T.C.C.B. - Interim / Quarterly Report 2021

Taichung Commercial Bank Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 2021 and 2020 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders Taichung Commercial Bank Co., Ltd.

Introduction

We have reviewed the accompanying consolidated financial statements of Taichung Commercial Bank Co., Ltd. (the “Bank”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of June 30, 2021 and 2020, the consolidated statements of comprehensive income for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, changes in equity and cash flows for the six months then ended, and the 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 Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and International Accounting Standard 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 Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of 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 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 caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of June 30, 2021 and 2020, and its consolidated financial performance for the three months ended June 30, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the six months ended June 30, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Other Matter

We have also audited the parent company only financial statements of the Bank as of and for the six months ended June 30, 2021 and 2020 on which we have issued an unmodified opinion.

The engagement partners on the reviews resulting in this independent auditors’ review report are Wen-Yea Shyu and Shu-Lin Liu.

Deloitte & Touche Taipei, Taiwan Republic of China August 12, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with 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 applied in the Republic of China.

For the convenience of readers, the independent auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ review report and consolidated financial statements shall prevail.

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CASH AND CASH EQUIVALENTS (Note 6) DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS (Notes 7 and 36) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Note 8) FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (Note 9) INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST (Notes 10 and 36) SECURITIES PURCHASED UNDER RESELL AGREEMENTS (Note 11) RECEIVABLES, NET (Notes 12 and 36) CURRENT TAX ASSETS (Note 4) NOTES DISCOUNTED AND LOANS, NET (Notes 13 and 35) INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET (Note 14) RESTRICTED ASSETS, NET (Notes 15 and 36) OTHER FINANCIAL ASSETS, NET (Note 16) PROPERTIES AND EQUIPMENT, NET (Note 17) RIGHT-OF-USE ASSETS, NET (Note 18) INVESTMENT PROPERTIES, NET (Note 19) INTANGIBLE ASSETS, NET (Note 20) DEFERRED TAX ASSETS (Note 4) OTHER ASSETS (Notes 21 and 36) TOTAL LIABILITIES AND EQUITY DUE TO THE CENTRAL BANK AND OTHER BANKS (Note 22) FUNDS BORROWED FROM CENTRAL BANK AND OTHER BANKS (Notes 23 and 36) FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (Note 8) SECURITIES SOLD UNDER REPURCHASE AGREEMENTS (Note 24) PAYABLES (Notes 25 and 35) CURRENT TAX LIABILITIES (Note 4) DEPOSITS AND REMITTANCES (Notes 26 and 35) BANK DEBENTURES (Notes 27 and 35) OTHER FINANCIAL LIABILITIES (Note 28) PROVISIONS (Notes 4 and 29) LEASE LIABILITIES (Note 18) DEFERRED TAX LIABILITIES (Note 4) OTHER LIABILITIES (Note 30) Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE BANK (Note 31) Ordinary shares Reserve for capitalization Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Total equity attributable to owners of the Bank Total equity TOTAL		June 30, 2021 (Reviewed) Amount % $ 14,186,460 2 34,680,652 5 34,374,715 4 44,972,375 6 109,833,434 15 14,604,913 2 16,336,250 2 20 - 467,027,787 62 162,407 - 499,392 - - - 12,390,865 2 971,753 - 17,969 - 208,515 - 813,340 - 2,513,552 - $ 753,594,399 100 $ 5,985,648 1 10,052,952 1 644,176 - 2,963,834 1 7,957,207 1 348,933 - 648,078,120 86 11,500,000 2 2,618,348 - 1,408,395 - 1,003,692 - 111,021 - 1,012,837 - 693,685,163 92 41,516,943 6 - - 803,606 - 9,469,859 1 150,243 - 6,435,236 1 1,533,349 - 59,909,236 8 59,909,236 8 $ 753,594,399 100		December 31, 2020 (Audited) Amount % $ 11,709,619 2 40,371,218 5 30,867,825 4 41,009,840 6 112,624,454 15 12,773,121 2 13,483,664 2 3,279 - 456,541,322 62 163,148 - 439,283 - 2,246 - 12,332,669 2 978,218 - 18,014 - 213,470 - 795,104 - 2,443,527 - $ 736,770,021 100 $ 7,037,338 1 8,510,652 1 785,819 - 2,300,077 - 7,349,384 1 162,112 - 636,589,468 87 11,500,000 2 1,695,813 - 1,424,492 - 1,006,781 - 111,021 - 975,311 - 679,448,268 92 41,516,943 6 - - 803,606 - 9,469,859 1 150,243 - 4,077,345 1 1,303,757 - 57,321,753 8 57,321,753 8 $ 736,770,021 100		June 30, 2020 (Reviewed)
						Amount % $ 14,593,320 2 33,651,818 5 23,479,709 3 38,196,785 5 110,638,662 16 13,181,595 2 15,826,672 2 3,312 - 447,794,081 63 162,287 - 505,425 - 72,246 - 11,985,074 2 811,897 - 18,058 - 166,835 - 811,406 - 2,026,695 - $ 713,925,877 100 $ 5,926,107 1 5,785,227 1 296,298 - 6,660,862 1 11,572,464 2 312,911 - 614,692,107 86 11,500,000 2 1,554,608 - 1,358,631 - 832,072 - 111,021 - 929,753 - 661,532,061 93 37,088,349 5 1,928,594 - 726,981 - 9,469,859 2 150,243 - 1,893,756 - 1,136,034 - 52,393,816 7 52,393,816 7 $ 713,925,877 100

The accompanying notes are an integral part of the consolidated financial statements.

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

INTEREST REVENUE (Notes 32 and 35) INTEREST EXPENSE (Notes 32 and 35) NET INTEREST NET INCOME AND LOSS OTHER THAN INTEREST Service fee income, net (Notes 32 and 35) Gains (losses) on financial assets and liabilities at fair value through profit or loss (Note 32) Realized gains on financial assets at fair value through other comprehensive income (Note 32) Foreign exchange gains (losses), net Impairment losses on financial assets (Notes 9, 10 and 32) Share of gains (losses) of associates for using the equity method (Note 14) Other non-interest gains, net (Notes 29 and 32) TOTAL NET REVENUE BAD-DEBT EXPENSES AND PROVISION FOR LOSSES ON COMMITMENTS AND GUARANTEES (Notes 12, 13, 29 and 32) OPERATING EXPENSES Employee benefits expenses (Note 32) Depreciation and amortization expenses (Note 32) Other selling and administrative expenses (Notes 32 and 35) Total operating expenses PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX EXPENSE (Notes 4 and 33) NET PROFIT FOR THE PERIOD		For the Three Months Ended June 30	For the Three Months Ended June 30	For the Three Months Ended June 30		For the Six Months	For the Six Months	Ended June 30
		2021		2020		2021		2020
		Amount % $ 3,063,670 93 (747,669) (23) 2,316,001 70 777,988 24 128,916 4 12,695 - 60,252 2 (1,121 ) - 92 - 6,471 - 3,301,294 100 (353,251) (11) (1,075,506 ) (32 ) (130,161 ) (4 ) (430,098) (13) (1,635,765) (49) 1,312,278 40 (166,204) (5) 1,146,074 35		Amount % $ 2,986,787 112 (983,945) (37) 2,002,842 75 605,025 22 71,114 3 19,880 1 (27,772 ) (1 ) (4,656 ) - 246 - 12,087 - 2,678,766 100 (1,296) - (999,720 ) (37 ) (118,629 ) (5 ) (463,347) (17) (1,581,696) (59) 1,095,774 41 (134,626) (5) 961,148 36		Amount % $ 6,082,236 92 (1,519,219) (23) 4,563,017 69 1,627,106 25 375,120 6 12,695 - 5,693 - (3,032 ) - (681 ) - 9,899 - 6,589,817 100 (672,978) (10) (2,139,888 ) (33 ) (262,400 ) (4 ) (879,581) (13) (3,281,869) (50) 2,634,970 40 (358,652) (6) 2,276,318 34		Amount % $ 6,276,781 115 (2,151,146) (39) 4,125,635 76 1,356,929 25 (61,815 ) (1 ) 34,111 - (11,050 ) - (7,121 ) - (1,671 ) - 11,586 - 5,446,604 100 (179,817) (3) (1,910,883 ) (35 ) (237,636 ) (4 ) (907,683) (17) (3,056,202) (56) 2,210,585 41 (369,747) (7) 1,840,838 34

(Continued)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Unrealized gains on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive (loss) income of associates accounted for using the equity method Income tax (expense) benefit relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 33) Items that will not be reclassified subsequently to profit or loss, net of income tax Items that may be reclassified subsequently to profit or loss: Exchange differences on the translation of financial statements of foreign operations Unrealized (loss) gain on investments in debt instruments designated as at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss, net of income tax Other comprehensive income for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD EARNINGS PER SHARE (Note 34) Basic Diluted		For the Three Months Ended June 30	For the Three Months Ended June 30	For the Three Months Ended June 30		For the Six Months	For the Six Months	Ended June 30
		2021		2020		2021		2020
		Amount % $ 131,453 4 (5,930 ) (1 ) (3,259) - 122,264 3 (14,136 ) - (87,792) (3) (101,928) (3) 20,336 - $ 1,166,410 35 $ 0.28 $ 0.28		Amount % $ 313,771 12 8,495 - (6,508) - 315,758 12 (23,040 ) (1 ) 28,507 1 5,467 - 321,225 12 $ 1,282,373 48 $ 0.25 $ 0.25		Amount % $ 314,772 5 (60 ) - (3,275) - 311,437 5 36,059 1 (36,331) (1) (272) - 311,165 5 $ 2,587,483 39 $0.55 $0.55		Amount % $ 101,084 2 7,170 - 3,774 - 112,028 2 (13,311 ) - 183,529 3 170,218 3 282,246 5 $ 2,123,084 39 $ 0.47 $ 0.47

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings Legal reserve Cash dividends Share dividends Net profit for the six months ended June 30, 2020 Other comprehensive (loss) income for the six months ended June 30, 2020, net of income tax Total comprehensive income (loss) for the six months ended June 30, 2020 Disposals of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT JUNE 30, 2020 BALANCE AT JANUARY 1, 2021 Net profit for the six months ended June 30, 2021 Other comprehensive income for the six months ended June 30, 2021, net of income tax Total comprehensive income for the six months ended June 30, 2021 Disposals of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT JUNE 30, 2021	Equity Attributable to Owners of the Bank	Equity Attributable to Owners of the Bank	Other Equity Exchange Differences on the Translation of Financial Statements of Unrealized Gains (Losses) on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income $ (96,316) $ 949,508 - - - - - - - - (13,311) 295,557 (13,311) 295,557 - 596 $ (109,627) $ 1,245,661 $ (121,110) $ 1,424,867 - - 36,059 275,106 36,059 275,106 - (81,573) $ (85,051) $ 1,618,400	Total Equity $ 51,309,206 - (1,038,474) - 1,840,838 282,246 2,123,084 - $ 52,393,816 $ 57,321,753 2,276,318 311,165 2,587,483 - $ 59,909,236
	Capital Stock Ordinary Shares Reserve for Capitalization Capital Surplus $ 37,088,349 $ - $ 726,981 - - - - - - - 1,928,594 - - - - - - - - - - - - - $ 37,088,349 $ 1,928,594 $ 726,981 $ 41,516,943 $ - $ 803,606 - - - - - - - - - - - - $ 41,516,943 $ - $ 803,606	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 8,188,237 $ 150,243 $ 4,302,204 1,281,622 - (1,281,622) - - (1,038,474) - - (1,928,594) - - 1,840,838 - - - - - 1,840,838 - - (596) $ 9,469,859 $ 150,243 $ 1,893,756 $ 9,469,859 $ 150,243 $ 4,077,345 - - 2,276,318 - - - - - 2,276,318 - - 81,573 $ 9,469,859 $ 150,243 $ 6,435,236

The accompanying notes are an integral part of the consolidated financial statements.

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense Amortization expense Provision for bad debts expense, commitments and guarantees liabilities (Gain) loss on financial assets and liabilities at fair value through profit or loss Gain on disposal of properties and equipment Interest expense Interest revenue Dividend income Net changes in provision for losses on others Share of loss of associates Gains on disposal of investments in debt instruments at fair value through other comprehensive income Impairment losses on financial assets Unrealized loss on foreign currency exchange Gain on lease suspension Total adjustment Net changes in operating assets and liabilities Due from the Central Bank and call loans to other banks Financial assets at fair value through profit or loss Receivables Notes discounted and loans Other financial assets Other assets Due to the Central Bank and other banks Financial liabilities at fair value through profit or loss Securities sold under repurchase agreements Payables Deposits and remittances Other financial liabilities Provision for employee benefits Other liabilities Changes in operating assets and liabilities Cash (used in) generated from operations Interest received Dividends received		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 2,634,970 230,737 31,663 672,978 (375,120) (1,187) 1,519,219 (6,082,236) (10,218) - 681 (2,477) 3,032 209,554 (3,861) (3,807,235) (971,571) (2,283,867) (2,875,144) (11,030,199) 3,320 29,967 (1,051,690) (989,546) 663,757 392,066 11,488,652 57,762 (38,591) (65,828) (6,670,912) (7,843,177) 6,090,308 10,218	2020 $ 2,210,585 209,312 28,324 179,817 61,815 (45) 2,151,146 (6,276,781) (9,926) (1,183) 1,671 (24,185) 7,121 726,167 (1,061) (2,947,808) (612,326) 1,681,915 (3,157,987) (12,493,123) (69,318) (91,051) (600,953) (785,408) (3,708,163) 4,328,500 31,370,150 126,021 (33,402) 40,346 15,995,201 15,257,978 6,477,848 9,926 (Continued)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

Interest paid Income tax paid Net cash (used in) generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Payments for properties and equipment Proceeds from disposal of properties and equipment Increase in refundable deposits Payments for intangible assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Borrowings (repayment of funds) from Central Bank and other banks Proceeds from commercial papers issued Repayments of bank debentures Proceeds from (refund of) guarantee deposits received Repayments of principal portion of lease liabilities Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (1,300,962) (190,083) (3,233,696) (4,806,277) 1,063,958 (451,866,296) 454,412,312 (164,470) 1,255 (162,801) (24,427) (1,546,746) 1,542,300 864,773 - 103,354 (119,548) 2,390,879 36,059 (2,353,504) 46,249,219 $ 43,895,715	2020 $ (1,933,773) (442,574) 19,369,405 $ (9,023,684) 2,676,232 (393,776,134) 390,388,420 (1,409,971) 435 (193,603) (39,882) (11,378,187) (306,813) 254,504 (2,500,000) (9,335) (95,094) (2,656,738) (13,311) 5,321,169 38,341,346 $ 43,662,515

(Continued)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

RECONCILIATIONS OF THE AMOUNTS IN THE CONSOLIDATED STATEMENTS OF CASH FLOWS WITH THE EQUIVALENT ITEMS REPORTED IN THE CONSOLIDATED BALANCE SHEETS AT JUNE 30, 2021 AND 2020 Cash and cash equivalents in the consolidated balance sheets Due from the central bank and call loans to other banks in accordance with cash and cash equivalents under IAS 7 “Statement of Cash Flows” Securities purchased under resell agreements in accordance with cash and cash equivalents under IAS 7 “Statement of Cash Flows” Cash and cash equivalents at the end of the period		June 30	June 30
		2021 $ 14,186,460 15,104,342 14,604,913 $ 43,895,715	2020 $ 14,593,320 15,887,600 13,181,595 $ 43,662,515

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

Taichung Commercial Bank Co., Ltd. (the “Bank”), formerly known as Taichung District Association Saving Co., Ltd. (Taichung District Association) was established on September 27, 1952 by the Taiwan Provincial Government. It was incorporated in April 1953 and started operation in August of the same year. In July of 1975, the Banking Law was revised and implemented. On January 1, 1978, the Taichung District Association Saving Co., Ltd. (Taichung District Association) was restructured into Taichung SME Bank Co., Ltd. (Taichung SME Bank) and its shares were listed on May 15, 1984.

In line with the national financial policy to provide public and social financial services and support the economic construction as well as the development of industrial and commercial, Taichung SME Bank was renamed as Taichung Commercial Bank Co., Ltd. in December 1998. As of June 30, 2021, the Bank had a business department, a trust department, a foreign exchange transaction department, 81 domestic branches, a Malaysia Labuan branch and an offshore banking unit (OBU). The operations of the Bank consist of planning, managing, operating a trust business and overseas financial business. These operations are regulated under the Bank Law of the Republic of China (“ROC”).

At the time of the establishment, the amount of capital invested by the Bank was $500 thousand. In order to improve the capital structure and cooperate with the government decree, the Bank has successively applied for increase and decrease of capital. As of June 30, 2021, the Bank’s capital amount was $41,516,943 thousand.

The consolidated financial statements are presented in the Bank’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Bank’s board of directors on August 12, 2021.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Group’s accounting policies:

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2”

The Group elected to apply the practical expedient provided in the amendments to deal with the changes in the basis for determining contractual cash flows of financial assets, financial liabilities or lease liabilities resulting from the interest rate benchmark reform. The changes are accounted for by updating the effective interest rate at the time the basis is changed, provided the changes are necessary

10 -

as a direct consequence of the reform and the new basis is economically equivalent to the previous basis.

