T.C.C.B. — Annual Report 2017

Apr 27, 2018

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2018.4.30

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Agenda ：

 Financial Highlights

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 Achievements & Business Strategy

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Financial Highlights

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Disclaimer

 Financial numbers in this report may include preliminary unaudited numbers or management accounts.

 The information, statements or opinions in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities of financial instruments or any advice or recommendation respect to such securities or other financial instruments.

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Balance sheet (Consolidated)

			YearlyResults	YearlyResults	YearlyResults		YoY (2017 V.S. 2016)
NT$million			2015	2016	2017
Assets：
	Cash and due from banks		96,325	100,323	45,123		-55.02%
	Financial investment, net		68,017	77,742	159,651		105.36%
	Loans, net		391,084	425,166	430,858		1.34%
	A/R, net		6,653	9,802	13,658		39.34%
	LT investments, net		137	131	128		-2.29%
	Land, premises and equipments, net		9,272	9,437	9,388		-0.52%
	Others		4,143	4,502	4,218		-6.31%
Total assets			575,631	627,103	663,024		5.73%
Liabilities:
	Deposits		504,864	539,809	566,095		4.87%
	Other liabilities		30,821	45,912	53,527		16.59%
Total liabilities			535,685	585,721	619,622		5.79%
Total stockholders' equity			39,946	41,382	43,402		4.88%
Total liabilities and stockholders' equity			575,631	627,103	663,024		5.73%

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P&L (Consolidated)

			YearlyResults	YearlyResults	YearlyResults	YoY (2017 V.S. 2016)
NT$ million			2015	2016	2017
Operating income
	Net interest income		7,475	7,787	8,186	5.1%
	Net fee income		2,043	2,272	2,449	7.8%
	LT investment income		(4)	(6)	(3)	50.0%
	Net trading income/(loss)		309	663	491	-25.9%
	Asset impairment loss or reversalprofit		39	106	(51)	-148.1%
	Others		241	(29)	323	1213.8%
Total operating income			10,103	10,793	11,395	5.6%
Non interest expenses
	Operatingexpenses		(5,222)	(5,848)	(5,915)	1.1%
Pre-provision Profit			4,881	4,945	5,480	10.8%
Credit Loss Provisions, net			(744)	(801)	(1,125)	40.4%
Profit Before Income Tax			4,137	4,144	4,355	5.1%
Net Profit After Income Tax			3,477	3,515	3,633	3.4%

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Summary ratios

			YearlyResults	YearlyResults	YearlyResults		YoY (2017 V.S. 2016)	YoY (2017 V.S. 2016)
			2015	2016	2017
Per Share Data
	EPS(after-tax) (NT$)		1.14	1.09	1.1		0.92%
	DPS(NT$)		0.67	0.72	0.70 【note】		-2.78%
	BVPS(NT$)		12.55	12.78	13.18		3.13%
	Common shares outstanding(million share)		3,047	3,238	3,293		1.70%
Profitability
	ROA(after-tax)(%)		0.63%	0.59%	0.57%		-0.02%
	ROE(after-tax)(%)		9.19%	8.64%	8.57%		-0.07%
Capital Adequacy(Individual)
	Capital adequacyratio(%)		11.15%	10.25%	12.01%			1.76%
	Tier 1 ratio(%)		9.49%	9.09%	10.98%			1.89%
	Common equity Tier 1 ratio(%)		9.39%	8.68%	9.25%			0.57%

【 note 】 Not recognized by meeting of shareholders.

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Summary ratios (continued)

			YearlyResults	YearlyResults	YearlyResults		YoY (2017 V.S. 2016)
			2015	2016	2017
Bank Growth Ratios
	NII Growth		4.37%	4.18%	5.12%		0.94%
	Feegrowth		-1.62%	11.18%	7.77%		-3.41%
	Netprofitgrowth		-6.99%	1.09%	3.35%		2.26%
Bank Performance Ratios
	Loangrowth		1.91%	8.58%	1.35%		-7.23%
	Depositgrowth		10.72%	6.92%	4.87%		-2.05%
	Loan-to-Deposit Ratio		78.69%	79.91%	77.22%		-2.69%
	NIM		1.32%	1.27%	1.28%		0.01%
	NII/Operation income		73.99%	72.16%	71.84%		-0.32%
	Fee/Operatingincome		20.23%	21.05%	21.49%		0.44%
	Cost-to-income ratio		51.69%	54.18%	51.91%		-2.27%
AssetQualityRatios
	NPLs/Total Loans		0.33%	0.58%	0.42%		-0.16%
	Reserve / Total Loans		1.58%	1.45%	1.46%		0.01%
	Reserve / NPLs		475.41%	248.94%	343.87%		94.93%

