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TBB Interim / Quarterly Report 2025

Dec 24, 2025

52201_rns_2025-12-24_42cc937b-ece7-4acb-ae70-8784d04f4b44.pdf

Interim / Quarterly Report

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1

Stock Code:2834

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2025 and 2024

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.

2

Table of contents

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
1
2
3
4
5
6
7
8
8
8～11
12
13
13～110
111～114
114～115
115～116
116
116
117～125
126
127～131
131～132
132
133～134
135〜136

3

==> picture [76 x 31] intentionally omitted <==

==> picture [168 x 19] intentionally omitted <==

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 kpmg.com/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 March 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2025 and 2024, 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 March 31, 2025 and 2024, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2025 and 2024 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) May 7, 2025

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.

4

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Consolidated Balance Sheets

March 31, 2025, December 31, 2024 and March 31, 2024

(Expressed in Thousands of New Taiwan Dollars)

Assets
11000
Cash and cash equivalents (Notes 6(a) and 7)
11500
Due from the Central Bank and call loans to banks
(Notes 6(b) and 7)
12000
Financial assets at fair value through profit or loss
(Note 6(c))
12100
Financial assets at fair value through other
comprehensive income (Notes 6(g) and (q))
12200
Investment in debt instruments at amortized cost
(Note 6(h))
12500
Securities purchased under resell agreements (Note
6(d))
13000
Receivables (Note 6(e))
13200
Current tax assets
13500
Discounts and loans, net (Notes 6(f) and 7)
15500
Other financial assets (Note 6(j))
18500
Property and equipment, net (Note 6(k))
18600
Right-of-use assets, net (Note 6(l))
19000
Intangible assets, net
19300
Deferred tax assets (Note 6(z))
19500
Other assets, net (Note 6(m))
Total assets		 March 31, 2025
Amount
%
$ 25,766,457
1
119,680,720
5
88,405,690
4
193,980,833
8
217,383,699
9
12,604,576
1
14,078,347
1
374,560
-
1,645,328,235
70
9,923
-
13,852,503
1
1,207,025
-
1,240,167
-
1,841,813
-
10,568,253
-
$ 2,346,322,801
100		 December 31, 2024
Amount
%
35,663,893
2
167,755,748
7
82,805,785
3
185,020,961
8
230,242,408
9
10,252,365
-
13,180,282
1
356,852
-
1,619,036,334
68
6,837
-
13,883,808
1
1,267,030
-
1,203,010
-
1,900,656
-
12,180,081
1
2,374,756,050
100		 March 31, 2024
Amount
%
34,259,767
2
125,486,632
6
75,624,403
3
205,508,903
9
248,181,592
11
1,416,454
-
13,175,890
1
353,060
-
1,491,622,754
67
7,540
-
13,962,620
1
1,262,548
-
1,049,242
-
1,823,363
-
10,082,939
-
2,223,817,707
100
Liabilities and Equity
Liabilities
21000
Deposits from the Central Bank and banks (Notes
6(n) and 7)
21500
Due to the Central Bank and banks (Note 6(o))
22000
Financial liabilities at fair value through profit or
loss (Notes 6(p) and (t))
22500
Notes and bonds issued under repurchase agreement
(Note 6(q))
23000
Payables (Note 6(r))
23200
Current tax liabilities
23500
Deposits and remittances (Notes 6(s) and 7)
24000
Bank notes payable (Note 6(t))
25500
Other financial liabilities (Note 6(u))
25600
Provisions (Note 6(v))
26000
Lease liabilities (Note 6(w))
29300
Deferred tax liabilities (Note 6(z))
29500
Other liabilities (Note 6(x))
Total liabilities
Equity attributable to owners of parent
31101
Common stock (Note 6(y))
31500
Capital Surplus (Note 6(y))
Retained earnings:
32001
Legal reserve (Note 6(y))
32003
Special reserve (Note 6(y))
32005
Unappropriated retained earnings (Note 6(y))
32500
Other equity interest (Note 6(y))
Total equity
Total liabilities and equity		 March 31, 2025 December 31, 2024 December 31, 2024 March 31, 2024
Amount
%
$ 231,971,649
10
1,697,843
-
10,269,966
-
5,884,073
-
20,992,016
1
1,408,331
-
1,877,755,536
81
53,210,000
2
2,199,591
-
2,399,313
-
1,238,831
-
989,524
-
2,384,711
-
2,212,401,384
94
91,679,828
4
816,129
-
23,647,983
1
185,128
-
17,900,951
1
(308,602)
-
133,921,417
6
$ 2,346,322,801
100		 Amount % Amount
%
128,147,722
6
1,510,922
-
9,650,457
-
1,923,927
-
26,998,450
2
510,247
-
1,868,427,697
84
53,460,000
3
2,199,375
-
2,601,533
-
1,285,776
-
878,623
-
2,789,395
-
2,100,384,124
95
82,224,061
4
815,900
-
20,028,865
1
3,954,803
-
14,958,535
-
1,451,419
-
123,433,583
5
2,223,817,707
100
240,697,672
1,443,506
10,213,236
2,011,108
20,092,502
865,240
1,903,841,852
53,460,000
2,528,132
2,384,421
1,307,295
933,342
3,543,962		 10
-
-
-
1
-
81
2
-
-
-
-
-
94
4
-
1
-
1
-
6
100
2,243,322,268
91,679,828
816,129
23,647,983
185,128
14,767,272
337,442
131,433,782
2,374,756,050

See accompanying notes to consolidated financial statements.

5

(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 ended March 31, 2025 and 2024

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

41000
Interest income (Notes 6(ad) and 7)
51000
Less: Interest expenses (Notes 6(ad) and 7)
Net interest revenue
Net revenue other than interest
49100
Net service fee revenue (Notes 6(ae) and 13)
49200
Gain on financial assets or liabilities measured at fair value through profit or loss (Note 6(af))
49310
Realized gain on financial assets at fair value through other comprehensive income (Note 6(ag))
49450
Gain arising from derecognition of financial assets measured at amortized cost (Note 6(h))
49600
Foreign exchange gain
49700
(Impairment loss on assets) reversal of impairment loss on assets (Note 6(ah))
49800
Net other revenue other than interest income (Note 6(ai))
49831
Net securities brokering revenue
Net revenue
58200
Bad debts expense, commitment and guarantee liability provision (Note 6(aj))
Operating expenses
58500
Employee benefits expenses (Note 6(ak))
59000
Depreciation and amortization expense (Note 6(al))
59500
Other general and administrative expense (Note 6(am))
Total operating expense
61001
Income from continuing operation before tax
61003
Less: Income tax expenses (Note 6(z))
Net income
65000
Other comprehensive income:
65200
Components of other comprehensive income that will not be reclassified to profit or loss
65204
Revaluation gains (losses) on investments in equity instruments measured at fair value through other
comprehensive income
65220
Less: Income tax related to components of other comprehensive income that will not be reclassified to
profit or loss (Note 6(z))
Components of other comprehensive income that will not be reclassified to profit or loss
65300
Components of other comprehensive income that will be reclassified to profit or loss
65301
Exchange difference on translation
65308
(Losses) gains from investments in debt instruments measured at fair value through other comprehensive
income
65320
Less: Income tax related to components of other comprehensive income that will be reclassified to profit
or loss (Note 6(z))
Components of other comprehensive income that will be reclassified to profit or loss
65000
Other comprehensive income
Total comprehensive income
Earnings per share (in NT dollar) (Note 6(ab))
Basic earnings per share (in NT dollar)
Diluted earnings per share (in NT dollar)		 For the three months ended March 31,
2024
%
Amount
%
164
13,138,105
153
(107)
(8,621,578)
(100)
57
4,516,527
53
22
2,196,417
26
16
1,471,416
17
2
78,212
1
-
26
-
2
116,744
1
-
(4,176)
-
-
119,390
1
1
116,006
1
100
8,610,562
100
(9)
(1,202,952)
(14)
(28)
(2,354,863)
(27)
(4)
(338,381)
(4)
(15)
(1,214,693)
(14)
(47)
(3,907,937)
(45)
44
3,499,673
41
10
655,200
8
34
2,844,473
33
(18)
938,945
11
-
-
-
(18)
938,945
11
3
657,712
8
11
(996,545)
(12)
1
133,287
2
13
(472,120)
(6)
(5)
466,825
5
29
3,311,298
38
0.32
0.31
0.32
0.31		 months ended March 31,
2024
%
Amount
%
164
13,138,105
153
(107)
(8,621,578)
(100)
57
4,516,527
53
22
2,196,417
26
16
1,471,416
17
2
78,212
1
-
26
-
2
116,744
1
-
(4,176)
-
-
119,390
1
1
116,006
1
100
8,610,562
100
(9)
(1,202,952)
(14)
(28)
(2,354,863)
(27)
(4)
(338,381)
(4)
(15)
(1,214,693)
(14)
(47)
(3,907,937)
(45)
44
3,499,673
41
10
655,200
8
34
2,844,473
33
(18)
938,945
11
-
-
-
(18)
938,945
11
3
657,712
8
11
(996,545)
(12)
1
133,287
2
13
(472,120)
(6)
(5)
466,825
5
29
3,311,298
38
0.32
0.31
0.32
0.31
2025 %
164
(107)
57
22
16
2
-
2
-
-
1
100
(9)
(28)
(4)
(15)
(47)
44
10
34
(18)
-
(18)
3
11
1
13
(5)
29
0.32
0.32		 2024
Amount
13,138,105
(8,621,578)
4,516,527
2,196,417
1,471,416
78,212
26
116,744
(4,176)
119,390
116,006
8,610,562
(1,202,952)
(2,354,863)
(338,381)
(1,214,693)
(3,907,937)
3,499,673
655,200
2,844,473
938,945
-
938,945
657,712
(996,545)
133,287
(472,120)
466,825
3,311,298
Amount
$ 14,057,764
(9,213,056)
4,844,708
1,927,583
1,361,255
147,245
43
144,950
3,340
57,658
102,903
8,589,685
(788,289)
(2,377,115)
(344,968)
(1,322,246)
(4,044,329)
3,757,067
821,692
2,935,375
(1,577,365)
-
(1,577,365)
245,714
940,095
56,184
1,129,625
(447,740)
$
2,487,635
$
$

See accompanying notes to consolidated financial statements.

6

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2024
Net income for the three months ended March 31, 2024
Other comprehensive income for the three months ended March 31, 2024
Total comprehensive income for the three months ended March 31, 2024
Balance at March 31, 2024
Balance at January 1, 2025
Net income for the three months ended March 31, 2025
Other comprehensive income for the three months ended March 31, 2025
Total comprehensive income for the three months ended March 31, 2025
Disposal of investments in equity instruments designated at fair value through other
comprehensive income
Balance at March 31, 2025		 Attributable to owners of parent Attributable to owners of parent 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
(629,158)
1,613,752
-
-
526,170
(59,345)
526,170
(59,345)
(102,988)
1,554,407
200,058
137,384
-
-
196,571
(644,311)
196,571
(644,311)
-
(198,304)
396,629
(705,231)		 Total
Share capital
Common stock
$ 82,224,061
-
-
-
$
82,224,061
$ 91,679,828
-
-
-
-
$
91,679,828		 Capital surplus
815,900
-
-
-
815,900
816,129
-
-
-
-
816,129		 Retained earnings
Legal reserve
20,028,865
-
-
-
20,028,865
23,647,983
-
-
-
-
23,647,983		 Special reserve
3,954,803
-
-
-
3,954,803
185,128
-
-
-
-
185,128		 Unappropriated
retained earnings
12,114,062
2,844,473
-
2,844,473
14,958,535
14,767,272
2,935,375
-
2,935,375
198,304
17,900,951		 Total
36,097,730
2,844,473
-
2,844,473
38,942,203
38,600,383
2,935,375
-
2,935,375
198,304
41,734,062		 Exchange
differences on
translation of
foreign financial
statements
(629,158)
-
526,170
526,170
(102,988)
200,058
-
196,571
196,571
-
396,629
120,122,285
2,844,473
466,825
3,311,298
123,433,583
131,433,782
2,935,375
(447,740)
2,487,635
-
133,921,417

See accompanying notes to consolidated financial statements.

7

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

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities:
Net income before tax
Adjustments:
Income and expences items:
Depreciation expense
Amortization expense
Provision for bad debt expense
Net 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
Loss on disposal of property and equipment
Impairment (reversal of impairment loss) loss on financial assets
Other items
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
Changes in operating assets:
Decrease (increase) in due from the central bank and call loans to banks
Increase 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
(Increase) decrease in other financial assets
Decrease in other assets
Total changes in operating assets
Changes in operating liabilities:
Decrease in deposits from the central bank and banks
(Decrease) increase in financial liabilities at fair value through profit or loss
Increase in notes and bonds issued under repurchase agreement
(Decrease) increase in payable
(Decrease) increase in deposits and remittances
(Decrease) increase in other financial liabilities
Increase (decrease) in provisions for employee benefits
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash (outflow) inflow generated from operations
Interest received
Interest paid
Income taxes paid
Net Cash flows (used in) 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 property and equipment
Proceeds from disposal of property and equipment
Decrease in refundable deposits
Acquisition of intangible assets
Net cash flows from (used in) investing activities
Cash flows (used in) from financing activities:
Increase in due to the central bank and banks
Repayments of bank notes payable
(Decrease) increase in guarantee deposits received
Payment of lease liabilities
Decrease in other liabilities
Net cash flows 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 three months ended March 31,
2025
2024
$ 3,757,067
3,499,673
235,672
254,225
109,296
84,156
779,607
1,206,039
551,754
135,852
9,213,056
8,621,578
(43)
(26)
(14,057,764)
(13,138,105)
9,860
1,527
(979)
(4,423)
1,653
1,296
(3,340)
4,176
8
(4)
(3,161,220)
(2,833,709)
48,071,968
(5,554,406)
(6,077,155)
(2,404,366)
(2,352,211)
5,694,031
(1,013,711)
(1,260,786)
(27,082,196)
(1,527,296)
(5,717)
1,811
1,537,275
1,374,731
13,078,253
(3,676,281)
(8,726,023)
(35,014,834)
(17,773)
266,457
3,872,965
137,212
(413,744)
1,330,900
(26,086,316)
45,014,463
(328,541)
62,973
5,700
(300,241)
(31,693,732)
11,496,930
(18,615,479)
7,820,649
(21,776,699)
4,986,940
(18,019,632)
8,486,613
14,167,053
13,115,600
(7,895,539)
(7,291,830)
(237,608)
(188,610)
(11,985,726)
14,121,773
(9,590,554)
(16,153,913)
(123,294,161)
(150,988,716)
136,149,296
155,700,509
(106,274)
(82,733)
21
52
320,241
89,016
(136,009)
(188,297)
3,342,560
(11,624,082)
254,337
79,082
(250,000)
(390,000)
(1,111,117)
870,558
(123,161)
(123,195)
(48,134)
(3,054,122)
(1,278,075)
(2,617,677)
23,805
22,872
(9,897,436)
(97,114)
35,663,893
34,356,881
$
25,766,457
34,259,767
2025
$ 3,757,067
235,672
109,296
779,607
551,754
9,213,056
(43)
(14,057,764)
9,860
(979)
1,653
(3,340)
8
(3,161,220)
48,071,968
(6,077,155)
(2,352,211)
(1,013,711)
(27,082,196)
(5,717)
1,537,275
13,078,253
(8,726,023)
(17,773)
3,872,965
(413,744)
(26,086,316)
(328,541)
5,700
(31,693,732)
(18,615,479)
(21,776,699)
(18,019,632)
14,167,053
(7,895,539)
(237,608)
(11,985,726)
(9,590,554)
(123,294,161)
136,149,296
(106,274)
21
320,241
(136,009)
3,342,560
254,337
(250,000)
(1,111,117)
(123,161)
(48,134)
(1,278,075)
23,805
(9,897,436)
35,663,893
$
25,766,457

See accompanying notes to consolidated financial statements.

8

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

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

March 31, 2025 and 2024

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

(1) Company history

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

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

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

  • (c) International banking business; and

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

As of March 31, 2025, the Bank not only sets up the business dept., international dept., securities dept. and trust dept. under head office but also has 124 domestic branches, 1 offshore banking unit, 8 overseas branches, 1 oversea representative office and 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 March 31, 2025, December 31 and March 31, 2024, the Bank and subsidiaries has 5,753, 5,740 and 5,693 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 May 7, 2025.

(3) New standards, amendments and interpretations adopted:

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

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

  • ●Amendments to IAS21 “Lack of Exchangeability”

(Continued)

9

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

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

The Bank’s anticipated adoption of the new amendments beginning on January 1, 2026, are expected to have the following impacts:

  • (i) Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” regarding the application guidance requirements for Section 4.1 of IFRS 9 and the related disclosure requirements of IFRS 7

For financial assets with contingent features that are not related directly to a change in basic lending risks or costs (e.g. where the cash flows change depending on whether the borrower meets an ESG target specified in the loan contract), the amendments introduce an additional test to assess the “ solely payments of principal and interest on the principal amount outstanding” criterion. In accordance with the Q&A published by the FSC on February 26, 2025, the Bank and subsidiaries did not elect to early adopt the application guidance in Section 4.1 of the amendments on January 1, 2025.

The Bank and subsidiaries invested in ESG-linked bonds and may need to change the classification due to the above amendments. The Bank and subsidiaries is continually evaluating the impact of its initial adoption of the amendments on its consolidated financial statements.

  • (c) The impact of IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

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

Standards or Effective date per Interpretations Content of amendment IASB IFRS 18 “Presentation and The new standard introduces three January 1, 2027 Disclosure in Financial categories of income and expenses, two Statements” income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

(Continued)

10

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

  • Standards or Effective date per

  • Interpretations Content of amendment IASB ●A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’ s main business activities.

  • ●Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.

  • ●Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes.

(Continued)

11

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

Standards or Interpretations

Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” regarding the application guidance requirements for Sections 3.1 and 3.3 of IFRS 9 and the related disclosure requirements of IFRS 7

Content of amendment

The amendments set out:

The company generally derecognises its trade payable on the settlement date. However, the amendments provide an exception for the derecognition of financial liabilities. The exception allows the company to derecognise its trade payable before the settlement date, potentially, when it uses an electronic payment system that meets all of the following criteria:

Effective date per IASB January 1, 2026

  • no practical ability to withdraw, stop or cancel the payment instruction;

  • no practical ability to access the cash to be used for settlement as a result of the payment instruction; and

  • the settlement risk associated with the electronic payment system is insignificant.

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

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

  • ●IFRS 19 “Subsidiaries without Public Accountability: Disclosures”

  • ●Annual Improvements to IFRS Accounting Standards—Volume 11

  • ●Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”

(Continued)

12

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

(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 Regulation"), and the preparation and guidelines of IAS 34 "Interim Financial Reporting" which are endorsed and issued into effect by 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 Financial Supervisory Commission (hereinafter referred to IFRS Accounting Standards 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 those in the consolidated financial statements for the year ended December 31, 2024. Please refer to Note 4 of the consolidated financial statements as of and for the year ended December 31, 2024 for the detail disclosures of significant accounting policies.

(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 %)
March 31,
2025		 December
31, 2024
March 31,
2024
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

(Continued)

13

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

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 IFRS Accounting Standards (in accordance with IAS 34 "Interim Financial Reporting" and endorsed by the FSC) requires management to make judgments, and estimates about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Except for the following, the preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis in conformity with the consolidated financial statements for the year ended December 31, 2024. For related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2024.

(6) Explanation of significant accounts:

  • (a) Cash and cash equivalents
Petty cash and revolving funds
Foreign currencies on hand
Checks for clearing
Due from other banks
Total		 March 31, 2025
$ 11,086,345
979,434
1,841,627
11,859,051
$
25,766,457		 December 31,
2024
16,244,131
1,028,938
2,406,858
15,983,966
35,663,893		 March 31, 2024
11,447,920
948,430
10,658,675
11,204,742
34,259,767
  • (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		 March 31, 2025
$ 77,498,983
41,423
42,140,314
140,000
(140,000)
$
119,680,720		 December 31,
2024
117,075,985
49,318
50,630,445
120,000
(120,000)
167,755,748		 March 31, 2024
87,227,234
46,924
38,212,474
120,000
(120,000)
125,486,632

As of March 31, 2025, December 31 and March 31, 2024, in accordance with the Banking Law and the Central Bank Law, the required reserve deposited by the Bank with the Central Bank amounted to $76,846,278, $116,625,097 and $86,719,753 of which $57,304,573, $58,351,432 and $53,014,664 respectively, were restricted and such restriction may only be lifted when the required reserve is adjusted to a lower amount.

