T.C.C.B. — Annual Report 2019

Mar 27, 2020

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2020.3.31

Disclaimer

• This presentation is provided by Taichung Commercial Bank(TCB).The information contained within is not reviewed or reviewed by any accountant or any independent third party. Users should read this material in conjunction with all other public financial and operational information filed to the competent authorities by TCB. While we endeavor to provide accurate, complete and consistent information herein, TCB makes no guarantee or warranties as to the accuracy or correctness of all the material contained. After this presentation is released to the public, we undertake no obligation to update any relevant data to reflect any change hereafter.

• Users should also notice that this presentation may contain forward-looking statements. Statements that are not historical facts, including statements relating to the implementation of strategic initiatives, future business development and economic performance are forward-looking statements. By their nature, forward-looking statements involve uncertainties, risks, assumptions and other factors that could cause actual developments and results to differ materially from our statement in this presentation. These factors include, but not limited to, regulatory developments, competitive conditions, technological developments, general economic conditions and management changes.

• The information, statements or opinions in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation respect to such securities or other financial instruments. TCB and its affiliates representatives, no matter for their negligence or any other reasons, should not be liable for any loss or damages arising from the use of or interpretation by others of information contained within this presentation or any matter related to this document.

A enda g

■Financial Highlights

■Financial Review

■Financial Information ■Appendix

3

2019 Financial Hi hli ht g g

Profitability

• Net Profit after tax 4.32 billions, 7.78% growth over the same period last year.

• EPS 1.16, 3.57% growth over the same period last year.

Asset quality

• NPL rate 0.31%、Provision for bad debt coverage rate 475.54%.

Capital adequacy

• Consolidated：Capital Ratio 13.91%、Tier I Capital Ratio 12.77%。

• Individual：Capital Ratio 13.23%、Tier I Capital Ratio 12.64%。

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A enda g

■Financial Highlights

■Financial Review

■Financial Information

■Appendix

5

Profitabilit y

Net Profit

( NT$ Million )

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4,320
+7.78%
4,008
+10.32%
3,633
2017 2018 2019
EPS
( NT$ )
1.18
-1.69% 1.16
+7.27%
1.10
2017 2018(Note) 2019
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Note：The EPS of 2018 was adjusted retroactively as 1.12. The growth rate between 2018 and 2019 increases 3.57%.

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6

(NT$)

Proposal for the distribution of earnings

Cash dividends Stock dividends

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0.52 0.52
0.45
0.28 0.28
0.25
65.00% 65.00%
64.29%
35.71% 35.00% 35.00%
2017 2018 2019(Note)
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	2017	2018	2019
Dividend Per Share	0.70	0.80	0.80
Cash dividends	0.45	0.28	0.28
Stock dividends	0.25	0.52	0.52

Note：The proposal for the distribution of earnings in 2019 is pending on the resolution of the General Meeting of shareholders scheduled to be held in June 11, 2020.

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Profitabilit y

ROA

0.64%

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0.60%
0.57%
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2017 2018 2019

ROE

8.57% 8.79%

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8.72%
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2019
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2017

2018

8

Chan e in Net Profit g

(NT$ Million)

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2018 2019
2018 2019
YoY 4.08% YoY -1.05% YoY 16.06% YoY 9.25%
11,111 5,067
10,675
4,638
5,626 5,567
411 477
Operating Operating Provision Profit before tax
Revenue Expenses
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De osit Breakdown (NT$ Hundred Million) p

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Total Deposit
YoY -0.73%
5,892 5,823 5,849 QoQ 1.51%
5,760 5,762
529 535 558 Foreign
566 583
currency
deposits
YoY 5.48%
QoQ -4.29%
Checking
Time &
&
saving
2,900 2,805 2,700 2,676 2,696 Time & demand
deposits
saving deposits
(local
deposits (local
(local currency)
currency)
currency) 46.09%
44.37%
YoY -7.03%
QoQ 0.75%
Checking &
demand Foreign
2,463 2,483 2,494 2,503 2,595 deposits currency
(local deposits
currency) 9.54%
YoY 5.36%
QoQ 3.68% Deposit Structure 4Q19
4Q18 1Q19 2Q19 3Q19 4Q19
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10

Loan Structure (NT$ Hundred Million)

Corporate Banking Consumer Banking

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2,293 2,363 2,254
2,219 2,156
2,067
52.59% 47.41% 51.57% 48.43% 51.11% 48.89%
2017 2018 2019
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	2017	2018	2019	YoY
Corporate Banking	2,293	2,363	2,254	-4.61%
Consumer Banking	2,067	2,219	2,156	-2.84%
Total	4,360	4,582	4,410	-3.75%

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Consumer Bankin -Consum tion Loans g p

(NT$ Hundred Million)

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Average Rate NPL Rate
4.56%
4.48%
4.45%
0.51% 0.51%
0.48%
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120
110 +9.09%
85
Local
Bank
4.74%
2017 2018 2019
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Note：Customption loans are not contain residential mortgage loans、loan of cash card、 credit card and debit card.