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(NT$ Million, NT$,%) Profitability

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Net Profit
YoY +3%
3,633
3,515
3,477
2015 2016 2017
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ROE(after tax)
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9.19%
8.64% 8.57%
2015 2016 2017
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Retroactively adjusted EPS

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1.10 1.10
1.07
EPS(after tax)
1.14
1.10
1.09
2015 2016 2017
ROA(after tax)
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0.63%
0.59% 0.57%
2015 2016 2017
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(NT$ Million,%) Asset quality

NPLs/Total Loans

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0.58%
0.41% 0.42% 0.41% 0.42%
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Reserve/Total Loans

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1.46% 1.46% 1.46%
1.45% 1.45%
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Reserve/NPLs

NPLs

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355.91% 344.14% 355.39% 343.87%
248.94%
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2,501
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1,783
1,842 1,845
1,758
Dec 16 Mar 17 Jun 17 Sep 17 Dec 17
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Loan Reserve

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6,345
6,338 6,337
6,256
6,227
Dec 16 Mar 17 Jun 17 Sep 17 Dec 17
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Deposit breakdown

			Yearly Results	Yearly Results	Yearly Results		YoY (2017 V.S. 2016)
NT$ million			2015	2016	2017
Checking、demand & savings
	Checking & demand deposits		125,636	114,992	112,438		-2.22%
	Saving deposits		110,419	118,155	121,997		3.25%
Sub-total			236,055	233,147	234,435		0.55%
Time & savings
	Time deposits (incl. CD)		85,322	120,491	134,125		11.32%
	Time saving deposits		139,369	142,156	146,105		2.78%
Sub-total			224,691	262,647	280,230		6.69%
Foreign currency deposits			44,081	43,979	51,414		16.91%
Remittances			37	36	16		-55.56%
Total deposits			504,864	539,809	566,095		4.87%

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Deposit breakdown(NT$ Hundred Million,%)

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Loan-to-deposit ratio Time
deposits(forei
gn currency)
79.91% YoY
78.72% 77.92% 78.61% 77.22% 4.56%
+4.9%
Time deposits
5,398 5,513 5,594 5,555 5,661 (foreign currency)
258
259 301 264 9.3%
236
223 233 234 256 Demand deposits Checking &
204 (foreign currency) demand
25.5% deposits(local
currency)
Time &
Time &
41.42%
saving deposits
2,626 2,777 2,801 2,776 2,802 (local currency) saving
deposits(local
6.7% currency)
49.50%
Checking & demand deposits
(local currency)
0.6%
2,332 2,254 2,259 2,281 2,345
Demand
(Dec 17)
deposits(forei
gn currency)
4.52%
Dec 16 Mar 17 Jun 17 Sep 17 Dec 17
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【 Note 】 At the end of Dec. 2017, the proportion of checking and demand deposits of local currency to 。 total deposit of local currency was 45.6%

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Credit risk analysis

			YearlyResults	YearlyResults	YearlyResults	YoY (2017 V.S. 2016)
NT$ million			2015	2016	2017
By Industry
	Personal loans		184,281	198,706	208,626	4.99%
	Manufacturer		76,805	88,364	92,453	4.63%
	Commerce		59,709	66,442	61,285	-7.76%
	Real estate		47,832	47,330	48,804	3.11%
	Construction industry		12,791	15,628	18,458	18.11%
	Others		32,895	36,590	36,374	-0.59%
Total			414,313	453,060	466,000	2.86%
By collateral
	Non-secured loans		74,150	84,975	82,327	-3.12%
	Secured loans
	By property		303,692	331,148	342,097	3.31%
	By letter of guarantee		18,269	17,463	17,531	0.39%
	Others		18,202	19,474	24,045	23.47%
Total			414,313	453,060	466,000	2.86%

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Loan breakdown(NT$ Hundred Million, %)