For the hedging relationships that are subject to the reform, the Group applies the following temporary exceptions:

1) The changes to the hedging relationship that are needed to reflect the changes required by the reform are treated as a continuation of the existing hedging relationship.
2) If an alternative benchmark rate that is reasonably expected to be separately identifiable within a period of 24 months, the Group designates the rate as a non-contractually specified risk component.
3) After a cash flow hedging relationship is amended, the amount accumulated in the gain/(loss) on hedging instruments of cash flow hedge is deemed to be based on the alternative benchmark rate on which the hedged future cash flows are determined.
4) The Group allocates the hedged items of a group hedge that is subject to the reform to subgroups based on whether the hedged items have been changed to reference an alternative benchmark rate, and designates the hedged benchmark rate separately.
b. The IFRSs endorsed by the FSC for application starting from 2022

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective Date Announced by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

Note 1: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2022.
Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

11 -
c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs 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” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Announced by IASB (Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

New IFRSs
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”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

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

Effective Date
Announced by IASB (Note 1)

To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 2)
January 1, 2023 (Note 3)
January 1, 2023 (Note 4)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 4: Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Group should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;
The Group may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and
Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

1) The Group changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
2) The Group chose the accounting policy from options permitted by the standards;
12 -
3) The accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;
4) The accounting policy relates to an area for which the Group is required to make significant judgements or assumptions in applying an accounting policy, and the Group discloses those judgements or assumptions; or
5) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in the interim consolidated financial statements is less than those required in a complete set of annual financial statements.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Classification of current and non-current assets and liabilities

Accounts included in the Group’s consolidated financial statements are not classified as current or non-current but are stated in the order of their liquidity. Refer to Note 39 for the maturity analysis of assets and liabilities.

d. Basis of consolidation
1) Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Bank and the entities controlled by the Bank (i.e. its subsidiaries).

13 -

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

2) Subsidiaries included in the consolidated financial statements

The subsidiaries included in the consolidated financial statements are as follows:

Investor Company Subsidiary Main Business and Products Taichung Commercial Bank Co., Ltd. Taichung Bank Insurance Brokers Co., Ltd. Insurance broker industry Taichung Bank Leasing Corporation Limited Leasing business Taichung Commercial Bank Securities Co., Ltd. Securities industry Taichung Bank Leasing Corporation Limited TCCBL Co., Ltd. Financial leasing and investment business TCCBL Co., Ltd. Taichung Bank Financial Leasing (Suzhou) Co., Ltd. Financial leasing business Taichung Commercial Bank Securities Co., Ltd. Taichung Bank Venture Capital Co., Ltd. Venture capital business	Percentage of Equity Held (%)
	June 30, 2021 December 31, 2020 June 30, 2020 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 -

Investor Company
Subsidiary
Main Business and
Products

Taichung Commercial Bank
Co., Ltd.
Taichung Bank Insurance Brokers
Co., Ltd.
Insurance broker industry
Taichung Bank Leasing Corporation
Limited
Leasing business
Taichung Commercial Bank
Securities Co., Ltd.
Securities industry
Taichung Bank Leasing
Corporation Limited
TCCBL Co., Ltd.
Financial leasing and
investment business
TCCBL Co., Ltd.
Taichung Bank Financial Leasing
(Suzhou) Co., Ltd.
Financial leasing business
Taichung Commercial Bank
Securities Co., Ltd.
Taichung Bank Venture Capital Co.,
Ltd.
Venture capital business

Percentage of Equity Held (%)

June 30, 2021
December 31,
2020
June 30, 2020
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-

Note: Taichung Commercial Bank Securities Co., Ltd. was newly established by a resolution of the board of directors of Taichung Commercial Bank Securities Co., Ltd. on June 12, 2020. Taichung Bank Venture Capital Co., Ltd. with the reinvestment amount is $210,000 thousand.

3) Subsidiaries not included in the consolidated financial statements: None.
e. Other significant accounting policies

Except for the following, please refer to the consolidated financial statements for the year ended December 31, 2020.

1) Employee benefits

Retirement benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

- Other long term employee benefits

Other long-term employee benefits for an interim period are accounted for in the same way as the accounting required for defined benefit plans except that annual remeasurement is recognized in profit or loss.

2) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings.

14 -

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, the Group’s management is required to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Group considers the recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates in cash flow projections, growth rate, discount rate, profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

The same critical accounting judgments and key sources of estimation uncertainty have been followed in these consolidated financial statements as were applied in the preparation of the Group’s consolidated financial statements for the year ended December 31, 2020. Please refer to Note 5 to the consolidated financial statements as of December 31, 2020 for the details of critical accounting judgments and key sources of estimation uncertainty.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checks for clearing Due from banks	June 30, 2021 $ 4,176,151 867,889 9,142,420 $ 14,186,460	December 31, 2020 $ 4,414,344 1,249,821 6,045,454 $ 11,709,619	June 30, 2020 $ 4,319,964 1,021,122 9,252,234 $ 14,593,320

a. The loss allowance was measured at an amount equal to 12-month ECLs per historical experience and forward-looking information; there was no loss allowance on cash and cash equivalents as of June 30, 2021, December 31, 2020 and June 30, 2020.
b. Reconciliations of cash and cash equivalents between the consolidated statements of cash flows and the consolidated balance sheets as of June 30, 2021 and 2020 are shown in the consolidated statements of cash flows. Reconciliations as of December 31, 2020 are stated below:

Reconciliations of the amounts in the consolidated statements of cash flows with the
equivalent items reported in the consolidated balance sheets at December 31,
2020
Cash and cash equivalents in the consolidated balance sheets

Due from the Central Bank and call loans to other banks in accordance with cash
and cash equivalents under IAS 7 “Statement of Cash Flows”
Securities purchased under resell agreements in accordance with cash and cash
equivalents under IAS 7 “Statement of Cash Flows”

Cash and cash equivalents at the end of the year

December 31,
2020
$ 11,709,619
21,766,479

12,773,121
$ 46,249,219

15 -
c. The amount of time deposits due from other banks as the operating deposit of Taichung Commercial Bank Securities Co., Ltd. was $200,000 thousand on June 30, 2021, December 31, 2020 and June 30, 2020, which were transferred to the refundable deposits. Refer to Note 21.

7. DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS

Deposit reserves Deposit reserves for checking accounts Deposit reserves for demand accounts Inter-bank clearing account Deposit reserves for foreign currency deposits Call loans to banks Deposit reserves for trust compensation	June 30, 2021 $ 11,000,660 19,430,130 4,006,904 75,233 107,725 60,000 $ 34,680,652	December 31, 2020 $ 19,301,038 18,458,399 2,017,397 73,057 461,327 60,000 $ 40,371,218	June 30, 2020 $ 13,807,126 17,470,824 1,510,724 70,800 732,344 60,000 $ 33,651,818

a. The loss allowance are measured at an amount equal to 12-month ECLs per historical experience and forward-looking information; there was no loss allowance on due from the Central Bank and call loans to other banks as of June 30, 2021, December 31, 2020 and June 30, 2020.
b. The monthly depository reserves to be deposited in the Central Bank of the Republic of China are calculated by applying the legally required reserve ratio to the monthly average balance of the reserve accounts. These reserve accounts can be used at any time but the demand accounts can only be used for monthly deposit reserve adjustments. In addition, the Group deposited reserves in the amount of $5,000,000 thousand for demand accounts on deposits paid to other securities lender project from Central Bank on June 30, 2021, December 31, 2020 and June 30, 2020. Refer to Note 36.
c. The Group deposited the reserves for trust compensation on government bonds measured at amortized cost on June 30, 2021, December 31, 2020 and June 30, 2020, both with a nominal amount of $60,000 thousand. Refer to Note 36.

8. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

		December 31,
	June 30, 2021	2020	June 30, 2020
Financial assets at FVTPL
Commercial paper	$ 27,715,268	$ 24,872,947	$ 19,291,845
Domestic listed shares and emerging market
shares	845,593	862,462	653,699
Domestic unlisted shares	46,270	7,508	-
Foreign listed shares	130,244	88,533	-
PEM group policy assets	802,394	799,269	823,053
Beneficiary certificate	666,208	363,744	253,725
Corporate bonds	392,826	203,112	100,567
Asset swap contracts	3,274,376	3,048,884	2,012,545
Cross-currency swap contracts	80,771	96,053	106,012
			(Continued)

16 -

Foreign exchange forward contracts Cross-currency option contracts Non-deliverable forward contracts Interest rate-linked structured instrument Financial liabilities at FVTPL Cross-currency swap contracts Foreign exchange forward contracts Cross-currency option contracts Interest rate-linked structured instrument contracts	June 30, 2021 $ 97,824 316,124 - 6,817 $ 34,374,715 $ 252,544 65,981 318,834 6,817 $ 644,176	December 31, 2020 $ 168,822 354,336 - 2,155 $ 30,867,825 $ 369,085 66,415 348,164 2,155 $ 785,819	June 30, 2020 $ 52,870 184,584 160 649 $ 23,479,709 $ 101,019 21,581 173,049 649 $ 296,298 (Concluded)

a. The Group engages in exchange rate related derivative financial contracts, mainly to provide customers and the Group with hedging instruments for foreign exchange positions arising from transactions such as import/export and currency exchange, to avoid the risks arising from the business and to flatten the demand for foreign exchange funds arising from non-transactional operations.
b. The nominal principal amounts of outstanding derivative contracts as of June 30, 2021, December 31, 2020 and June 30, 2020 were as follows:

Asset swap contracts Cross-currency swap contracts Foreign exchange forward contracts Cross-currency option contracts Non-deliverable forward contracts Interest rate-linked structured instrument contracts	June 30, 2021 Contract Amounts Interest Rate Range $ 3,263,500 0.85%-4,25% 8,059,286 - 7,975,028 - 38,486,107 - - - 165,008 5.00%-6.20%	December 31, 2020 Contract Amounts Interest Rate Range $ 3,039,300 0.90%-3.50% 9,459,647 - 7,224,302 - 23,537,713 - - - 109,938 5.25%-6.20%	June 30, 2020
			Contract Amounts Interest Rate Range $ 2,015,800 0.90%-3.50% 6,474,807 - 5,492,302 - 23,081,302 - 118,000 - 126,021 6.20%-6.75%

9. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments at FVTOCI Investments in debt instruments at FVTOCI	June 30, 2021 $ 4,224,502 40,747,873 $ 44,972,375	December 31, 2020 $ 3,176,107 37,833,733 $ 41,009,840	June 30, 2020 $ 2,739,106 35,457,679 $ 38,196,785

17 -

a. Investments in equity instruments at FVTOCI

		December 31,
	June 30, 2021	2020	June 30, 2020
Domestic listed shares	$ 3,142,884	$ 2,113,147	$ 1,742,884
Domestic unlisted shares	754,083	751,556	717,190
Foreign listed shares	327,535	311,404	279,032
	$ 4,224,502	$ 3,176,107	$ 2,739,106

These investments in equity instruments are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

Dividends income of $10,218 thousand, $9,746 thousand, $10,218 thousand and $9,926 thousand were recognized in profit or loss for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, respectively. Those were related to investments held at June 30, 2021 and 2020, respectively.

b. Investments in debt instruments at FVTOCI

Corporate bonds Government bonds Foreign bonds Bank debentures	June 30, 2021 $ 29,876,831 5,209,984 3,452,659 2,208,399 $ 40,747,873	December 31, 2020 $ 26,959,132 5,379,466 3,486,270 2,008,865 $ 37,833,733	June 30, 2020 $ 26,806,213 5,849,890 797,951 2,003,625 $ 35,457,679

Foreign bonds denominated in foreign currencies were as follows:

		December 31,	December 31,
	June 30, 2021		2020	June	30, 2020
USD	$ 50,000	$	50,000	$	26,000
CNY	445,000		445,000		-
AUD	6,000		6,000		-

1) The Group recognized impairment loss of $(2,532) thousand, $(2,898) thousand, $(5,154) thousand, and $(4,064) thousand for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, respectively, after assessing the expected credit losses of the investments in debt instruments at FVTOCI.
2) Refer to Note 39 for information relating to their credit risk management and impairment.
18 -

10. INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST

Foreign bonds Government bonds NCDs issued by the CBC Corporate bonds Credit certificate Less: Allowance for impairment loss Less: Withdrawal of reserves for trust compensation and refundable deposits	June 30, 2021 $ 25,161,773 12,613,841 62,400,000 10,607,404 - 110,783,018 (31,884) (917,700) $ 109,833,434	December 31, 2020 $ 24,794,803 12,654,717 64,970,000 11,159,474 - 113,578,994 (34,140) (920,400) $ 112,624,454	June 30, 2020 $ 26,331,915 12,695,944 61,305,000 11,261,674 9,136 111,603,669 (44,307) (920,700) $ 110,638,662

a. The foreign bonds denominated in foreign currencies were as follows:

		December 31,
	June 30, 2021	2020	June 30, 2020
USD	$ 697,159	$ 661,159	$ 697,159
CNY	805,000	890,000	850,000
AUD	66,000	66,000	61,000
ZAR	450,000	490,000	570,000

b. As of June 30, 2021, December 31, 2020 and June 30, 2020, the government bonds and the foreign bonds at amortized cost amounted to $1,200,000 thousand and $1,794,442 thousand (US$64,400 thousand), $1,200,000 thousand and $1,123,960 thousand (US$40,000 thousand) and $1,200,000 thousand and $5,793,800 thousand (US$196,400 thousand), respectively, which had been sold under repurchase agreements. Refer to Note 40 for information relating to their carrying amount.
c. The Group recognized the gain on reversal of impairment (loss) of $1,411 thousand, $(1,758) thousand, $2,122 thousand and $(3,057) thousand for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, respectively, after assessing the expected credit losses of the investments in debt instruments at amortized cost.
d. Refer to Note 39 for information relating to their credit risk management and impairment.

11. SECURITIES PURCHASED UNDER RESELL AGREEMENTS

Securities purchased amounted to $14,604,913 thousand, $12,773,121 thousand and $13,181,595 thousand under repurchase agreements as of June 30, 2021, December 31, 2020 and June 30, 2020, would subsequently be sold for $14,605,688 thousand, $12,774,072 thousand and $13,182,732 thousand, respectively, with interest rate ranging from 0.20% to 0.21%, 0.21% to 0.25% and 0.29% to 0.32%, respectively.

19 -

12. RECEIVABLES, NET

Notes receivable Receivables on credit cards Accounts receivable factored without recourse Acceptances Interest receivables Receivables on foreign currency settlement Lease receivables Assignment receivables Receivables on securities settlement Other receivables Less: Unrealized interest income Less: Allowance for doubtful accounts	June 30, 2021 $ 6,239,816 601,826 315,360 845,156 1,129,542 888 3,936,379 890,760 3,027,215 495,154 17,482,096 (816,179) (329,667) $ 16,336,250	December 31, 2020 $ 4,694,417 742,251 154,805 443,447 1,049,138 1,082,521 3,461,743 991,861 1,324,586 584,053 14,528,822 (722,637) (322,521) $ 13,483,664	June 30, 2020 $ 4,117,007 656,901 191,318 571,154 1,122,759 4,464,571 3,110,208 847,876 1,230,618 420,572 16,732,984 (596,803) (309,509) $ 15,826,672

a. Movements in the total carrying amount of receivables for the six months ended June 30, 2021 and 2020 were as follows:

For the six months ended June 30, 2021

	12-month ECLs	12-month ECLs		Lifetime ECL	Credit- impaired Financial Assets	Credit- impaired Financial Assets		Total
Balance at January 1, 2021 Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs New receivables purchased or originated Write-offs Derecognition Foreign exchange differences and other changes Balance at June 30, 2021		$ 73,430,829 (156,529) (23,821) 47,158 9,950,374 - (6,123,266) (256,031) $ 76,868,714		$ 371,436 157,384 (31,615) (46,705) 982 (14,729 ) (70,206 ) 6,982 $ 373,529		$ 313,418 (855) 55,436 (453) 208 (88,704) (72,619) 3,347 $ 209,778		$ 74,115,683 - - - 9,951,564 (103,433) (6,266,091) (245,702) $ 77,452,021

20 -

For the six months ended June 30, 2020

	12-month ECLs	12-month ECLs		Lifetime ECL	Credit- impaired Financial Assets	Credit- impaired Financial Assets		Total
Balance at January 1, 2020 Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs New receivables purchased or originated Write-offs Derecognition Foreign exchange differences and other changes Balance at June 30,2020		$ 62,904,165 (73,241) (29,944) 6,729 10,983,513 - (4,660,583) (255,893) $ 68,874,746		$ 557,317 73,928 (81,304) (6,636) 3,716 (415) (55,340) (12,045) $ 479,221		$ 315,071 (687) 111,248 (93) 31,333 (48,833) (81,456) 15,907 $ 342,490		$ 63,776,553 - - - 11,018,562 (49,248) (4,797,379) (252,031) $ 69,696,457

The above-mentioned carrying amount of receivables include due from the banks, due from the Central Bank and call loans to other banks, securities purchased under resell agreements, notes receivable, receivables on credit cards, accounts receivable factored without recourse, acceptances, interest receivables, lease receivables, assignment receivables, receivables on securities settlement, other receivables, other financial assets, net (including delinquent receivables not arising from loans) and refundable deposits.

b. Movements in the allowance for doubtful accounts of receivables for the six months ended June 30, 2021 and 2020 were as follows:

For the six months ended June 30, 2021

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2021 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Write-offs Recovery of written-offs Foreign exchange differences and other changes Balance at June 30,2021		$ 91,312 (2,587) (197) 5,183 (40,685) 61,019 - - - (8,275) $ 105,770		$ 9,199 3,223 (972) (4,831) (2,176) 78 - (14,729) - 19,765 $ 9,557		$ 174,311 (636) 1,169 (352 ) (29,556) 34 - (55,535) - 50,337 $ 139,772		$ 274,822 - - - (72,417) 61,131 - (70,264) - 61,827 $ 255,099		$ 49,220 - - - - - 51,347 (33,169) 7,617 - $ 75,015		$ 324,042 - - - (72,417) 61,131 51,347 (103,433) 7,617 61,827 $ 330,114

21 -

For the six months ended June 30, 2020

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2020 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Write-offs Recovery of written-offs Foreign exchange differences and other changes Balance at June 30, 2020		$ 95,880 (1,207) (260) 1,135 (48,436) 38,033 - - - (3,160) $ 81,985		$ 11,625 1,694 (1,492) (1,063) (1,742) 645 - (415) - 1,000 $ 10,252		$ 165,224 (487) 1,752 (72) (2,211) 10,509 - (18,062) - 18,830 $ 175,483		$ 272,729 - - - (52,389) 49,187 - (18,477) - 16,670 $ 267,720		$ 23,828 - - - - - 42,816 (30,771) 7,494 - $ 43,367		$ 296,557 - - - (52,389) 49,187 42,816 (49,248) 7,494 16,670 $ 311,087

The allowance for doubtful accounts of the above mentioned receivables includes allowances for delinquent receivables not arising from loans, refer to Note 16.

c. Refer to Note 36 for information relating to note receivable as a guarantee for interbank financing.