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Loan Structure b Currenc (NT$ Hundred Million) y y

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Foreign Currency Loan NTD Loan
4,199
3,992 4,031
91.56% 91.64% 91.41%
368 383 379
8.44% 8.36% 8.59%
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368 383 379 8.59% 8.36% 8.44%	368 383 379 8.59% 8.36% 8.44%	368 383 379 8.59% 8.36% 8.44%	368 383 379 8.59% 8.36% 8.44%	368 383 379 8.59% 8.36% 8.44%
2017 2018 2019
	2017	2018	2019	YoY
NTD Loan	3,992	4,199	4,031	-4.00%
Foreign Currency Loan	368	383	379	-1.04%
Total	4,360	4,582	4,410	-3.75%

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Loan Breakdown (NT$ Hundred Million)

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Total Loan
4,582 4,511 YoY -3.75%
4,411 4,410 QoQ -0.07%
4,407
Mortgage
229
209 204 225 194 Corporate OBU & 12.56% ConsumptionLoan
YoY -15.28% Overseas
2.99%
QoQ -13.78%
branch
SME 6.90%
1,842 1,782 YoY -4.67%
1,722 1,708 1,756 QoQ 2.81%
Other
OBU & Overseas Personal
branch(Note) Loan
YoY 3.75%
293 311 314 302 304 QoQ 0.66% SME 33.33%
Mortgage 39.82%
570 567 561 557 554 YoY -2.81%
QoQ -0.54%
120 122 125 128 132
Consumption Loan
YoY 10.00%
QoQ 3.13%
Corporate
1,528 1,520 1,485 1,487 1,470
4.40%
Other Personal Loan
YoY -3.80%
QoQ -1.14% Loan Structure 4Q19
4Q18 1Q19 2Q19 3Q19 4Q19
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Note：The balances of loan of OBU and Overseas branch on December 31, 2019 were 28.7 14 billion and 1.7 billion, respectively.

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Loan Breakdown (NT$ Hundred Million)

oan Breakdown(NT$ Hundred Mi	oan Breakdown(NT$ Hundred Mi	oan Breakdown(NT$ Hundred Mi	oan Breakdown(NT$ Hundred Mi	oan Breakdown(NT$ Hundred Mi
712 705 664 3,648 3,877 3,746 2017 2018 2019 Non-secured Secured 15.06% 84.94% 84.61% 83.67% 15.39% 16.33%
	2017	2018	2019	YoY
Non-secured	712	705	664	-5.82%
Secured	3,648	3,877	3,746	-3.38%
Secured by property	3,321	3,536	3,437	-2.80%
Secured by Letter of Guarantee	170	164	149	-9.15%
Others	157	177	160	-9.60%
Total	4,360	4,582	4,410	-3.75%

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LDR

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Overall LDR NTD LDR FCY LDR
78.48%
77.79%
77.34% 77.38%
76.40%
77.92%
77.48%
76.57% 76.49%
75.59%
74.40%
72.34%
69.58%
68.54%
67.91%
4Q18 1Q19 2Q19 3Q19 4Q19
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S reads p

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Overall Spreads

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NTD Spreads FCY Spreads

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2.44%
2.38%
2.34%
2.11% 2.10%
1.77%
1.76% 1.76%
1.75% 1.75%
1.74%
1.72%
1.71%
1.70%
1.69%
4Q18 1Q19 2Q19 3Q19 4Q19
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(NT$ Hundred million)

NIM and Interest earning assets

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NIM
1.24%
1.21%
1.20% 1.20%
1.19%
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Average of Interest earning assets

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6,436 6,430 6,406 6,380
6,322
4Q18 1Q19 2Q19 3Q19 4Q19
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O eratin Ex enses to Net Income (NT$ million) p g p

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Net Income Operating Expenses