(Continued)

14

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

As of March 31, 2025, December 31 and March 31, 2024, the Bank’ s subsidiaries and overseas branches, in compliance with the Central Bank’ s reserve requirement set by local authorities, deposited $326,346, $129,995 and $138,846 and in reserve, of which $70,441, $63,880 and $41,624 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 March 31, 2025, December 31 and March 31, 2024, the required reserve with the Central Bank amounted to $326,359, $320,893 and $368,635 respectively, and its use was unrestricted.

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

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

  • (c) Financial assets at fair value through profit or loss
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		 March 31, 2025
$ 6,873
2,271,459
9,559
28,583
139,168
84,104,039
904,469
528,305
213,235
200,000
$
88,405,690		 December 31,
2024
10,004
2,882,743
11,352
27,320
-
78,181,124
794,532
493,166
205,544
200,000
82,805,785		 March 31, 2024
4,039
3,135,558
9,916
26,930
1,029
70,134,417
1,337,270
407,177
368,067
200,000
75,624,403

(Continued)

15

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

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		 March 31, 2025
$ 210,027,806
22,023,757
1,726,660
1,726,660
1,725,009		 December 31,
2024
March 31, 2024
212,126,990
216,300,376
12,985,786
12,735,781
1,229,438
2,272,355
1,229,438
2,272,355
1,472,936
1,707,896

(d) Securities purchased under resell agreements

Securities under resell
agreements
Face amount
Resell period
Range of resell interest rate
Resell price		 March 31, 2025
$
12,604,576
$
12,644,800
2025.04.01~2025.04.18
1.62%~1.64%
$
12,617,764		 December 31, 2024
10,252,365
10,287,300
2025.01.06~2025.01.17
1.64%~1.65%
10,259,976		 March 31, 2024
1,416,454
1,420,000
2024.04.02~2024.04.16
1.51%~1.52%
1,417,320

(Continued)

16

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

(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		 March 31, 2025
$ 5,951,084
988,340
656,046
1,182,703
10,241
-
-
1,145,833
1,305,379
-
2,557,380
419,809
14,216,815
(138,468)
$
14,078,347		 December 31,
2024
6,061,292
1,245,377
384,262
1,211,887
27,414
-
-
1,283,650
499,128
-
2,268,953
331,349
13,313,312
(133,030)
13,180,282		 March 31, 2024
5,493,235
875,634
589,835
2,156,067
9,917
2,174
2,400
1,054,250
182,810
445,137
2,048,645
438,276
13,298,380
(122,490)
13,175,890

The outstanding contract amount of financial assets that have been written off and still have recourse as of March 31, 2025, December 31 and March 31, 2024 were $86,615,226, $85,862,421 and $85,701,288 respectively.

The change in allowance for bad debts was as follows:

Beginning balance
Provision (reversal)
Foreign exchange
Ending balance		 For the three months ended March 31, For the three months ended March 31,
2025
$ 133,030
4,692
746
$
138,468		 2024
121,512
(507)
1,485
122,490

(Continued)

17

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

(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		 March 31, 2025
$ 140,442
686,218
-
2,075,614
186,882,522
229,604,192
3,867,494
219,422,516
329,848,492
41,831,375
651,870,771
1,301,651
1,667,531,287
(272,251)
(21,930,801)
$ 1,645,328,235		 December 31,
2024
220,924
634,680
19,228
835,678
180,131,363
233,140,541
4,072,823
219,030,813
329,201,296
41,693,266
630,763,210
1,440,665
1,641,184,487
(273,170)
(21,874,983)
1,619,036,334		 March 31, 2024
98,260
335,505
15,856
1,187,658
163,138,471
220,110,480
3,287,335
205,754,889
321,503,883
37,750,741
557,010,243
1,506,084
1,511,699,405
(279,676)
(19,796,975)
1,491,622,754

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 three months ended March 31, For the three months ended March 31,
2025
$ 21,874,983
776,650
(7,390)
(1,702,205)
966,809
21,954
$
21,930,801		 2024
19,602,842
1,212,480
(3,781)
(1,477,187)
438,976
23,645
19,796,975

(Continued)

18

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

(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		 March 31, 2025
$ 54,329,837
80,152,596
35,772,040
668,357
170,922,830
14,550,079
8,399,376
108,548
23,058,003
$
193,980,833		 December 31,
2024
55,187,459
75,901,236
35,671,677
652,513
167,412,885
10,012,278
7,476,886
118,912
17,608,076
185,020,961		 March 31, 2024
59,409,499
81,134,308
37,470,827
635,402
178,650,036
20,802,700
5,914,909
141,258
26,858,867
205,508,903

(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.

  • (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 $147,190 and $78,150, respectively as dividend revenue for the three months ended March 31, 2025 and 2024.

In which, the disposal equity instruments were recognized $27,992 and $0 as dividend revenue for the three months ended March 31, 2025 and 2024.

(Continued)

19

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

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 $1,490,225 and $0. And gains on disposal are $198,304 and $0 for the three months ended March 31, 2025 and 2024. Therefore, accumulated gains on disposal were transferred from other equity to retained earnings.

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

  • (iv) Reserve for provisional seizure by the court:

Court provisional seizure March 31, 2025
$
336,800		 December 31,
2024
226,900		 March 31, 2024
-
  • (v) The changes in the allowance for credit losses attribute to the FVOCI were as follows:
Beginning balance
Provision (reversal)
Foreign exchange
Ending balance		 For the three months ended March 31, For the three months ended March 31,
2025
$ 87,728
(6,861)
272
$
81,139		 2024
100,349
2,586
748
103,683
  • (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		 March 31, 2025
$ 145,835,000
19,251,377
31,766,064
20,537,470
69,731
217,459,642
(75,943)
$
217,383,699		 December 31,
2024
154,215,000
25,405,650
31,241,169
19,384,065
68,849
230,314,733
(72,325)
230,242,408		 March 31, 2024
176,135,000
30,572,801
23,131,456
18,357,527
67,211
248,263,995
(82,403)
248,181,592

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.

(Continued)

20

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

  • (i) Please refer to Note 6(ao) 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
Guarantee for borrowing US dollars
Guarantee for borrowing JPY
dollars
Total		 March 31, 2025
$ 799,000
69,731
2,000,000
29,000,000
200,000
$
32,068,731		 December 31,
2024
850,600
68,849
2,000,000
29,000,000
200,000
32,119,449		 March 31, 2024
1,153,200
67,211
2,000,000
29,000,000
200,000
32,420,411

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

Beginning balance
Provision
Foreign exchange
Ending balance		 For the three months ended March 31, For the three months ended March 31,
2025
$ 72,325
3,521
97
$
75,943		 2024
80,620
1,590
193
82,403

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

Corporate bonds
Corporate bonds		 For the three months ended March 31, 2025 For the three months ended March 31, 2025
The carrying amount
at the date of
derecognition
Gain (Loss) on
disposal
$
4,118
43
For the three months ended March 31, 2024		 Gain (Loss) on
disposal
43
The carrying
amount at the date of
derecognition
$
2,371		 Gain (Loss) on
disposal
26

For the three months ended March 31, 2025 and 2024, it is due to the advanced redemption of the issuer.

(Continued)

21

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

(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. 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.

(ii) Guarantee

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		 March 31, 2025
$ 20,536
(10,613)
$
9,923		 December 31,
2024
15,380
(8,543)
6,837		 March 31, 2024
18,261
(10,721)
7,540

The change in allowance for bad debts was as follows:

Beginning balance
Reversal
Transfer in
Write-off
Written-off recovered
Ending balance		 For the three months ended March 31,
2025
2024
$ 8,543
11,490
(4,759)
(4,905)
7,390
3,781
(5,173)
(3,959)
4,612
4,314
$
10,613
10,721
2025
$ 8,543
(4,759)
7,390
(5,173)
4,612
$
10,613

(Continued)

22

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

(k) Property and equipment, net

March 31, 2025 Cost
$ 6,746,952
8,258,775
2,983,150
269,367
707,345
205,043
3,636
262,788
$
19,437,056
Cost
$ 6,746,952
8,241,481
3,018,119
271,903
708,017
204,009
1,812
219,165
$
19,411,458
Cost
$ 6,746,952
8,174,482
2,861,641
264,023
669,183
200,448
32,385
186,892
$
19,136,006		 Revaluation
increment
2,984,621
31,184
-
-
-
-
-
-
3,015,805
Revaluation
increment
2,984,621
31,184
-
-
-
-
-
-
3,015,805
Revaluation
increment
2,984,621
31,184
-
-
-
-
-
-
3,015,805		 Accumulated
depreciation
-
5,237,630
2,380,967
233,326
577,009
142,641
-
-
8,571,573
Accumulated
depreciation
-
5,185,589
2,385,703
235,262
574,736
133,380
-
-
8,514,670
Accumulated
depreciation
-
5,027,242
2,216,143
227,858
564,484
124,679
-
-
8,160,406		 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
3,037,575
602,183
36,041
130,336
62,402
3,636
262,788
Land
Buildings
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Leasehold improvements
Construction in progress
Prepayment for equipment
Total
December 31, 2024
13,852,503
Total
9,717,542
3,072,322
632,416
36,641
133,281
70,629
1,812
219,165
Land
Buildings
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Leasehold improvements
Construction in progress
Prepayment for equipment
Total
March 31, 2024
13,883,808
Total
9,717,542
3,163,670
645,498
36,165
104,699
75,769
32,385
186,892
Land
Buildings
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Leasehold improvements
Construction in progress
Prepayment for equipment
Total
13,962,620

(Continued)

23

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, 2025
$ 9,731,573
8,272,665
3,018,119
271,903
708,017
204,009
1,812
219,165
$
22,427,263
January 1, 2024
$ 9,731,573
8,174,873
2,809,955
264,916
671,418
203,138
61,737
220,805
$
22,138,415		 Increase
-
17,294
25,370
2,340
5,677
-
11,232
53,769
115,682
Increase
-
30,793
84,403
1,632
6,382
420
233
18,333
142,196		 Decrease
-
-
61,611
5,041
7,227
812
9,408
10,156
94,255
Decrease
-
-
36,128
2,838
9,714
4,109
29,585
52,486
134,860		 Foreign
Exchange
-
-
1,272
165
878
1,846
-
10
4,171
Foreign
Exchange
-
-
3,411
313
1,097
999
-
240
6,060		 March 31, 2025
9,731,573
8,289,959
2,983,150
269,367
707,345
205,043
3,636
262,788
22,452,861
March 31, 2024
9,731,573
8,205,666
2,861,641
264,023
669,183
200,448
32,385
186,892
22,151,811

Change of depreciation

Buildings
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Leasehold improvements
Total		 January 1, 2025
$ 5,185,589
2,385,703
235,262
574,736
133,380
$
8,514,670		 Increase
52,041
54,180
2,911
8,704
8,258
126,094		 Decrease
-
60,030
4,986
7,189
812
73,017		 Foreign
Exchange
-
1,114
139
758
1,815
3,826		 March 31, 2025
5,237,630
2,380,967
233,326
577,009
142,641
8,571,573

(Continued)

24

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

January 1, 2024
Buildings
$ 4,979,561
Machinery and equipment
2,170,544
Transportation equipment
227,359
Miscellaneous equipment
565,428
Leasehold improvements
119,859
Total
$
8,062,751
Accumulated impairment
January 1, 2025
Land
$ 14,031
Buildings
14,754
Total
$
28,785
January 1, 2024
Land
$ 14,031
Buildings
14,754
Total
$
28,785		 Increase
47,681
78,661
3,048
7,609
8,242
145,241
Increase
-
-
-
Increase
-
-
-		 Decrease
-
34,986
2,790
9,556
4,109
51,441
Decrease
-
-
-
Decrease
-
-
-		 Foreign
Exchange
-
1,924
241
1,003
687
3,855
Foreign
Exchange
-
-
-
Foreign
Exchange
-
-
-		 March 31, 2024
5,027,242
2,216,143
227,858
564,484
124,679
8,160,406
March 31, 2025
14,031
14,754
28,785
March 31, 2024
14,031
14,754
28,785

Accumulated impairment

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

As of March 31, 2025, December 31 and March 31, 2024, land which was occupied amounted to $348, $5,496 and $5,496 thousands separately. 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:

March 31, 2025 Cost
$ 2,131,408
98,549
13,615
$
2,243,572		 Accumulated
depreciation
982,388
47,082
7,077
1,036,547		 Accumulated
impairment
-
-
-
-		 Total
1,149,020
51,467
6,538
Buildings
Transportation equipment
Miscellaneous equipment
Total
1,207,025

(Continued)

25

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

December 31, 2024 Cost
$ 2,122,455
92,796
13,271
$
2,228,522
Cost
$ 2,083,729
26,178
92,388
13,538
$
2,215,833		 Accumulated
depreciation
901,041
53,951
6,500
961,492
Accumulated
depreciation
881,806
26,174
39,739
5,566
953,285		 Accumulated
impairment
-
-
-
-
Accumulated
impairment
-
-
-
-
-		 Total
1,221,414
38,845
6,771
Buildings
Transportation equipment
Miscellaneous equipment
Total
March 31, 2024
1,267,030
Total
1,201,923
4
52,649
7,972
Buildings
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Total
1,262,548

Change of cost

Buildings
Transportation equipment
Miscellaneous equipment
Total
Buildings
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Total		 January 1, 2025
$ 2,122,455
92,796
13,271
$
2,228,522
January 1, 2024
$ 2,026,012
26,178
80,397
11,484
$
2,144,071		 Increase
27,241
19,420
521
47,182
Increase
60,532
-
15,773
2,440
78,745		 Decrease
22,657
13,753
177
36,587
Decrease
12,900
-
3,963
386
17,249		 Foreign
Exchange
4,369
86
-
4,455
Foreign
Exchange
10,085
-
181
-
10,266		 March 31, 2025
2,131,408
98,549
13,615
2,243,572
March 31, 2024
2,083,729
26,178
92,388
13,538
2,215,833

Change of depreciation

Buildings
Transportation equipment
Miscellaneous equipment
Total		 January 1, 2025
$ 901,041
53,951
6,500
$
961,492		 Increase
101,978
6,846
754
109,578		 Decrease
22,271
13,769
177
36,217		 Foreign
Exchange
1,640
54
-
1,694		 March 31, 2025
982,388
47,082
7,077
1,036,547

(Continued)

26

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

Foreign
January 1, 2024 Increase Decrease Exchange March 31, 2024
Buildings $ 791,158 101,700 12,498
1,446		 881,806
Machinery and equipment 26,174 - - - 26,174
Transportation equipment 37,072 6,550 3,963
80		 39,739
Miscellaneous equipment 5,218 734 386
-		 5,566
Total $ 859,622 108,984 16,847
1,526		 953,285
(m) Other assets, net
December 31,
March 31, 2025 2024
March 31, 2024
Office supplies $ 29,911 29,855 29,481
Prepayments 4,295,114 5,143,289 4,339,386
Operating guarantee deposits and 34,069 32,866 32,866
settlement fund
Guarantee deposits paid 2,499,188 2,819,429 2,318,781
Deferred assets 303 237 314
Temporary payments and suspense 3,501,561 3,877,085 3,116,067
accounts
Proceeds of settlement and margin trading 11,425 100,889 69,612
Other assets 196,682 176,431 176,432
Total $ 10,568,253 12,180,081 10,082,939
(n) Deposits from the Central Bank and banks
December 31,
March 31, 2025 2024
March 31, 2024
Deposits from the Central Bank $ 266,244 171,214 162,768
Due from the Central Bank 16,270,450 16,064,650 15,362,400
Deposits from banks 364,555 328,917 1,074,636
Call loans from banks 30,407,543 36,436,700 28,633,447
Overdrafts on banks 563,522 596,856 815,136
Deposits transferred from Chunghwa Post 184,099,335 187,099,335 82,099,335
Co., Ltd.
Total $ 231,971,649 240,697,672 128,147,722

(Continued)

27

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

(o) Due to the Central Bank and banks

Agricultural Bank of
Taiwan
Hua Nan Commercial
Bank, Ltd
Mega International
Commercial Bank
First Commercial Bank
Taiwan Cooperative Bank
Sunny Commercial Bank
(OBU)
Bank of Panshin (OBU)
Mega International
Commercial Bank
First Commercial Bank
(Shanghai)
Bank SinoPac (Shanghai)
Taiwan cooperative Bank
(Suzhou)
Total
Unused credit lines		 March 31, 2025
Currency
TWD
TWD
TWD
TWD
TWD
USD
USD
USD
CNY
CNY
CNY		 Interest Rate
1.750%~2.125%
1.865%~2.047%
1.750%~1.950%
1.875%
1.875%
5.31%~5.61%
5.96%
6.70%
3.75%
3.65%
3.75%		 Maturity Date
2025.09.27
2025.12.25
2025.06.16
2025.06.19
2025.11.08
2025.07.08
2026.03.24
2026.03.28
2025.05.23
2025.03.15
2025.05.16		 Original
Amount
NTD
Amount
400,000 $ 400,000
10,000
10,000
275,000
275,000
30,000
30,000
200,000
200,000
14,800
491,433
500
16,603
500
16,603
12,750
58,293
29,500
134,874
14,225
65,037
$ 1,697,843
$ 2,166,495

(Continued)

28

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

Agricultural Bank of
Taiwan
Mega International
Commercial Bank
First Commercial Bank
Sunny Commercial Bank
(OBU)
First Commercial Bank
(Shanghai)
Bank SinoPac (Shanghai)
Taiwan cooperative Bank
(Suzhou))
Total
Unused credit lines		 December 31, 2024
Currency
TWD
TWD
TWD
USD
CNY
CNY
CNY		 Interest Rate
1.75%~1.95%
1.75%~1.95%
1.875%
5.50%~5.80%
3.75%
3.65%
3.75%		 Maturity Date
2025.09.27
2025.06.16
2025.03.09~2025.05.15
2025.07.08
2025.05.23
2025.03.15
2025.05.16		 Original
Amount
NTD
Amount
400,000 $ 400,000
240,000
240,000
200,000
200,000
16,100
527,839
4,375
19,618
9,500
42,598
3,000
13,452
$ 1,443,506
$ 2,187,905
Agricultural Bank of
Taiwan
Hua Nan Commercial
Bank, Ltd
Mega International
Commercial Bank
First Commercial Bank
Bank of Kaohsiung (OBU)
Chang Hwa Commercial
Bank, Ltd.
Sunny Commercial Bank
(OBU)
Bank of Panshin
Total
Unused credit lines		 March 31, 2024
Currency
TWD
TWD
TWD
TWD
USD
USD
USD
USD		 Interest Rate
1.75%
1.865%
1.72%~1.75%
1.825%
7.13%
7.00%
6.32%~6.62%
6.98%		 Maturity Date
2024.10.13
2025.01.02
2024.06.11~2024.09.15
2025.01.05
2026.06.10
2025.01.03~2025.03.29
2024.07.05
2024.11.14		 Original
Amount
NTD
Amount
385,000 $ 385,000
60,000
60,000
255,000
255,000
30,000
30,000
1,400
44,807
2,000
64,010
20,000
640,100
1,000
32,005
$ 1,510,922
$ 1,342,341

(Continued)

29

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

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

Financial liabilities designated at fair
value through profit or loss：
Financial debentures
Financial liabilities held for trading：
Derivative instruments not used for
hedging
Foreign exchange forward contracts
Currency swap contracts
Foreign currency option-sell
Interest rate contract
Total		 March 31, 2025
$ 9,869,915
18,599
267,109
9,564
104,779
$
10,269,966		 December 31,
2024
9,927,272
18,220
256,384
11,360
-
10,213,236		 March 31, 2024
9,448,139
17,881
174,507
9,930
-
9,650,457

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 March 31, 2025, December 31 and March 31, 2024.