13. NOTES DISCOUNTED AND LOANS, NET

Bills negotiated Overdrafts Secured overdrafts Accounts receivable financing Securities margin loans receivables Short-term unsecured loans Short-term secured loans Medium-term unsecured loans Medium-term secured loans Long-term unsecured loans Long-term secured loans Delinquent loans Add: Adjustment of premium or discount Less: Allowance for doubtful accounts	June 30, 2021 $ 265,373 1,590 33,578 48,497 1,278,850 40,872,465 100,167,933 58,659,113 113,703,009 7,909,213 149,500,526 919,487 473,359,634 30,368 (6,362,215) $ 467,027,787	December 31, 2020 $ 293,388 1,310 30,988 51,149 1,099,366 39,175,727 101,315,539 54,480,676 110,808,195 6,842,847 147,939,346 814,242 462,852,773 23,940 (6,335,391) $ 456,541,322	June 30, 2020 $ 131,702 356 30,358 77,037 850,667 41,331,715 103,105,349 51,490,556 107,750,323 5,738,981 142,498,349 1,262,845 454,268,238 20,369 (6,494,526) $ 447,794,081

22 -
a. As of June 30, 2021, December 31, 2020 and June 30, 2020, the delinquent loans on which interest ceased to accrue amounted to $909,631 thousand, $805,311 thousand and $1,247,371 thousand, respectively. The unrecognized interest receivable on these loans were $10,206 thousand, $18,132 thousand and $14,451 thousand as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
b. There was no credit loan written off without a lawsuit for the six months ended June 30, 2021 and 2020.
c. Movements in the total carrying amount of notes discounted and loans for the six months ended June 30, 2021 and 2020 were as follows:

For the six months ended June 30, 2021

	12-month ECLs	12-month ECLs		Lifetime ECL	Credit- impaired Financial Assets	Credit- impaired Financial Assets		Total
Balance at January 1, 2021 Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs New notes discounted and loans purchased or originated Write-offs Derecognition Foreign exchange differences and other changes Balance at June 30, 2021		$ 439,608,628 (5,047,788) (492,291) 1,971,428 140,155,996 - (109,716,945) (16,172,182) $ 450,306,846		$ 14,857,468 5,091,057 (617,533) (1,955,209) 754,300 - (2,086,906) (612,545) $ 15,430,632		$ 8,410,617 (43,269) 1,109,824 (16,219) 97,536 (870,150) (847,812) (188,003) $ 7,652,524		$ 462,876,713 - - - 141,007,832 (870,150) (112,651,663) (16,972,730) $ 473,390,002

For the six months ended June 30, 2020

	12-month ECLs	12-month ECLs		Lifetime ECL	Credit- impaired Financial Assets	Credit- impaired Financial Assets		Total
Balance at January 1, 2020 Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs New notes discounted and loans purchased or originated Write-offs Derecognition Foreign exchange differences and other changes Balance at June 30, 2020		$ 415,543,744 (5,622,330) (749,224) 1,814,096 146,265,598 - (119,663,023) (11,815,575) $ 425,773,286		$ 16,873,865 5,906,039 (1,571,696) (1,797,062) 1,936,111 (1,834) (3,183,521) (39,353) $ 18,122,549		$ 9,554,442 (283,709) 2,320,920 (17,034) 338,066 (487,805) (1,261,346) 229,238 $ 10,392,772		$ 441,972,051 - - - 148,539,775 (489,639) (124,107,890) (11,625,690) $ 454,288,607

23 -
d. Movements in the allowance for doubtful accounts of notes discounted and loans for the six months ended June 30, 2021 and 2020 were as follows:

For the six months ended June 30, 2021

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2021 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Write-offs Recovery of written-offs Foreign exchange differences and other changes Balance at June 30, 2021		$ 1,725,305 (9,997) (3,030) 83,496 (616,772) 626,454 - - - (377,241) $ 1,428,215		$ 925,826 13,822 (71,930) (81,995) (96,276) 32,060 - - - 45,811 $ 767,318		$ 1,856,155 (3,825) 74,960 (1,501) (203,565) 40,752 - (254,844) - 232,300 $ 1,740,432		$ 4,507,286 - - - (916,613) 699,266 - (254,844) - (99,130) $ 3,935,965		$ 1,828,105 - - - - - 860,211 (615,306) 353,240 - $ 2,426,250		$ 6,335,391 - - - (916,613) 699,266 860,211 (870,150) 353,240 (99,130) $ 6,362,215

For the six months ended June 30, 2020

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2020 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Write-offs Recovery of written-offs Foreign exchange differences and other changes Balance at June 30, 2020		$ 1,776,628 (11,988) (2,268) 63,630 (740,326) 816,779 - - - (191,569) $ 1,710,886		$ 852,354 185,838 (100,853) (61,776) (132,104) 201,899 - (550) - 189,063 $ 1,133,871		$ 2,468,257 (173,850) 103,121 (1,854) (270,428) 210,989 - (180,957) - 203,962 $ 2,359,240		$ 5,097,239 - - - (1,142,858) 1,229,667 - (181,507) - 201,456 $ 5,203,997		$ 1,476,478 - - - - - (190,889) (308,132) 313,072 - $ 1,290,529		$ 6,573,717 - - - (1,142,858) 1,229,667 (190,889) (489,639) 313,072 201,456 $ 6,494,526

24 -

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET

The following table shows the Group’s proportion of ownership and voting right of associates at the end of the reporting date:

June 30, 2021 December 31, 2020 June 30, 2020 Amount Proportion of Ownership (%) Amount Proportion of Ownership (%) Amount Proportion of Ownership (%) Associates that are not individually material Taichung Bank Securities Investment Trust Co., Ltd. $ 162,407 38.46 $ 163,148 38.46 $ 162,287 38.46 The share of profit (loss) of the investments in associates accounted for using the equity method was as follows: For the Three Months Ended June 30 For the Six Months Ended June 30 Investee Company 2021 2020 2021 2020 Taichung Bank Securities Investment Trust Co., Ltd. $ 92 $ 246 $ (681) $ (1,671)	June 30, 2021 December 31, 2020 June 30, 2020 Amount Proportion of Ownership (%) Amount Proportion of Ownership (%) Amount Proportion of Ownership (%) Associates that are not individually material Taichung Bank Securities Investment Trust Co., Ltd. $ 162,407 38.46 $ 163,148 38.46 $ 162,287 38.46 The share of profit (loss) of the investments in associates accounted for using the equity method was as follows: For the Three Months Ended June 30 For the Six Months Ended June 30 Investee Company 2021 2020 2021 2020 Taichung Bank Securities Investment Trust Co., Ltd. $ 92 $ 246 $ (681) $ (1,671)	June 30, 2021 December 31, 2020 June 30, 2020 Amount Proportion of Ownership (%) Amount Proportion of Ownership (%) Amount Proportion of Ownership (%) Associates that are not individually material Taichung Bank Securities Investment Trust Co., Ltd. $ 162,407 38.46 $ 163,148 38.46 $ 162,287 38.46 The share of profit (loss) of the investments in associates accounted for using the equity method was as follows: For the Three Months Ended June 30 For the Six Months Ended June 30 Investee Company 2021 2020 2021 2020 Taichung Bank Securities Investment Trust Co., Ltd. $ 92 $ 246 $ (681) $ (1,671)		June 30, 2020	June 30, 2020
		2021 $ (681)			2020 $ (1,671)

The share of profit (loss) of the investments in associates accounted for using the equity method was as follows:

Investment was accounted for using the equity method and the share of profit (loss) of the investment was calculated based on financial statements which have been reviewed.

The Group is the single largest shareholder of Taichung Bank Securities Investment Trust Co., Ltd. with 38.46% interest in the investee, in which the remaining interest is held by several other shareholders. The Group considered the absolute size of its holding, and the relative size and dispersion of the other shareholdings in Taichung Bank Securities Investment Trust Co., Ltd. and concluded that it does not have control over Taichung Bank Securities Investment Trust Co., Ltd. The management of the Group considered the Group as exercising significant influence over Taichung Bank Securities Investment Trust Co., Ltd. and, therefore, classified Taichung Bank Securities Investment Trust Co., Ltd. as associate of the Group.

15. RESTRICTED ASSETS, NET

		December 31,
	June 30, 2021	2020	June 30, 2020
Restricted assets - cash in banks	$ 464,524	$ 436,106	$ 474,880
Pending settlement payments	34,868	3,177	30,545
	$ 499,392	$ 439,283	$ 505,425

Refer to Note 36 for information relating to the restricted assets - cash in banks, which are used as collateral for financing to other banks.

25 -

16. OTHER FINANCIAL ASSETS, NET

			December	December	31,
	June 30, 2021			2020		June	30, 2020
Other delinquent receivables, net	$	-	$	2,246		$	2,246
Time deposits with original maturities of more
than 3 months		-			-		70,000
	$	-	$	2,246		$	72,246

The interest rates were 0.82%-1.02% of time deposits with original maturities of more than 3 months on June 30, 2020.

Other delinquent receivables, net were as follows:

			December 31,	December 31,
	June	30, 2021		2020	June	30, 2020
Delinquent receivables not arising from loans	$	447	$	3,767	$	3,824
Less: Allowance for doubtful accounts (Note 12)		(447)		(1,521)		(1,578)
	$	-	$	2,246	$	2,246

17. PROPERTIES AND EQUIPMENT, NET

Cost Balance, January 1, 2021 Additions Disposals Reclassifications Exchange differences, net Balance, June 30, 2021 Accumulated depreciation Balance, January 1, 2021 Additions Disposals Reclassifications Exchange differences, net Balance, June 30, 2021 Impairment Balance, January 1, 2021 Balance, June 30, 2021 Balance, June 30, 2021			For the Six M	onths Ended June	30, 2021
		Land $ 7,847,588 227 - - - 7,847,815 - - - - - - 77,000 77,000 $ 7,770,815	Building and Structures Transportation Equipment $ 2,101,530 $ 59,101 - 627 - (1,292 ) - 6,246 - (5) 2,101,530 64,677 1,231,486 36,075 19,240 3,425 - (1,291 ) - 2,258 - (3) 1,250,726 40,464 - - - - $ 850,804 $ 24,213	Miscellaneous Equipment $ 2,009,496 49,192 (16,156 ) (6,073 ) (131) 2,036,328 1,596,941 80,385 (16,089 ) (2,258 ) (91) 1,658,888 - - $ 377,440	Lease Improvement $ 8,975 353 - - - 9,328 3,001 819 - - - 3,820 - - $ 5,508	Construction in Progress $ 3,250,482 114,071 - (2,468 ) - 3,362,085 - - - - - - - - $ 3,362,085	Total $ 15,277,172 164,470 (17,448 ) (2,295 ) (136) 15,421,763 2,867,503 103,869 (17,380 ) - (94) 2,953,898 77,000 77,000 $ 12,390,865

26 -

Cost Balance, January 1, 2020 Additions Disposals Exchange differences, net Balance, June 30, 2020 Accumulated depreciation Balance, January 1, 2020 Additions Disposals Exchange differences, net Balance, June 30, 2020 Impairment Balance, January 1, 2020 Balance, June 30, 2020 Balance, June 30, 2020			For the Six M	onths Ended June	30, 2020
		Land $ 7,847,588 - - - 7,847,588 - - - - - 77,000 77,000 $ 7,770,588	Building and Structures Transportation Equipment $ 2,101,530 $ 54,053 - 407 - (57 ) - (50) 2,101,530 54,353 1,191,481 29,932 20,008 3,183 - (57 ) - (19) 1,211,489 33,039 - - - - $ 890,041 $ 21,314	Miscellaneous Equipment $ 1,900,254 58,021 (8,081 ) (1,316) 1,948,878 1,453,794 83,866 (7,691 ) (948) 1,529,021 - - $ 419,857	Lease Improvement $ 7,799 98 - - 7,897 1,632 672 - - 2,304 - - $ 5,593	Construction in Progress $ 1,526,236 1,351,445 - - 2,877,681 - - - - - - - $ 2,877,681	Total $ 13,437,460 1,409,971 (8,138 ) (1,366) 14,837,927 2,676,839 107,729 (7,748 ) (967) 2,775,853 77,000 77,000 $ 11,985,074

The above items of property and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Building and structures Building 30 to 60 years Renovation 10 to 29 years Transportation equipment 2 to 5 years Miscellaneous equipment 1 to 15 years Lease improvements 2 to 5 years

18. LEASE ARRANGEMENTS

a. Right-of-use assets

June 30, 2021 December 31, 2020 June 30, 2020 $ 846,222 $ 789,200 $ 759,434 125,531 189,018 52,463 $ 971,753 $ 978,218 $ 811,897 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 66,466 $ 60,022 $ 208,522 $ 82,591 $ 33,853 $ 32,500 $ 67,077 $ 66,953 29,246 17,742 59,746 34,585 $ 63,099 $ 50,242 $ 126,823 $ 101,538	June 30, 2021 December 31, 2020 June 30, 2020 $ 846,222 $ 789,200 $ 759,434 125,531 189,018 52,463 $ 971,753 $ 978,218 $ 811,897 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 66,466 $ 60,022 $ 208,522 $ 82,591 $ 33,853 $ 32,500 $ 67,077 $ 66,953 29,246 17,742 59,746 34,585 $ 63,099 $ 50,242 $ 126,823 $ 101,538	June 30, 2021 December 31, 2020 June 30, 2020 $ 846,222 $ 789,200 $ 759,434 125,531 189,018 52,463 $ 971,753 $ 978,218 $ 811,897 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 66,466 $ 60,022 $ 208,522 $ 82,591 $ 33,853 $ 32,500 $ 67,077 $ 66,953 29,246 17,742 59,746 34,585 $ 63,099 $ 50,242 $ 126,823 $ 101,538	June 30, 2021 December 31, 2020 June 30, 2020 $ 846,222 $ 789,200 $ 759,434 125,531 189,018 52,463 $ 971,753 $ 978,218 $ 811,897 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 66,466 $ 60,022 $ 208,522 $ 82,591 $ 33,853 $ 32,500 $ 67,077 $ 66,953 29,246 17,742 59,746 34,585 $ 63,099 $ 50,242 $ 126,823 $ 101,538
	$

2021 $ 66,466 $ 33,853 29,246 $ 63,099		2021 $ 208,522 $ 67,077 59,746 $ 126,823	2020 $ 82,591 $ 66,953 34,585 $ 101,538

27 -

Except for the aforementioned addition and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the six months ended June 30, 2021 and 2020.

b. Lease liabilities

		December 31,
	June 30, 2021	2020	June	30, 2020
Carrying amounts	$ 1,003,692	$ 1,006,781	$	832,072

Range of discount rate for lease liabilities was as follows:

		December 31,
	June 30, 2021	2020	June 30, 2020
Land	1.01%-4.14%	1.01%-4.14%	1.01%-4.14%
Buildings	1.01%-5.95%	1.01%-5.95%	1.01%-5.95%
Transportation equipment	1.01%-5.96%	1.01%-5.96%	1.01%-5.96%

c. Material lease-in activities and terms

The Group leases domestic offices, ATM sites and transportation equipment with lease terms of 1 to 15 years. The lease contract specifies that lease payments will be adjusted on the basis of changes in market rental rates. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms.

d. Other lease information

Lease arrangements under operating leases for the leasing out of freehold properties are set out in Note 19.

