T.C.C.B. — Interim / Quarterly Report 2020

Aug 27, 2020

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2020.8.28

Disclaimer

• This presentation is provided by Taichung Commercial Bank(TCB). 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 Half Year Financial Hi hli ht g g

Profitability

• Net Profit after tax 1.8billions, declined by 12.58% over the same period last year.

• EPS 0.47, declined by 12.96% over the same period last year.

Asset quality

• NPL ratio 0.44%、NPL coverage ratio 324.25%.

Capital adequacy

• Consolidated：Capital Adequacy Ratio 13.56%、Tier I Capital Ratio 12.55%。

• Individual：Capital Adequacy Ratio 12.94%、Tier I Capital Ratio

• 12.45%。

4

A enda g

■Financial Highlights

■Financial Review

■Financial Information

■Appendix

5

Profitabilit y

Net Profit

( NT$ Million )

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2,106 -12.58%
1,841
1H19 1H20
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+7.78%
4,320
+10.32% 4,008
3,633
2017 2018 2019
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EPS

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( NT$ )
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0.57 -12.96%
0.47
1H19 1H20
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1.18 -1.69%
+7.27% 1.16
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%.

6

Profitabilit y

ROA

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0.62%
0.54%
1H19(Note) 1H20(Note)
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0.64%
0.60%
0.57%
2017 2018 2019
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ROE

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8.68%
7.10%
1H19(Note) 1H20(Note)
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8.57% 8.79% 8.72%
2017 2018 2019
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Note：ROE and ROA are annualized

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Chan e in Net Profit (NT$ Million) g

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1H19 1H20
1H19 1H20
YoY -9.88% YoY -3.25% YoY -61.15% YoY -11.35%
5,549
5,001 2,450
2,172
2,803
2,714
296
115
Total Net 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 6.93%
6,159 QoQ 4.78%
5,849 5,878
5,760 5,762
Foreign
666
558 578 currency
566 583 deposits
YoY 17.67%
QoQ 15.22%
Time &
2,696 2,697 2,807 saving
2,700 2,676 deposits
(local
currency)
YoY 3.96%
QoQ 4.08%
Checking &
demand
2,494 2,503 2,595 2,603 2,686 deposits
(local
currency)
YoY 7.70%
QoQ 3.19%
2Q19 3Q19 4Q19 1Q20 2Q20
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(%)

De osit Structure p

Checking & demand deposits (local currency) Time & saving deposits(local currency) Foreign currency deposits

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49.22%
46.09% 45.58%
44.37%
43.61%
41.80%
10.81%
9.54%
8.98%
4Q18 4Q19 2Q20
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Loan Structure (NT$ Hundred Million)

Corporate Banking Consumer Banking

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2,363 2,318
2,219 2,254 2,156 2,216
51.57% 48.43% 51.11% 48.89% 51.12% 48.88%
2018 2019 2020
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	2018	2019	1H20	HoH
Corporate Banking	2,363	2,254	2,318	2.84%
Consumer Banking	2,219	2,156	2,216	2.78%
Total	4,582	4,410	4,534	2.81%

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Consumer Banking-Consumption Loans

(NT$ Hundred Million)

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Average Rate NPL Rate
4.48% 4.45%
4.09%
0.51% 0.48%
0.35%
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129
+7.50%
120
Local Bank
110
+10.84%
2018 2019 2020
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Note：Consumption loans are excluding 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 4,155
4,031
91.64% 91.41% 91.64%
383 379 379
8.36% 8.59% 8.36%
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383 379 379 8.36% 8.59% 8.36%	383 379 379 8.36% 8.59% 8.36%	383 379 379 8.36% 8.59% 8.36%	383 379 379 8.36% 8.59% 8.36%	383 379 379 8.36% 8.59% 8.36%
2018 2019 2020
	2018	2019	1H20	HoH
NTD Loan	4,199	4,031	4,155	3.08%
Foreign Currency Loan	383	379	379	-
Total	4,582	4,410	4,534	2.81%

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Loan Breakdown (NT$ Hundred Million)