(Continued)

30

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

  • (q) Notes and bonds issued under repurchase agreement
Assets March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025
Par value Selling Price
(Recognized in
securities sold
under repurchase
agreements)		 Designated
repurchase
amount		 Designated
repurchase date
Financial assets at fair
value through other
comprehensive income		 $ 6,362,611 5,884,073 5,925,669 2025/4/1~2026/1/13
Assets December 31, 2024
Par value Selling Price
(Recognized in
securities sold
under repurchase
agreements)		 Designated
repurchase
amount		 Designated
repurchase date
Financial assets at fair
value through other
comprehensive income		 $ 2,121,000 2,011,108 2,022,769 2025/1/2~2025/7/10
Assets March 31, 2024
Par value Selling Price
(Recognized in
securities sold
under repurchase
agreements)		 Designated
repurchase
amount		 Designated
repurchase date
Financial assets at fair
value through other
comprehensive income		 $ 2,052,892 1,923,927 1,929,790 2024/4/2~2025/1/23

(Continued)

31

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
Settlement payable
Other
Total
(s)
Deposits and remittances
Savings deposits
Time deposits
Demand deposits
Checking account deposits
Remittances
Total		 March 31, 2025
$ 9,969,390
2,522,036
1,009,510
4,385,374
786,169
32,147
35,317
11,596
938,084
122,184
1,172,908
7,301
$
20,992,016
March 31, 2025
$ 789,508,243
607,923,074
459,228,220
20,871,338
224,661
$ 1,877,755,536		 December 31,
2024
8,656,132
2,619,710
1,261,717
4,233,683
1,699,210
57,578
74,701
27,110
965,374
198,804
291,302
7,181
20,092,502
December 31,
2024
794,086,046
604,049,106
473,683,397
31,275,032
748,271
1,903,841,852		 March 31, 2024
8,591,276
11,150,299
904,366
3,592,983
877,531
19,068
42,064
14,402
1,186,620
612,369
-
7,472
26,998,450
March 31, 2024
779,066,509
583,414,323
480,455,471
25,123,667
367,727
1,868,427,697

(Continued)

32

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

(t) Bank notes payable

Bonds T erms of Transactions Bond I ssued
Issue date Maturity
date		 Interest Rate & repayment Type Amount
2015-2B
2017-1B
2017-1C
2017-2
2018-2
2019-1A
2019-1B
2020-1
2020-2
2021-1
2023-1
2023-2		 08/31/2015
03/28/2017
03/28/2017
05/23/2017
08/20/2018
03/21/2019
03/21/2019
03/25/2020
08/13/2020
11/17/2021
06/20/2023
09/27/2023		 08/31/2025
03/28/2025
03/28/2027
05/23/2027
08/20/2028
03/21/2026
03/21/2029
03/25/2030
None
None
06/20/2030
09/27/2025		 The debentures bear an annual interest rate of
2.10%. Simple interest is accrued and paid
annually. The principal will be repaid in full at
maturity.
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.
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.		 Unsecured
subordinated
long-term
financial
debentures
〞
〞
〞
〞
〞
〞
〞
Perpetual
non-
accumulated
subordinated
financial
debentures
〞
Unsecured
subordinated
long-term
financial
debentures
Unsecured
senior
financial
debentures		 March 31,
2025
$ 300,000
-
3,360,000
1,300,000
5,450,000
1,000,000
4,800,000
10,000,000
10,000,000
8,000,000
8,000,000
1,000,000
$ 53,210,000		 December
31, 2024
300,000
250,000
3,360,000
1,300,000
5,450,000
1,000,000
4,800,000
10,000,000
10,000,000
8,000,000
8,000,000
1,000,000
53,460,000		 March 31,
2024
300,000
250,000
3,360,000
1,300,000
5,450,000
1,000,000
4,800,000
10,000,000
10,000,000
8,000,000
8,000,000
1,000,000
53,460,000

(Continued)

33

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

The Bank and subsidiaries issued $120,000 thousand and $180,000 thousand 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 and subsidiaries 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 and subsidiaries classified the debentures into financial liabilities at fair value through profit or loss. In addition, the Bank and subsidiaries 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 Is sued March 31,
2024
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		 March 31,
2025
$ 3,984,600
5,976,900
(91,585)
$
9,869,915		 December
31, 2024
3,934,200
5,901,300
91,772
9,927,272
3,840,600
5,760,900
(153,361)
9,448,139

The increase (decrease) 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		 March 31, 2025
$ 9,869,915
699,446
(91,585)		 December 31,
2024
March 31, 2024
9,927,272
9,448,139
695,984
286,253
91,772
(153,361)

(Continued)

34

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

(u) Other financial liabilities

Cumulative earnings on appropriated
loans fund		 March 31, 2025
$
2,199,591		 December 31,
2024
2,528,132		 March 31, 2024
2,199,375

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		 March 31, 2025
$ 356,921
63,763
76,350
1,902,279
$
2,399,313		 December 31,
2024
347,009
64,682
76,151
1,896,579
2,384,421		 March 31, 2024
286,064
89,245
75,563
2,150,661
2,601,533

Change of provision

Provision for guarantee liabilities
Provision for loan commitments
Indeterminate indemnity provisions
Provision for employee benefits
Total
Provision for guarantee liabilities
Provision for loan commitments
Indeterminate indemnity provisions
Provision for employee benefits
Total		 January 1,
2025
$ 347,009
64,682
76,151
1,896,579
$
2,384,421
January 1,
2024
$ 284,412
92,689
75,372
2,450,902
$
2,903,375		 Increase
9,860
-
199
43,914
53,973
Increase
1,527
-
191
47,728
49,446		 Decrease
-
1,178
-
28,468
29,646
Decrease
-
4,614
-
341,315
345,929		 Use
-
-
-
9,746
9,746
Use
-
-
-
6,654
6,654		 Foreign
exchange
52
259
-
-
311
Foreign
exchange
125
1,170
-
-
1,295		 March 31,
2025
356,921
63,763
76,350
1,902,279
2,399,313
March 31,
2024
286,064
89,245
75,563
2,150,661
2,601,533

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

(Continued)

35

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

(w) Lease liabilities

Lease liabilities as follows:

Lease liabilities as follows:
Less than one year
More than one year		 March 31, 2025
$
432,676
$
806,155		 December 31,
2024
431,412
875,883		 March 31, 2024
403,161
882,615

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities
Expenses relating to short-term leases
Expenses relating to leases of low-value assets, excluding
short-term leases of low-value assets		 For the three months ended March 31, For the three months ended March 31,
2025
$
4,259
$
5,566
$
4,466		 2024
4,493
5,385
4,461

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

Total cash outflow for leases For the three months ended March 31, For the three months ended March 31,
2025
$
133,193		 2024
133,041

(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.

(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.

(Continued)

36

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

(x) Other liabilities

Advance interest receipts
Unearned revenue
Other advance receipts
Guarantee deposits received
Others
Total		 March 31, 2025
$ 5,985
412,279
65,343
1,856,962
44,142
$
2,384,711		 December 31,
2024
4,193
457,394
71,964
2,968,079
42,332
3,543,962		 March 31, 2024
4,012
390,201
97,184
2,258,348
39,650
2,789,395

(y) Equity

(i) Common stock

As of March 31, 2025, December 31 and March 31, 2024, the Bank’s authorized capital were all $100,000,000, and the paid-in capital for common shares of the Bank were $91,679,828, $91,679,828 and $82,224,061, respectively, with a par value of $10 per share. The outstanding shares were 9,167,983, 9,167,983 and 8,222,406 thousand shares, respectively.

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

(ii) Capital surplus

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

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

(Continued)

37

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

(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.

The Bank resolved the earning distribution for the earnings of 2024 and 2023 in the shareholders' meeting on April 16, 2025 and June 21, 2024, respectively. The dividends distributed were as follows:

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

(Continued)

38

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

(iv) Other equity interest

January 1, 2025
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
March 31, 2025
January 1, 2024
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
March 31, 2024		 Unrealized gains
from financial
assets measured at
fair value through
other
comprehensive
income
$ 137,384
117
(644,373)
(55)
-
(198,304)
$
(705,231)
$ 1,613,752
117
(59,400)
(62)
-
$
1,554,407		 Exchange
differences on
translation of
foreign financial
statements
200,058
16,579
-
-
179,992
-
396,629
(629,158)
14,595
-
-
511,575
(102,988)		 Total
337,442
16,696
(644,373)
(55)
179,992
(198,304)
(308,602)
984,594
14,712
(59,400)
(62)
511,575
1,451,419

(z) Income taxes

(i) The income tax expenses were as follows:

Current tax expense
Current period
Adjustment for prior period
Deferred tax expense
Origination and reversal of temporary different
Changes in unrecognized deductible temporary
different
Income tax expenses		 For the three months ended March 31, For the three months ended March 31,
2025
$ 762,996
-
762,996
58,701
(5)
$
821,692		 2024
633,521
(37,796)
595,725
59,209
266
655,200

(Continued)

39

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

  • (ii) The income tax expenses (income) recognized under other comprehensive income were as follows:
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 March 31,
2025
$ 49,143
7,041
$
56,184		 2024
131,542
1,745
133,287
  • (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 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 2022 by the Tax Authority.

(vi) Global minimum top-up tax

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

Some of the overseas branches have enacted new legislation to implement the global minimum top-up tax, with Australia and Japan effective from January 1, 2024. Preliminary assessments indicate that various tax jurisdictions can pass the global minimum top-up tax safe harbor test, and it is expecetd that don't need to be subject to the top-up tax in relation to its operations. However, as of March 31, 2025, the Bank and subsidiaries has not yet obtained sufficient information to determine the quantitative impact and the taxpayer status brought about by Global minimum top-up tax.

(Continued)

40

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

(aa) Provision for employee benefit

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

benefit of the Bank and subsidiaries was as follows:
Defined benefit plan
Employee deposits with favorable rate		 March 31, 2025
$ 819,149
1,083,130
$
1,902,279		 December 31,
2024
823,657
1,072,922
1,896,579		 March 31, 2024
1,017,528
1,133,133
2,150,661

(i) Defined benefit plan

In 2024, 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, 2024 and 2023 by the Bank and subsidiaries.

The Bank and subsidiaries recognized the expenses amounting to $33,705 and $37,059 for the three months ended March 31, 2025 and 2024, 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 $53,763 and $49,286 for the three months ended March 31, 2025 and 2024, respectively.

  • (iii) Employee deposit with favorable rate

In 2024, 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, 2024 and 2023 by the Bank and subsidiaries.

The Bank and subsidiaries recognized expenses amounting to $65,701 and $65,640 for the three months ended March 31, 2025 and 2024, respectively.

(Continued)

41

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

(ab) Earnings per share

Earnings per share
Net income
Weighted average number of common stock shares
outstanding (in thousands) (Note 1)
Basic earnings per share (in dollars) (Note 1)
Dilutive potential common shares (in thousands) (Note 1, 2)
Weighted average number of common shares outstanding for
diluted earnings per share (in thousands) (Note 1)
Diluted earnings per share (in dollars) (Note 1)		 For the three months ended March 31,
2025
$
2,935,375
9,167,983
$
0.32
14,498
9,182,481
$
0.32		 2024
2,844,473
9,167,983
0.31
14,013
9,181,996
0.31

Note 1: The earnings per share as of March 31, 2024 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 ended March 31, 2025 and 2024, the estimated employee remuneration were $211,666 and $202,970, and the estimated directors' remuneration were $21,167 and $20,297, 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, 2024 and 2023, the employees' remuneration was accrued at $901,323 and $723,563 and the directors' remuneration was accrued at $90,132 and $79,237, respectively.

The Bank remuneration has not yet benen actually paid in 2024. There is no difference with actual distribution for 2023 remuneration. The information is available at the Market Observation Post System website.

(Continued)

42

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

(ad) Net interest revenue

Interest income:
Loans
Secured loans
Bills negotiated
Bank overdrafts
Discounts
Time deposit from Central Bank
Due from the Central Bank
Call loans to banks
Bonds
International credit card
Overdue loans
Bills
Due from Banks
Others
Subtotal
Interest expense:
Deposits
Deposits from banks
Call loans from banks
Financial debentures
Notes and bond issued under repurchase agreement
Others
Subtotal
Total		 For the three months ended March 31, For the three months ended March 31,
2025
$ 3,807,005
7,518,343
1,091
8,842
7,630
461,723
160,356
309,616
1,452,578
8,716
72,823
66,578
65,180
117,283
14,057,764
8,415,543
115
551,497
197,867
13,858
34,176
9,213,056
$
4,844,708		 2024
3,591,268
6,730,181
1,553
6,262
6,308
516,806
125,175
437,350
1,450,428
8,626
40,327
34,396
74,291
115,134
13,138,105
7,798,209
3,870
575,339
200,965
6,165
37,030
8,621,578
4,516,527

(Continued)

43

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

(ae) Net service fee revenue

Service fee income:
Remittance service fee
Import bills negotiated service fee
Export bills negotiated service fee
Letter of credit service fee
Certification service fee
Acceptance service fee
Trust service fee
Guarantee service fee
Agency service fee
Interbank service fee
Card service fee
Commission revenue of insurance premium
Custodian service fee
Foreign currency service fee
Commission of futures
Loan service fee
Miscellaneous fees
Subtotal
Service fee expense:
Foreign currency service fee
Interbank service fee
Trust service fee
Agency service fee
IC card service fee
Check clearing service fee
Remittance service fee
Custodian service fee
Call loans service fee
Miscellaneous fees
Subtotal
Total		 For the three months ended March 31, For the three months ended March 31,
2025
$ 15,708
11,038
2,181
1,406
550
709
166,109
96,936
5,148
32,717
45,969
1,111,824
55,853
19,468
495
438,672
50,821
2,055,604
7,792
56,151
869
400
34,508
1,723
1,959
17,118
471
7,030
128,021
$
1,927,583		 2024
16,219
8,809
2,263
1,327
575
584
162,005
73,277
6,112
30,162
50,367
949,040
48,661
18,770
629
850,443
98,006
2,317,249
7,544
52,823
996
384
30,595
2,148
1,287
15,580
3,141
6,334
120,832
2,196,417

(Continued)

44

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):
Financial debentures
Listed stocks and emerging stocks
Unlisted stocks
Beneficiary certificates
Private fund
Commercial paper
Derivative financial instruments
Subtotal
Disposal gains (losses):
Listed stocks and emerging stocks
Commercial paper
Derivative financial instruments
Subtotal
Dividend revenue
Interest income
Total		 For the three months ended March 31, For the three months ended March 31,
2025
$ 72,677
(3,686)
8,639
-
2,091
(6,085)
(625,390)
(551,754)
(13,145)
(2,343)
1,569,961
1,554,473
407
358,129
$
1,361,255		 2024
(17,311)
(15,066)
(34,298)
10,845
(5,267)
(11,644)
(63,111
(135,852
46,580
(841)
1,303,792
1,349,531
94
257,643
1,471,416

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

Gain on disposal of corporate bonds
Dividend revenue
Total		 For the three months ended March 31, For the three months ended March 31,
2025
$ 55
147,190
$
147,245		 2024
62
78,150
78,212

(Continued)

45

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

(ah) (Impairment losses on assets) 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 March 31,
2025
2024
$ 6,861
(2,586)
(3,521)
(1,590)
$
3,340
(4,176)
2025
$ 6,861
(3,521)
$
3,340

(ai) Net other revenue other than interest income

Rental revenue 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 March 31,
2025
2024
$ 2,856
2,521
(1,653)
(1,296)
(19)
(7)
1,725
350
(9,876)
(6,829)
64,625
124,651
$
57,658
119,390
2025
$ 2,856
(1,653)
(19)
1,725
(9,876)
64,625
$
57,658

(aj) 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 March 31,
2025
2024
$ 776,650
1,212,480
3,024
(1,029)
(67)
(5,412)
779,607
1,206,039
9,860
1,527
(1,178)
(4,614)
$
788,289
1,202,952
2025
$ 776,650
3,024
(67)
779,607
9,860
(1,178)
$
788,289

(Continued)

46

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

(ak) 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 March 31,
2025
$ 1,927,872
146,582
87,327
24,228
191,106
$
2,377,115		 2024
1,915,788
139,628
86,133
24,244
189,070
2,354,863

(al) Depreciation and amortization expense

Depreciation
Property and equipment
Right-of-use assets
Amortization
Computer software
Other deferred charges
Total		 For the three months ended March 31, For the three months ended March 31,
2025
$ 126,094
109,578
109,272
24
$
344,968		 2024
145,241
108,984
84,142
14
338,381

(Continued)

47

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

(am) Other general and administrative expense

Compensation loss
Utilities fee
Postage and telecommunication fee
Transportation fee
Printing and advertisement fee
Repair and maintenance fee
Insurance fee
Professional service fee
Materials and supplies
Rental expenses
Duties and levies
Membership, donation and partaking
Storage, packing and processing fee
Cash transit fee
Others
Total		 For the three months ended March 31, For the three months ended March 31,
2025
$ 36
20,340
59,667
6,666
115,987
91,376
101,288
56,972
43,601
10,032
611,600
161,051
13,390
17,500
12,740
$
1,322,246		 2024
3
20,398
60,022
7,223
79,764
86,287
99,672
50,585
25,396
9,846
566,339
159,992
12,001
17,170
19,995
1,214,693

(an) Financial Instruments

(i) Fair value information

1) General description

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

The financial instruments are record as fair value when original recognizing, usually refer to the transaction price in many circumstances. Except some amortized cost financial instruments, the financial instruments are measured in fair value. A quoted market price in an active market provides the most reliable evidence of fair value. If financial instruments are without active market, the Bank 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)

48

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)

49

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
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		 March 31, 2025 March 31, 2025
Total
$ 1,432,774
200,000
84,317,274
22,949,455
170,254,473
776,905
9,869,915
$ 2,455,642
400,051		 Level 1
904,469
-
-
14,550,079
98,527,200
108,548
-
28,583
-		 Level 2
Level 3
-
528,305
200,000
-
84,104,039
213,235
-
8,399,376
71,727,273
-
668,357
-
9,869,915
-
2,427,059
-
400,051
-

(Continued)

50

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

Assets and Liabilities December 31, 2024 December 31, 2024
Level 1
794,532
-
-
10,012,278
97,980,180
118,912
-
27,320
-		 Level 2
Level 3
-
493,166
200,000
-
78,181,124
205,544
-
7,476,886
68,780,192
-
652,513
-
9,927,272
-
2,904,099
-
285,964
-
Instruments measured at fair value on a
recurring basis
Non-derivative financial assets and
liabilities:

(Continued)

51

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

Assets and Liabilities
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
Other
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		 March 31, 2024 March 31, 2024
Total
$ 1,744,447
200,000
70,502,484
26,717,609
178,014,634
776,660
9,448,139
$ 3,177,472
202,318		 Level 1
1,337,270
-
165,466
20,802,700
107,763,193
141,258
-
26,930
-		 Level 2
Level 3
-
407,177
200,000
-
70,134,417
202,601
-
5,914,909
70,251,441
-
635,402
-
9,448,139
-
3,150,542
-
202,318
-

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)

52

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)

53

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 three months ended March 31, 2025 and 2024.

  • 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 t For t he three months ended March 31, 2025
Beginning
balance		 Valuation profit and loss Incr ease Decr ease
Transfer out
from Level 3
(Note)
Ending
balance
-
741,540
-
8,399,376
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
Name		 $ 698,710
7,476,886		 7,330
-		 -
(329,068)
For t		 35,500
1,251,558
he three months		 -
-
ended March 31,		 -
-
2024
Beginning
balance		 Valuation profit and loss Incr ease Decr ease
Transfer out
from Level 3
(Note)
Ending
balance
12,162
609,778
-
5,914,909
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		 $ 630,754
5,825,636		 (39,564)
-		 -
89,273		 30,750
-		 -
-		 -
-

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

(Continued)

54

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)		 For the three months ended March 31,
2025
2024
$ 7,330
(56,059)
(329,068)
89,273
  • 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		 March 31, 2025
fair value
$ 213,235
528,305
8,399,376		 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%-40.40% The higher market
liquidity discount, the
lower fair value.
15.83%-27.48% The higher market
liquidity discount, the
lower fair value.
0.00%-1.53%
The higher sustainable
growth rate, the higher
fair value.
11.20%-12.63% The higher rate of cost
of equity, the lower
fair value.