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	For the Three Months Ended June 30 2021 2020 $ 561 $ 692 $ 2,228 $ 2,035 $ (70,836) $ (58,784)	For the Three Months Ended June 30 2021 2020 $ 561 $ 692 $ 2,228 $ 2,035 $ (70,836) $ (58,784)		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 561 $ 2,228 $ (70,836)		2021 $ 1,174 $ 4,400 $ (144,838)	2020 $ 1,540 $ 3,773 $ (116,645)

The Group leases certain office equipment under leases which qualify as short-term leases and certain computer equipment under leases which qualify as low-value asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

28 -

19. INVESTMENT PROPERTIES, NET

Cost Balance, January 1, 2021 Balance, June 30, 2021 Accumulated depreciation Balance, January 1, 2021 Additions Balance, June 30, 2021 Balance, June 30, 2021 Cost Balance, January 1, 2020 Balance, June 30, 2020 Accumulated depreciation Balance, January 1, 2020 Additions Balance, June 30, 2020 Balance, June 30, 2020		For the Six Months Ended June 30, 2021	For the Six Months Ended June 30, 2021	For the Six Months Ended June 30, 2021
		Land Structures Total $ 15,801 $ 5,972 $ 21,773 15,801 5,972 21,773 - 3,759 3,759 - 45 45 - 3,804 3,804 $ 15,801 $ 2,168 $ 17,969 For the Six Months Ended June 30, 2020
		Land $ 15,801 15,801 - - - $ 15,801	Structures $ 5,972 5,972 3,670 45 3,715 $ 2,257	Total $ 21,773 21,773 3,670 45 3,715 $ 18,058

a. The investment properties are depreciated using the straight-line method over their estimated useful lives as follows:

Building and structures Building 60 years Renovation 10 to 25 years

b. The fair values of the investment properties of the Group on December 31, 2020 and 2019 were $53,579 thousand and $53,847 thousand, respectively. The fair value was not evaluated by independent qualified professional valuers. The valuation was arrived at by reference to the market evidence of transaction price for similar properties, and the fair value was measured by using Level 3 inputs. There was no significant change in the fair value of June 30, 2021 and 2020 compared to December 31, 2020 and 2019.
c. The abovementioned investment properties were leased out for 5 years. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.
29 -
d. The maturity analysis of lease payments receivable under operating leases of investment properties as of June 30, 2021, December 31, 2020 and June 30, 2020 was as follows:

				December	December	31,
	June		30, 2021		2020		June		30, 2020
Year 1	$		864	$	864		$		214
Year 2			864			-			-
Year 3			864			-			-
Year 4			864			-			-
Year 5			216			-			-
	$		3,672	$	864		$		214
INTANGIBLE ASSETS, NET
				December		31,
	June		30, 2021		2020		June		30, 2020
Business right	$		28,000	$	28,000		$		28,000
Computer software		180,515			185,470			138,835
	$	208,515		$	213,470		$	166,835

20. INTANGIBLE ASSETS, NET

a. Business right of the Group arose from the transfer of Fengxing Securities Co., Ltd., with indefinite useful lives and no amortization. As of June 30, 2021, no impairment loss of the business right should be charged.
b. Movements of intangible assets were as follows:

Balance, January 1 Additions Amortization Reclassifications Exchange differences, net Balance, June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 213,470 24,427 (31,663) 2,295 (14) $ 208,515	2020 $ 153,125 39,882 (28,324) 2,213 (61) $ 166,835

Computer software is amortized on a straight-line basis over its estimated useful life as follows: Computer software 1-5 years

30 -

21. OTHER ASSETS, NET

		December 31,
	June 30, 2021	2020	June 30, 2020
Refundable deposits	$ 2,358,560	$ 2,198,459	$ 1,865,376
Prepayments	147,321	136,226	160,369
Receipts under payment for shares underwriting	5,702	107,826	-
Others	1,969	1,016	950
	$ 2,513,552	$ 2,443,527	$ 2,026,695

As of June 30, 2021, December 31, 2020 and June 30, 2020, the time deposits and government bonds at amortized cost which amounted to $1,057,700 thousand, $1,060,400 thousand and $1,060,700 thousand, respectively, were pledged to the district court for litigation, as collateral for the overdraft of the U.S. dollar clearing account and the guarantee deposit of business operations. These amounts were stated as refundable deposits. Refer to Note 36.

22. DUE TO THE CENTRAL BANK AND OTHER BANKS

		December 31,
	June 30, 2021	2020	June 30, 2020
Call loans from banks	$ 5,817,960	$ 6,411,231	$ 5,300,000
Due to Chunghwa Post Co., Ltd.	167,675	326,094	326,094
Due to banks	13	300,013	300,013
	$ 5,985,648	$ 7,037,338	$ 5,926,107

23. FUNDS BORROWED FROM CENTRAL BANK AND OTHER BANKS

Funds borrowed from central banks Funds borrowed from other banks Funds borrowed from central banks (%) Funds borrowed from other banks (%)	June 30, 2021 $ 2,554,880 7,498,072 $ 10,052,952 0.10 0.95-5.23	December 31, 2020 $ 2,167,280 6,343,372 $ 8,510,652 0.10 0.95-5.23	June 30, 2020 $ 460,830 5,324,397 $ 5,785,227 0.10 1.00-5.23

Refer to Note 36 for information relating to collateral of funds borrowed from other banks.

24. SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

		December 31,
	June 30, 2021	2020	June 30, 2020
Government bonds	$ 1,204,577	$ 1,203,592	$ 1,204,345
Foreign bonds	1,759,257	1,096,485	5,456,517
	$ 2,963,834	$ 2,300,077	$ 6,660,862

31 -

The details of repurchase price and interest rate at the end of the period were as follows:

June 30, 2021 Government bonds $ 1,204,880 Foreign bonds 1,760,188 $ 2,965,068 Government bonds 0.17%-0.18% Foreign bonds 0.21%-0.25% The foreign bonds denominated in foreign currencies were as follows: June 30, 2021 USD $ 63,137 25. PAYABLES June 30, 2021 Accounts payable for delivery $ 3,159,513 Accrued expenses 1,337,398 Notes and checks in clearing 867,889 Acceptances 849,177 Interest payable 543,278 Collections payable 489,059 Foreign currency settlement payable 968 Cash dividends payable - Factored accounts payable 113,791 Other payables 596,134 $ 7,957,207 26. DEPOSITS AND REMITTANCES June 30, 2021 Checking $ 7,188,381 Demand 178,874,167 Demand savings 153,965,600 Time 154,366,369 Time savings 153,630,185 Remittances 53,418 $ 648,078,120	December 31, 2020 $ 1,203,981 1,097,527 $ 2,301,508 0.20%-0.21% 0.38% December 31, 2020 $ 39,022 December 31, 2020 $ 1,526,955 1,653,548 1,249,821 455,797 327,521 144,075 1,083,053 - 105,876 802,738 $ 7,349,384 December 31, 2020 $ 8,826,292 171,324,169 150,643,016 150,519,288 155,188,149 88,554 $ 636,589,468	June 30, 2020 $ 1,204,853 5,472,026 $ 6,676,879 0.29%-0.33% 0.58%-1.48% June 30, 2020 $ 184,967 June 30, 2020 $ 1,044,690 1,269,707 1,021,122 572,159 682,465 500,976 4,465,945 1,038,474 41,230 935,696 $ 11,572,464 June 30, 2020 $ 6,561,123 150,406,222 137,972,243 163,512,780 156,203,649 36,090 $ 614,692,107

32 -

27. BANK DEBENTURES

Subordinated financial debenture	June 30, 2021 $ 11,500,000	December 31, 2020 $ 11,500,000	June 30, 2020 $ 11,500,000

a. The Bank issued first subordinated financial debenture and second subordinated financial debenture on June 25, 2013 and December 16, 2013, respectively, which were approved under ruling reference No. 10200089330 issued by the Banking Bureau of the FSC on April 8, 2013. Details of the financial subordinated debenture’s issuance are summarized as follows:
1) Total approved principal: $6,000,000 thousand.
2) Principal issued:
- a) Debenture I on 2013: $2,500,000 thousand.

b) Debenture II on 2013: $3,000,000 thousand.

3) Denomination:
- a) Debenture I on 2013: $500 thousand, issued at par.
- b) Debenture II on 2013: $500 thousand, issued at par.
4) Period:
- a) Debenture I on 2013: 7 years with maturities on June 25, 2020.
- b) Debenture II on 2013: 6 years with maturities on December 16, 2019.
5) Nominal interest rate:
- a) Debenture I on 2013: Fixed interest rate, 2.1%.
- b) Debenture II on 2013: Fixed interest rate, 2.1%.
6) Repayment: The subordinated financial debenture will be paid on the maturity date.
7) The interest will be paid semi-annually from the issuance date.
b. The Bank issued first subordinated financial debenture on December 28, 2015, which was approved under ruling reference No. 10400200460 issued by the Banking Bureau of the FSC on August 26, 2015. Details of the subordinated financial debenture’s issuance are summarized as follows:
1) Total approved principal: $1,500,000 thousand.
2) Principal issued: $1,500,000 thousand.
3) Denomination: $10,000 thousand, issued at par.
4) Period: No due date.
5) Nominal interest rate: According to the interest rate of one-year time savings deposit of Chunghwa Post Co., Ltd., plus 3.08%.
6) Repayment: To be executed according to the issuance.
7) The interest will be paid annually from the issuance date.
33 -
c. The Bank issued first no due date non-cumulative subordinated financial debenture, second no due date non-cumulative subordinated financial debenture, third no due date non-cumulative subordinated financial debenture and first no due date non-cumulative subordinated financial debenture on March 28, 2017, May 18, 2017, August 28, 2017 and December 28, 2016, respectively, which were approved under ruling reference No. 10500210950 issued by the Banking Bureau of the FSC on September 2, 2016. Details of the subordinated financial debenture’s issuance are summarized as follows:
1) Total approved principal: $3,500,000 thousand.
2) Principal issued:
- a) Debenture I on 2016: $1,500,000 thousand.
- b) Debenture I on 2017: $1,000,000 thousand.
- c) Debenture II on 2017: $500,000 thousand.
- d) Debenture III on 2017: $500,000 thousand.
3) Denomination:
- a) Debenture I on 2016: $10,000 thousand, issued at par.
- b) Debenture I on 2017: $10,000 thousand, issued at par.
- c) Debenture II on 2017: $10,000 thousand, issued at par.
- d) Debenture III on 2017: $10,000 thousand, issued at par.
4) Period: No due date.
5) Nominal interest rate: According to the interest rate of one-year time savings deposit of Chunghwa Post Co., Ltd., plus 3.08%.
6) Repayment: To be executed according to the issuance.
7) The interest will be paid annually from the issuance date.
d. The Bank issued first no due date non-cumulative subordinated financial debenture, fourth no due date non-cumulative subordinated financial debenture and fifth no due date non-cumulative subordinated financial debenture on April 25 2018, December 5, 2017 and December 27, 2017, respectively, which were approved under ruling reference No. 10600229120 issued by the Banking Bureau of the FSC on September 22, 2017. Details of the subordinated financial debenture’s issuance are summarized as follows:
1) Total approved principal: $5,000,000 thousand.
2) Principal issued:
- a) Debenture IV on 2017: $1,350,000 thousand. b) Debenture V on 2017: $2,650,000 thousand. c) Debenture I on 2018: $1,000,000 thousand.
3) Denomination:
- a) Debenture IV on 2017: $10,000 thousand, issued at par. b) Debenture V on 2017: $10,000 thousand, issued at par. c) Debenture I on 2018: $10,000 thousand, issued at par.
34 -
4) Period: No due date.
5) Nominal interest rate: According to the interest rate of one-year time savings deposit of Chunghwa Post Co., Ltd., plus 3.08%.
6) Repayment: To be executed according to the issuance.
7) The interest will be paid annually from the issuance date.
e. The Bank issued second no due date non-cumulative subordinated financial debenture on December 18, 2018, which was approved under ruling reference No. 10702156550 issued by the Banking Bureau of the FSC on August 23, 2018. Details of the subordinated financial debenture issuance is summarized as follows:
1) Total approved principal: $1,500,000 thousand.
2) Principal issued: $1,500,000 thousand.
3) Denomination: $10,000 thousand, issued at par.
4) Period: No due date.
5) Nominal interest rate: According to the interest rate of one-year time savings deposit of Chunghwa Post Co., Ltd., plus 3.08%.
6) Repayment: To be executed according to the issuance.
7) The interest will be paid annually from the issuance date.

28. OTHER FINANCIAL LIABILITIES

		December 31,
	June 30, 2021	2020	June 30, 2020
Commercial paper payable	$ 2,453,340	$ 1,588,567	$ 1,428,587
Structured commodity principal	165,008	107,246	126,021
	$ 2,618,348	$ 1,695,813	$ 1,554,608
PROVISIONS
		December 31,
	June 30, 2021	2020	June 30, 2020
Provision for employee benefits	$ 1,050,691	$ 1,089,282	$ 1,100,370
Provision for losses on guarantees	263,963	235,963	188,463
Other provision	16,865	13,097	10,657
Provision for loan commitments	60,286	72,060	59,141
Provision for outstanding loss	16,590	14,090	-
	$ 1,408,395	$ 1,424,492	$ 1,358,631

29. PROVISIONS

35 -

a. Details of provision for employee benefits were as follows:

			December 31,	December 31,
	June 30, 2021			2020	June 30, 2020
Benefit plans	$	870,283	$	913,854	$	934,713
Preferential interest on employees’ deposits		141,902		139,406		133,780
Other long-term employee benefit liabilities		38,506		36,022		31,877
	$ 1,050,691		$	1,089,282	$ 1,100,370

1) Defined contribution plans

The Group adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The amounts of contributions paid by the Group in accordance with the defined contribution plan and recognized in the consolidated statements of comprehensive income for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020 in the amounts of $27,654 thousand, $25,156 thousand, $54,138 thousand and $49,503 thousand, respectively.

2) Defined benefit plans

The defined benefit plan adopted by the Bank of the Group in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Bank contributes amounts equal to 10% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Bank assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Bank is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Bank has no right to influence the investment policy and strategy.

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans in accordance with the pension cost rate for the six months ended June 30, 2021 and 2020 was as follows:

Operating expenses	For the Three Months Ended June 30 2021 2020 $ 3,147 $ 4,167	For the Three Months Ended June 30 2021 2020 $ 3,147 $ 4,167		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 3,147		2021 $ 6,294	2020 $ 8,288

3) Preferential interest on employees’ deposits plan

The Group had revised the interest rate of the employees’ savings deposit since December 21, 2014, in accordance with the regulations of the Financial Management Law No. 10110000850 and the Regulations Governing the Preparation of Financial Reports by Public Banks, and the preferential interest on employee’s deposit liabilities were carried out by qualified actuaries.

36 -

For the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the expenses under preferential interest on employees’ deposits plan recognized in the consolidated statements of comprehensive income amounted to $1,248 thousand, $1,174 thousand, $2,496 thousand and $2,347 thousand, respectively.

4) Other long-term employee benefit liabilities

Other long-term employee benefits of the Group are long-term disability benefits. If the employee does not encounter any casualty due to occupational disaster or accidental death, the Group will pay the pension according to the seniority.