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Total Loan
4,410 4,436 4,534 YoY 2.79%
4,407 QoQ 2.21%
4,411 Mortgage
223
204 225 194 207 Corporate(Note1) 12.15% Consumption
YoY 9.31%
Loan
QoQ 7.73%
3.11%
OBU &
SME overseas
1,722 1,708 1,756 1,752 1,789 QoQ 2.11%YoY 3.89% branch
6.75% Other
OBU & overseas
Personal
branch(Note2)
YoY -2.55% Loan
314 302 304 313 306 QoQ -2.24% 33.61%
SME
Mortgage
561 557 554 551 551 YoY -1.78% 39.46%
QoQ -
141
125 128 132 132
Consumption Loan
YoY 12.8%
QoQ 6.82% Corporate
1,485 1,487 1,470 1,481 1,524 4.92%
Other Personal Loan
YoY 2.63%
QoQ 2.90%
Loan Structure 2Q20
2Q19 3Q19 4Q19 1Q20 2Q20
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Note 1：The balance of Corporate loan included NT$ 1 billion government loans. Note 2：The loan balance of OBU & overseas branch were 28.2 billions and 2.4 billions in NT$ ,respectively.

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Loan Breakdown (NT$ Hundred Million)

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Non-secured Secured
3,877 3,861
3,746
84.61% 84.94% 85.16%
705 664 673
15.39% 15.06% 14.84%
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2018 2019 1H20	2018 2019 1H20	2018 2019 1H20	2018 2019 1H20	2018 2019 1H20
	2018	2019	1H20	HoH
Non-secured	705	664	673	1.36%
Secured	3,877	3,746	3,861	3.07%
Secured by property	3,536	3,437	3,530	2.71%
Secured by Letter of Guarantee	164	149	164	10.07%
Others	177	160	167	4.38%
Total	4,582	4,410	4,534	2.81%

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Loan to Deposit Ratio(LDR)

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Overall LDR NTD LDR Foreign Currency LDR
77.34% 77.38%
76.40% 76.43%
75.61%
76.57% 76.49%
75.59% 75.50%
73.59%
69.58%
68.54% 67.91% 67.03%
56.89%
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2Q19

3Q19

4Q19

1Q20

2Q20

16

S reads p

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Overall Spreads NTD Spreads Foreign Currency Spreads
Note
2.34% 2.11% 2.10% 2.04%
1.74%
1.76% 1.75% 1.77% 1.79%
1.59%
1.72% 1.74% 1.77%
1.71%
1.59%
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2Q19 3Q19 4Q19 1Q20 2Q20

Note：

• 1.Central Bank of the R.O.C(Taiwan) announced the discount rate be reduced by 0.25 percentage points to 1.125% in March 19 2020.

• 2.The US Fed cut the FOMC's target federal funds rate by 0.5 percentage from 1.50%-1.75% to 1.00%1.25% in March 3 2020, and then cut the federal fund rate by 1 percentage to 0%-0.25% again in March 16 2020.

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(NT$ Hundred million)

NIM and Interest earning assets

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NIM

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1.24%
1.20% 1.20%
1.19%
1.18%
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Average of Interest earning assets

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6,430 6,406 6,380 6,384 6,441
2Q19 3Q19 4Q19 1Q20 2Q20
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18

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-Income Ratio

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56.85%
54.08%
52.78% 51.76%
46.86% 46.63%
2,809 2,740 2,772 2,790
2,533
2,468
1,519
1,463
1,301 1,311 1,403
1,284
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
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19

Asset ualit (NT$ Million) q y

NPL ratio &NPLs

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NPL ratio NPLs
0.45% 0.44%
0.42%
0.37% 0.37%
0.31%
2,054
2,003
1,845
1,655 1,645
1,382
4Q17 2Q18 4Q18 2Q19 4Q19 2Q20
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20

Asset ualit (NT$ Million) q y

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NPL Coverage Ratio & Loan Loss Provision
NPL Coverage Ratio Loan Loss Provision
475.54%
403.68%
378.28%
343.87% 324.25%
317.95%
6,643
6,573
6,532
6,494
6,345
6,260
4Q17 2Q18 4Q18 2Q19 4Q19 2Q20
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21

Fee Income Breakdown (NT$ Million)