(Continued)

55

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
Financial assets at fair value through
profit or loss
Private fund
Unlisted stocks
Financial assets at fair value through
other comprehensive income
Unlisted stocks		 December 31, 2024
fair value
$ 205,544
493,166
7,476,886		 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
March 31, 2024		 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%~40.40% The higher market
liquidity discount, the
lower fair value.
0.00%-26.92% The higher market
liquidity discount, the
lower fair value.
0.00%-1.53%
The higher sustainable
growth rate, the higher
fair value.
11.14%-12.57% The higher rate of cost
of equity, the lower
fair value.
fair value
$ 202,601
407,177
5,914,909		 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%~43.31% The higher market
liquidity discount, the
lower fair value.
11.70%-29.69% The higher market
liquidity discount, the
lower fair value.
0.00%-1.54%
The higher sustainable
growth rate, the higher
fair value.
10.76%-12.40% The higher rate of cost
of equity, the lower
fair value.

(Continued)

56

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

  • 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:

March 31, 2025
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
December 31, 2024
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%)
$ 39,991
(39,991)
490,930
(490,930)
the effects to the net income and
other comprehensive income
Favorable
changes (-5%)
Unfavorable
changes (5%)
$ 42,442
(42,442)
433,274
(433,274)

(Continued)

57

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

the effects to the net income and the effects to the net income and
other comprehensive income
Favorable Unfavorable
changes (-5%) changes (5%)
March 31, 2024
Financial assets at fair value through profit
or loss
Unlisted stocks and private fund $ 37,232 (37,232)
Financial assets at fair value through other
comprehensive income
Unlisted stocks 345,318 (345,318)
Inc ome approach
Ad opting the income approach to evaluate Level 3 financial instruments of
the
Bank
and subsidiaries. The evaluation parameters		 are divided into
sus tainable growth rate and cost of equity capital. The effects of the two
eva luation parameters on the other comprehensive profit and loss are as
foll ows:
1. sustainable growth rate
the effects to other comprehensive
income
Favorable Unfavorable
changes (0.3%) changes (-0.3%)
March 31, 2025
Financial assets at fair value through other
comprehensive income
Unlisted stocks $ 3,614 (3,446)
the effects to other comprehensive
income
Favorable Unfavorable
changes (0.3%) changes (-0.3%)
December 31, 2024
Financial assets at fair value through other
comprehensive income
Unlisted stocks $ 3,699 (3,531)

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:

  1. sustainable growth rate

(Continued)

58

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

March 31, 2024
Financial assets at fair value through other
comprehensive income
Unlisted stocks
2.
cost of equity
March 31, 2025
Financial assets at fair value through other
comprehensive income
Unlisted stocks
December 31, 2024
Financial assets at fair value through other
comprehensive income
Unlisted stocks
March 31, 2024
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%)
$ 3,107
(2,913)
the effects to other comprehensive
income
Favorable
changes (-3%)
Unfavorable
changes (3%)
$ 46,585
(24,556)
the effects to other comprehensive
income
Favorable
changes (-3%)
Unfavorable
changes (3%)
$ 74,568
(36,659)
the effects to other comprehensive
income
Favorable
changes (-3%)
Unfavorable
changes (3%)
$ 65,179
(31,597)

(Continued)

59

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		 March 31, 2025 March 31, 2025

Book value
$ 217,383,699
December
Fair value
218,056,528
31, 2024

Book value
Fair value
$ 230,242,408
230,751,781
March 31, 2024
Fair value

Book value
$ 248,181,592
Fair value
248,438,196
  • b) The fair value hierarchy of information
Assets and Liabilities March 31, 2025 March 31, 2025
Total
$ 218,056,528		 Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable
inputs (Level 3)
47,162,055
170,894,473
-
December 31, 2024
Debt instruments measured at amortized cost
Assets and Liabilities
Total
$ 230,751,781		 Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable
inputs (Level 3)
53,478,375
177,273,406
-
March 31, 2024
Debt instruments measured at amortized cost
Assets and Liabilities
Total
$ 248,438,196		 Quoted prices
in active markets
for identical
assets (Level 1)
47,683,823		 Significant other
observable inputs
(Level 2)
Significant
unobservable
inputs (Level 3)
200,754,373
-
Debt instruments measured at amortized cost

(Continued)

60

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)

61

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

  • (ao) Financial Risk Information

  • (i) General description

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

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

  • (ii) Risk management organization structure

  • 1) Risk Management Committee

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

  • a) Conduct Analysis and response project when significant domestic and foreign economic, financial and industrial risk management occur.

  • b) Risk management report of various risk exposure and agenda processing.

  • c) The processing of examination of the risk management relevant policy of the Bank and limitations, management indices and the response project when the risk exceeds the limitations.

  • d) Supervise the Bank 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)

62

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)

63

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.

(Continued)

64

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

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.

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;

(Continued)

65

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

  - 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;

  - 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)

66

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)

67

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)

68

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)

69

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)

70

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.

d) Enhancement of other credit

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

(Continued)

71

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

  • 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:
March 31, 2025
Impairment financial assets：
Receivables
Accounts receivables
Interest receivable
Discounts and loans
Overdue receivable
Total impairment financial
assets
December 31, 2024
Impairment financial assets：
Receivables
Accounts receivables
Interest receivable
Discounts and loans
Overdue receivable
Total impairment financial
assets
March 31, 2024
Impairment financial assets：
Receivables
Acceptances receivables
Accounts receivable
factoring without
recourse
Interest receivable
Discounts and loans
Overdue receivable
Total impairment financial
assets		 Carrying
amount
$ 182,574
70,091
20,842,103
20,536
$
21,115,304
Carrying
amount
$ 160,100
53,196
18,943,078
15,380
$
19,171,754
Carrying
amount
$ 149,909
1,064
55,573
18,864,876
18,261
$
19,089,683		 Allowance
impairment
22,404
15,254
5,224,718
9,998
5,272,374
Allowance
impairment
20,195
12,036
5,032,126
7,946
5,072,303
Allowance
impairment
13,535
1,064
11,071
4,346,534
10,134
4,382,338		 Exposure
(measured at
amortized cost)
109,361
54,837
15,617,385
10,538
15,792,121
Exposure
(measured at
amortized cost)
139,905
41,160
13,910,952
7,434
14,099,451
Exposure
(measured at
amortized cost)
136,374
-
44,502
14,518,342
8,127
14,707,345		 Value of
collateral
131,765
-
24,209,651
-
24,341,416
Value of
collateral
154,660
-
23,074,264
-
23,228,924
Value of
collateral
149,909
-
-
22,662,423
-
22,812,332

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.

(Continued)

72

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

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 March 31, 2 025
%
%
59.50
%
1.93
%
2.50
%
0.16
%
28.89
%
0.68
%
6.23
%
0.11
%
100.00		 December 31 , 2024
%
%
60.59
%
1.44
%
2.67
%
0.16
%
28.30
%
0.66
%
6.07
%
0.11
%
100.00		 **March 31, ** 2024
Amount
$ 992,240,986
32,147,435
41,657,759
2,722,075
481,727,777
11,364,920
103,881,546
1,788,789
$
1,667,531,287		 Amount
994,458,590
23,659,672
43,788,000
2,672,117
464,452,775
10,829,982
99,622,258
1,701,093
1,641,184,487		 Amount
935,047,678
22,726,840
46,485,000
2,693,495
396,827,135
8,571,631
97,452,337
1,895,289
1,511,699,405		 %
%
61.85
%
1.50
%
3.08
%
0.18
%
26.25
%
0.57
%
6.45
%
0.12
%
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 March 31, 2 025
%
%
92.98
%
7.02
%
100.00		 December 31 , 2024
%
%
93.17
%
6.83
%
100.00		 March 31, 2024
Amount
$ 1,550,496,032
117,035,255
$
1,667,531,287		 Amount
1,529,031,154
112,153,333
1,641,184,487		 Amount
1,403,780,148
107,919,257
1,511,699,405		 %
%
92.86
%
7.14
%
100.00
Domestic
Foreign
Total
  • c) By collateral

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

Collateral March 31, 2 025
%
%
17.46
%
0.68
%
1.05
%
63.15
%
0.97
%
0.11
%
15.96
%
0.62
%
100.00		 December 31 , 2024
%
%
17.71
%
0.70
%
1.08
%
62.87
%
1.02
%
0.14
%
15.87
%
0.61
%
100.00		 **March 31, ** 2024
Amount
$ 291,222,938
11,333,978
17,566,959
1,053,081,009
16,106,261
1,837,577
266,024,727
10,357,838
$
1,667,531,287		 Amount
290,659,153
11,434,500
17,754,711
1,031,845,127
16,679,073
2,357,604
260,374,328
10,079,991
1,641,184,487		 Amount
260,385,785
9,634,511
21,245,713
948,699,080
14,015,273
2,544,069
246,201,984
8,972,990
1,511,699,405		 %
%
17.22
%
0.64
%
1.41
%
62.76
%
0.93
%
0.17
%
16.28
%
0.59
%
100.00
Unsecured
Stocks
Bonds
Real estate
Chattel
Notes receivable
Guarantees
Others
Total

(Continued)

73

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

  - Note: Secured credit are categorized in its respective item per the type of the collaterals. Non-secured credit (no collateral provided) is classified in unsecured. If the credit amount is higher than the accreditation value, the credit amount within the accreditation is classified in the respective item, the credit amount exceeds the accreditation value is classified in unsecured. The accreditation value is the value calculated per the accreditation regulations of the Bank 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
March 31, 2025
$ 101,333,098
18,418,210
9,421,012
33,701,455
$
162,873,775		 December 31, 2024
82,622,791
17,974,642
8,268,607
33,893,522
142,759,562		 March 31, 2024
Issued and irrevocable loan
commitments
Irrevocable credit card loan
commitments
Letters of credit issued yet unused
Various guarantee proceeds
Total		 110,082,197
17,701,447
9,573,184
27,586,685
164,943,513

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)

74

TAIWAN BUSINESS BANK, LTD. 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

March 31, 2025 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 $ 446,128 241,034 148,430 - 1,056 300,973 1,137,621 2,282 3,124 2,159 - 105 542 8,212 - 1,290 1,144,543
Acceptances receivable 277,306 472,249 158,279 - - 80,506 988,340 - - - - - - - - 9,883 978,457
Other receivables 684,946 3,404,225 505,877 64,505 27,541 4,481,408 9,168,502 1,697 3,617 3,516 1,110 2,587 29,922 42,449 252,665 127,295 9,336,321
Discounts and loans
Private banking 250,039,316 162,813,416 57,254,237 2,657,470 1,236,411 4,680,277 478,681,127 88,922 141,065 364,310 65,790 173,717 7,876 841,680 3,993,759 6,159,168 477,357,398
Corporate banking 310,892,210 429,027,233 274,072,367 42,440,045 16,870,869 87,865,105 1,161,167,829 1,238,666 1,642,958 1,037,734 371,268 702,288 1,005,634 5,998,548 16,848,344 15,771,633 1,168,243,088
Other financial assets
Overdue receivable - - - - - - - - - - - - - - 20,536 10,613 9,923
Total $ 562,339,906 595,958,157 332,139,190 45,162,020 18,135,877 97,408,269 1,651,143,419 1,331,567 1,790,764 1,407,719 438,168 878,697 1,043,974 6,890,889 21,115,304 22,079,882 1,657,069,730
Guarantee and commitments $ 28,180,273 21,207,057 9,789,763 142,208 265,509 102,829,891 162,414,701 155,876 81,783 7,374 85,931 769 695 332,428 126,646 420,684 162,453,091
December 31, 2024 12-month ECL Lifetime ECL－not impaired Lifetime ECL－
impaired
Excellent Good Medium Acceptable Under
standard		 No rating Subtotal Excellent Good Medium Acceptable Under
standard		 No rating Subtotal High risk Allowance
impairment		 Total
Receivable
Credit card $ 490,011 255,117 153,914 5 1,545 373,399 1,273,991 2,276 2,311 3,223 - 127 1,722 9,659 - 1,441 1,282,209
Acceptances receivable 544,890 508,851 148,854 3,541 - 39,241 1,245,377 - - - - - - - - 12,454 1,232,923
Other receivables 619,261 3,116,993 612,121 73,713 28,975 4,575,283 9,026,346 508 2,603 3,405 802 8,895 96,868 113,081 213,296 119,135 9,233,588
Discounts and loans
Private banking 239,613,287 157,115,714 55,738,686 2,859,702 1,405,153 4,839,886 461,572,428 22,854 191,234 288,800 32,373 157,949 3,074 696,284 3,885,156 6,008,481 460,145,387
Corporate banking 305,590,576 428,717,976 268,220,823 48,161,526 17,209,210 86,877,154 1,154,777,265 262,024 913,207 883,441 348,776 1,631,473 1,156,511 5,195,432 15,057,922 15,866,502 1,159,164,117
Other financial assets
Overdue receivable - - - - - - - - - - - - - - 15,380 8,543 6,837
Total $ 546,858,025 589,714,651 324,874,398 51,098,487 18,644,883 96,704,963 1,627,895,407 287,662 1,109,355 1,178,869 381,951 1,798,444 1,258,175 6,014,456 19,171,754 22,016,556 1,631,065,061
Guarantee and commitments $ 26,589,388 21,419,459 9,901,075 417,465 262,871 83,936,364 142,526,622 19,442 78,236 5,935 2,140 183 358 106,294 126,646 411,691 142,347,871
March 31, 2024 12-month ECL Lifetime ECL－not impaired Lifetime ECL－
impaired
Excellent Good Medium Acceptable Under
standard		 No rating Subtotal Excellent Good Medium Acceptable Under
standard		 No rating Subtotal High risk Allowance
impairment		 Total
Receivable
Credit card $ 389,457 216,507 165,177 (5) 2,454 273,629 1,047,219 919 2,785 2,940 - 350 37 7,031 - 990 1,053,260
Acceptances receivable 387,027 325,042 85,015 15,440 358 62,752 875,634 - - - - - - - - 8,756 866,878
Other receivables 542,904 2,912,406 527,497 83,222 27,763 5,169,650 9,263,442 492 3,719 5,103 2,671 3,554 91,935 107,474 206,542 112,744 9,464,714
Discounts and loans
Private banking 166,567,579 146,519,883 70,705,927 3,266,713 1,043,211 5,820,183 393,923,496 13,311 125,924 365,533 115,008 163,336 22,493 805,605 3,993,323 5,016,366 393,706,058
Corporate banking 276,123,109 401,531,278 257,520,425 49,450,303 15,609,277 91,563,999 1,091,798,391 437,543 1,229,334 1,157,074 1,163,171 1,254,754 1,065,161 6,307,037 14,871,553 14,780,609 1,098,196,372
Other financial assets
Overdue receivable - - - - - - - - - - - - - - 18,261 10,721 7,540
Total $ 444,010,076 551,505,116 329,004,041 52,815,673 16,683,063 102,890,213 1,496,908,182 452,265 1,361,762 1,530,650 1,280,850 1,421,994 1,179,626 7,227,147 19,089,679 19,930,186 1,503,294,822
Guarantee and commitments $ 27,789,595 14,068,169 8,782,013 2,408,048 269,600 111,163,093 164,480,518 78,716 237,266 3,317 3,030 6,900 28 329,257 133,738 375,309 164,568,204

(Continued)

75

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

ii) Debt instruments

March 31, 2025 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 $ 71,727,271 - - - 71,727,271 - - - - - - 71,727,271 21,715
NT bonds 98,527,202 - - - 98,527,202 - - - - - - 98,527,202 59,175
Negotiable certificates of deposit 668,357 - - - 668,357 - - - - - - 668,357 249
Investment in debt instruments at amortized cost
Overseas bonds 25,098,447 - - - 25,098,447 - - - - - - 25,098,447 7,919
NT bonds and treasury bills 46,456,464 - - - 46,456,464 - - - - - - 46,456,464 31,598
Certificates of deposit with the Central Bank 145,835,000 - - - 145,835,000 - - - - - - 145,835,000 36,400
Negotiable certificates of deposit 69,731 - - - 69,731 - - - - - - 69,731 26
Total $ 388,382,472 - - - 388,382,472 - - - - - - 388,382,472 157,082
December 31, 2024 12-month ECL Lifetime ECL－not impaired Lifetime ECL－
impaired
Investment Sub investment High risk No rating Subtotal Investment Sub investment High risk No rating Subtotal High risk Total Accumulated
impairment(Note)
Investment in debt instruments measured at fair
value through other comprehensive income
Overseas bonds $ 68,780,192 - - - 68,780,192 - - - - - - 68,780,192 20,900
NT bonds 97,980,180 - - - 97,980,180 - - - - - - 97,980,180 66,583
Negotiable certificates of deposit 652,513 - - - 652,513 - - - - - - 652,513 245
Investment in debt instruments at amortized cost
Overseas bonds 27,143,649 - - - 27,143,649 - - - - - - 27,143,649 6,963
NT bonds and treasury bills 48,887,235 - - - 48,887,235 - - - - - - 48,887,235 26,844
Certificates of deposit with the Central Bank 154,215,000 - - - 154,215,000 - - - - - - 154,215,000 38,492
Negotiable certificates of deposit 68,849 - - - 68,849 - - - - - - 68,849 26
Total $ 397,727,618 - - - 397,727,618 - - - - - - 397,727,618 160,053
March 31, 2024 12-month ECL Lifetime ECL－not impaired Lifetime ECL－
impaired
Investment Sub investment High risk No rating Subtotal Investment Sub investment High risk No rating Subtotal High risk Total Accumulated
impairment(Note)
Investment in debt instruments measured at fair
value through other comprehensive income
Overseas bonds $ 70,251,441 - - - 70,251,441 - - - - - - 70,251,441 20,333
NT bonds 107,763,193 - - - 107,763,193 - - - - - - 107,763,193 83,111
Negotiable certificates of deposit 635,402 - - - 635,402 - - - - - - 635,402 239
Investment in debt instruments at amortized cost
Overseas bonds 27,539,578 - - - 27,539,578 - - - - - - 27,539,578 6,549
NT bonds and treasury bills 44,522,206 - - - 44,522,206 - - - - - - 44,522,206 23,814
Certificates of deposit with the Central Bank 176,135,000 - - - 176,135,000 - - - - - - 176,135,000 52,015
Negotiable certificates of deposit 67,211 - - - 67,211 - - - - - - 67,211 25
Total $ 426,914,031 - - - 426,914,031 - - - - - - 426,914,031 186,086

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

(Continued)

76

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:

March 31, 2025 Maximum credit
risk exposure
$ 200,000
84,104,039
904,469
528,305
213,235
2,455,642
Maximum credit
risk exposure
$ 200,000
78,181,124
794,532
493,166
205,544
2,931,419
Maximum credit
risk exposure
$ 200,000
70,134,417
1,337,270
407,177
368,067
3,177,472		 Collateral
Enhancement of
other credit
-
-
-
-
-
-
-
-
-
-
1,087,073
604,695
Collateral
Enhancement of
other credit
-
-
-
-
-
-
-
-
-
-
2,074,252
612,147
Collateral
Enhancement of
other credit
-
-
-
-
-
-
-
-
-
-
739,643
1,561,184
Financial assets at fair value
through profit or loss
－Debt investments
－Commercial paper
－Listed stocks
－Unlisted stocks
－Beneficiary certificates
－Derivative instrument
December 31, 2024
Financial assets at fair value
through profit or loss
－Debt investments
－Commercial paper
－Listed stocks
－Unlisted stocks
－Beneficiary certificates
－Derivative instruments
March 31, 2024
Financial assets at fair value
through profit or loss
－Debit investments
－Commercial paper
－Listed stocks
－Unlisted stocks
－Beneficiary certificates
－Derivative instrument

(Continued)