For the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the Group recognized total expenses related to the long-term employee benefits in the consolidated statements of comprehensive income were $1,242 thousand, $1,179 thousand, $2,484 thousand and $2,358 thousand, respectively.

b. Movements of the provision for losses on guarantees were as follows:

For the six months ended June 30, 2021

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2021 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Foreign exchange differences and other changes Balance at June 30,2021		$ 168,958 (1,706) (5) 740 (97,741) 100,285 - (15,161) $ 155,370		$ 4,799 1,706 - (740) (2,636) - - 21,123 $ 24,252		$ 36,355 - 5 - - - - (1,157) $ 35,203		$ 210,112 - - - (100,377) 100,285 - 4,805 $ 214,825		$ 25,851 - - - - - 23,287 - $ 49,138		$ 235,963 - - - (100,377) 100,285 23,287 4,805 $ 263,963

37 -

For the six months ended June 30, 2020

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2020 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Foreign exchange differences and other changes Balance at June 30,2020		$ 109,720 - (157) 4,104 (64,082) 81,840 - (8,138) $ 123,287		$ 1,778 3,653 - (768) (1,010) 2,071 - (2,487) $ 3,237		$ 58,621 (3,653) 157 (3,336) (10,696) 570 - 5,638 $ 47,301		$ 170,119 - - - (75,788) 84,481 - (4,987) $ 173,825		$ 4,344 - - - - - 10,294 - $ 14,638		$ 174,463 - - - (75,788) 84,481 10,294 (4,987) $ 188,463

For the six months ended June 30, 2021 and 2020, a provision was recognized for bad-debt expense, commitments and guarantees.

c. Movements of the other provision were as follows:

For the six months ended June 30, 2021

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2021 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Foreign exchange differences and other changes Balance at June 30,2021		$ 9,157 - - - (8,640) 8,923 - (420) $ 9,020		$ 3,263 - - - (3,263) - - - $ -		$ - - - - - - - - $ -		$ 12,420 - - - (11,903) 8,923 - (420) $ 9,020		$ 677 - - - - - 7,168 - $ 7,845		$ 13,097 - - - (11,903) 8,923 7,168 (420) $ 16,865

38 -

For the six months ended June 30, 2020

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2020 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Foreign exchange differences and other changes Balance at June 30,2020		$ 9,638 - - - (9,460) 7,778 - (104) $ 7,852		$ - - - - - 556 - - $ 556		$ 7 - - - (7) - - - $ -		$ 9,645 - - - (9,467) 8,334 - (104) $ 8,408		$ 2,233 - - - - - 16 - $ 2,249		$ 11,878 - - - (9,467) 8,334 16 (104) $ 10,657

For the six months ended June 30, 2021 and 2020, a provision was recognized for bad-debt expense, commitments and guarantees.

d. Movements of the loan commitments were as follows:

For the six months ended June 30, 2021

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2021 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Foreign exchange differences and other changes Balance at June 30,2021		$ 58,968 (10) (312) 4,893 (19,962) 11,161 - (4,909) $ 49,829		$ 7,205 10 246 (4,893) (5,427) 13 - 3,305 $ 459		$ 2,555 - 66 - (688) - - (66) $ 1,867		$ 68,728 - - - (26,077) 11,174 - (1,670) $ 52,155		$ 3,332 - - - - - 4,799 - $ 8,131		$ 72,060 - - - (26,077) 11,174 4,799 (1,670) $ 60,286

39 -

For the six months ended June 30, 2020

		12-month ECLs	Lifetime ECL	Lifetime ECL		Credit- impaired Financial Assets	Impairment Loss Assessed under IFRS 9	Impairment Loss Assessed under IFRS 9	Difference of Impairment Loss under Regulations	Difference of Impairment Loss under Regulations		Total
Balance at January 1, 2020 Reconciliation arising from financial instruments recognized at the beginning of the period: Transfers to lifetime ECL Transfers to credit-impaired financial assets Transfers to 12-month ECLs Derecognition of financial assets in current period New financial assets purchased or originated Difference of impairment loss under regulations Foreign exchange differences and other changes Balance at June 30,2020		$ 48,760 (10) (2) 1,691 (1,016) 13,568 - (9,050) $ 53,941		$ 1,848 10 (6) (1,691) (137) 1,178 - 999 $ 2,201		$ 4,025 - 8 - (4,025) - - (8) $ -		$ 54,633 - - - (5,178) 14,746 - (8,059) $ 56,142		$ 8,724 - - - - - (5,725) - $ 2,999		$ 63,357 - - - (5,178) 14,746 (5,725) (8,059) $ 59,141

For the six months ended June 30, 2021 and 2020, a provision was recognized for bad-debt expense, commitments and guarantees.

e. Please refer to Note 37 for the amount of $16,590 thousand and $14,090 thousand for the outstanding compensation provision of the Bank on June 30, 2021 and December 31, 2020.

30. OTHER LIABILITIES

			December 31,	December 31,
	June 30, 2021			2020	June	30, 2020
Guarantee deposits received	$	670,502	$	567,148	$	572,729
Advance receipts		255,399		318,649		276,729
Credit transactions		1,202		3,604		7,356
Others		85,734		85,910		72,939
	$ 1,012,837		$	975,311	$	929,753

31. EQUITY

a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands)	June 30, 2021 6,150,000 $ 61,500,000 4,151,694	December 31, 2020 6,150,000 $ 61,500,000 4,151,694	June 30, 2020 4,320,000 $ 43,200,000 3,708,835

40 -

Shares issued Reserve for capitalization	June 30, 2021 $ 41,516,943 - $ 41,516,943	December 31, 2020 $ 41,516,943 - $ 41,516,943	June 30, 2020 $ 37,088,349 1,928,594 $ 39,016,943

Ordinary shares issued at a $10 par value per share. Each share has one voting right and the right to receive dividends.

As of June 30, 2020, the Bank had issued ordinary shares totaling $37,088,349 thousand, divided into 3,708,835 thousand ordinary shares at $10 par value per share. In September 2020, the Bank transferred $1,928,594 thousand of unappropriated earnings to ordinary shares, divided into 192,859 thousand ordinary shares at $10 par value per share. In July 2020, the board of directors of the Bank resolved to issue 250,000 thousand ordinary shares with a par value of $10, for a consideration of $10.2 per share issued at premium. On October 13, 2020, the above transaction was approved under ruling reference No. 1090359541 issued by the Banking Bureau of the FSC and the subscription base date was determined as at December 17, 2020. As of June 30, 2021, the Bank had increased ordinary shares to $41,516,943 thousand, divided into 4,151,694 thousand ordinary shares at $10 par value per share.

b. Capital surplus

		December 31,
	June 30, 2021	2020	June 30, 2020
May be used to offset a deficit, distributed as
cash dividends, or transferred to share
capital*
Issuance of ordinary shares	$ 713,633	$ 713,633	$ 663,633
May be used to offset a deficit only
Issuance of ordinary shares - employee share
options	58,664	58,664	32,124
Expired employee share options	6,767	6,767	6,682
Share of changes in capital surplus of
associates	16,813	16,813	16,813
Conversion of bank debentures components	7,729	7,729	7,729
	$ 803,606	$ 803,606	$ 726,981

Such capital surplus may be used to offset a deficit; in addition, when the Bank has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Bank’s capital surplus and to once a year).

c. Appropriation of earnings and dividend policy

Under the Bank’s dividend policy as set forth in the Articles, where the Bank made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve of 30% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Bank’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors, refer to employees’ compensation and remuneration of directors in Note 32.

41 -

The appropriation of earnings mentioned above shall be retained by the board of directors in accordance with the changing operating environment, operating and investment needs. When dividends are declared, cash dividends must be at least 10% of total dividends declared.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Bank’s paid-in capital. The legal reserve may be used to offset deficits. If the Bank has no deficit and the legal reserve has exceeded 25% of the Bank’s paid-in capital, the excess may be transferred to capital or distributed in cash.

In addition, the Banking Law limits the appropriation of cash dividends to 15% of the Bank’s paid-in capital. But when the legal reserve equals the Bank’s paid-in capital, this 15% limit may be waived. If the ratio of own capital to risky assets does not meet the standards set by the business authority, the appropriation of earnings in cash or other properties should be subject to the restrictions or prohibitions of the relevant provisions of the business authority.

Under related regulations, a special reserve is appropriated from the balance of the retained earnings at an amount from the net income and unappropriated earnings that is equal to the debit balance of accounts in the shareholders’ equity section. Afterward, if there is any reversal of the decrease in shareholders’ equity, the Bank is allowed to appropriating retained earnings from the reversal amount.

According to Order No. 1010012865 issued by the FSC (repealed at December 31, 2021), Order No. 1010047490 issued by the FSC (repealed at March 31, 2021), Order No. 1090150022 issued by the FSC, Order No. 10901500221 issued by the FSC and International Financial Reporting Standards and “Q&A on the application of the reference to the special reserve following adoption of IFRSs”, retained earnings should be appropriated to or reversed from a special reserve by the Bank. Afterward, if there is any reversal of the decrease in other shareholders’ equity, the Bank is allowed to appropriating retained earnings from the reversal amount. According to Order No. 10510001510 issued by the FSC, a special reserve should be appropriated between 0.5% and 1% of net income after tax when banks appropriate earnings of 2016 through 2018. After that, under No. 10802714560 issued by the FSC, the Bank no longer use special reserve to protect the right of its employee in response to the developments of financial technology since 2019. From the fiscal year of 2019, the Bank can reverse the amount of expenditure of employees’ transfer arising from financial technology development within the amount of the abovementioned special reserve from 2016 to 2018.

The appropriations of earnings for 2020 had been proposed by board of directors on February 25, 2021 and 2019 were approved in the shareholders’ meetings on June 30, 2020, respectively, as follows:

Legal reserve Cash dividends Share dividends	Appropriation of Earnings 2020 2019 $ 1,207,149 $ 1,281,622 996,407 1,038,474 1,868,262 1,928,594	Dividends Per Share (NT$)
		2020 2019 $ - $ - 0.24 0.28 0.45 0.52

The Bank suspends its originally scheduled shareholders’ meeting in response to the FSC’s announcement: “For pandemic prevention, the FSC demands public companies to postpone their shareholders’ meetings.” The appropriations for 2020 will be resolved by the shareholders in their meeting to be held on July 1, 2021.

42 -

d. Other equity items

Exchange
Differences on
Translation of
the Financial
Statements of
Foreign
Operations
Unrealized
Gain on
Financial Assets
at FVTOCI
Balance at January 1, 2021
$ (121,110) $ 1,424,867

Recognized for the period
Unrealized gains (losses)
Equity instruments
-
314,772
Debt instruments
-
(41,485)
Net remeasurement of loss allowance - debt
instruments
-
5,154
Share from associates accounted for using
the equity method
-
(60)
Cumulative unrealized gain of equity
instruments transferred to retained earnings
due to disposal
-
(81,573)
Cumulative translation adjustment
Exchange differences for current period
36,059
-
Income tax related to other comprehensive
income

-

(3,275)

Balance at June 30, 2021
$ (85,051)
$ 1,618,400

Balance at January 1, 2020
$ (96,316) $ 949,508

Recognized for the period
Unrealized gains
Equity instruments
-
101,084
Debt instruments
-
179,465
Net remeasurement of loss allowance - debt
instruments
-
4,064
Share from associates accounted for using
the equity method
-
7,170
Cumulative unrealized loss of equity
instruments transferred to retained earnings
due to disposal
-
596
Cumulative translation adjustment
Exchange differences for current period
(13,311)
-
Income tax related to other comprehensive
income

-

3,774

Balance at June 30, 2020
$ (109,627)
$ 1,245,661

Total
$ 1,303,757
314,772

(41,485)
5,154

(60)

(81,573)
36,059

(3,275)
$ 1,533,349
$ 853,192
101,084
179,465
4,064
7,170
596
(13,311)

3,774
$ 1,136,034

43 -

32. NET PROFIT FROM CONTINUING OPERATIONS

Net profit from continuing operations was attributable to:

a. Net interest

Interest revenue Notes discounted and loans Due from banks and call loans to the other banks Investment in securities Installment plan Rental Revolving interests of credit cards Securities purchased under resell agreements Accounts receivable factoring without recourse Others Interest expense Deposits Financial debentures Funds borrowed from the Central Bank and other banks Due to the Central Bank and other banks Securities sold under repurchase agreements Structured instruments Lease liabilities Others		For the Three Months Ended June 30 2021 2020 $ 2,489,959 $ 2,447,909 17,405 20,968 366,553 372,098 94,737 67,808 78,792 58,221 8,397 9,098 5,901 8,444 1,849 2,174 77 67 3,063,670 2,986,787 (568,692) (772,956) (111,531) (130,853) (48,194) (40,223) (728) (720) (2,790) (28,775) (1,800) (2,016) (9,733) (8,041) (4,201) (361) (747,669) (983,945) $ 2,316,001 $ 2,002,842		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 2,489,959 17,405 366,553 94,737 78,792 8,397 5,901 1,849 77 3,063,670 (568,692) (111,531) (48,194) (728) (2,790) (1,800) (9,733) (4,201) (747,669) $ 2,316,001		2021 $ 4,932,793 36,426 739,716 178,129 161,191 17,852 12,515 3,395 219 6,082,236 (1,163,532) (221,836) (94,699) (1,628) (6,193) (3,491) (19,716) (8,124) (1,519,219) $ 4,563,017	2020 $ 5,140,149 52,950 785,548 137,168 115,003 18,812 22,355 4,577 219 6,276,781 (1,693,768) (262,643) (98,780) (1,613) (75,020) (2,306) (16,238) (778) (2,151,146) $ 4,125,635

44 -

b. Service fee income, net

Service fee income Brokering Trust business Loans Guarantee Others Service fee expense Commission Cross-bank transactions Others		For the Three Months Ended June 30 2021 2020 $ 303,405 $ 198,497 269,244 212,264 136,235 139,360 51,642 36,816 87,448 72,894 847,974 659,831 (21,201) (16,511) (9,814) (8,702) (38,971) (29,593) (69,986) (54,806) $ 777,988 $ 605,025		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 303,405 269,244 136,235 51,642 87,448 847,974 (21,201) (9,814) (38,971) (69,986) $ 777,988		2021 $ 569,167 590,359 318,212 100,574 177,490 1,755,802 (42,465) (19,715) (66,516) (128,696) $ 1,627,106	2020 $ 513,519 464,660 279,766 72,326 146,019 1,476,290 (45,343) (17,479) (56,539) (119,361) $ 1,356,929

The Group provides custody, trust, investment management and consultancy services to third parties, so the Group’s activities involve the planning, management and trading decisions of financial instruments. For the trust funds or investment portfolios that are managed and used on behalf of the trustee, the independent accounting reports and preparation of financial statements for internal management purposes are not included in the Group’s consolidated financial statements.

c. Gain on financial assets and liabilities at fair value through profit or loss

Realized profit and loss Commercial papers Shares Beneficiary certificates Derivative financial instruments Corporate bonds Valuation Commercial papers Shares Beneficiary certificates PEM Group policy assets Derivative financial instruments Corporate bonds	For the Three Months Ended June 30 2021 2020 $ 15,566 $ 21,669 60,649 35,322 3,787 1,285 (49,627) 118,437 470 - 30,845 176,713 3,490 (7,162) (2,312) 84,858 52,419 54,705 13,922 (171,033) 28,793 (67,360) 1,759 393 98,071 (105,599) $ 128,916 $ 71,114	For the Three Months Ended June 30 2021 2020 $ 15,566 $ 21,669 60,649 35,322 3,787 1,285 (49,627) 118,437 470 - 30,845 176,713 3,490 (7,162) (2,312) 84,858 52,419 54,705 13,922 (171,033) 28,793 (67,360) 1,759 393 98,071 (105,599) $ 128,916 $ 71,114		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 15,566 60,649 3,787 (49,627) 470 30,845 3,490 (2,312) 52,419 13,922 28,793 1,759 98,071 $ 128,916		2021 $ 31,006 123,855 (7,756) 55,945 470 219,032 789 47,066 65,676 9,713 29,318 3,526 156,088 $ 375,120	2020 $ 50,873 2,059 (46,482) 106,666 906 114,022 (7,993) (2,014) 17,948 (191,894) 7,744 372 (175,837) $ (61,815)

45 -
1) For the six months ended June 30, 2021 and 2020, realized profit and loss of gain on financial assets and liabilities at fair value through profit or loss include disposal profit amounted to $141,033 thousand and $39,163 thousand, dividend income amounted to $18,099 thousand and $14,593 thousand and interest revenue amounted to $59,900 thousand and $60,266 thousand, respectively.
2) Net income from exchange rate commodities includes realized and unrealized gains and losses on exchange forward contracts, cross-currency options and cross-currency swap. The translation gains or losses included net income from exchange rate commodities when significant assets and liabilities denominated in foreign currencies classified as at FVTPL, which are not designated for hedging relationship.
d. Realized gains on financial assets at fair value through other comprehensive income

Dividend income Gain on disposal of bonds	For the Three Months Ended June 30 2021 2020 $ 10,218 $ 9,746 2,477 10,134 $ 12,695 $ 19,880	For the Three Months Ended June 30 2021 2020 $ 10,218 $ 9,746 2,477 10,134 $ 12,695 $ 19,880		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 10,218 2,477 $ 12,695		2021 $ 10,218 2,477 $ 12,695	2020 $ 9,926 24,185 $ 34,111

e. Impairment losses on financial assets

Investments in debt instruments at FVTOCI Financial assets at amortized cost	For the Three Months Ended June 30 2021 2020 $ (2,532) $ (2,898) 1,411 (1,758) $ (1,121) $ (4,656)	For the Three Months Ended June 30 2021 2020 $ (2,532) $ (2,898) 1,411 (1,758) $ (1,121) $ (4,656)		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (2,532) 1,411 $ (1,121)		2021 $ (5,154) 2,122 $ (3,032)	2020 $ (4,064) (3,057) $ (7,121)

f. Other non-interest gains (losses), net

(Losses) gains on disposal of properties and equipment Others	For the Three Months Ended June 30 2021 2020 $ (15) $ 48 6,486 12,039 $ 6,471 $ 12,087	For the Three Months Ended June 30 2021 2020 $ (15) $ 48 6,486 12,039 $ 6,471 $ 12,087		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (15) 6,486 $ 6,471		2021 $ 1,187 8,712 $ 9.899	2020 $ 45 11,541 $ 11,586

46 -

g. Bad-debt expenses and provision for losses on commitment and guarantees

Bad debt on receivables (Reversal of) bad debt on notes discounted and loans (Reversal of) losses on guarantees (Reversal of) loan commitments Others	For the Three Months Ended June 30 2021 2020 $ 44,462 $ 17,427 348,328 (36,262) (26,500) 14,000 (13,033) 6,131 (6) - $ 353,251 $ 1,296	For the Three Months Ended June 30 2021 2020 $ 44,462 $ 17,427 348,328 (36,262) (26,500) 14,000 (13,033) 6,131 (6) - $ 353,251 $ 1,296		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 44,462 348,328 (26,500) (13,033) (6) $ 353,251		2021 $ 102,280 550,526 28,000 (11,607) 3,779 $ 672,978	2020 $ 58,406 111,189 14,000 (3,778) - $ 179,817

h. Employee benefits expenses

Salaries Labor and health insurance Pension expense Other employee expenses		For the Three Months Ended June 30 2021 2020 $ 936,420 $ 866,269 57,845 51,363 30,801 29,323 50,440 52,765 $ 1,075,506 $ 999,720		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 936,420 57,845 30,801 50,440 $ 1,075,506		2021 $ 1,869,866 112,378 60,432 97,212 $ 2,139,888	2020 $ 1,623,112 116,321 57,791 113,659 $ 1,910,883

i. Employees’ compensation and remuneration of directors

According to the Articles of Incorporation of the Bank, the Bank accrued employees’ compensation and remuneration of directors at rates of 0.5%-3% and no higher than 2.5%, respectively, of net profit before income tax, employees’ compensation and remuneration of directors. For the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the employees’ compensation and the remuneration of directors were as follows:

Accrual rate

Employees’ compensation Remuneration of directors Amount	For the Six Months Ended June 30
	2021 2020 0.75% 1.05% 2.50% 1.50%

Employees’ compensation Remuneration of directors	For the Three Months Ended June 30 2021 2020 $ 10,541 $ 14,492 $ 39,200 $ 13,931	For the Three Months Ended June 30 2021 2020 $ 10,541 $ 14,492 $ 39,200 $ 13,931		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 10,541 $ 39,200		2021 $ 20,205 $ 66,900	2020 $ 23,415 $ 33,431

47 -

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

The appropriations of employees’ compensation and remuneration of directors for 2020 and 2019 that were resolved by the Bank’s board of directors on February 25, 2021 and February 25, 2020 respectively, are as shown below:

Employees’ compensation Remuneration of directors		Cash
		2020 $ 35,975 $ 96,195	2019 $ 38,880 $ 77,759

There was no difference between the actual amounts of employee’s compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2020 and 2019.