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824 Fee Income YoY -5.32%
816 YoY -12.23%
769 QoQ -19.12%
752
86 73 1,559 1,476
86 85 660 Others Others
YoY -15.12%
154 176 QoQ - 169
73 146
142 172
Loans
YoY 23.94% 293
QoQ - 352 Loans
176
266
252
221 Trust
230 405
YoY -4.07%
QoQ -15.87% 464
212 Trust
Insurance &
Securities
303 318 282 315 YoY -34.32% 692
QoQ -36.83% 514 Insurance
199
&
Securities
2Q19 3Q19 4Q19 1Q20 2Q20 1H19 1H20
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22

Wealth Mana ement Fee Income g

(NT$ Million)

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568 549 Total
YoY -23.23%
508 495 390 QoQ -28.96% YoY -11.58%
1,062
939
161
161
Mutual Fund
143 260
146 YoY -13.29%
QoQ -22.98%
285 Mutual
Fund
124
Insurance &
318 Securities
303 315 YoY -34.32% 692 Insurance
282
QoQ -36.83%
514 &
199 Securities
Others
YoY 8.06 % Others
62 89 67 73 67 QoQ -8.22% 110 140
1H19 1H20
2Q19 3Q19 4Q19 1Q20 2Q20
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23

Profit of Subsidiar to TCB (NT$ Million) y

Net Profit after tax	1H19	1H20	HoH
TCB	1,831	1,697	-7.32%
Subsidiary	275	144	-47.64%
Total	2,106	1,841	-12.58%

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Subsidiary of TCB
13.08%
TCB
86.92%
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1H19 Profit Breakdown

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Subsidiary
of TCB
7.82%
TCB
92.18%
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1H20 Profit Breakdown

24

Capital Adequacy

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Consolidated
BIS Ratio Tier I Capital Ratio BIS Ratio
+0.88%
13.91%
13.63% 13.56%
13.01%
12.68%
12.41%
12.48% 12.77% 12.55%
11.79%
11.15% 10.99%
2017 1H18 2018 1H19 2019 1H20
Individual
BIS Ratio
BIS Ratio Tier I Capital Ratio
+0.93%
13.23%
12.98% 12.94%
12.35%
12.01%
11.75%
12.37% 12.64% 12.45%
11.65%
10.98% 10.82%
2017 1H18 2018 1H19 2019 1H20
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25

A enda g

■Financial Highlights ■Financial Review

■Financial Information ■Appendix

26

Balance Sheet (Individual)

(NT$ Million)

	2017	2018	2019	1H20	YTD
Assets：
Cash and due from banks	44,066	46,740	44,134	47,527	7.69%
Financial investment, net	158,984	163,891	173,347	184,295	6.32%
Loans, net	429,656	451,729	434,469	446,944	2.87%
Receivables, net	6,329	5,028	4,064	7,104	74.80%
Equity method investments, net	4,735	5,225	5,491	5,100	-7.12%
Properties and equipment, net	9,296	9,368	10,620	11,932	12.35%
Others	3,424	2,178	2,898	3,168	9.32%
Total assets	656,490	684,159	675,023	706,070	4.60%
Liabilities：
Deposits	567,256	589,243	584,866	615,940	5.31%
Other Liabilities	45,832	47,092	38,848	37,736	-2.86%
Total Liabilities	613,088	636,335	623,714	653,676	4.80%
Total Equity	43,402	47,824	51,309	52,394	2.11%
Total Liabilities and Equity	656,490	684,159	675,023	706,070	4.60%

27

P&L (Individual)

(NT$ Million)

	2017	2018	2019	1H19	1H20	HoH
Net interest income	7,823	7,991	7,902	3,964	3,927	-0.93%
Net fee income	1,554	1,793	1,926	902	972	7.76%
Others	971	891	1,283	683	102	-85.07%
Total Net Revenue	10,348	10,675	11,111	5,549	5,001	-9.88%
Operating Expenses	(5,131)	(5,626)	(5,567)	(2,803)	(2,714)	-3.18%
Pre-provision Profit	5,217	5,049	5,544	2,746	2,287	-16.72%
Credit Loss Provisions, net	(947)	(411)	(477)	(296)	(115)	-61.15%
Profit Before Income Tax	4,270	4,638	5,067	2,450	2,172	-11.35%
Income Tax Expense	(637)	(630)	(747)	(344)	(331)	-3.78%
Net Profit After Income Tax	3,633	4,008	4,320	2,106	1,841	-12.58%
Other Comprehensive Income	168	34	153	371	282	-23.99%
Total Comprehensive Income for the Year	3,801	4,042	4,473	2,477	2,123	-14.29%