77

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

Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－Transferred to 12-months
ECL
－Transferred to lifetime ECL
－Transferred to the credit-
impaired financial assets
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Other changes
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans "
Ending balance		 Fo r the three mont hs ended March 31, 2025 hs ended March 31, 2025 Total
12-month
ECL
$ 41,523
322
(25)
(20)
(9,308)
15,686
(3,050)
-
$
45,128		 Lifetime
ECL－not
impaired
9,170
(241)
108
(495)
(78)
128
396
-
8,988		 Lifetime
ECL－
impaired
32,231
(81)
(83)
515
(7,685)
12,057
704
-
37,658		 Impaired
(IFRS9)
82,924
-
-
-
(17,071)
27,871
(1,950)
-
91,774		 Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
50,106
-
-
-
-
-
-
(3,412)
46,694
133,030
-
-
-
(17,071)
27,871
(1,950)
(3,412)
138,468

(Continued)

78

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

Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－Transferred to 12-months
ECL
－Transferred to lifetime ECL
－Transferred to the credit-
impaired financial assets
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Other changes
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans "
Ending balance		 Fo r the three mont hs ended March 31, 2024 hs ended March 31, 2024 Total
12-month
ECL
$ 39,104
164
(17)
(11)
(6,546)
16,200
(2,166)
-
$
46,728		 Lifetime
ECL－not
impaired
7,043
(19)
29
(28)
(17)
118
350
-
7,476		 Lifetime
ECL－
impaired
30,542
(145)
(12)
39
(3,881)
3,938
(4,811)
-
25,670		 Impaired
(IFRS9)
76,689
-
-
-
(10,444)
20,256
(6,627)
-
79,874		 Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
44,823
-
-
-
-
-
-
(2,207)
42,616
121,512
-
-
-
(10,444)
20,256
(6,627)
(2,207)
122,490

(Continued)

79

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

b) Discounts and loans

Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－Transferred to 12-months
ECL
－Transferred to lifetime ECL
－Transferred to the credit-
impaired financial assets
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Write-off
Other changes
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans "
Ending balance		 Fo r the three mont hs ended March 31, 2025 hs ended March 31, 2025 Total
12-month
ECL
$ 5,678,500
43,023
(13,916)
(11,828)
(1,226,335)
1,262,658
-
(29,496)
-
$
5,702,606		 Lifetime
ECL－not
impaired
407,406
(6,551)
21,511
(67,758)
(8,665)
3,409
-
155,392
-
504,744		 Lifetime
ECL－
impaired
5,032,126
(36,472)
(7,595)
79,586
(185,657)
80,587
(1,694,527)
1,956,670
-
5,224,718		 Impaired
(IFRS9)
11,118,032
-
-
-
(1,420,657)
1,346,654
(1,694,527)
2,082,566
-
11,432,068		 Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
10,756,951
-
-
-
-
-
-
-
(258,218)
10,498,733
21,874,983
-
-
-
(1,420,657)
1,346,654
(1,694,527)
2,082,566
(258,218)
21,930,801

(Continued)

80

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

Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－Transferred to 12-months
ECL
－Transferred to lifetime ECL
－Transferred to the credit-
impaired financial assets
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Write-off
Other changes
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans "
Ending balance		 Fo r the three mont hs ended March 31, 2024 hs ended March 31, 2024 Total
12-month
ECL
$ 5,120,615
75,999
(9,467)
(7,563)
(1,177,249)
1,186,040
-
(62,664)
-
$
5,125,711		 Lifetime
ECL－not
impaired
317,996
(7,025)
11,184
(6,159)
(5,650)
1,800
-
374,336
-
686,482		 Lifetime
ECL－
impaired
4,196,783
(68,974)
(1,717)
13,722
(222,804)
124,495
(1,206,679)
1,511,708
-
4,346,534		 Impaired
(IFRS9)
9,635,394
-
-
-
(1,405,703)
1,312,335
(1,206,679)
1,823,380
-
10,158,727		 Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
9,967,448
-
-
-
-
-
-
-
(329,200)
9,638,248
19,602,842
-
-
-
(1,405,703)
1,312,335
(1,206,679)
1,823,380
(329,200)
19,796,975

(Continued)

81

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

  • c) Other financial assets
Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Write-off
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans "
Ending balance		 Fo r the three mont hs ended March 31, 2025 hs ended March 31, 2025 Total
12-month
ECL
$ -
-
-
-
-
$
-		 Lifetime
ECL－not
impaired
-
-
-
-
-
-		 Lifetime
ECL－
impaired
7,946
(4)
7,229
(5,173)
-
9,998		 Impaired
(IFRS9)
7,946
(4)
7,229
(5,173)
-
9,998		 Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
597
-
-
-
18
615
8,543
(4)
7,229
(5,173)
18
10,613

For the three months ended March 31, 2024

Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Write-off
Other changes
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans "
Ending balance		 12-month
ECL
$ -
-
-
-
-
-
$
-		 Lifetime
ECL－not
impaired
-
-
-
-
-
-
-		 Lifetime
ECL－
impaired
10,891
(3)
3,025
(3,959)
180
-
10,134		 Impaired
(IFRS9)
10,891
(3)
3,025
(3,959)
180
-
10,134		 Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
599
-
-
-
-
(12)
587		 Total
11,490
(3)
3,025
(3,959)
180
(12)
10,721

(Continued)

82

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

d) Guarantee and commitments

Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－Transferred to lifetime ECL
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Other changes
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans"
Ending balance
Beginning balance
Changes in financial instruments
that have been identified at the
beginning of the period：
－Transfer to lifetime ECL
－Transferred to the credit-
impaired financial assets
－The financial assets that
have been derecognized
New financial assets originated or
purchased
Other changes
Impairment difference of
"Regulations Governing the
Procedures for Banking
Institutions to Evaluate Assets
and Deal with Non-Performing
and Non-Accrual Loans"
Ending balance		 Fo r the three mont hs ended March 31, 2025 hs ended March 31, 2025 Total
12-month
ECL
$ 134,318
(393)
(26,449)
26,988
(377)
-
$
134,087		 Lifetime
ECL－not
impaired
511
393
-
73
-
-
977
Fo		 Lifetime
ECL－
impaired
47,096
-
-
-
-
-
47,096
r the three mont		 Impaired
(IFRS9)
Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
181,925
229,766
-
-
(26,449)
-
27,061
-
(377)
-
-
8,758
182,160
238,524
hs ended March 31, 2024
411,691
-
(26,449)
27,061
(377)
8,758
420,684
Total
Lifetime
ECL－not
impaired
1,117
21
-
(143)
104
(498)
-
601		 Lifetime
ECL－
impaired
42,703
-
15
(850)
-
560
-
42,428		 Impaired
(IFRS9)
203,068
-
-
(32,003)
30,344
(183)
-
201,226		 Impairment difference
of "Regulations
Governing the
Procedures for
Banking
Institutions to
Evaluate Assets and
Deal with Non-
Performing and Non-
Accrual Loans"
174,033
-
-
-
-
-
50
174,083
377,101
-
-
(32,003)
30,344
(183)
50
375,309

(Continued)

83

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

e) Debts investments

Beginning balance
Additions
Derecognition
Other changes
Ending balance
Beginning balance
Additions
Derecognition
Other changes
Ending balance		 For the three months ended March 31, 2025
12-month ECL
Lifetime ECL
－not
impaired
Lifetime ECL
－impaired
Total
$ 160,053
-
-
160,053
33,588
-
-
33,588
(33,404)
-
-
(33,404)
(3,155)
-
-
(3,155)
$
157,082
-
-
157,082
For the three months ended March 31, 2024
12-month ECL
Lifetime ECL
－not
impaired
Lifetime ECL
－impaired
Total
$ 180,969
-
-
180,969
52,139
-
-
52,139
(48,020)
-
-
(48,020)
998
-
-
998
$
186,086
-
-
186,086		 For the three months ended March 31, 2025
12-month ECL
Lifetime ECL
－not
impaired
Lifetime ECL
－impaired
Total
$ 160,053
-
-
160,053
33,588
-
-
33,588
(33,404)
-
-
(33,404)
(3,155)
-
-
(3,155)
$
157,082
-
-
157,082
For the three months ended March 31, 2024
12-month ECL
Lifetime ECL
－not
impaired
Lifetime ECL
－impaired
Total
$ 180,969
-
-
180,969
52,139
-
-
52,139
(48,020)
-
-
(48,020)
998
-
-
998
$
186,086
-
-
186,086		 For the three months ended March 31, 2025
12-month ECL
Lifetime ECL
－not
impaired
Lifetime ECL
－impaired
Total
$ 160,053
-
-
160,053
33,588
-
-
33,588
(33,404)
-
-
(33,404)
(3,155)
-
-
(3,155)
$
157,082
-
-
157,082
For the three months ended March 31, 2024
12-month ECL
Lifetime ECL
－not
impaired
Lifetime ECL
－impaired
Total
$ 180,969
-
-
180,969
52,139
-
-
52,139
(48,020)
-
-
(48,020)
998
-
-
998
$
186,086
-
-
186,086
12-month ECL
$ 180,969
52,139
(48,020)
998
$
186,086		 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)

84

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)

85

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)

86

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		 March 31, 2025 March 31, 2025
0-30 days
$ 1,146,585,529
630,799
563,522
35,132,789
134,874
-
1,442,795
1,989,653
5,000,000
942,234,104
159,172,963
224,661
-
750
58,619		 31-90 days
277,597,907
-
-
9,718,962
428,330
-
4,366,629
4,000,503
15,000,000
-
244,015,199
-
-
1,500
66,784		 91 days-1 year
1-5 years
643,433,907
88,872,760
-
-
-
-
1,826,242
-
1,134,639
-
-
-
74,649
-
3,832,742
146,465
146,099,335
18,000,000
-
-
487,784,277
44,321,386
-
-
2,300,000
24,910,000
74,750
831,170
307,273
663,739
December 31, 2024		 Over 5 years
Total
37,306,725
2,193,796,828
-
630,799
-
563,522
-
46,677,993
-
1,697,843
9,869,915
9,869,915
-
5,884,073
27
9,969,390
-
184,099,335
-
942,234,104
2,946
935,296,771
-
224,661
26,000,000
53,210,000
1,291,421
2,199,591
142,416
1,238,831
0-30 days
$ 1,200,253,116
500,131
596,856
35,229,219
-
-
861,942
1,402,758
21,000,000
977,409,931
162,428,286
748,271
-
4,501
71,221		 31-90 days
240,489,084
-
-
15,629,951
142,598
-
399,202
2,256,680
18,099,335
-
203,639,278
-
250,000
3,250
68,790		 91 days-1 year
638,697,624
-
-
1,642,180
1,300,908
-
749,964
4,858,961
113,000,000
-
515,474,960
-
1,300,000
79,250
291,401		 1-5 years
96,711,654
-
-
-
-
-
-
137,701
35,000,000
-
44,137,180
-
15,910,000
804,000
722,773		 Over 5 years
Total
47,721,491
2,223,872,969
-
500,131
-
596,856
-
52,501,350
-
1,443,506
9,927,272
9,927,272
-
2,011,108
32
8,656,132
-
187,099,335
-
977,409,931
3,946
925,683,650
-
748,271
36,000,000
53,460,000
1,637,131
2,528,132
153,110
1,307,295

(Continued)

87

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		 March 31, 2024 March 31, 2024
0-30 days
$ 1,154,222,593
1,237,404
815,136
35,513,127
-
-
517,227
1,968,177
10,000,000
973,810,572
129,942,810
367,727
-
2,250
48,163		 31-90 days
208,461,535
-
-
7,202,520
100,000
-
693,109
3,102,719
-
-
197,295,542
-
-
4,750
62,895		 91 days-1 year
603,929,368
-
-
1,280,200
1,366,115
-
713,591
3,408,591
72,099,335
-
524,437,013
-
250,000
82,420
292,103		 1-5 years
61,630,724
-
-
-
44,807
-
-
111,766
-
-
42,568,301
-
17,210,000
981,580
714,270		 Over 5 years
Total
46,750,614
2,074,994,834
-
1,237,404
-
815,136
-
43,995,847
-
1,510,922
9,448,139
9,448,139
-
1,923,927
23
8,591,276
-
82,099,335
-
973,810,572
5,732
894,249,398
-
367,727
36,000,000
53,460,000
1,128,375
2,199,375
168,345
1,285,776

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 March 31, 2025, December 31 and March 31, 2024, maturity analysis for the derivative financial liabilities settled by net amount is as follows:

Derivative financial
liabilities at fair value
through profit or loss
－Foreign exchange
derivative instrument
－Interest rate derivative
instrument
Total		 March 31, 2025 March 31, 2025
0-30 days
$ -
-
$
-		 31-90 days
1,220
-
1,220		 91-180 days
327
-
327		 181 days
to 1 year
2,120
506
2,626		 Over
1 year
-
72,305
72,305		 Total
3,667
72,811
76,478

(Continued)

88

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

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

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

December 31, 2024
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 $ - 1,340 - 470 - 1,810
derivative instrument
March 31, 2024
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 $ - 910 518 5 - 1,433
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:

March 31, 2025
Derivative financial
instruments at fair value
through profit or loss
－Foreign exchange
derivative instruments
－Cash outflow
－Cash inflow
Total cash outflow
Total cash inflow
Net cash flow		 0-30 days
$ 34,236,228
34,131,316
34,236,228
34,131,316
$
104,912		 31-90 days
14,167,949
14,064,145
14,167,949
14,064,145
103,804		 91-180 days
9,769,718
9,555,772
9,769,718
9,555,772
213,946		 181 days
to 1 year
3,218,690
3,204,236
3,218,690
3,204,236
14,454		 Over 1 year
-
-
-
-
-		 Total
61,392,585
60,955,469
61,392,585
60,955,469
437,116

(Continued)

89

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

December 31, 2024
Derivative financial
instruments at fair value
through profit or loss
－Foreign exchange
derivative instruments
－Cash outflow
－Cash inflow
Total cash outflow
Total cash inflow
Net cash flow
March 31, 2024
Derivative financial
instruments at fair value
through profit or loss
－Foreign exchange
derivative instruments
－Cash outflow
－Cash inflow
Total cash outflow
Total cash inflow
Net cash flow		 0-30 days
$ 40,045,263
39,427,193
40,045,263
39,427,193
$
618,070
0-30 days
$ 39,441,357
39,216,141
39,441,357
39,216,141
$
225,216		 31-90 days
13,620,759
13,508,692
13,620,759
13,508,692
112,067
31-90 days
18,471,409
18,170,355
18,471,409
18,170,355
301,054		 91-180 days
6,163,409
5,944,896
6,163,409
5,944,896
218,513
91-180 days
3,224,469
3,174,644
3,224,469
3,174,644
49,825		 181 days
to 1 year
5,708,876
5,382,052
5,708,876
5,382,052
326,824
181 days
to 1 year
12,248,859
11,932,322
12,248,859
11,932,322
316,537		 Over 1 year
-
-
-
-
-
Over 1 year
-
-
-
-
-		 Total
65,538,307
64,262,833
65,538,307
64,262,833
1,275,474
Total
73,386,094
72,493,462
73,386,094
72,493,462
892,632

5) Maturity analysis of off-balance sheet items

March 31, 2025
Issued and irrevocable loan
commitments
Irrevocable credit card loan
commitments
Letters of credit issued yet
unused
Other guarantees
Total		 0-30 days
$ 1,609,366
1,476
2,409,572
2,178,556
$
6,198,970		 31-90 days 91-180 days 181 days
to 1 year		 Over 1 year
73,826,883
18,271,266
161,401
23,579,710
115,839,260		 Total
101,333,098
18,418,210
9,421,012
33,701,455
21,138,250
31,877
5,423,484
1,576,624
28,170,235		 842,513
33,662
743,872
2,561,870
4,181,917		 3,916,086
79,929
682,683
3,804,695
8,483,393
162,873,775

(Continued)

90

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

December 31, 2024
Issued and irrevocable loan
commitments
Irrevocable credit card loan
commitments
Letters of credit issued yet
unused
Other guarantees
Total
March 31, 2024
Issued and irrevocable loan
commitments
Irrevocable credit card loan
commitments
Letters of credit issued yet
unused
Other guarantees
Total		 0-30 days
$ 137,495
1,849
2,259,408
1,997,787
$
4,396,539
0-30 days
$ 190,800
3,420
2,139,114
2,510,505
$
4,843,839		 31-90 days 91-180 days 181 days
to 1 year		 Over 1 year
53,769,704
17,746,267
153,179
23,803,013
95,472,163
Over 1 year
55,820,739
16,701,670
266,147
18,789,543
91,578,099		 Total
82,622,791
17,974,642
8,268,607
33,893,522
939,928
76,833
4,773,597
2,002,498
7,792,856
31-90 days		 23,097,633
54,394
881,706
1,380,366
25,414,099
91-180 days		 4,678,031
95,299
200,717
4,709,858
9,683,905
181 days
to 1 year
142,759,562
Total
110,082,197
17,701,447
9,573,184
27,586,685
41,495,539
417,085
5,914,912
1,877,621
49,705,157		 7,043,282
316,887
1,023,426
1,322,921
9,706,516		 5,531,837
262,385
229,585
3,086,095
9,109,902
164,943,513

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 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:

March 31, 2025
Operating lease income
(lessor)
December 31, 2024
Operating lease income
(lessor)
March 31, 2024
Operating lease income
(lessor)		 Below 1 year
$ 2,099
Below 1 year
$ 2,299
Below 1 year
$ 1,806		 1-5 years
7,000
1-5 years
8,033
1-5 years
807		 Over 5 years
Total
5,577
14,676
Over 5 years
Total
6,267
16,599
Over 5 years
Total
-
2,613

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:

March 31, 2025
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Total		 Below 1 year
$ 1,359,076
2,640
6,306
$
1,368,022		 1-5 years
-
-
-
-		 Over 5 years
-
-
-
-		 Total
1,359,076
2,640
6,306
1,368,022

(Continued)

91

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

December 31, 2024
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Total
March 31, 2024
Machinery and equipment
Transportation equipment
Miscellaneous equipment
Total		 Below 1 year
$ 1,320,333
5,542
6,924
$
1,332,799
Below 1 year
$ 2,565,110
3,182
6,324
$
2,574,616		 1-5 years
-
-
-
-
1-5 years
-
-
-
-		 Over 5 years
-
-
-
-
Over 5 years
-
-
-
-		 Total
1,320,333
5,542
6,924
1,332,799
Total
2,565,110
3,182
6,324
2,574,616
  • (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)

92

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)

93

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)

94

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

  • v) Process of foreign exchange risk management

  • Identification and measurement

    • a. Risk Management department established risk factor chart based on different financial transactions to effectively identify risk factors and market risk resources. In addition, the financial transactions which the Bank 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.

  • 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.

(Continued)

95

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

  • 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.