Information on the employees’ compensation and remuneration of directors resolved by the Bank’s board of directors in 2021 and 2020 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

j. Depreciation and amortization expenses

Properties and equipment Investment properties Right-of-use assets Intangible assets	For the Three Months Ended June 30 2021 2020 $ 51,367 $ 53,983 22 22 63,099 50,242 15,673 14,382 $ 130,161 $ 118,629	For the Three Months Ended June 30 2021 2020 $ 51,367 $ 53,983 22 22 63,099 50,242 15,673 14,382 $ 130,161 $ 118,629		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 51,367 22 63,099 15,673 $ 130,161		2021 $ 103,869 45 126,823 31,663 $ 262,400	2020 $ 107,729 45 101,538 28,324 $ 237,636

k. Other selling and administrative expenses

Taxes Professional service Insurance Entertainment Donation Postage Others	For the Three Months Ended June 30 2021 2020 $ 178,464 $ 155,872 47,526 60,906 43,157 40,353 19,370 13,903 26,844 36,167 18,062 16,709 96,675 139,437 $ 430,098 $ 463,347	For the Three Months Ended June 30 2021 2020 $ 178,464 $ 155,872 47,526 60,906 43,157 40,353 19,370 13,903 26,844 36,167 18,062 16,709 96,675 139,437 $ 430,098 $ 463,347		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 178,464 47,526 43,157 19,370 26,844 18,062 96,675 $ 430,098		2021 $ 357,701 90,445 87,629 35,201 43,692 33,850 231,063 $ 879,581	2020 $ 334,774 96,171 81,919 25,889 58,167 32,014 278,749 $ 907,683

48 -

33. INCOME TAXES RELATING TO CONTINUING OPERATIONS

a. Income tax recognized in profits or loss

Major components of income tax expense were as follows:

b.	For the Three Months Ended June 30 2021 2020 Current tax In respect of the current period $ 121,772 $ 143,696 Income tax on unappropriated earnings 77 1,169 Adjustments for prior periods (23,868) (3,031) Deferred tax In respect of the current period 68,223 (7,208) Income tax expense recognized in profit or loss $ 166,204 $ 134,626 Income tax recognized in other comprehensive income For the Three Months Ended June 30 2021 2020 Deferred tax In respect of the current period Fair value changes of financial assets at FVTOCI $ (3,259) $ (6,508)		For the Six Months Ended June 30	For the Six Months Ended June 30
			2021 2020 $ 403,954 $ 372,201 77 1,169 (23,868) (3,031) (21,511) (592) $ 358,652 $ 369,747 For the Six Months Ended June 30
			2021 $ (3,275)	2020 $ 3,774

c. Income tax assessments

The income tax returns of Taichung Commercial Bank Co., Ltd., Taichung Bank Insurance Brokers Co., Ltd., and Taichung Commercial Bank Securities Co., Ltd., through 2019 have been assessed by the tax authorities, while the income tax returns of Taichung Bank Leasing Corporation Limited through 2018 have been assessed and approved by the tax authorities.

49 -

34. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share Pro forma earnings per share that was adjusted retrospectively to reflect the effects of changes in the number of shares resulting from bonus issue occurring after these consolidated financial statements were approved Diluted earnings per share Pro forma earnings per share that was adjusted retrospectively to reflect the effects of changes in the number of shares resulting from bonus issue occurring after these consolidated financial statements were approved	For the Three Months Ended June 30 2021 2020 $ 0.28 $ 0.25 $ 0.26 $ 0.24 $ 0.28 $ 0.25 $ 0.26 $ 0.24	For the Three Months Ended June 30 2021 2020 $ 0.28 $ 0.25 $ 0.26 $ 0.24 $ 0.28 $ 0.25 $ 0.26 $ 0.24	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 0.28 $ 0.26 $ 0.28 $ 0.26		2021 $ 0.55 $ 0.52 $ 0.55 $ 0.52	2020 $ 0.47 $ 0.45 $ 0.47 $ 0.45

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows:

Net profit for the period

Earnings used in the computation of basic earnings per share Earnings used in the computation of diluted earnings per share		For the Three Months Ended June 30 2021 2020 $ 1,146,074 $ 961,148 $ 1,146,074 $ 961,148		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 1,146,074 $ 1,146,074		2021 $ 2,276,318 $ 2,276,318	2020 $ 1,840,838 $ 1,840,838

50 -

The weighted average number of ordinary shares outstanding (in thousands of shares) was as follows:

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Employees’ compensation or bonuses issued to employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Three Months Ended June 30 2021 2020 4,151,694 3,901,694 1,742 2,010 4,153,436 3,903,704	For the Three Months Ended June 30 2021 2020 4,151,694 3,901,694 1,742 2,010 4,153,436 3,903,704		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 4,151,694 1,742 4,153,436		2021 4,151,694 2,754 4,154,448	2020 3,901,694 2,986 3,904,680

Since the allotment base date for the 2021 of the Group’s surplus to capital increase was set after the date of passing the financial report, thus, when calculating the earnings per share, the impact of this free allotment was not considered. If the Group offered to settle the compensation or bonuses paid to employees in cash or shares, the Group assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

35. RELATED-PARTY TRANSACTIONS

Related Party
China Man-Made Fiber Corporation
Hsu Tian Investment Co., Ltd.
Pan Asia Chemical Co., Ltd. and Ho Yang Management
Consultant Co., Ltd. (Note 2)
Kuei-Fong Wang (Note 1)
Te-Wei Chia (Note 1)
Hsin-Chang Tsai, Li-Woon Lim, Pi-Ta Chen, Chien-An
Shin (Note 1)
Jin-Yi Lee (Note 2)
Hsin-Ching Chang, Wei-Liang Lin, Ming-Hsiung Huang,
Siou-Huei Ye, Shih-Yi Chiang, Li-Tzu Lai (Note 1)
Lai-Hsing Tsai, Chien-Hui Huang, Ming-Shan Chuang
(Note 2)
24 persons including the Chairman and general manager’s
spouse
41 persons including the director of the Board’s spouse
6 persons including Yi-Yuan Tung

Relationship with the Group

Parent company of the Bank
Legal director of the Bank
Legal directors of the Bank
Natural director of the Bank
General manager and legal representatives of
the Bank’s director
Independent directors of the Bank
Independent director of the Bank
Legal representatives of the Bank’s director
Legal representatives of the Bank’s director
The spouses and second-degree relatives, etc.
of the Bank’s chairman and general
managers
The spouses and children of the Bank’s
directors
Key management personnel
(Continued)

51 -

Relationship with the Group

Related Party

17 persons including associate general manager’s spouse

106 persons including Hung-Lung Tsai 11 persons including Kuei-Hsien Wang

Taichung Bank Securities Investment Trust Co., Ltd.

China Fiber Investment Co., Ltd. Pan Asia Investment Co., Ltd. Taichung Commercial Bank Cultural and Educational Foundation, Taichung Commercial Bank Workers’ Welfare Commission Deh Hsing Investment Co., Ltd. Iolite Company Limited Hammock (Hong Kong) Company Limited Hebei Hanoshi Contact Lens Co., Ltd. Chou Chin Industrial Co., Ltd. Chou Chang Co., Ltd. Pan Feng Enterprise Co., Ltd. Greenworld Food Co., Ltd. Nan Chung Petrochemical Corporation Je Mi Fang Corporation Rai Chia Investment Co., Ltd. Reliance Securities Co., Ltd. Xiang Fong Development Co., Ltd. Sheen Ren Knitting Factory Co., Ltd. Ta Fa Investment Co., Ltd. Formosa Imperial Wineseller Corp. Tou Ming Industry Limited Company Jin Bang Ge Industrial Company Limited. Ta Yi Development Co., Ltd. Yu Hui Limited Formosawine Vintners Corporation Bomi International Co., Ltd. Shanghai Bomi Food Co., Ltd. Noble House Global Limited Noble House Glory Corporation Wang Wanjin Culture and Education Foundation Chaoqing Investment Co., Ltd. Sheng Yuan Ze Investment Limited Company Pan Hsu Investment Co., Ltd. Precious Wealth International Limited Storm Model Management Co., Ltd. Bonwell Praise Co., Ltd. Chen Teng Public Relations (Shanghai) Company Shanghai Bomi Consulting management Limited Company Shuo-Jung Co., Ltd. Fengteng Co., Ltd.

The spouses and children of the Bank’s associate general managers Managers of the Bank The spouses and children of the parent company’s chairman and general managers

Associate accounted for using the equity method

Related party in substance Related party in substance Related party in substance

Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance

Related party in substance Related party in substance

(Continued)

52 -

Relationship with the Group

Related Party

Shanghai Nianjia Culture Communication Co., Ltd. General Pride Enterprise Co., Ltd. Fengqi Investment Co., Ltd. Reliance Kuan Chun Venture Capital Co., Ltd. Reliance Securities Investment Consultant Co., Ltd. Reliance Kuan Chun Venture Management Consulting Co., Ltd. Shen Ching Investment Co., Ltd. Fu Ching Co., Ltd. Lei Fu Life Business Co., Ltd.

Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance

Related party in substance Related party in substance Related party in substance

(Concluded)

Note 1: 12 directors out of 24 directors (including 4 independent directors), were elected at the shareholders’ meeting of the Bank on June 30, 2020. The followings were respectively elected as directors: Kuei-Fong Wang and Ming-Hsiung Huang (legal representative of Hsu Tian Investment Co., Ltd.), Wei-Liang Lin (legal representative of Hsu Tian Investment Co., Ltd.), Te-Wei Chia (legal representative of Hsu Tian Investment Co., Ltd.), Shih-Yi Chiang (legal representative of Hsu Tian Investment Co., Ltd.), Hsin-Ching Chang (legal representative of Hsu Tian Investment Co., Ltd.), Siou-Huei Ye (legal representative of Hsu Tian Investment Co., Ltd.), Li-Tzu Lai (legal representative of Hsu Tian Investment Co., Ltd.), Hsin-Chang Tsai (independent directors of the Bank), Li-Woon Lim (independent directors of the Bank), Chien-An Shin (independent directors of the Bank) and Pi-Ta Chen (independent directors of the Bank).

Note 2: Resigned after the shareholders’ meeting of the Bank on June 30, 2020.

Significant transactions between the Group and related parties:

a. Loans

For the six months ended June 30, 2021

Balance,
Numbers/
Name
Highest
Balance
End of the
Period
Employees
consumption loans
10
$ 5,517
$ 3,902
Loans on mortgage
34
200,741
150,366
Other loans
Lee OO
2,414
2,344
Chang OO
4,500
-
Liu OO
1,774
336
Tsai OO
5,000
-
Lin OO
412
367
Chiu OO
1,500
1,500
Chen OO
70,000
40,000
Fang OO
15,616
11,416
Wang OO
3,000
3,000
Lin OO
25,600
24,950
Tsai OO
248
181
Liang OO
767
707
Ye OO
11,000
11,000
Huang OO
1,435
1,367
Jhuang OO
1,314
-
Chiu OO
2,935
2,782
Hsu OO
2,200
2,200

Compliance
The
Difference
Between
Related and
Performing
Loans
Overdue
Loans
Interest
Revenue
Collaterals
Non-related
Party
$ 3,902
$ -
$ 33
Credit loans
None
150,366
-
922
Real estate
None
2,344
-
15
Real estate
None
-
-
4
Real estate
None
336
-
7
Real estate
None
-
-
8
Real estate
None
367
-
-
Real estate
None
1,500
-
11
Real estate
None
40,000
-
235
Real estate
None
11,416
-
73
Real estate
None
3,000
-
17
Real estate
None
24,950
-
142
Real estate
None
181
-
2
Real estate
None
707
-
4
Real estate
None
11,000
-
67
Real estate
None
1,367
-
10
Real estate
None
-
-
7
Real estate
None
2,782
-
17
Real estate
None
2,200
-
16
Real estate
None

53 -

For the six months ended June 30, 2020

Balance,
Numbers/
Name
Highest
Balance
End of the
Period
Employees
consumption loans
10
$ 3,223
$ 2,597
Loans on mortgage
34
156,748
114,020
Other loans
Lee OO
2,552
2,484
Liu OO
1,911
1,843
Lin OO
504
458
Fang OO
4,916
1,416
Lin OO
18,800
18,200
Tsai OO
380
314
Liang OO
886
827
Ye OO
11,000
11,000
Huang OO
1,570
1,503
Chiu OO
3,238
3,088

Compliance
The
Difference
Between
Related and
Performing
Loans
Overdue
Loans
Interest
Revenue
Collaterals
Non-related
Party
$ 2,597
$ -
$ 26
Credit loans
None
114,020
-
812
Real estate
None
2,484
-
19
Real estate
None
1,843
-
13
Real estate
None
458
-
-
Real estate
None
1,416
-
19
Real estate
None
18,200
-
161
Real estate
None
314
-
3
Real estate
None
827
-
6
Real estate
None
11,000
-
79
Real estate
None
1,503
-
12
Real estate
None
3,088
-
22
Real estate
None

According to Articles 32 and 33 of the Banking Law, credit loans cannot be made to related parties except loans to government and consumers; secured loans to related parties shall be provided with adequate collateral, and the terms of credits to related parties should be similar to those for third parties.

b. Deposits

Taichung Bank Securities Investment Trust Co., Ltd. Taichung Commercial Bank Workers’ Welfare Commission China Man-Made Fiber Corporation Taichung Commercial Bank Cultural and Educational Foundation Formosa Imperial Wineseller Corp. Greenworld Food Co., Ltd. Pan Asia Chemical Corporation Pan Feng Enterprise Co., Ltd. Chou Chin Industrial Co., Ltd. Chou Chang Co., Ltd. Je Mi Fang Corporation Yu Hui Limited Hsu Tian Investment Co., Ltd. Pan Asia Investment Co., Ltd. Pan Hsu Investment Co., Ltd. Reliance Securities Co., Ltd. Shuo-Jung Co., Ltd. Deh Hsing Investment Co., Ltd. Fengqi Investment Co., Ltd. Others	For the Six Months Ended June 30, 2021	For the Six Months Ended June 30, 2021
	Ending Balance Interest Ratio $ 98,643 0.00-0.79 144,031 0.01-4.80 41,319 0.01-0.05 8,235 0.01-0.84 37 0.04 2,909 0.01-0.04 24,416 0.01-0.04 41 0.04 15,167 0.01-0.04 84 0.01 20,120 0.04-0.81 4 0.01 542 0.01-0.05 7 0.01 4 0.01 13,784 0.04-0.55 36,638 0.01 1 0.04 6 0.04 375,735 0.00-4.80 $ 781,723	Interest Expense $ 354 3,468 12 34 - - 6 - - - 70 - 1 - - 36 1 1 - 1,771 $ 5,754

54 -

Taichung Bank Securities Investment Trust Co., Ltd. Taichung Commercial Bank Workers’ Welfare Commission China Man-Made Fiber Corporation Taichung Commercial Bank Cultural and Educational Foundation Formosa Imperial Wineseller Corp. Greenworld Food Co., Ltd. Pan Asia Chemical Corporation Pan Feng Enterprise Co., Ltd. Chou Chin Industrial Co., Ltd. Chou Chang Co., Ltd. Je Mi Fang Corporation Yu Hui Limited Hsu Tian Investment Co., Ltd. Pan Asia Investment Co., Ltd. Pan Hsu Investment Co., Ltd. Reliance Securities Co., Ltd. Shuo-Jung Co., Ltd. Deh Hsing Investment Co., Ltd. Others	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
	Ending Balance Interest Ratio $ 164,119 0.00-1.05 148,150 0.01-4.80 91,311 0.01-0.05 8,262 0.01-0.84 610 0.04 2,436 0.04 18,486 0.01-0.04 272 0.04 5,078 0.01-0.04 1,228 0.01 16,410 0.04 4 0.01 571 0.01-0.04 6 0.01 3 0.01 13,704 0.04-0.80 15,244 0.01 6,833 0.04 338,674 0.00-4.80 $ 831,401	Interest Expense $ 618 3,629 14 39 - 1 4 - 1 - 5 - - - - 52 - 2 2,005 $ 6,370

The interest rates do not significantly differ from those with ordinary customers except for the interest rates on the Bank’s employee deposits at 4.80% as of June 30, 2021, December 31, 2020 and June 30, 2020.

c. Financial debenture

The Bank issued, first no due date non-cumulative subordinated financial debenture on 2015, first no due date non-cumulative subordinated financial debenture on 2016, first no due date non-cumulative subordinated financial debenture, second no due date non-cumulative subordinated financial debenture, third no due date non-cumulative subordinated financial debenture, fourth no due date non-cumulative subordinated financial debenture and fifth no due date non-cumulative subordinated financial debenture on 2017, first no due date non-cumulative subordinated financial debenture and second no due date non-cumulative subordinated financial debenture on 2018, and entrusted Concord Securities Co., Ltd. and KGI Securities Co., Ltd. as financial advisor for the issuance and collection of bonds.