28

Balance Sheet (Consolidated)

(NT$ Million)

	2017	2018	2019	1H20	YTD
Assets：
Cash and due from banks	45,123	47,644	45,237	48,245	6.65%
Financial investment, net	159,651	165,027	174,356	185,497	6.39%
Loans, net	430,858	452,595	435,398	447,794	2.85%
Receivables, net	13,658	12,781	12,820	15,827	23.46%
Equity method investments, net	128	153	157	162	3.18%
Properties and equipment, net	9,388	9,447	10,684	11,985	12.18%
Others	4,218	3,185	4,037	4,416	9.39%
Total assets	663,024	690,832	682,689	713,926	4.58%
Liabilities：
Deposits	566,095	587,968	583,322	614,692	5.38%
Other Liabilities	53,527	55,040	48,058	46,840	-2.53%
Total Liabilities	619,622	643,008	631,380	661,532	4.78%
Total Equity	43,402	47,824	51,309	52,394	2.11%
Total Liabilities and Equity	663,024	690,832	682,689	713,926	4.58%

29

P&L (Consolidated)

(NT$ Million)

	2017	2018	2019	1H19	1H20	HoH
Net interest income	8,186	8,434	8,351	4,171	4,126	-1.08%
Net fee income	2,449	2,846	2,913	1,430	1,357	-5.10%
Others	760	409	831	468	(36)	-107.69%
Total Net Revenue	11,395	11,689	12,095	6,069	5,447	-10.25%
Operating Expenses	(5,915)	(6,457)	(6,273)	(3,191)	(3,056)	-4.23%
Pre-provision Profit	5,480	5,232	5,822	2,878	2,391	-16.92%
Credit Loss Provisions, net	(1,125)	(472)	(615)	(365)	(180)	-50.68%
Profit Before Income Tax	4,355	4,760	5,207	2,513	2,211	-12.02%
Income Tax Expense	(722)	(752)	(887)	(407)	(370)	-9.09%
Net Profit After Income Tax	3,633	4,008	4,320	2,106	1,841	-12.58%
Other Comprehensive Income	168	34	153	371	282	-23.99%
Total Comprehensive Income for the Year	3,801	4,042	4,473	2,477	2,123	-14.29%

30

A enda g

■Financial Highlights ■Financial Review

■Financial Information

■Appendix

31

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Credit Rating
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Date： 2020.05.12

Fitch Ratings Long-term Short-term Outlook National Rating A- (twn) F1 (twn) Stable ~~2018~~ ~~年上半年營運亮點~~ International Rating BB+ B Stable Viability Rating bb+ Support Rating 4

2

Facilitating Digital Service!! Go to ‘MyData Platform’ now

With the aim of actively improving the digital service level for customers’ convenience, the Bank has participated in the ”MyData”, a digital service personalization platform, jointly promoted by the Financial Supervisory Commission and the National Council. It was one of the seven Development banks providing the first wave of online operations, announced by the Financial Supervisory Commission on July 29, 2020.

The platform mainly provides two service applications, which are ‘Credit Card Online Application and Loan Online Application.’ It is in the hope of assisting the public in speeding up the processing of financial services and saving their valuable time, allowing customers to experience the convenience.

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Credit Card Online Application Loan Online Application

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for the Second Half
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Deepen Corporate Governance & Reinforce Corporate Culture of Fair Customer Treatment.

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Improve Capital Risk Management & Optimize Credit Asset Quality. Consolidate 2018 Core Competitive Advantages & Expand International 年上半年營運亮點 Financial Territories. Strengthen Financial Investment Capabilities & Develop Diversified Profit Engines.

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Grasp Fintech Business Opportunities & Facilitate Innovative Operations and Digital Transformation.

2

Thanks for your listening!

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