  • 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)

96

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)

97

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)

98

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 changes in the six interest rate stress scenarios set by the Bank Association of the Republic of China (IRRBB) 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)

99

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)

100

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)

March 31, 2025

Currency
USD
JPY
AUD
ZAR
CNY		 Foreign currency
amount
(in thousands)
NT$ amount
$ 347,459
11,537,376
2,197,620
489,410
17,736
370,328
82,358
148,409
19,268
88,093
Significant net positions of foreign currencies (Market risk) Significant net positions of foreign currencies (Market risk)
December 31, 2024
Currency
USD
JPY
AUD
CNY
ZAR		 Foreign currency
amount
(in thousands)
NT$ amount
$ 363,838
11,928,429
2,214,548
464,169
15,708
320,757
66,303
297,303
64,162
111,899

Significant net positions of foreign currencies (Market risk) March 31, 2024

Currency
USD
CNY
JPY
AUD
HKD		 Foreign currency
amount
(in thousands)
NT$ amount
$ 368,886
11,806,196
101,973
449,599
1,844,304
390,070
16,265
339,125
34,933
142,841

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)

101

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

ii) Assets and liabilities of foreign currency

March 31, 2025

March 31, 2025 March 31, 2025
Currency Monetary financial assets
Foreign
currency
amount (in
thousands)
Spot rate
NTD amount
$ 14,119,274
33.2050
468,830,495
5,756,862
20.8800
120,203,279
8,105,360
4.5720
37,057,707
152,796,326
0.2227
34,027,742
6,978,411
4.2680
29,783,858
229,357
35.9700
8,249,971
5,263,091
1.8020
9,484,090
27,643
43.0500
1,190,031
49,061
18.9600
930,197
16,252
23.2100
377,209
6,396
24.7700
158,429
191,356
0.9846
188,409
-
-
140,554		 Monetary financial liabilities
Foreign
currency
amount (in
thousands)
$ 14,119,274
5,756,862
8,105,360
152,796,326
6,978,411
229,357
5,263,091
27,643
49,061
16,252
6,396
191,356
-		 Spot rate
33.2050
20.8800
4.5720
0.2227
4.2680
35.9700
1.8020
43.0500
18.9600
23.2100
24.7700
0.9846
-		 Foreign
currency
amount (in
thousands)
13,819,421
5,688,882
7,372,034
151,370,493
6,294,779
299,590
6,434,227
24,862
42,052
16,014
12,623
193,014
-		 Spot rate
NTD amount
32.7850
453,069,731
20.4200
116,166,970
4.4840
33,056,199
0.2096
31,727,255
4.2220
26,576,557
34.1400
10,228,003
1.7440
11,221,292
41.1800
1,023,817
18.5000
777,962
22.8600
366,080
24.1400
304,719
0.9846
190,042
-
141,699
USD
AUD
CNY
JPY
HKD
EUR
ZAR
GBP
NZD
CAD
SGD
THB
Others (Note)

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

December 31, 2024 December 31, 2024
Currency Monetary financial assets
Foreign
currency
amount (in
thousands)
Spot rate
NTD amount
$ 14,283,789
32.7850
468,294,030
5,825,840
20.4200
118,963,653
7,626,537
4.4840
34,197,393
152,960,726
0.2096
32,060,568
6,923,917
4.2220
29,232,778
299,583
34.1400
10,227,764
6,435,608
1.7440
11,223,700
24,948
41.1800
1,027,359
42,106
18.5000
778,961
16,029
22.8600
366,423
12,582
24.1400
303,729
179,829
0.9637
173,301
-
-
126,472		 Monetary financial liabilities
Foreign
currency
amount (in
thousands)
$ 14,283,789
5,825,840
7,626,537
152,960,726
6,923,917
299,583
6,435,608
24,948
42,106
16,029
12,582
179,829
-		 Spot rate
32.7850
20.4200
4.4840
0.2096
4.2220
34.1400
1.7440
41.1800
18.5000
22.8600
24.1400
0.9637
-		 Foreign
currency
amount (in
thousands)
13,819,421
5,688,882
7,371,945
151,370,493
6,294,779
299,590
6,434,227
24,862
42,052
16,014
12,623
179,037
-		 Spot rate
NTD amount
32.7850
453,069,731
20.4200
116,166,970
4.4840
33,055,801
0.2096
31,727,255
4.2220
26,576,557
34.1400
10,228,003
1.7440
11,221,292
41.1800
1,023,817
18.5000
777,962
22.8600
366,080
24.1400
304,719
0.9637
172,538
-
129,117
USD
AUD
CNY
JPY
HKD
EUR
ZAR
GBP
NZD
CAD
SGD
THB
Others (Note)

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

(Continued)

102

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

March 31, 2024

March 31, 2024 March 31, 2024
Currency Monetary financial assets
Foreign
currency
amount (in
thousands)
Spot rate
NTD amount
$ 14,439,065
32.0050
462,122,288
5,858,293
20.8500
122,145,409
5,181,786
4.4090
22,846,495
131,044,825
0.2115
27,715,980
5,421,309
4.0890
22,167,733
279,955
34.4900
9,655,648
4,828,942
1.6890
8,156,083
45,771
40.4200
1,850,064
31,051
19.1200
593,695
14,848
23.6400
351,007
13,569
23.7100
321,721
3,560
35.4650
126,255
41,933
2.9900
125,380
164,665
0.8812
145,103		 Monetary financial liabilities
Foreign
currency
amount (in
thousands)
$ 14,439,065
5,858,293
5,181,786
131,044,825
5,421,309
279,955
4,828,942
45,771
31,051
14,848
13,569
3,560
41,933
164,665		 Spot rate
32.0050
20.8500
4.4090
0.2115
4.0890
34.4900
1.6890
40.4200
19.1200
23.6400
23.7100
35.4650
2.9900
0.8812		 Foreign
currency
amount (in
thousands)
14,010,569
5,737,788
4,958,751
129,997,956
4,856,192
279,858
4,826,620
45,741
30,995
14,895
13,473
3,639
42,304
168,620		 Spot rate
NTD amount
32.0050
448,408,265
20.8500
119,632,880
4.4090
21,863,132
0.2115
27,494,568
4.0890
19,856,969
34.4900
9,652,302
1.6890
8,152,161
40.4200
1,848,851
19.1200
592,624
23.6400
352,118
23.7100
319,445
35.4650
129,057
2.9900
126,489
0.8812
148,588
USD
AUD
CNY
JPY
HKD
EUR
ZAR
GBP
NZD
CAD
SGD
CHF
SEK
THB

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%.

March 31, 2025

Currency
USD
AUD
HKD
JPY
GBP
SGD
ZAR
SEK
CHF
CAD
THB
EUR
NZD
CNY
Total		 Depreciate by 1%
Equity
(75,914)
(33,597)
(31,014)
(3,526)
-
-
-
-
-
-
-
-
-
-
(144,051)		 Appreciate by 1% Appreciate by 1%

Income
$ (7,159)
4,191
3,338
27
6
8
(24)
6
6
(9)
16
(20)
(53)
(70,507)
$
(70,174)
Income
7,159
(4,191)
(3,338)
(27)
(6)
(8)
24
(6)
(6)
9
(16)
20
53
70,507
70,174
Equity
75,914
33,597
31,014
3,526
-
-
-
-
-
-
-
-
-
-
144,051

(Continued)

103

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

Currency
USD
AUD
HKD
JPY
GBP
SGD
ZAR
CHF
CAD
THB
EUR
NZD
CNY
Total
Currency
USD
AUD
HKD
JPY
GBP
SGD
ZAR
SEK
CHF
CAD
THB
EUR
NZD
CNY
Total		 December 31, 2024 December 31, 2024 December 31, 2024
Depreciate by 1%
Appreciate by 1%
Equity
Income
Equity
(82,652)
3,581
82,652
(32,046)
(4,119)
32,046
(29,741)
(3,301)
29,741
(3,441)
(51)
3,441
-
36
-
-
(6)
-
-
25
-
-
(26)
-
-
3
-
-
8
-
-
(2)
-
-
21
-
-
59,714
-
(147,880)
55,883
147,880
March 31, 2024		 Appreciate by 1%

Income
$ (3,581)
4,119
3,301
51
(36)
6
(25)
26
(3)
(8)
2
(21)
(59,714)
$
(55,883)
Equity
82,652
32,046
29,741
3,441
-
-
-
-
-
-
-
-
-
147,880
Depreciate by 1%
Equity
(75,147)
(29,184)
(25,639)
(3,266)
-
-
-
-
-
-
-
-
-
-
(133,236)		 Appreciate by 1%

Income
(2,287)
(4,128)
(3,164)
(1,047)
25
27
41
(11)
(28)
(18)
(35)
45
18
57,425
46,863
Equity
75,147
29,184
25,639
3,266
-
-
-
-
-
-
-
-
-
-
133,236

(Continued)

104

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

  • 8) Interest rate risk disclosure and sensitivity analysis

  • a) Interest rate sensitivity analysis

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

Currency
Trading book
TWD
Banking book
TWD
USD
EUR
AUD
HKD
CNY
ZAR
Total		 March 31, 2025 March 31, 2025 March 31, 2025
Interest rate increases by 1 bp
Income
Equity
$ (2,306)
(1,443)
-
(78,010)
-
(31,525)
-
(1,779)
-
(126)
-
(398)
-
(1,189)
-
(76)
$
(2,306)
(114,546)		 Interest rate decreases by 1 bp

Income
$ (2,306)
-
-
-
-
-
-
-
$
(2,306)
Income
2,306
-
-
-
-
-
-
-
2,306
Equity
1,443
78,010
31,525
1,779
126
398
1,189
76
114,546
Currency
Trading book
TWD
Banking book
TWD
USD
EUR
AUD
HKD
CNY
ZAR
Total		 December 31, 2024 December 31, 2024 December 31, 2024
Interest rate increases by 1 bp
Income
Equity
$ (1,808)
(1,563)
-
(79,763)
-
(28,514)
-
(1,754)
-
(129)
-
(215)
-
(964)
-
(83)
$
(1,808)
(112,985)		 Interest rate decreases by 1 bp

Income
$ (1,808)
-
-
-
-
-
-
-
$
(1,808)
Income
1,808
-
-
-
-
-
-
-
1,808
Equity
1,563
79,763
28,514
1,754
129
215
964
83
112,985

(Continued)

105

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

Currency
Trading book
TWD
Banking book
TWD
USD
EUR
AUD
HKD
CNY
ZAR
Total		 March 31, 2024 March 31, 2024 March 31, 2024
Interest rate increases by 1 bp
Income
Equity
$ (1,134)
(1,973)
-
(80,415)
-
(28,706)
-
(1,931)
-
(195)
-
(289)
-
(1,256)
-
(105)
$
(1,134)
(114,870)		 Interest rate decreases by 1 bp

Income
$ (1,134)
-
-
-
-
-
-
-
$
(1,134)
Income
1,134
-
-
-
-
-
-
-
1,134
Equity
1,973
80,415
28,706
1,931
195
289
1,256
105
114,870

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
Scenario
Interest rate increases by 100 bp
Interest rate decreases by 100 bp		 March 31, 2025
in 1 year
Effect on EVE
USD
TWD
USD
(23,652)
(5,932,398)
(135,166)
19,155
14,133,638
121,745
December 31, 2024
in 1 year
Effect on EVE
USD
TWD
USD
(25,222)
(5,345,546)
(128,314)
20,755
13,044,638
114,999
March 31, 2024
in 1 year
Effect on EVE
USD
TWD
USD
(27,313)
(6,134,527)
(134,799)
26,203
14,327,150
120,946
Effect on NII
TWD
1,973,662
(2,716,003)
Effect on NII
TWD
1,732,841
(2,529,293)
Effect on NII in 1 year
USD
(27,313)
26,203
TWD
1,471,882
(2,298,248)

(Continued)

106

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

  • 9) Equity security risk disclosure and sensitivity analysis

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

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

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
TWD		 March 31, 2025
Income
Equity
731
-
(731)
-
March 31, 2024
Income
Equity
8,048
-
(8,048)
-
  • b) Value at Risk of equity security
Value at Risk From April 1, 2024 to March 31, 2025 From April 1, 2024 to March 31, 2025 From April 1, 2024 to March 31, 2025
Average Maximum Minimum
Equity security risk 8,145 28,200 -
Value at Risk For the year ended December 31, 2024
Average Maximum Minimum
Equity security risk 11,128 28,200 -
Value at Risk From April 1, 2023 to March 31, 2024
Average Maximum Minimum
Equity security risk 12,910 26,359 6,614
  • (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 March 31, 2025, December 31 and March 31, 2024, there were not any financial assets of the Bank that are not fully derecognized.

(Continued)

107

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

  • (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:

March 31, 2025 March 31, 2025 March 31, 2025 Net amount
(e)=(c)-(d)
(871,841)
Financial assets un de r offsetting or general agreement of ne t amount settlement o r similar norm
Item Gross amounts
of recognized
financial assets
(a)
f		 Gross amounts of
inancial 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
1,087,073
Financial
instruments
(Note)
Derivative financial
instruments		 $
819,927		 - 819,927 604,695
March 31, 2025 March 31, 2025 March 31, 2025 Net amount
(e)=(c)-(d)
(2,153,438)
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)		 f Net amount of
inancial liabilities
presented in the
balance sheet
(c)=(a)-(b)		 Amounts not
balance		 s
s		 et off in the
heet (d)
Cash collateral
pledged
2,266,241
Financial
instrument
(Note)
Derivative financial
instruments		 $
112,803		 - 112,803 -
December 31, 2024 December 31, 2024 December 31, 2024 Net amount
(e)=(c)-(d)
(1,450,409)
Financial assets un de r offsetting or general agreement of ne t amount settlement or similar norm
Item Gross amounts
of recognized
financial assets
(a)
f		 Gross amounts of
inancial 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
2,074,252
i Financial
nstruments (Note)
Derivative financial
instruments		 $
1,235,990		 - 1,235,990 612,147
December 31, 2024 December 31, 2024 December 31, 2024 Net amount
(e)=(c)-(d)
(2,467,540)
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)		 f Net amount of
inancial liabilities
presented in the
balance sheet
(c)=(a)-(b)		 Amounts not
balance		 set off in the
sheet(d)
Cash collateral
pledged
2,577,622
Financial
instruments
(Note)
Derivative financial
instruments		 $
110,082		 - 110,082
March 31, 2024		 -
Net amount
(e)=(c)-(d)
(718,341)
Financial assets un de r offsetting or general agreement of ne t amount settlement o r similar norm
Item Gross amounts
of recognized
financial assets
(a)
f		 Gross amounts of
inancial 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
1,561,184
Financial
instruments
(Note)
Derivative financial
instruments		 $
1,582,486		 - 1,582,486 739,643

(Continued)

108

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

March 31, 2024 March 31, 2024 March 31, 2024 Net amount
(e)=(c)-(d)
(2,003,102)
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
2,089,366
Financial
instruments
(Note)
Derivative financial
instruments		 $
86,264		 - 86,264 -

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

(ap) Capital Management

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

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

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

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

  • 1) Tier 1 capital

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

(Continued)

109

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

  • 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.

  • (aq) 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 three months ended March 31, 2025 and 2024 were carried out to acquire right-of-use assets under leases. Please refer to Note 6(l).

Reconciliation of liabilities arising from financing activities were as follows:

Financial liabilities at fair value
through profit or loss
Bank notes payable
Lease liabilities
Total liabilities from financing
activities
Financial liabilities at fair value
through profit or loss
Bank notes payable
Lease liabilities
Total liabilities from financing
activities		 January 1,
2025
$ 9,927,272
53,460,000
1,307,295
$ 64,694,567
January 1,
2024
$ 9,175,560
53,850,000
1,319,108
$ 64,344,668		 Cash flows
-
(250,000)
(123,161)
(373,161)
Cash flows
-
(390,000)
(123,195)
(513,195)		 Non-cash changes
Foreign
exchange
rate
movement
Fair value
changes
Other
changes
126,000
(183,357)
-
-
-
-
3,196
-
51,501
129,196
(183,357)
51,501
Non-cash changes
Foreign
exchange
rate
movement
Fair value
changes
Other
changes
390,000
(117,421)
-
-
-
-
7,031
-
82,832
397,031
(117,421)
82,832		 Non-cash changes
Foreign
exchange
rate
movement
Fair value
changes
Other
changes
126,000
(183,357)
-
-
-
-
3,196
-
51,501
129,196
(183,357)
51,501
Non-cash changes
Foreign
exchange
rate
movement
Fair value
changes
Other
changes
390,000
(117,421)
-
-
-
-
7,031
-
82,832
397,031
(117,421)
82,832		 March 31,
2025
9,869,915
53,210,000
1,238,831
64,318,746
March 31,
2024
9,448,139
53,460,000
1,285,776
Foreign
exchange
rate
movement
390,000
-
7,031
397,031		 Fair value
changes
(117,421)
-
-
(117,421)
64,193,915

(Continued)

110

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

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

  • (i) The table below presents the types of structured entities that the Bank and subsidiaries does not include in consolidated financial reports but in which they hold an interest:
Types of structured
entities		 Nature and purpose
Interests held by the Bank and
subsidiaries
Investing in funds that cannot be
freely traded on the open
market
Investing in units or limited
partnership interests issued by
these funds.
Investing in commercial real
estate assets securitization
products
Investment in asset-backed
securities issued by
unconsolidated structured
entities
Private fund
Asset securitization
product
  • (ii) The scales of structures entities not included in consolidated financial reports were as follow:
Private fund
Asset securitization product
Total		 March 31, 2025
$ 213,235
1,463,022
$
1,676,257		 December 31,
2024
205,544
480,013
685,557		 March 31, 2024
202,601
524,294
726,895

(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		 March 31, 2025
$ 213,235
1,406,498
56,524
$
1,676,257		 December 31,
2024
205,544
420,142
59,871
685,557		 March 31, 2024
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		 202,601
454,689
69,605
726,895

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 March 31, 2025, December 31 and March 31, 2024, the Bank and subsidiaries has not provided any financial support to its special purpose entities that is not included in consolidated financial reports.

(Continued)

111

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

(7) Related-party transactions

  • (a) Names and relationship with related parties

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

in the consolidated financial statements.
Name of related party Relationship with the Bank and subsidiaries
Bank of Taiwan Corporate director of the Bank
Ministry of Finance, R.O.C Corporate director of the Bank
National Development Fund, Executive Corporate director of the Bank
Yuan
Taiwan Business Bank Guild Corporate director of the Bank
Small and Medium Enterprise Credit Substantive related parties
Guarantee Fund of Taiwan (Note)
TBB No. 1 Venture Capital Limited Substantive related parties
Partnership
Fubon Securities Co., Ltd. (Note) Substantive related parties
Media Talk Consulting Co., Ltd. Associates
Others Management and other related parties of the Bank

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

  • (b) Significant transactions with related parties

  • (i) Due from banks

Bank of Taiwan
Bank of Taiwan
Bank of Taiwan		 March 31, 2025 March 31, 2025

Amount
%
$
141,919
1.20
December 31, 2024
%
1.20

%
0.98

Interest rates are the same as those with regular clients.

(Continued)

112

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

  • (ii) Call loans to banks

==> picture [447 x 181] intentionally omitted <==

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

Interest Income
For the three
months ended Annual
Highest balance March 31, 2025 interest rate
Bank of Taiwan $ 1,331,660 378 1.200%~4.530%
Interest income
For the three
months ended Annual
Highest balance March 31, 2024 interest rate
Bank of Taiwan $ 339,772 322 1.627%~1.934%
Interest rates are the same as those with regular clients.
(iii) Call loans from banks
----- End of picture text -----

==> picture [447 x 283] intentionally omitted <==

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

December 31,
March 31, 2025 2024 March 31, 2024
Bank of Taiwan $ 830,125 1,279,090 2,920,300
Interest Expense
For the three
months ended Annual
Highest balance March 31, 2025 interest rate
Bank of Taiwan $ 7,191,062 24,536 1.30%~4.93%
Interest Expense
For the three
months ended Annual
Highest balance March 31, 2024 interest rate
Bank of Taiwan $ 13,481,342 32,502 0.68%~5.87%
Interest rates are the same as those with regular clients.
(iv) Deposits
March 31, 2025
Amount %
Others $ 1,487,897 0.08
----- End of picture text -----

(Continued)

113

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

December 31, 2024 December 31, 2024
Amount %
Others $ 1,557,190 0.08
March 31, 2024
Amount %
Others $ 2,382,359 0.13

Interest rates are the same as those with regular clients.

(v) Credit

Credit Credit Credit Credit
March 31, 2 025
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 16 6,601 6,272 6,272 - none none
Self-use home mortgages
loans		 73 426,872 421,764 421,764 - real estate none
Others Natural person 373,338 364,364 364,364 - real estate none
December 31, 2024
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 16 14,362 4,500 4,500 - none none
Self-use home mortgages
loans		 70 593,976 383,471 383,471 - real estate none
Others Natural person 595,978 391,026 391,026 - real estate none
March 31, 2 024
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 14,362 13,666 13,666 - none none
Self-use home mortgages
loans		 121 566,521 549,815 549,815 - real estate none
Others Natural person 560,660 553,227 553,227 - real estate none

(vi) Donation:

Small and Medium Enterprise Credit Guarantee Fund of
Taiwan
Taiwan Business Bank Guild
Total		 For the three months ended March 31, For the three months ended March 31,
2025
$ -
4,500
$
4,500		 2024
81,790
4,500
86,290

(Continued)

114

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

(vii) Receivables from related parties

National Development Fund,
Excutive Yuan		 March 31, 2025
$
692		 December 31,
2024
707		 March 31, 2024
-

(viii) Guarantees: None.

(ix) Service fees: None.

(x) Rental revenue: None.

(xi) Derivatives financial instrument transactions: None.