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Cost-Benefit Ratio

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57.50%
53.66% 54.08% 52.78%
50.57% 49.54%
46.86% 46.63%
2,717 2,756 2,743 2,809 2,740 2,772 2,790
2,459
1,414 1,374 1,479 1,359 1,519 1,284 1,463 1,301
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
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Asset ualit (NT$ Million) q y

NPLs/Total Loans &NPLs

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NPLs/Total Loans NPLs
-0.27%
0.58%
0.45%
0.42% 0.42%
0.37% 0.37%
0.31%
2,501
2,054
1,845
1,842
1,655 1,645
1,382
4Q16 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19
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Asset ualit (NT$ Million) q y

Reserve/NPLs & Loan Reserve

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Reserve/NPLs Loan Reserve
+226.6%
475.54%
403.68%
378.28%
344.14% 343.87%
317.95%
248.94%
6,643
6,573
6,532
6,338 6,345
6,260
6,227
4Q16 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19
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21

Fee Income Breakdown (NT$ Million)

Fee Income YoY -3.51% YoY -3.79% 797 807 824 QoQ -6.67% 769 752 3,276 3,152 86 83 97 Others 85 359 Others 86 YoY -12.37% 340 QoQ -1.16% 154 151 169 620 142 172 619 Loans Loans YoY 1.78% 184 QoQ 11.69% 183 266 809 221 901 230 Trust Trust YoY 25.68% QoQ -13.53% Insurance 348 389 Insurance & & 303 318 Securities 1,488 1,292 Securities 282 YoY -18.97% QoQ -11.32%

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2018 2019

4Q18 1Q19 2Q19 3Q19 4Q19

22

Wealth Mana ement Fee Income g

(NT$ Million)

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554 568 Total
YoY -3.70%
508
514 495 QoQ -12.85%
117
161
113
Mutual Fund
143
146 YoY 29.20%
QoQ -9.32%
Insurance &
Securities
318
389
348 YoY -18.97%
303 QoQ -11.32%
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Insurance & Securities YoY -18.97% 282 QoQ -11.32%

Others YoY 24.07 % QoQ -24.72%

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89
54 48 62 67
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YoY -5.18%

2,241 2,125

Mutual Fund

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Insurance & Securities

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1,488 1,292

Others

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266
186
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4Q18 1Q19 2Q19 3Q19 4Q19
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2018 2019

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Profit of Subsidiar to TCB (NT$ Million) y

Net Profit after tax	2018	2019	YoY
TCB	3,566	3,753	5.24%
Subsidiary	442	567	28.28%
Total	4,008	4,320	7.78%

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Subsidiary
of TCB
11.04%
TCB
88.96%
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2018 Profit Breakdown

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Subsidiary
of TCB
13.12%
TCB
86.88%
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2019 Profit Breakdown

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Capital Adequacy

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Consolidated
BIS Tier I Capital Ratio BIS
+2.78%
13.91%
13.63%
13.01%
12.68%
12.41%
11.13%
12.77%
12.48%
11.79%
11.15% 10.99%
9.46%
1H17 2017 1H18 2018 1H19 2019
Individual
BIS
BIS Tier I Capital Ratio
+2.74%
13.23%
12.98%
12.35%
12.01%
11.75%
10.49%
12.64%
12.37%
11.65%
10.98% 10.82%
9.27%
1H17 2017 1H18 2018 1H19 2019
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A enda g

■Financial Highlights ■Financial Review

■Financial Information ■Appendix

26

Balance Sheet (Individual)

(NT$ Million)

	2017	2018	2019	YoY
Assets：
Cash and due from banks	44,066	46,740	44,134	-5.58%
Financial investment, net	158,984	163,891	173,347	5.77%
Loans, net	429,656	451,729	434,469	-3.82%
A/R, net	6,329	5,028	4,064	-19.17%
LT investments, net	4,735	5,225	5,491	5.09%
Land, premises and equipment, net	9,296	9,368	10,620	13.36%
Others	3,424	2,178	2,898	33.06%
Total assets	656,490	684,159	675,023	-1.34%
Liabilities：
Deposits	567,256	589,243	584,866	-0.74%
Other Liabilities	45,832	47,092	38,848	-17.51%
Total Liabilities	613,088	636,335	623,714	-1.98%
Total stockholders’ equity	43,402	47,824	51,309	7.29%
Total liabilities and stockholders’ equity	656,490	684,159	675,023	-1.34%

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27

P&L (Individual)

(NT$ Million)