55 -

As of June 30, 2021, the related parties subscribed for the financial debentures issued by the Bank through underwriting brokers were as follows:

Counterparty	Subscription	Period
Hsu Tian Investment	$ 4,000,000	First no due date non-cumulative subordinated financial
Co., Ltd.		debenture on 2015, first no due date non-cumulative
		subordinated financial debenture on 2016, first no due
		date non-cumulative subordinated financial debenture and
		fifth no due date non-cumulative subordinated financial
		debenture on 2017, first no due date non-cumulative
		subordinated financial debenture, second no due date
		non-cumulative subordinated financial debenture on 2018
Others	3,750,000	First no due date non-cumulative subordinated financial
		debenture on 2015, first no due date non-cumulative
		subordinated financial debenture on 2016, first no due
		date non-cumulative subordinated financial debenture,
		second no due date non-cumulative subordinated financial
		debenture, third no due date non-cumulative subordinated
		financial debenture, fourth no due date non-cumulative
		subordinated financial debenture, fifth no due date
		non-cumulative subordinated financial debenture on 2017,
		first no due date non-cumulative subordinated financial
		debenture and second no due date non-cumulative
		subordinated financial debenture on 2018

The interest payables on the financial debentures of the above-mentioned related parties were $196,607 thousand, $47,108 thousand and $210,122 thousand on June 30, 2021, December 31, 2020 and June 30, 2020, respectively. The interest expenses were $75,162 thousand, $79,993 thousand, $149,498 thousand and $159,986 thousand for the three months ended June 30, 2021 and 2020, and for the six months ended June 30, 2021 and 2020, respectively.

d. Service fee income

Taichung Bank Securities Investment Trust Co., Ltd.	For the Three Months Ended June 30 2021 2020 $ 207 $ 142	For the Three Months Ended June 30 2021 2020 $ 207 $ 142		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 207		2021 $ 368	2020 $ 296

The above amounts are for the promotion and channel revenue, etc. The price of transactions with its related parties is similar to those of the non-related parties.

e. Other expenses

Greenworld Food Co., Ltd. Je Mi Fang Corporation Pan Feng Enterprise Co., Ltd.	For the Three Months Ended June 30 2021 2020 $ 153 $ 383 - 1,450 - 31 $ 153 $ 1,864	For the Three Months Ended June 30 2021 2020 $ 153 $ 383 - 1,450 - 31 $ 153 $ 1,864		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 153 - - $ 153		2021 $ 349 - - $ 349	2020 $ 552 1,472 81 $ 2,105

56 -

The above amounts are other business expenses. The price of transactions with its related parties is similar to those of the non-related parties.

f. Compensation of directors and key management personnel

For the for the three months ended June 30, 2021 and 2020, and for the six months ended June 30, 2021 and 2020, compensation of directors and key management personnel were as follows:

Short-term benefits Post-employee benefits Other long-term benefits	For the Three Months Ended June 30 2021 2020 $ 69,584 $ 48,955 141 327 1 5 $ 69,726 $ 49,287	For the Three Months Ended June 30 2021 2020 $ 69,584 $ 48,955 141 327 1 5 $ 69,726 $ 49,287		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 69,584 141 1 $ 69,726		2021 $ 163,434 575 2 $ 164,011	2020 $ 122,366 654 9 $ 123,029

36. PLEDGED ASSETS

			December 31,	December 31,
	June 30, 2021			2020	June 30, 2020
Call loans to other banks - time deposits	$	200,000	$	200,000	$	200,000
Restricted assets - cash in banks		464,524		436,106		474,880
Notes receivable		3,079,799		2,426,158		2,322,121
Investments in debt instrument at amortized cost -
government bonds		917,700		920,400		920,700
Deposit reserves for demand accounts		5,000,000		5,000,000		5,000,000
	$	9,662,023	$	8,982,664	$	8,917,701

Call loans to other banks - time deposits were the provision of operation deposit. Restricted assets - cash in banks and notes receivable were the guarantee for financing to other banks. Government bonds were pledged to district courts for litigation, the collateral for the overdraft of the clearing account and the compensation reserve for the securities firm and the trust business. The details were as follows:

		December 31,
	June 30, 2021	2020	June 30, 2020
Guarantee to district courts for litigation	$ 357,700	$ 360,400	$ 360,700
Collateral for overdraft of clearing account	500,000	500,000	500,000
Reserve of trust compensation	60,000	60,000	60,000
	$ 917,700	$ 920,400	$ 920,700

57 -

37. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in Notes 8, 11 and 24, significant commitments and contingencies of the Group as of June 30, 2021, December 31, 2020 and June 30, 2020 were as follows:

a. Significant commitments

		December 31,
	June 30, 2021	2020	June 30, 2020
Loan commitments (excluding credit card)	$ 140,490,590	$ 143,630,068	$ 142,235,973
Loan commitments - credit card	13,455,985	12,799,065	12,475,261
Guarantee receivable	25,121,561	22,879,091	18,409,380
Trust liabilities	73,015,209	65,050,103	65,399,771
Letters of credit	4,073,558	3,430,243	2,866,245
Lease contract commitment	1,400,228	2,121,644	1,202,818

b. According to Article 17 of the Implementation Rules of Trust Law, the Bank should disclose its balance sheet of trust account and its asset items, which were as follows:

Trust Account Balance Sheet June 30, 2021

Trust Assets Cash in banks Debentures Stocks Funds Structured finance instruments Real estate Land Buildings Securities under custody Trust assets Item Cash in banks Debentures Stocks Funds Structured finance instruments Real estate Land Buildings Securities under custody	Amount Trust Liabilities $ 6,324,075 Securities under custody 8,219,899 payable 2,931,264 Trust capital 46,135,375 Net income 1,226,126 Deferred carry-over amounts 3,265,208 205,619 4,707,643 $ 73,015,209 Trust liabilities Trust Account Asset Items June 30, 2021	Amount $ 4,707,643 68,307,566 639,153 (639,153) $ 73,015,209 Amount $ 6,324,075 8,219,899 2,931,264 46,135,375 1,226,126 3,265,208 205,619 4,707,643 $ 73,015,209

58 -

Trust Account Income Statement Six Months Ended June 30, 2021

Trust income Interest revenue Trust expense Management fee Tax Income before income tax Income tax expense Net income	Amount $ 1,228,998 (589,845) - 639,153 - $ 639,153

Trust Assets Cash in banks Debentures Stocks Funds Structured finance instruments Real estate Land Buildings Securities under custody Trust assets Item Cash in banks Debentures Stocks Funds Structured finance instruments Real estate Land Buildings Securities under custody	Trust Account Balance Sheet December 31, 2020 Amount Trust Liabilities $ 4,689,969 Securities under custody 7,976,548 payable 2,285,436 Trust capital 43,580,019 Net income 1,406,286 Deferred carryover amounts 2,056,768 136,691 2,918,386 $ 65,050,103 Trust liabilities Trust Account Asset Items December 31, 2020	Amount $ 2,918,386 62,131,717 1,569,531 (1,569,531)
		$ 65,050,103
		Amount $ 4,689,969 7,976,548 2,285,436 43,580,019 1,406,286 2,056,768 136,691 2,918,386 $ 65,050,103

59 -

Trust Account Income Statement Year Ended December 31, 2020

Amount

Trust income Interest revenue Trust expense Management fee Tax Income before income tax Income tax expense Net income	$ 2,641,698 (1,072,146) (21) 1,569,531 - $ 1,569,531

Trust Account Balance Sheet June 30, 2020

Trust Assets Cash in banks Debentures Stocks Funds Structured finance instruments Real estate Land Buildings Securities under custody Trust assets Item Cash in banks Debentures Stocks Funds Structured finance instruments Real estate Land Buildings Securities under custody	Amount Trust Liabilities $ 4,228,688 Securities under custody 6,703,748 payable 1,927,770 Trust capital 43,681,199 Net income 1,603,867 Deferred carry-over amounts 1,564,307 133,940 5,556,252 $ 65,399,771 Trust liabilities Trust Account Asset Items June 30, 2020	Amount $ 5,556,252 59,843,519 897,910 (897,910) $ 65,399,771 Amount $ 4,228,688 6,703,748 1,927,770 43,681,199 1,603,867 1,564,307 133,940 5,556,252 $ 65,399,771

60 -

Trust Account Income Statement For the Six Months Ended June 30, 2020

Trust income Interest revenue Trust expense Management fee Tax Income before income tax Income tax expense Net income	Amount $ 1,362,452 (464,542) - 897,910 - $ 897,910

c. Maturity analysis of lease commitments and capital expenditures

The lease contract commitments of the Group include operating leases and finance leases.

Operating lease commitment is the minimum lease payment when the Group is lessee or lessor with non-cancelling condition. The lease contract commitments of the operating leases are referred to in Note 19.

The finance lease commitments refer to the total lease investment of the lessor under the finance lease conditions and the present value of the minimum lease payments receivable.

Capital expenditure commitments represent contractual commitments for the acquisition of capital expenditures on construction and equipment.

Considering the expansion of business scale and the increasing number of employees in the future, the Group held a tender for the construction project of head office through an online open bidding process on February 11, 2019. Dacin Construction Co., Ltd. and Earthpower Co., Ltd. won the bidding, both parties entered into a joint venture agreement worth $11,160,000 thousand on March 29, 2019, and started construction on April 27, 2019. In order to improve construction safety, both parties agreed to change the “reverse drilling steel column well type foundation alternative construction method” and the “raft foundation beam structure optimization alternative plan”. The first supplementary agreement was made on January 8, 2021, and the total contract price after the change is $11,155,943 thousand. In addition, the Group entered into a contract of planning, design and supervision worth $480,492 thousand with YSL Architects & Associates.

Maturity analysis of lease commitments and capital expenditures is summarized as follows:

Financing lease income

					December 31,
			June 30, 2021		2020	June 30, 2020
Year	1		$	3,403,504	$ 2,259,461	$ 2,041,275
Year	2			330,145	785,605	799,798
Year	3			15,915	219,267	64,925
Year	4			12,739	13,030	13,030
Year	5			12,739	13,030	13,030
Year	6	onwards		161,337	171,350	178,150
			$	3,936,379	$ 3,461,743	$ 3,110,208

61 -

Present value of financing lease income

			December 31,	December 31,
	June 30, 2021			2020	June 30, 2020
Year 1	$ 3,041,476		$ 2,006,629		$	1,824,830
Year 2		303,218		712,027		735,914
Year 3		6,619		188,214		53,468
Year 4		3,803		3,457		3,296
Year 5		4,162		3,805		3,627
Year 6 onwards		92,718		93,881		96,109
	$ 3,451,996		$ 3,008,013		$	2,717,244
Capital expenditure commitment
			December 31,
	June 30, 2021			2020	June 30, 2020
Year 1	$ 3,956,468		$ 3,949,454		$	453,360
Year 2		3,271,309		3,309,926		3,939,572
Year 3		1,236,643		1,236,643		3,261,877
Year 4		14,394		14,394		1,236,643
Year 5		-		-		14,394
	$ 8,478,814		$ 8,510,417		$	8,905,846

d. The Bank and Pihsiang Energy Technology Co., Ltd. are parties in a consumer consignment litigation. The Taichung District Court of first instance issued a civil judgment on the 2018 case No. 598 that the Bank lost the case on February 4, 2020. The claim of Pihsiang Energy Technology Co., Ltd. against the Bank is $100 million, and the interest shall be calculated at 5% per annum from April 10, 2018 to the settlement date. The litigation costs shall be borne by the defendant (i.e., the Bank). The appointed lawyer of the Bank assessed that the content of the original judgment is contradictory and unprovoked. Therefore, the Bank filed an appeal on February 27, 2020, and is now in the High Court Taichung Branch as 2020 renewed trial No. 78. According to the civil judgment on the 2018 case No. 598 on February 4, 2020, the Bank has prepared in advance the outstanding indemnities (statutory fruits and litigation costs) of the open litigation. Movements of the outstanding loss provision were as follows:

	June 30, 2021
Balance, January 1, 2021	$ 14,090
Loss provision	2,500
Balance, June 30, 2021	$ 16,590

For the six months ended June 30, 2021, the loss provision was the recognized interest expense.

62 -

38. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured at fair value

Except as detailed in the following table, the carrying amounts of financial instruments recognized in the consolidated financial statements approximate their fair values or that the fair values cannot be reasonably measured. Therefore, those were not disclosed in this note.

1) Fair value hierarchy

June 30, 2021

Carrying Amount Financial assets Investments in debt instrument at amortized cost $ 110,751,134 Financial liabilities Financial liabilities at amortized cost Bank debentures 11,500,000 December 31, 2020 Carrying Amount Financial assets Investments in debt instrument at amortized cost $ 113,544,854 Financial liabilities Financial liabilities at amortized cost Bank debentures 11,500,000 June 30, 2020 Carrying Amount Financial assets Investments in debt instrument at amortized cost $ 111,559,362 Financial liabilities Financial liabilities at amortized cost Bank debentures 11,500,000	Fair Value
	Level 1 Level 2 Level 3 Total $ 86,100,864 $ 25,569,638 $ - $ 111,670,484 - 11,683,787 - 11,683,787 Fair Value
	Level 1 Level 2 Level 3 Total $ 89,450,493 $ 25,317,446 $ - $ 114,767,939 - 11,663,699 - 11,663,699 Fair Value
	Level 1 Level 2 Level 3 Total $ 85,775,959 $ 26,860,605 $ - $ 112,636,564 - 11,663,367 - 11,663,367

2) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instruments Valuation Techniques and Inputs

Non-derivatives

The market transaction price in the non-active market is taken as the fair value.