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

(xiii) Unearned revenue:

March 31, 2025
TBB No. 1 Venture Capital Limited
Partnership
$
12,786
(xiv) Other revenue:
TBB No. 1 Venture Capital Limited Partnership
Major management salary information
Salary and other short-term employee benefits
Post-employment benefits
Total		 March 31, 2025 December 31,
2024
March 31, 2024
-
12,786
For the three months ended March 31,		 March 31, 2024
12,786
2025
2024
$
4,262
4,262
For the three months ended March 31,		 2024
4,262
2025
$ 37,345
702
$
38,047		 2024
38,326
813
39,139

(c) Major management salary information

(8) Pledged assets:

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

(Continued)

115

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

(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		 March 31, 2025
$ 5,000,085
36,298,809
41,138,282
43,122,467
312,900,336
745,718
67,745,400
4,080,307
32,335,800		 December 31,
2024
March 31,
2024
5,185,261
7,702,665
38,732,548
38,993,780
39,588,139
42,433,518
42,162,129
37,159,869
299,620,745
226,283,845
737,404
648,856
71,430,200
77,457,900
4,425,334
3,362,915
32,277,500
32,358,950
  • (b) Unrecognized contractual commitments:

As of March 31, 2025, December 31 and March 31, 2024, major constructions in progress and purchases amounted to $1,111,790, $1,143,904 and $1,042,034 respectively, of which $854,490, $919,362 and $827,638 respectively, remained unpaid.

  • (c) In 1996, the Bank’ s World Trade Center Branch was sued for handling a letter of credit export collection from Chin Seen Industrial Ltd., which allegedly used a forged export document and failed to ship the goods to the importer, the International Comagnie de Commercialization et d’ Invertissement (I.C.C.I.) of the Republic of Zaire, who suffered a loss thereon. In November 1998, I.C.C.I. initiated a case with the Court of Commerce of Brussels in Belgium, requesting the L/C opening bank (Banque Bruxelles Lambert, or BBL) and the Bank to jointly pay compensation of USD7,830, plus interest, losses, and expenses for the L/C. On August 31, 2005, the Court of Commerce of Brussels ordered the Bank has to compensate for the damage of USD7,674, plus interest to I.C.C.I. Disatisfied with the decision made by the court, the Bank has engaged a local attorney in Belgium to formally file an appeal. In February 2011, Court of Appeal in Brussels had made an intermediate adjudication wherein both I.C.C.I and the Bank were responsible for the offense. Furthermore, on November 16, 2011, the court ruled that the Bank should be responsible for 90% of the negligence proportion. In terms of the decision made by the court on the second instance, the Bank has filed an appeal on November 3, 2011, in which the court ruled against the Bank on February 6, 2013. Since the Bank and I.C.C.I could not reach an agreement on the exchange rate and the calculation of the compensation, I.C.C.I filed an appeal to the Court of Frankfurt in Germany in October 2016, demanding for the Bank's account in Germany to be seized, in which the Bank lodged the guaranty amount of EUR13,200 to the court to rescind the order for attachment.

(Continued)

116

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

In July 2017, I.C.C.I applied for compulsory execution to the guaranty amount, which was transferred to I.C.C.I. by the court. The Bank then filed a lawsuit objecting to the debt through the attorney, in which the case was dismissed by the Court of Frankfurt in November 2018 and remanded back for reconsideration in November 2019 after the Bank's appeal was granted by the High Court of Frankfurt. On March 16, 2019, I.C.C.I. has filed a statement of grounds for objection and requested the Frankfurt High Court to revoke its ruling, wherein the Bank has appointed a lawyer to act as an attorney in the Federal Supreme Court of Justice to defend its case, which is currently being tried by the Regional Court of Frankfurt. The Federal Supreme Court of Justice has denied the I.C.C.I interlocutory appeal on May 20, 2021. The Frankfurt District Court ruled in favor of the Bank in the first instance on August 23, 2023. Moreover, I.C.C.I. was ordered to pay the Bank the amount of EUR1,046, plus interest, on November 17, 2017. wherein it disagreed with the ruling and filed an appeal on September 25, 2023. The High Court of Frankfurt dismissed the appeal on July 11, 2024.

Also, in October and November 2019, the Bank received subpoenas from the court of the Democratic Republic of Congo by a third person Star Marine, who demanded I.C.C.I to pay the damage of USD1,130, and held the Bank jointly liable. I.C.C.I, in turn, demanded the Bank to pay the amount of USD20,060, less its reimbursed amount, to make a security deposit of EUR$14,000. In light of the above matter, the Bank has engaged local attorneys to represent itself in the Court of Congo, who will merge the two cases as one. In April 2021, the Court of Congo demanded the Bank to pay the approximate amount of EUR20,060 to I.C.C.I., who will have to compensate Star Marine the damage amounting to USD1,130, as well as make a security deposit of EUR14,000 in the domestic bank in Congo. According to the statement of plaintiff and considering that I.C.C.I has already received the amount of EUR14,860, an addition provision for lawsuit amounting to $76,350 has been made in 2021. Please refer to Note 6(v) for more details. As of March 31, 2025, the Bank has accrued the compensation of $261,366 and EUR9,660.

(10) Losses from disasters: None

(11) Subsequent Events: None

(Continued)

117

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 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025
Non-performing
loans (Note1)		 Total loans Non-performing
loan ratio (Note2)		 Allowance for
credit losses		 Coverage ratio
(Note3)
Corporate
finance		 Secured 1,412,266 800,229,605 0.18 % 10,452,200 740.10 %
Unsecured 467,910 395,547,857 0.12 % 5,319,433 1,136.85 %
Consumer
finance		 Residence mortgages(Note 4) 189,979 295,336,205 0.06 % 3,849,652 2,026.36 %
Cash cards - - -
%		 - -
%
Microcredit(Note 5) 4,550 402,682 1.13 % 8,005 175.93 %
Others
(Note 6)		 Secured 171,399 163,774,015 0.10 % 2,136,991 1,246.79 %
Unsecured 10,564 12,240,923 0.09 % 164,520 1,557.36 %
Total loan busin ess 2,256,668 1,667,531,287 0.14 % 21,930,801 971.82 %
Overdue
receivables		 Total receivables Delinquency ratio Allowance for
credit losses		 Coverage ratio
Credit cards bus iness 1,047 1,160,146 0.09 % 8,960 855.78 %
Account receiva
(Note 7)		 ble factoring-without recourse - - -
%		 - -
%
Items Month/Year Month/Year December 31, 2024 December 31, 2024 December 31, 2024 December 31, 2024 December 31, 2024
Non-performing
loans (Note1)		 Total loans Non-performing
loan ratio (Note2)		 Allowance for
credit losses		 Coverage ratio
(Note3)
Corporate
finance		 Secured 2,099,371 791,779,808 0.27 % 10,498,619 500.08 %
Unsecured 336,268 395,200,885 0.09 % 5,367,883 1,596.31 %
Consumer
finance		 Residence mortgages(Note 4) 129,309 278,754,583 0.05 % 3,681,544 2,847.09 %
Cash cards - - -
%		 - -
%
Microcredit(Note 5) 4,694 402,305 1.17 % 7,758 165.27 %
Others
(Note 6)		 Secured 185,206 162,726,471 0.11 % 2,153,456 1,162.74 %
Unsecured 11,190 12,320,435 0.09 % 165,723 1,480.99 %
Total loan busin ess 2,766,038 1,641,184,487 0.17 % 21,874,983 790.84 %
Overdue
receivables		 Total receivables Delinquency ratio Allowance for
credit losses		 Coverage ratio
Credit cards bus iness 841 1,298,254 0.06 % 9,260 1,101.07 %
Account receiva
(Note 7)		 ble factoring-without recourse - - -
%		 - -
%

(Continued)

118

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

Items Month/Year Month/Year March 31, 2024 March 31, 2024 March 31, 2024 March 31, 2024 March 31, 2024
Non-performing
loans (Note1)		 Total loans Non-performing
loan ratio (Note2)		 Allowance for
credit losses		 Coverage ratio
(Note3)
Corporate
finance		 Secured 1,583,501 761,662,179 0.21 % 9,915,153 626.15 %
Unsecured 417,697 364,611,627 0.11 % 4,865,456 1,164.83 %
Consumer
finance		 Residence mortgages(Note 4) 151,265 219,813,195 0.07 % 2,853,676 1,886.54 %
Cash cards - - -
%		 - -
%
Microcredit(Note 5) 2,675 361,512 0.74 % 6,288 235.07 %
Others
(Note 6)		 Secured 194,136 151,798,110 0.13 % 1,972,548 1,016.07 %
Unsecured 36,135 13,452,782 0.27 % 183,854 508.80 %
Total loan busin ess 2,385,409 1,511,699,405 0.16 % 19,796,975 829.92 %
Overdue
receivables		 Total receivables Delinquency ratio Allowance for
credit losses		 Coverage ratio
Credit cards bus iness 805 1,071,794 0.08 % 10,994 1,365.71 %
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)

119

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

Overdue loans and receivables exempted from reporting

March 31, 2025
Loans may be
exempted from
reporting as a
non-performing
loan
Receivables may
be exempted
from reporting
as overdue
receivables
Pursuant to a contract under a
debt negotiation plan (Note1)
$ 86
424
Pursuant to a contract under a
debt liquidation plan and a
debt relief plan (Note 2)
79,274
12,842
Total
$
79,360
13,266		 March 31, 2025 March 31, 2025 December 31, 2024 March 31, 2024 March 31, 2024
Loans may be
exempted from
reporting as a
non-performing
loan		 Receivables may
be exempted
from reporting
as overdue
receivables		 Loans may be
exempted from
reporting as a
non-performing
loan		 Receivables may
be exempted
from reporting
as overdue
receivables		 Loans may be
exempted from
reporting as a
non-performing
loan		 Receivables may
be exempted
from reporting
as overdue
receivables
424
12,842
13,266		 95
79,064
79,159		 463
13,300
13,763		 142
71,802
71,944		 631
16,108
16,739

  • 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
March 31, 2025
Ranking Group enterprise Credit amount Credit amount to
equity ratio (%)
1 A group. (Real estate for sale and rental with own or
leased property)		 23,141,847 %
17.28
2 B company. (Railway transportation) 20,228,474 %
15.10
3 C group. (Other holding) 14,547,887 %
10.86
4 D group. (Steel rolling and extruding) 10,124,543 %
7.56
5 E group. (Liquid crystal panel and components
manufacturing)		 7,437,879 %
5.55
6 F group. (Computers manufacturing) 7,436,844 %
5.55
7 G group. (Real estate development) 7,405,610 %
5.53
8 H group. (Real estate development) 7,135,884 %
5.33
9 I group. (Real estate development) 6,689,166 %
4.99
10 J group. (Computers manufacturing) 6,508,180 %
4.86

(Continued)

120

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

December 31, 2024 December 31, 2024 December 31, 2024 December 31, 2024
Ranking Group enterprise Credit amount Credit amount to
equity ratio (%)
1 A group. (Real estate for sale and rental with own or
leased property)		 22,774,375 %
17.33
2 B company. (Railway transportation) 20,228,474 %
15.39
3 C group. (Other holding) 14,640,993 %
11.14
4 D group. (Steel rolling and extruding) 9,579,930 %
7.29
5 E group. (Liquid crystal panel and components
manufacturing)		 8,398,427 %
6.39
6 G group. (Real estate developmentg) 7,416,110 %
5.64
7 F group. (Computers manufacturing) 7,292,812 %
5.55
8 K group. (Real estate development) 7,027,987 %
5.35
9 H group. (Real estate development) 6,987,484 %
5.32
10 L group. (Financial leasing) 6,979,217 %
5.31
March 31, 2024 March 31, 2024 March 31, 2024 March 31, 2024
Ranking Group enterprise Credit amount Credit amount to
equity ratio (%)
1 B company. (Railway transportation) 20,248,040 %
16.40
2 A group. (Real estate for sale and rental with own or
leased property)		 17,796,142 %
14.42
3 C group. (Other holding) 11,657,986 %
9.44
4 D group. (Steel rolling and extruding) 9,915,794 %
8.03
5 G group. (Real estate development) 7,406,407 %
6.00
6 E group. (Liquid crystal panel and components
manufacturing)		 7,072,757 %
5.73
7 H group. (Real estate development) 6,874,923 %
5.57
8 F group. (Computers manufacturing) 6,578,289 %
5.33
9 K group. (Real estate development) 6,199,160 %
5.02
10 L group. (Financial Leasing) 5,905,573 %
4.78

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)

121

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 : %

March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025
Item 1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $ 1,702,392,006 66,167,307 30,645,260 142,992,635 1,942,197,208
Interest rate-sensitive liabilities 1,442,569,744 108,318,998 96,855,360 52,893,064 1,700,637,166
Interest rate sensitivity gap 259,822,262 (42,151,691) (66,210,100) 90,099,571 241,560,042
Net worth 133,921,417
Ratio of interest rate-sensitive assets to liabilities (%) 114.20
Ratio of interest rate-sensitive gap to net worth (%) 180.37
December 31, 2024
Item 1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $ 1,710,951,247 37,165,355 42,802,710 146,534,932 1,937,454,244
Interest rate-sensitive liabilities 1,464,813,013 94,762,368 111,936,395 53,379,521 1,724,891,297
Interest rate sensitivity gap 246,138,234 (57,597,013) (69,133,685) 93,155,411 212,562,947
Net worth 131,433,782
Ratio of interest rate-sensitive assets to liabilities (%) 112.32
Ratio of interest rate-sensitive gap to net worth (%) 161.73
March 31, 2024
Item 1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $ 1,561,766,007 55,181,568 50,982,951 145,369,783 1,813,300,309
Interest rate-sensitive liabilities 1,315,675,666 99,852,615 129,827,020 61,954,233 1,607,309,534
Interest rate sensitivity gap 246,090,341 (44,671,047) (78,844,069) 83,415,550 205,990,775
Net worth 123,433,583
Ratio of interest rate-sensitive assets to liabilities (%) 112.82
Ratio of interest rate-sensitive gap to net worth (%) 166.88

(Continued)

122

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, %

March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025
Item 1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $ 4,624,984 445,525 258,440 1,844,201 7,173,150
Interest rate-sensitive liabilities 7,823,789 2,207,013 1,399,483 - 11,430,285
Interest rate sensitivity gap (3,198,805) (1,761,488) (1,141,043) 1,844,201 (4,257,135)
Net worth 4,033,170
Ratio of interest rate-sensitive assets to liabilities (%) 62.76
Ratio of interest rate-sensitive gap to net worth (%) (105.55)
December 31, 2024 December 31, 2024 December 31, 2024 December 31, 2024 December 31, 2024 December 31, 2024
Item 1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $ 4,299,171 368,321 171,449 1,976,057 6,814,998
Interest rate-sensitive liabilities 6,866,815 2,268,523 2,166,345 - 11,301,683
Interest rate sensitivity gap (2,567,644) (1,900,202) (1,994,896) 1,976,057 (4,486,685)
Net worth 4,008,961
Ratio of interest rate-sensitive assets to liabilities (%) 60.30
Ratio of interest rate-sensitive gap to net worth (%) (111.92)
March 31, 2024
Item 1~90 days 91~180 days 181days~1year over 1 year total
Interest rate-sensitive assets $ 4,220,000 380,518 312,932 1,888,099 6,801,549
Interest rate-sensitive liabilities 7,817,313 1,286,727 2,063,119 - 11,167,159
Interest rate sensitivity gap (3,597,313) (906,209) (1,750,187) 1,888,099 (4,365,610)
Net worth 3,856,697
Ratio of interest rate-sensitive assets to liabilities (%) 60.91
Ratio of interest rate-sensitive gap to net worth (%) (113.20)

(Continued)

123

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 March 31, 2025 March 31, 2024
The ratio of return on
assets		 Before income tax 0.16 0.16
After income tax 0.13 0.13
The ratio of return on
equity		 Before income tax 2.83 2.87
After income tax 2.21 2.34
Net income ratio 34.17 33.03

  • 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

March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025
Total Amount during the maturity period from the balance sheet date to due date
0-10days 11-30days 31-90days 91-180days 181days-1year Over 1 year
Major maturity
capital inflow		 $ 2,033,114,463 212,731,889 136,538,816 179,945,920 219,105,558 172,404,821 1,112,387,459
Major maturity
capital outflow		 2,501,358,769 53,361,453 98,517,438 238,978,654 296,788,240 573,116,724 1,240,596,260
Gap (468,244,306) 159,370,436 38,021,378 (59,032,734) (77,682,682) (400,711,903) (128,208,801)

(Continued)

124

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 $474,716,880.

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

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

March 31, 2024 March 31, 2024 March 31, 2024 March 31, 2024 March 31, 2024 March 31, 2024
Total Amount during the maturity period from the balance sheet date to due date
0-10days 11-30days 31-90days 91-180days 181days-1year Over 1 year
Major maturity
capital inflow		 $ 1,938,114,156 202,115,163 165,069,768 179,932,546 189,673,849 171,268,836 1,030,053,994
Major maturity
capital outflow		 2,387,654,321 51,493,765 96,530,675 205,390,996 265,484,201 525,713,819 1,243,040,865
Gap (449,540,165) 150,621,398 68,539,093 (25,458,450) (75,810,352) (354,444,983) (212,986,871)

Note: Listed amounts are denominated in New Taiwan dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow $455,013,326.

  • 2) Maturity analysis in US dollars

Unit : In Thousands of US Dollars

March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025 March 31, 2025
Total Amount during the maturity period from the balance sheet date to due date
0-30days 31-90days 91-180days 181days-1year Over 1 year
Major maturity
capital inflow		 $ 12,869,861 2,970,508 1,454,519 1,777,087 3,534,437 3,133,310
Major maturity
capital outflow		 13,415,677 3,906,576 3,043,307 2,747,912 1,915,461 1,802,421
Gap (545,816) (936,068) (1,588,788) (970,825) 1,618,976 1,330,889

Note: Listed amounts are denominated in US dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow USD $517,323.

(Continued)

125

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

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

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

$586,992.
March 31, 2024
Total Amount during the maturity period from the balance sheet date to due date
0-30days 31-90days 91-180days 181days-1year Over 1 year
Major maturity
capital inflow		 $ 12,729,060 3,267,402 2,180,508 1,382,409 2,978,961 2,919,780
Major maturity
capital outflow		 13,405,875 4,185,118 2,818,064 1,619,792 2,827,563 1,955,338
Gap (676,815) (917,716) (637,556) (237,383) 151,398 964,442

Note: Listed amounts are denominated in US dollars of the Bank and subsidiaries, including loan commitments of credit agreement and estimates to outflow USD $617,901.

(Continued)

126

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 three months ended March 31, 2025 Transaction status for the three months ended March 31, 2025 Transaction status for the three months ended March 31, 2025 Transaction status for the three months ended March 31, 2025
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		 24,100 No difference with non-
related parties		 -
%
1 TBB International
Leasing Co., Ltd.		 Taiwan Business Bank,
Ltd.		 2 Right-of-use assets 2,620 No difference with non-
related parties		 -
%
1 TBB International
Leasing Co., Ltd.		 Taiwan Business Bank,
Ltd.		 2 Lease liabilities 2,660 No difference with non-
related parties		 -
%
0 Taiwan Business Bank,
Ltd.		 TBB International
Leasing Co., Ltd.		 1 Net revenue other than
interest		 227 No difference with non-
related parties		 -
%
0 Taiwan Business Bank,
Ltd.		 TBB Venture Capital Co.,
Ltd.		 1 Deposits and
remittances		 21,086 No difference with non-
related parties		 -
%
2 TBB Venture Capital Co.,
Ltd.		 Taiwan Business Bank,
Ltd.		 2 Right-of-use assets 275 No difference with non-
related parties		 -
%
2 TBB Venture Capital Co.,
Ltd.		 Taiwan Business Bank,
Ltd.		 2 Lease liabilities 282 No difference with non-
related parties		 -
%
0 Taiwan Business Bank,
Ltd.		 TBB Venture Capital Co.,
Ltd.		 1 Net revenue other than
interest		 45 No difference with non-
related parties		 -
%
0 Taiwan Business Bank,
Ltd.		 Taiwan Business Bank
International Leasing Co.,
Ltd.		 1 Deposits and
remittances		 291 No difference with non-
related parties		 -
%
0 Taiwan Business Bank,
Ltd.		 TBB Consulting Co., Ltd. 1 Deposits and
remittances		 105,654 No difference with non-
related parties		 -
%
0 Taiwan Business Bank,
Ltd.		 TBB Consulting Co., Ltd. 1 Net revenue other than
interest		 249 No difference with non-
related parties		 -
%
3 TBB Consulting Co., Ltd. Taiwan Business Bank,
Ltd.		 2 Right-to-use assets 1,530 No difference with non-
related parties		 -
%
3 TBB Consulting Co., Ltd. Taiwan Business Bank,
Ltd.		 2 Lease liabilities 1,562 No difference with non-
related parties		 -
%
2 TBB Venture Capital Co.,
Ltd.		 TBB Consulting Co., Ltd. 3 Business expenses 7,839 No difference with non-
related parties		 0.09 %
2 TBB Venture Capital Co.,
Ltd.		 TBB Consulting Co., Ltd. 3 Accounts payable 29,308 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.