	2017	2018	2019	YoY
Net interest income	7,823	7,991	7,902	-1.11%
Net fee income	1,554	1,793	1,926	7.42%
Others	971	891	1,283	44.00%
Total Operating Income	10,348	10,675	11,111	4.08%
Operating expenses	(5,131)	(5,626)	(5,567)	-1.05%
Pre-provision Profit	5,217	5,049	5,544	9.80%
Credit Loss Provisions, net	(947)	(411)	(477)	16.06%
Profit Before Income Tax	4,270	4,638	5,067	9.25%
Tax Fee	(637)	(630)	(747)	18.57%
Net Profit After Income Tax	3,633	4,008	4,320	7.78%
Other Profits	168	34	153	350.00%
Current period other comprehensive income	3,801	4,042	4,473	10.66%

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28

Balance Sheet (Consolidated)

(NT$ Million)

	2017	2018	2019	YoY
Assets：
Cash and due from banks	45,123	47,644	45,237	-5.05%
Financial investment, net	159,651	165,027	174,356	5.65%
Loans, net	430,858	452,595	435,398	-3.80%
A/R, net	13,658	12,781	12,820	0.31%
LT investments, net	128	153	157	2.61%
Land, premises and equipment, net	9,388	9,447	10,684	13.09%
Others	4,218	3,185	4,037	26.75%
Total assets	663,024	690,832	682,689	-1.18%
Liabilities：
Deposits	566,095	587,968	583,322	-0.79%
Other Liabilities	53,527	55,040	48,058	-12.69%
Total Liabilities	619,622	643,008	631,380	-1.81%
Total stockholders’ equity	43,402	47,824	51,309	7.29%
Total liabilities and stockholders’ equity	663,024	690,832	682,689	-1.18%

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P&L (Consolidated)

(NT$ Million)

	2017	2018	2019	YoY
Net interest income	8,186	8,434	8,351	-0.98%
Net fee income	2,449	2,846	2,913	2.35%
Others	760	409	831	103.18%
Total Operating Income	11,395	11,689	12,095	3.47%
Operating expenses	(5,915)	(6,457)	(6,273)	-2.85%
Pre-provision Profit	5,480	5,232	5,822	11.28%
Credit Loss Provisions, net	(1,125)	(472)	(615)	30.30%
Profit Before Income Tax	4,355	4,760	5,207	9.39%
Tax Fee	(722)	(752)	(887)	17.95%
Net Profit After Income Tax	3,633	4,008	4,320	7.78%
Other Profits	168	34	153	350.00%
Current period other comprehensive income	3,801	4,042	4,473	10.66%

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A enda g

■Financial Highlights

■Financial Review

■Financial Information

■Appendix

31

83 Branches

Greater Taipei：12 Branches

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(Taipei and New Taipei, Excluding OBU Branch) Taoyuan/Hsinchu/Miaoli：11 Branches

Central Taiwan：49 Branches

、 (Taichung Changhua and Nantou) Southern Taiwan：10 Branches 、 、 (Yunlin Chiayi Tainan and Kaohsiung) Overseas Branches：Malaysia

Kuala Lumpur

Labuan

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Recognitions
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Received the “Outstanding Institution Golden Security Award” from Joint Credit Information Center for five consecutive years.

Received “New Southbound Nation Financing Growth Outstanding Prize 2018” from Overseas Credit Guarantee Fund (Taiwan).

Awarded “Best Service Innovation Award in Electronic Finance Sector” from Financial Information Service CO., LTD. 2018 Received “Sports 年上半年營運亮點 Promotor Award” - Silver Prize in Sponsorship Category from the Ministry of Education.

• Received “Wealth Management Grand Prize 2019” “Best Digital Finance” and “Best Public Welfare Promotion” from .

Received the “Best Corporate Social Responsibility Award” and “Best Client Recommendation Award” from < Excellence Banking Rating>.

Received “Internet Popularity Award” and “Best Creativity Filming” from Taipei Golden Eagle Micro-Movie Festival 2019.

2

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Annual Strategy
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2020
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Strengthening the ideas of compliance, fully implementing money-laundering prevention mechanisms. Perfecting capital risk management, optimizing qualities of asset-based loans. Consolidating 2018 core competency’s strength, expanding international finance 年上半年營運亮點 territory.

Cultivating niche product business, developing diversified profitable engines. Grasping financial technology business, digital transformation for innovative operations.

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Nurturing financial talents with multiple cores, investing in human capital.

2

Thanks for your listening!

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