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YoY YoY YoY YoY YoY YoY
-0.3% +3.0% +2.4% -7.6% -4.4% +88.2%
Other personal
loan
1,772 32% 32%
1,775 1,769
1,759 1,757 Consumption
4Q/16 loan
1% 2%
1,406 1,410 1Q/17 7% 6% Corporate
1,389 1,399
1,369
2Q/17 SME
41% 41%
3Q/17
OBU
4Q/17
6% 6%
Mortgage
555 563 561 560 13% 13%
547
2016 2017
292 282 271
288 273 266 267 260 261 259
Total Loan %
51 64 78 87 96
2016: 4,301 2017: 4,360 +1.4%
SME Other personal loan Mortgage Corporate OBU Consumer loan
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Net interest income & fee income

NII Breakdown	NII Breakdown	NII Breakdown	NII Breakdown	NII Breakdown	NII Breakdown	NII Breakdown
			YearlyResults			YoY (2017 V.S. 2016)
NT$ million			2015	2016	2017
Loan interest			10,078	9,802	10,212	4.18%
Other interest			1,513	1,671	1,866	11.67%
Interest expense			(4,116)	(3,686)	(3,892)	5.59%
Net interest income			7,475	7,787	8,186	5.12%
Fee Breakdown
			YearlyResults			YoY (2017 V.S. 2016)
NT$ million			2015	2016	2017
Trust fee			539	557	770	38.24%
Brokerage fee			1,364	1,586	1,437	-9.39%
Loan fee			244	274	313	14.23%
Other fee			381	417	466	11.75%
Total fee income			2,528	2,834	2,986	5.36%

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Net interest margin and interest-bearing asset

(NT$ Hundred Million,%)

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NIM NIM
1.28%
1.28%
1.27%
1.24% 1.24% 1.24%
Average interest-bearing asset Average interest-bearing asset
QoQ -1.6%
YoY +5.4%
6,016
6,113
6,097
5,707
6,047
6,016
1Q/17 2Q/17 3Q/17 4Q/17 2016 2017
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Average interest-bearing asset

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YoY +5.4% Loan +250
6,016
5,707
2016 2017
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Fee breakdown(NT$ Million,%)

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2,986
2,834
-9.4% YoY +38.4% YoY +14.4% YoY +21.8% YoY +8.3% YoY Brokerage
1,437
1,586 Trust
528
4Q/16
Loans
1Q/17
770
557
2Q/17 Guarantee
323 320 320
313
269 3Q/17 273
122
100
211 Others
184 199 4Q/17 318 344
170 176
2016 2017
82 88 91 86 86 85 87
74 68 75 Fee income %
33 25 30 33 34
2016: 2,834 2017: 2,986 +5.36%
Brokerage Trust Loans Guarantee Others
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(%) Capital adequacy

Consolidated Tier I Capital Ratio Tier II Capital Ratio

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11.94% 10.96% 12.68%
1.53%
2.15%
1.61%
11.15%
9.79% 9.35%
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2015

Individual

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2016 Tier I Capital Ratio Tier II Capital Ratio

2017

11.15% 1.66% 9.49%

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10.25%
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12.01%

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1.03%
1.66%
1.16%
10.98%
9.49% 9.09%
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2015

2016

2017

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Achievements

&

Business Strategy

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2017 Achievements

• Acquiring financial technology patents of “Bank Counter’s ID Verification System” and “Automated Teller Machine Featuring Biometrics And Barcode Verifications.”

 Setting up the 81th branch, “Xingang Branch,” In Chiayi county. Acquired permission to set up “Yanchao Branch” In Kaohsiung city (under preparation). Richly cultivating and completing marketing channels in Taiwan.

• Winner of the joint credit information center “Golden Security Award” for three consecutive years, Shows recognition for our excellent work in credit information security control.

 Winner of the 2017 wealth management award “Best Customer Recommendation Bank” of Wealth Magazine, 2017 outstanding banks survey “Best Potential Prize,” “The 18th Golden Prize (Large Enterprise Group) Of The Top Ten Enterprises/Directors” , Etc.

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2018 Business Strategy

• Maximize our benefits from our advantages in low funding costs and SME operations, Exploit benefits through business integration.

• Assuring the quality of our credit assets while increasing the scale steadily and firmly.

• Startup digital transformation in order to raise operating efficiency and bring in new customers.

• Strengthen the bond with our customers, Exploit benefits through the cooperation between parent and subsidiary companies.

• Carry out the capital management mechanism, Increase the overall risk-adjusted return.

• Start digital transformation Establishment of consumer promotion center instead of physical channel.

• Developing high-net-worth customer wealth management services

• Strive for the establishment of the very first foreign branch.

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Thanks for your listening.

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