  1. There are three kinds of relationships with counterparty

  2. (1) Parent company to subsidiary

  3. (2) Subsidiary to parent company

  4. (3) Between subsidiaries

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

(Continued)

127

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 % 1,689,076 17,551 155,000 - 155,000 100.00 % Already written-off when
preparing the consolidated
financial statements
TBB (Cambodia)
Microfinance
Institution Plc		 Cambodia SMEs and personal
finance business		 100.00 % 677,552 7,689 20 - 20 100.00 % 〞
TBB Venture Capital
Co., Ltd.		 Taiwan Investing business 100.00 % 1,414,956 1,179 133,181 - 133,181 100.00 % 〞
TBB Consulting Co.,
Ltd.		 Taiwan Consulting business 100.00 % 109,019 3,236 5,000 - 5,000 100.00 % 〞
Media Talk
Consulting Co., Ltd.		 Taiwan Investing cultural
and creative
business		 20.00 % - - 200 - 200 20.00 %

(ii) Loans to others:

NO. Creditor Debtor Interaction
Account		 Related
party		 Highest
Amount		 Ending
balance		 Actual
drawdown
amount		 Range of
interest
rate		 Nature
of the
loan		 Dealing
amount		 The
necessary
reason for
short-term
loans		 Allowance
for
bad debts		 Guarantee 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 58,694 42,030 100,000 2%-10% 2 - To the
lender for
buying
goods		 420 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Xi Quan
Restaurant
Co., Ltd.		 Financial
receivables		 No 98,827 94,326 100,000 2%-10% 2 - To the
lender for
buying
goods		 943 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Maw Shing
Top Co., Ltd.		 Financial
receivables		 No 5,512 3,006 15,000 2%-10% 2 - To the
lender for
buying
goods		 30 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Yu Ding
Investment
Co., Ltd.		 Financial
receivables		 No 47,762 43,260 50,000 2%-10% 2 - To the
lender for
buying
goods		 433 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Chao-Chi
Property
Management
Consulting
Co., Ltd.		 Financial
receivables		 No 8,477 - 20,000 2%-10% 2 - To the
lender for
buying
goods		 - None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Qing Rui
Construction
Co., Ltd.		 Financial
receivables		 No 17,872 15,725 20,000 2%-10% 2 - To the
lender for
buying
goods		 157 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Li Cheng
Construction
Co., Ltd.		 Financial
receivables		 No 15,071 12,114 18,000 2%-10% 2 - To the
lender for
buying
goods		 121 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 99 Bottles Co.
Ltd.		 Financial
receivables		 No 10,000 8,375 10,000 2%-10% 2 - To the
lender for
buying
goods		 84 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 V-Optech Inc. Financial
receivables		 No 9,731 9,189 10,000 2%-10% 2 - To the
lender for
buying
goods		 92 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Wen Ying
International
Logistics Co.,
Ltd.		 Financial
receivables		 No 3,853 3,853 5,106 2%-10% 2 - To the
lender for
buying
goods		 39 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Shye Yao
Steel Co., Ltd.		 Financial
receivables		 No 30,000 25,110 30,000 2%-10% 2 - To the
lender for
buying
goods		 251 None - 413,727 1,654,907

(Continued)

128

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.		 Flagship
Square
Enterprise Co
Ltd.		 Financial
receivables		 No 25,000 23,858 25,000 2%-10% 2 - To the
lender for
buying
goods		 239 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Weineng
Machinery
Sheet Metal
Co., Ltd.		 Financial
receivables		 No 8,000 7,706 8,000 2%-10% 2 - To the
lender for
buying
goods		 77 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Liang-wei
Tobacco&Liq
uor Co., Ltd.		 Financial
receivables		 No 10,000 9,191 10,000 2%-10% 2 - To the
lender for
buying
goods		 92 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Good Appetite
Co., Ltd.		 Financial
receivables		 No 8,000 8,000 16,000 2%-10% 2 - To the
lender for
buying
goods		 80 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Hung-Bo Food
Co., Ltd.		 Financial
receivables		 No 8,864 7,465 15,000 2%-10% 2 - To the
lender for
buying
goods		 75 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Yousing
Enterprise Co
Ltd.		 Financial
receivables		 No 23,542 21,128 30,000 2%-10% 2 - To the
lender for
buying
goods		 211 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Yung Yuan
Co., Ltd.		 Financial
receivables		 No 5,080 3,062 12,000 2%-10% 2 - To the
lender for
buying
goods		 31 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Wisdom
International
Pet Science
Co., Ltd.		 Financial
receivables		 No 15,088 15,088 25,000 2%-10% 2 - To the
lender for
buying
goods		 151 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Mr. Mick Co.,
Ltd.		 Financial
receivables		 No 5,754 4,840 8,000 2%-10% 2 - To the
lender for
buying
goods		 48 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Yong Da Long
Construction
Ltd.		 Financial
receivables		 No 10,095 9,129 12,000 2%-10% 2 - To the
lender for
buying
goods		 91 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Beef Traden
Co., Ltd.		 Financial
receivables		 No 6,706 5,396 8,000 2%-10% 2 - To the
lender for
buying
goods		 54 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Chi Hong Co.,
Ltd.		 Financial
receivables		 No 4,000 3,643 4,000 2%-10% 2 - To the
lender for
buying
goods		 36 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Master Builde
Construction
Co., Ltd.		 Financial
receivables		 No 20,000 20,000 20,000 2%-10% 2 - To the
lender for
buying
goods		 200 None - 413,727 1,654,907
1 TBB
International
Leasing Co.,
Ltd.		 Kuan Lin
Electrical
Engineerin
Co., Ltd.		 Financial
receivables		 No 5,000 5,000 5,000 2%-10% 2 - To the
lender for
buying
goods		 50 None - 413,727 1,654,907

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.

(Continued)

129

TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES Notes to the Consolidated 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		 - 1,081,364 100.00 % 1,081,364 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		 548 36,197 0.62 % 36,197 Listed Stocks
TBB Venture Capital
Co., Ltd.		 Lungteh Shipbuilding Co.,
Ltd.		 - Financial assets at fair
value through profit or
loss		 479 54,136 0.42 % 54,136 〞
TBB Venture Capital
Co., Ltd.		 Evergreen Aviation
Technologies Corporation		 - Financial assets at fair
value through profit or
loss		 13 1,275 -
%		 1,275 〞
TBB Venture Capital
Co., Ltd.		 Tigerair Taiwan Co., Ltd. - Financial assets at fair
value through profit or
loss		 356 32,251 0.08 % 32,251 〞
TBB Venture Capital
Co., Ltd.		 Starlux Airlines Co., Ltd. - Financial assets at fair
value through profit or
loss		 5,612 145,634 0.19 % 145,634 〞
TBB Venture Capital
Co., Ltd.		 Eir Genix, Inc. - Financial assets at fair
value through profit or
loss		 845 58,981 0.28 % 58,981 OTC Stocks
TBB Venture Capital
Co., Ltd.		 Chenfull Precision Co.,
Ltd		 - Financial assets at fair
value through profit or
loss		 147 20,948 0.25 % 20,948 〞
TBB Venture Capital
Co., Ltd.		 Handa Pharmaceuticals,
Inc.		 - Financial assets at fair
value through profit or
loss		 1,500 121,464 1.06 % 121,464 Emerging Stocks
TBB Venture Capital
Co., Ltd.		 Locus Cell Co., Ltd. - Financial assets at fair
value through profit or
loss		 1,338 29,637 0.67 % 29,637 〞
TBB Venture Capital
Co., Ltd.		 TFBS Bioscience, Inc. - Financial assets at fair
value through profit or
loss		 260 7,319 0.74 % 7,319 〞
TBB Venture Capital
Co., Ltd.		 Iovtec Co., Ltd. - Financial assets at fair
value through profit or
loss		 556 51,388 2.61 % 51,388 〞
TBB Venture Capital
Co., Ltd.		 MegaPro Biomedical Co.,
Ltd.		 - Financial assets at fair
value through profit or
loss		 200 2,340 0.31 % 2,340 〞
TBB Venture Capital
Co., Ltd.		 Annji Pharmaceutical Co.,
Ltd.		 - Financial assets at fair
value through profit or
loss		 400 7,760 0.43 % 7,760 〞
TBB Venture Capital
Co., Ltd.		 Ina Energy Corporation - Financial assets at fair
value through profit or
loss		 2,179 87,470 0.98 % 87,470 〞
TBB Venture Capital
Co., Ltd.		 Song Chuan Precision
Co., Ltd		 - Financial assets at fair
value through profit or
loss		 665 109,053 0.92 % 109,053 〞
TBB Venture Capital
Co., Ltd.		 aetherAI Co., Ltd. - Financial assets at fair
value through profit or
loss		 1,730 65,481 1.95 % 65,481 〞
TBB Venture Capital
Co., Ltd.		 Techplasma Technology
Co., Ltd		 - Financial assets at fair
value through profit or
loss		 944 36,049 2.84 % 36,049 Unlisted Stocks
TBB Venture Capital
Co., Ltd.		 Hephas Energy
Corporation Ltd.		 - Financial assets at fair
value through profit or
loss		 979 73,447 2.96 % 73,447 〞
TBB Venture Capital
Co., Ltd.		 Manford Machinery Co.,
Ltd		 - Financial assets at fair
value through profit or
loss		 1,195 31,237 2.99 % 31,237 〞

(Continued)

130

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.		 E-Fomula Technologies
Inc.		 - Financial assets at fair
value through profit or
loss		 760 19,000 2.84 % 19,000 Unlisted Stocks
TBB Venture Capital
Co., Ltd.		 Amazing Cool
Technology Co., Ltd		 - Financial assets at fair
value through profit or
loss		 390 9,602 2.02 % 9,602 〞
TBB Venture Capital
Co., Ltd.		 Long-Shun Green Energy
Technology Ltd		 - Financial assets at fair
value through profit or
loss		 1,135 43,550 2.99 % 43,550 〞
TBB Venture Capital
Co., Ltd.		 Toyo Automation Co.,
Ltd		 - Financial assets at fair
value through profit or
loss		 289 32,826 0.95 % 32,826 〞
TBB Venture Capital
Co., Ltd.		 Quants AI Inc. - Financial assets at fair
value through profit or
loss		 1,600 11,168 8.89 % 11,168 〞
TBB Venture Capital
Co., Ltd.		 Honley Auto. Parts Co.,
Ltd		 - Financial assets at fair
value through profit or
loss		 7,000 119,000 5.75 % 119,000 〞
TBB Venture Capital
Co., Ltd.		 Juncheng Technology
Co., Ltd		 - Financial assets at fair
value through profit or
loss		 600 12,702 1.53 % 12,702 〞
TBB Venture Capital
Co., Ltd.		 Asia Hydrogen Energy
Corporation		 - Financial assets at fair
value through profit or
loss		 490 18,436 3.34 % 18,436 〞
TBB Venture Capital
Co., Ltd.		 Eti Ca Battery Inc. - Financial assets at fair
value through profit or
loss		 575 30,475 2.76 % 30,475 〞
TBB Venture Capital
Co., Ltd.		 Yi Chuan Technology
Co., Ltd		 - Financial assets at fair
value through profit or
loss		 1,189 9,629 0.98 % 9,629 〞
TBB Venture Capital
Co., Ltd.		 How Kan Entertainment
Production Co., Ltd		 - Financial assets at fair
value through profit or
loss		 580 19,000 2.87 % 19,000 〞
TBB Venture Capital
Co., Ltd.		 Maxima Biotech Inc. - Financial assets at fair
value through profit or
loss		 1,425 35,625 4.76 % 35,625 〞
TBB Venture Capital
Co., Ltd.		 GoodLinker Co., Ltd. - Financial assets at fair
value through profit or
loss		 100 3,000 2.86 % 3,000 〞
TBB Venture Capital
Co., Ltd.		 Yiyi Pictures Co., Ltd. - Financial assets at fair
value through profit or
loss		 85 2,992 2.94 % 2,992 〞
TBB Venture Capital
Co., Ltd.		 Longwalk social
enterprise, Co., Ltd.		 - Financial assets at fair
value through profit or
loss		 120 780 12.77 % 780 〞
TBB Venture Capital
Co., Ltd.		 Carpost Co., Ltd. - Financial assets at fair
value through profit or
loss		 330 3,901 2.84 % 3,901 〞
TBB Venture Capital
Co., Ltd.		 Rising FinTech Corp. - Financial assets at fair
value through profit or
loss		 38 450 1.95 % 450 〞
TBB Venture Capital
Co., Ltd.		 Unoscope Technology
Inc.		 - Financial assets at fair
value through profit or
loss		 90 660 0.96 % 660 〞
TBB Venture Capital
Co., Ltd.		 Pinkoi Inc. - Financial assets at fair
value through profit or
loss		 93 14,777 0.53 % 14,777 〞
TBB Venture Capital
Co., Ltd.		 Taiwania Buffalo III
Biotechnology Venture
Capital LLP.		 - Financial assets at fair
value through profit or
loss		 - 69,825 4.57 % 69,825 Private Fund
TBB Venture Capital
Co., Ltd.		 Ju He Venture Capital
LLP.		 - Financial assets at fair
value through profit or
loss		 - 30,747 2.46 % 30,747 〞
TBB Venture Capital
Co., Ltd.		 TBB No.1 Venture
Capital Limited
Partnership		 - Financial assets at fair
value through profit or
loss		 - 11,959 1.12 % 11,959 〞
TBB Venture Capital
Co., Ltd.		 Outstanding Capital
Limited Partnership		 - Financial assets at fair
value through profit or
loss		 - 28,761 4.86 % 28,761 〞
TBB Venture Capital
Co., Ltd.		 Jia Da International
Development Co., Ltd.		 - Financial assets at
fairvalue through other
comprehensive income		 2,919 30,624 8.52 % 30,624 Unlisted Stocks
TBB Consulting Co.,
Ltd.		 Media Talk Consulting
Co., Ltd		 Associates Investment under
equity method		 200 - 20.00 % -

(Continued)

131

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 Consulting Co.,
Ltd.		 TBB No.1 Venture
Capital Limited
Partnership		 - Financial assets at fair
value through profit or
loss		 - 1,196 0.11 % 1,196 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.

  • (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 4,748,364 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 4,597,947 "
Taiwan Business
Bank International
Leasing Co., Ltd.		 Leasing
business		 838,305
(CNY170 million)
(Operating capital)		 (1) 838,305
(CNY170 million)		 - - 838,305
(CNY170 million)		 9,099
(2)c		 100% 9,099
(2)c		 1,081,364 "

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.

(Continued)

132

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

(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)		 80,352,850

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 1,486,465,695 %
16.21
National Development Fund, Executive Yuan 537,855,378 %
5.87

(Continued)

133

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
March 31, 2025
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		 Banking Segment
$ 4,753,918
2,427,226
7,181,144
(790,595)
(3,781,359)
$
2,609,190
$
2,329,557,511
$
2,199,503,398		 Securities, Trust,
Insurance agent
and Others
90,790
1,355,245
1,446,035
2,306
(270,809)
1,177,532
20,840,837
13,082,930		 Adjustment and
Elimination
-
(37,494)
(37,494)
-
7,839
(29,655)
(4,075,547)
(184,944)		 Total
4,844,708
3,744,977
8,589,685
(788,289)
(4,044,329)
3,757,067
2,346,322,801
2,212,401,384

(Continued)

134

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

For the three months ended
March 31, 2024		 Banking Segment
$ 4,434,052
2,924,302
7,358,354
(1,200,393)
(3,671,840)
$
2,486,121
$
2,208,685,459
$
2,088,856,673		 Securities, Trust,
Insurance agent
and Others
82,475
1,152,749
1,235,224
(2,559)
(243,203)
989,462
19,088,839
11,847,211		 Adjustment and
Elimination
-
16,984
16,984
-
7,106
24,090
(3,956,591)
(319,760)		 Total
4,516,527
4,094,035
8,610,562
(1,202,952)
(3,907,937)
3,499,673
2,223,817,707
2,100,384,124
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

(c) Significant client information:

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

135

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

Reviewed only, not audited in accordance with generally standards as of March 31, 2025 and 2024. TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Balance Sheets of Security Division March 31, 2025, December 31, 2024 and March 31, 2024

(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
125800
Right-of-use assets, net
127000
Intangible assets
129000
Other non-current assets
Total non-current assets
Total assets		 March 31, 2025
Amount
％
$ 1,993,231
19
3,828,819
35
-
-
-
-
1,397,627
13
17,190
-
7,236,867
67
3,221,302
30
299,096
3
36,562
-
106
-
23,030
-
34,764
-
3,614,860
33
$
10,851,727
100		 December 31, 2024
Amount
％
1,098,288
11
4,032,095
38
-
-
-
-
590,132
6
108,446
1
5,828,961
56
4,301,380
41
299,067
3
34,469
-
113
-
26,362
-
33,613
-
4,695,004
44
10,523,965
100		 March 31, 2024
Amount
％
200,741
2
3,254,462
33
2,174
-
2,400
-
705,212
7
76,524
1
4,241,513
43
5,214,380
53
298,974
3
39,161
-
136
-
20,560
-
33,561
1
5,606,772
57
9,848,285
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
216000
Current lease liabilities
219000
Other current liabilities
Total current liabilities
229030
Guaranteed deposits received
226000
Non-current lease liabilities
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		 March 31, 2025
Amount
%
$ 1,028,548
10
32,147
-
35,317
-
1,300,187
12
30
-
52,247
-
2,448,476
22
20
-
77
-
6,094,569
56
6,094,666
56
8,543,142
78
2,200,000
20
185,127
2
53,837
1
(130,379)
(1)
2,308,585
22
$
10,851,727
100		 December 31, 2024 March 31, 2024
Amount
%
950,341
10
19,068
-
42,064
-
614,323
6
30
-
117,909
1
1,743,735
17
20
-
107
-
5,789,223
59
5,789,350
59
7,533,085
76
2,200,000
22
185,127
2
67,915
1
(137,842)
(1)
2,315,200
24
9,848,285
100

136

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

Reviewed only, not audited in accordance with auditing standards. TAIWAN BUSINESS BANK, LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income of Security Division

For the three months ended March 31, 2025 and 2024

(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
Impairment loss (impairment gain and reversal of impairment 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
Net income
805000
Other comprehensive income：
805615
Unrealized gains (losses) from investment in debt instruments measured at fair value through
other comprehensive income
805000
Other comprehensive income (net amount after tax)
Total comprehensive income		 For the three months ended March 31,
2025
2024
Amount
％
Amount
％
$ 113,773
69
128,125
75
148
-
157
-
48,443
30
42,958
25
495
-
629
-
842
1
1
-
440
-
296
-
164,141
100
172,166
100
8,412
5
9,306
5
2
-
12
-
2,191
1
1,597
1
207
-
239
-
84,779
52
80,243
47
14,713
9
12,854
7
110,304
67
104,251
60
53,837
33
67,915
40
16,249
10
(26,035)
(15)
16,249
10
(26,035)
(15)
$
70,086
43
41,880
25
2025
Amount
％
$ 113,773
69
148
-
48,443
30
495
-
842
1
440
-
164,141
100
8,412
5
2
-
2,191
1
207
-
84,779
52
14,713
9
110,304
67
53,837
33
16,249
10
16,249
10
$
70,086
43

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