attached repurchase agreements 214040 Securities financing refundable deposits 214050 Deposits payable for securities financing 214130 Accounts payable 219000 Other current liabilities Total current liabilities 229030 Guaranteed deposits received 229110 Inter-department accounts, credit Total non-current liabilities Total liabilities Equity parent company 301110 Assigned working capital 304020 Special reserve 304040 Unappropriated retained earnings 305290 Other equity, other Total equity Total liabilities and equity	September 30, 2023 Amount % $ 787,852 8 57,123 1 67,281 1 192,415 2 43,003 - 1,147,674 12 20 - 5,832,010 62 5,832,030 62 6,979,704 74 2,200,000 23 185,127 2 142,592 2 (116,713) (1) 2,411,006 26 $ 9,390,710 100	December 31, 2022		September 30, 2022 Amount % 741,269 8 103,705 1 113,998 1 319,035 3 137,010 2 1,415,017 15 20 - 5,644,935 60 5,644,955 60 7,059,972 75 2,200,000 23 185,127 2 178,082 2 (230,542) (2) 2,332,667 25 9,392,639 100

133

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Statements of Comprehensive Income of Security Division

For the three months and nine months ended September 30, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Revenues`：` 401000 Brokerage handling fee revenue 401110 Handling fees from securities financing 421200 Interest revenue 424100 Future commission revenue 425300 Expected credit loss and reversal of expected credit loss 428000 Other operating income Expenses`：` 501000 Brokerage handling fee expenses 503000 Refinancing processing fee expenses 521200 Financial costs 528000 Other operating expenditure 530000 Operating expenses 602000 Other losses and (gains) Net income 805000 Other comprehensive income`：` 805615 Unrealized gains (losses) from investment in debt instruments measured at fair value through other comprehensive income 805699 Add: Income tax related to components of other comprehensive income 805000 Other comprehensive income (net amount after tax) Total comprehensive income	For the three months ended September 30, 2023 2022 Amount `％` Amount `％` $ 128,804 75 86,665 67 253 - 385 - 41,914 24 40,338 31 982 1 921 2 105 - 242 - 151 - 47 - 172,209 100 128,598 100 9,318 5 6,435 5 5 - 73 - 1,399 1 520 - 220 - 223 - 84,075 50 74,182 59 15,825 9 1,853 1 110,842 65 83,286 65 61,367 35 45,312 35 (7,012) (4) (99,272) (77) - - - - (7,012) (4) (99,272) (77) $ 54,355 31 (53,960) (42)	For the nine months ended September 30, 2023 2022 Amount `％` Amount `％` 314,070 72 275,176 67 739 - 1,038 - 117,786 27 133,175 32 2,307 1 2,198 1 108 - 356 - 385 - 106 - 435,395 100 412,049 100 22,788 5 19,871 5 125 - 114 - 3,680 1 1,319 - 626 - 642 - 228,920 53 219,150 53 36,664 8 (7,129) (2) 292,803 67 233,967 56 142,592 33 178,082 44 39,739 9 (275,282) (67) - - - - 39,739 9 (275,282) (67) 182,331 42 (97,200) (23)
	2023 Amount `％` $ 128,804 75 253 - 41,914 24 982 1 105 - 151 - 172,209 100 9,318 5 5 - 1,399 1 220 - 84,075 50 15,825 9 110,842 65 61,367 35 (7,012) (4) - - (7,012) (4) $ 54,355 31	2023 Amount `％` 314,070 72 739 - 117,786 27 2,307 1 108 - 385 - 435,395 100 22,788 5 125 - 3,680 1 626 - 228,920 53 36,664 8 292,803 67 142,592 33 39,739 9 - - 39,739 9 182,331 42

AI assistant

TBB — Interim / Quarterly Report 2023

52201_rns_2023-11-14_2929f0a1-e1b7-4aa4-b9bc-59e22d874245.pdf

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Conclusion

KPMG

Notes to Readers

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2023, December 31, 2022, and September 30, 2022

(Expressed in Thousands of New Taiwan Dollars)

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2023 and 2022

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

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Attributable to owners of parent

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements September 30, 2023 and 2022

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

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of material accounting policies:

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Basis of consolidation

(c) Income taxes

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(a) Impairment losses on loans

(b) Retirement benefit

(c) Fair value of financial instruments

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Receivables, net

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Property and equipment, net

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Change of cost

Change of depreciation

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Right-of-use assets

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Other assets, net

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Due to the Central Bank and banks

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Payables

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Bank notes payable

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TBB Interim / Quarterly Report 2023