63 -
b. Fair value of financial instruments measured at fair value on a recurring basis

1) Fair value hierarchy

Financial assets at FVTPL Derivative financial assets Commercial papers Domestic listed shares and emerging market shares Foreign listed shares Domestic unlisted shares Beneficiary certificates Domestic corporate bonds Others Financial assets at FVTOCI Investments in equity instruments Domestic unlisted shares Domestic listed shares Foreign listed shares Investments in debt instruments Domestic corporate bonds Domestic government bonds Foreign bonds Bank debentures Financial liabilities at FVTPL Derivative financial liabilities			June 30, 2021	June 30, 2021
		Total $ 3,775,912 27,715,268 845,593 130,244 46,270 666,208 392,826 802,394 $ 34,374,715 $ 754,083 3,142,884 327,535 29,876,831 5,209,984 3,452,659 2,208,399 $ 44,972,375 $ 644,176	Level 1 $ - 27,715,268 811,988 130,244 - 666,208 392,826 - $ 29,716,534 $ - 3,142,884 327,535 29,876,831 5,209,984 - 2,208,399 $ 40,765,633 $ -	Level 2 $ 3,775,912 - 33,605 - - - - 802,394 $ 4,611,911 $ - - - - - 3,452,659 - $ 3,452,659 $ 644,176	Level 3 $ - - - - 46,270 - - - $ 46,270 $ 754,083 - - - - - - $ 754,083 $ -

Reconciliation of Level 3 fair value measurements of financial instruments:

Item	Beginning Balance	Valuation Gains (Losses)	Increase	Increase	Decrease	Decrease	Ending Balance
			Buy or Issue	Transfer in	Sell, Disposal	Transfer Out
Financial assets at FVTPL Unlisted shares	$ 7,508	$ 6,262	$ 32,500	$ -	$ -	$ -	$46,270

Item	Beginning Balance	Valuation Gains (Losses)	Increase		Decrease		Ending Balance
			Buy or Issue	Transfer in	Sell, Disposal	Transfer Out
Financial assets at FVOCI Unlisted shares	$ 751,556	$ 2,527	$ -	$ -	$ -	$ -	$ 754,083

64 -

Financial assets at FVTPL Derivative financial assets Commercial papers Domestic listed shares and emerging market shares Foreign listed shares Domestic unlisted shares Beneficiary certificates Domestic corporate bonds Others Financial assets at FVTOCI Investments in equity instruments Domestic unlisted shares Domestic listed shares Foreign listed shares Investments in debt instruments Domestic corporate bonds Domestic government bonds Foreign bonds Bank debentures Financial liabilities at FVTPL Derivative financial liabilities			December 31, 2020	December 31, 2020
		Total $ 3,670,250 24,872,947 862,462 88,533 7,508 363,744 203,112 799,269 $ 30,867,825 $ 751,556 2,113,147 311,404 26,959,132 5,379,466 3,486,270 2,008,865 $ 41,009,840 $ 785,819	Level 1 $ - 24,872,947 794,600 88,533 - 363,744 203,112 - $ 26,322,936 $ - 2,113,147 311,404 26,959,132 5,379,466 - 2,008,865 $ 36,772,014 $ -	Level 2 $ 3,670,250 - 67,862 - - - - 799,269 $ 4,537,381 $ - - - - - 3,486,270 - $ 3,486,270 $ 785,819	Level 3 $ - - - - 7,508 - - - $ 7,508 $ 751,556 - - - - - - $ 751,556 $ -

Reconciliation of Level 3 fair value measurements of financial instruments:

Item	Beginning Balance	Valuation Gains (Losses)	Increase	Increase	Decrease	Decrease	Ending Balance
			Buy or Issue	Transfer in	Sell, Disposal	Transfer Out
Financial assets at FVTPL Unlisted shares	$ -	$ 8	$45,000	$ -	$ -	$ 37,500	$ 7,508

Item	Beginning Balance	Valuation Gains (Losses)	Increase		Decrease		Ending Balance
			Buy or Issue	Transfer in	Sell, Disposal	Transfer Out
Financial assets at FVOCI Unlisted shares	$ 664,957	$ 86,599	$ -	$ -	$ -	$ -	$ 751,556

Financial assets at FVTPL Derivative financial assets Commercial papers Domestic listed shares and emerging market shares Beneficiary certificates Domestic corporate bonds Others			June 30, 2020	June 30, 2020
		Total $ 2,356,820 19,291,845 653,699 253,725 100,567 823,053 $ 23,479,709	Level 1 $ - 19,291,845 632,982 253,725 100,567 - $ 20,279,119	Level 2 $ 2,356,820 - 20,717 - - 823,053 $ 3,200,590	Level 3 $ - - - - - - $ - (Continued)

65 -

Financial assets at FVTOCI Investments in equity instruments Domestic unlisted shares Domestic listed shares Foreign listed shares Investments in debt instruments Domestic corporate bonds Domestic government bonds Foreign bonds Bank debentures Financial liabilities at FVTPL Derivative financial liabilities			June 30, 2020	June 30, 2020
		Total $ 717,190 1,742,884 279,032 26,806,213 5,849,890 797,951 2,003,625 $ 38,196,785 $ 296,298	Level 1 $ - 1,742,884 279,032 26,806,213 5,849,890 - 2,003,625 $ 36,681,644 $ -	Level 2 Level 3 $ - $ 717,190 - - - - - - - - 797,951 - - $ 797,951 $ 717,190 $ 296,298 $ - (Concluded)

Reconciliation of Level 3 fair value measurements of financial instruments:

Item	Beginning Balance	Valuation Gains (Losses)	Increase	Increase	Decrease	Decrease	Ending Balance
			Buy or Issue	Transfer in	Sell, Disposal	Transfer Out
Financial assets at FVTPL Unlisted shares	$ 664,957	$ 52,233	$ -	$ -	$ -	$ -	$ 717,190

There were no transfers between Levels 1 and 2 for the six months ended June 30, 2021 and 2020.

2) Valuation techniques and inputs applied for Level 2 fair value measurement
Financial Instruments Valuation Techniques and Inputs
Non-derivatives The market transaction price in the non-active market is taken as the fair value.
Derivatives Option contracts Valuation model: The execution price, maturity date, market volatility, interest rate and exchange rate set by the contract are used as valuation parameters. The model with closed solution is then used for valuation.
Cross-currency swap Discounted cash flow: Future cash flows are estimated based on contracts, foreign observable forward exchange rates at the end of the reporting exchange forward period and contract forward rates, discounted at a rate that contracts reflects the credit risk of various counterparties.
Asset swap contract Convertible corporate bond closing price on the day minus bond value. The pure bond value is discounted by the cash flow provided by the convertible corporate bonds in accordance with Taiwan Bills Index Rate (TAIBIR).

Structured finance instruments Interest rate-linked The counterparty quotes. structured instruments

66 -
3) The quantitative information on fair value of significant unobservable input (Level 3)

The quantitative information on unobservable inputs of the financial instruments classified in Level 3, and held by the Group on June 30, 2021, December 31, 2020 and June 30, 2020, were as follows:

Items	Fair value on June 30, 2021	Fair value on December 31, 2020	Fair value on June 30, 2020	Valuation Techniques	Significant Unobservable Input	Range (Weighted- average)	Relationship Between Inputs and Fair Value
Financial assets at fair value through profit or loss Domestic unlisted shares Financial assets at fair value through other comprehensive income Domestic unlisted shares	$ 46,270 754,083	$ 7,508 751,556	$ - 717,190	Seller’s quote (Monte Carlo Simulation Method) Seller’s quote (Monte Carlo Simulation Method)	Volatility rate Minority equity volatility rate Volatility rate	31.00%-32.00% 9.21%-43.03% 24.37%-24.87%	The lower the volatility rate, the higher the fair value The lower the minority equity volatility rate, the higher the fair value The lower the volatility rate, the higher the fair value

4) The assessment of fair value in Level 3

The Group assessed fair value in accordance with evaluation report provided by independent company, and compiled the evaluation result into a quarterly report presented to the board of directors.

5) Sensitivity analysis of Level 3 fair value if reasonable possible alternative assumptions may be used.

The Group uses the volatility rate of quantitative information on significant unobservable input of market multiple. The sensitivity analysis based on assets category is as follows:

June 30, 2021
Significant Unobservable Input	Sensitivity Rate	Impact
Liquidity discount ratio	Increase 10%	$ 19,951
	Decrease 10%	(19,951)
December 31, 2020
Significant Unobservable Input	Sensitivity Rate	Impact
Liquidity discount ratio	Increase 10%	$ 16,463
	Decrease 10%	(16,463)
June 30, 2020
Significant Unobservable Input	Sensitivity Rate	Impact
Liquidity discount ratio	Increase 10%	$ 15,683
	Decrease 10%	(15,683)

67 -

c. Categories of financial instruments

		December 31,
	June 30, 2021	2020	June 30, 2020
Financial assets
Financial assets at FVTPL	$ 34,374,715	$ 30,867,825	$ 23,479,709
Financial assets at amortized cost (Note 1)	659,533,150	650,143,386	638,129,195
Financial assets at FVTOCI
Equity instruments	4,224,502	3,176,107	2,739,106
Debt instruments	40,747,873	37,833,733	35,457,679
Financial liabilities
Financial liabilities at FVTPL	644,176	785,819	296,298
Financial liabilities at amortized cost (Note 2)	689,826,611	675,549,880	658,264,104

Note 1: The balances include financial assets at amortized cost, which comprise cash and cash equivalents, due from the Central Bank and call loans to other banks, investment in debt instrument at amortized cost, securities purchased under resell agreements, receivables, notes discounted and loans, restricted assets, refundable deposits, receipts under payment for shares underwriting and other financial assets.
Note 2: The balances include financial liabilities at amortized cost, which comprise due to the Central Bank and other banks, funds borrowed from Central Bank and other banks, securities sold under repurchase agreements, payables, deposits and remittances, bank debentures, other financial liabilities, and guarantee deposits received.

39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Overview

The financial risk management objectives of the Group is to achieve the goal of balancing risk tolerance, business objectives and external legal restrictions. These risks include market risks (including interest rate, exchange rate, equity securities and product price) and liquidity risks of on and off- balance sheet business.

The Group has formulated a relevant risk management policy, which has been approved by the board of directors to effectively identify, measure, monitor and control credit risk, market risk and liquidity risk.

Risk Management Organizational Structure

The board of directors is the highest decision-making unit for the Group’s corporate risk management and assumes the ultimate responsibility for risk management. The Group has a risk management committee and a risk management department, which grants risk authority and confers responsibilities on the relevant departments to ensure the smooth operation of risk management. The responsibilities of the committee are as follows:

a. Consideration of the risk management programme.
b. Consideration and review of risk limits.
c. Consideration of the bill on institutionalization of risk management.
68 -

d. Report to the board of directors regularly.

Members of the risk management committee set up various risk management measurement indicators according to the nature of their business and the scope of their duties, and the risk management department should report to the risk management committee to provide a reference for senior decision-making.

1) Market risk

a) The source and definition of market risk

Market risks refer to the loss due to the changes in market price, such as the changes of the market interest rate, the exchange rate, the share price and the product price.

b) Market risk management policy

The objective of the Group market risk management is to develop a sound and effective market risk management mechanism that is consistent with the size, nature and complexity of the Group’s business to ensure that the risks borne by the Group can be properly managed and market risks are effectively identified, measured, monitored and controlled, and strike a balance between the level of risk tolerance and the expected level of compensation.

c) Market risk management process

i. Identification and measurement

The relevant market risks should be assessed through appropriate procedures to consider whether the risk is within an acceptable risk range before new products, business activities, processes and systems are rolled out or operated. The relevant units should use the methods of business analysis or product analysis to identify the sources of market risks, define the market risk factors of each financial commodity and make appropriate specifications.

Market risk measurement can use a variety of effective measures to properly measure risk, including but not limited to the following methods: Statistical basis measures, sensitivity analysis and situational analysis. The risk management department should measure the risk of the site on a daily basis and conduct regular stress tests to measure the amount of abnormal losses that may occur in the current extremes or historical extremes.

ii. Monitoring and reporting

The risk management department should report to the risk management committee and the board of directors regularly on the implementation of the Group’s market risk management, including the Group’s market risk allocation, risk level, profit and loss status, quota usage and compliance with relevant market risk management regulations and suggestions. The authorities also set up relevant limit management, stop loss mechanism, overrun treatment and exception management methods to effectively monitor market risks. In the event of an overrun or exception, it should be notified immediately to facilitate the immediate response.

d) Interest rate risk

i. Definition of interest rate risk

Interest rate risk refers to the change in interest rate, which causes the Group to bear the risk of changes in the fair value of the interest rate risk or the loss of the surplus. The main sources of risk include deposits and interest-related securities.

69 -

ii. Measurement methods and management procedures

The Group monitors the interest rate risk system, sets the scope of the indicators to regularly monitor and report the results to the asset and liability management committee, the risk management committee and the board of directors, and adjusts according to the overall operating conditions of the Group. In addition, the Group measures the interest rate risk by DV01, assuming that the interest rate curve moves 100BP in parallel, the degree of impact on earnings and equity controls the interest rate risk.

iii. The effect of interest rate benchmark reform

For the financial instruments of the Group affected by changes in interest rate benchmark, the linked indicator interest rate include USD LIBOR, EUR LIBOR, GBP LIBOR and JPY LIBOR. It is expected that the US Secured Overnight Financing Rate (SOFR) will replace the USD LIBOR, the euro short-term rate (ESTER) will replace the EURO LIBOR, the Sterling Overnight Index Average (SONIA) will replace the GBP LIBOR, and the Tokyo Overnight Average Rate (TONAR) will replace the JPY LIBOR. However, there is a fundamental difference between the replacement interest rate and LIBOR. LIBOR is a forward-looking interest rate indicator that implies market expectations for future interest rate trends, and includes inter-bank credit discounts. Each alternative interest rate is a retrospective interest rate indicator calculated with reference to actual transaction data, and does not include a credit discount. Therefore, when an existing contract is modified from a linked LIBOR to a linked alternative interest rate, additional adjustments must be made to the aforementioned differences to ensure that the interest rate basis before and after the modification is economically equivalent.

The Group has formulated a LIBOR conversion plan to deal with risk management policy adjustments, internal process adjustments, information system updates, financial instrument evaluation model adjustments, and related accounting or tax issues that are required to meet the changes in interest rate benchmark. On June 30, 2021, the Group has identified all the information systems and internal processes that need to be updated, and completed some of the updates. The Group has begun to discuss with the counterparty of the financial instrument how to amend the affected contract, and the amendment is expected to be completed in September 2021.

Changes in interest rate indicators have mainly caused the Group to face basic interest rate risks. If the Group fails to complete the contract modification negotiation with the counterparty of the financial instrument before LIBOR exits, it will cause significant uncertainty in the interest rate base applicable to the financial instrument in the future, and trigger the unexpected interest rate risk of the Group. As of June 30, 2021, the financial instruments of the Group that have been affected by the change in interest rate benchmark and have not yet converted to alternative interest rate benchmark are summarized as follows:

Non-derivative Financial Notes discounted and loans, net USD LIBOR EUR LIBOR GBP LIBOR JPY LIBOR	Amount	Amount
	Financial Assets $ 33,038,674 811,467 5,396 4,298,045 38,153,582	Financial Liabilities $ - - - - (Continued)

70 -

Non-derivative Financial Receivables USD LIBOR Funds borrowed from central bank and other banks USD LIBOR Financial assets at amortized cost USD LIBOR	Amount	Amount
	Financial Assets $ 13,437 - 7,537,212 $ 45,704,231	Financial Liabilities $ - 640,872 - $ 640,872 (Concluded)

e) Exchange rate risk

i. Definition of exchange rate risk

Exchange rate risk is the gain or loss resulting from the conversion of two different currencies at different times. The Group’s exchange rate risk is mainly due to the changes in spot and forward foreign exchange rates of the business operations. Since the foreign exchange transactions are mostly based on the principle of flattening the customer’s position for the day, the exchange rate risk is relatively small.

ii. Measurement methods and management procedures

The Group adopts the quota management mechanism for the exchange rate risk system, sets the business quota and overnight limit for each currency, controls the maximum net foreign exchange position that can be held by all levels of personnel, and sets the maximum transaction amount according to the counterparty, and monitors it regularly. The results will be reported to the risk management committee and the board of directors for discussion.

In addition, the Group assesses the degree of impact on earnings and equity in the hypothetical scenarios when the USD/NTD, CNY/NTD, and AUD/NTD separately appreciates/depreciates by 3%, in order to control exchange rate risk.

f) Equity securities price risk
i. Definition of equity securities price risk

The market risk of the Group’s equity securities is the individual risk arising from changes in the market price of individual equity securities and the general market risk arising from changes in the overall market price. The main risks include listed shares and beneficiary certificates.

71 -
ii. Measurement methods and management procedures

The Group adopts a quota management mechanism for the equity securities price risk, ensuring that all levels are traded within the authorized amount, and sets up relevant mechanisms for stop loss control, and regularly reports the monitoring results to the risk management committee and the board of directors for discussion.

In addition, the Group assesses the degree of impact on earnings and equity in the hypothetical scenarios when the price of equity securities rises/falls by 15% in order to control the risk of equity securities.

g) Market risk sensitivity analysis

Interest risk

The Group assumed that when other change factors remain unchanged, if the yield curve increased/decreased by 100 basis points, the income before income tax of the Group as of June 30, 2021, December 31, 2020 and June 30, 2020 would have increased/decreased by $804,864 thousand, $876,160 thousand and $667,544 thousand, respectively, and other equity would have decreased/increased by $1,975,282 thousand, $1,796,491 thousand and $2,274,832 thousand, respectively.

Exchange rate risk

The Group assumed that when other change factors remain unchanged, if the exchange rate of USD/NTD, CNY/NTD, and AUD/NTD appreciated/depreciated by 3%, the income before income tax as of June 30, 2021, December 31, 2020 and June 30, 2020 would have increased/decreased by $14,814 thousand, and decreased/increased by $3,336 thousand and $10,527 thousand, respectively, and other equity would have increased/decreased by $126,202 thousand, $125,310 thousand and $11,240 thousand, respectively.

Equity securities price risk

The Group assumed that when other factors remain unchanged, if the price of equity securities increased/decreased by 15%, the income before income tax as of June 30, 2021, December 31, 2020 and June 30, 2020 would have increased/decreased by $253,247 thousand, $198,337 thousand and $136,114 thousand, respectively, and other equity would have increased/decreased by $633,675 thousand, $476,416 thousand and $410,866 thousand, respectively.

The summary of sensitivity analysis was as follows:

	June 30, 2021
Main Risk	Range of Change	Influence Amount
		Other Equity	Income
Interest risk	Interest rate curve rises 100BPS Interest rate curve falls 100BPS	$ (1,975,282) 1,975,282	$ 804,864 (804,864)
Exchange rate risk	USD/NTD, CNY/NTD, AUD/NTD increase by 3% USD/NTD, CNY/NTD, AUD/NTD decrease by 3%	126,202 (126,202)	14,814 (14,814)
Equity securities price risk	Equity securities prices rise by 15% Equity securities prices fall by 15%	633,675 (633,675)	253,247 (253,247)

72 -

	December 31, 2020
Main Risk	Range of Change	Influence Amount
		Other Equity	Income
Interest risk	Interest rate curve rises 100BPS Interest rate curve falls 100BPS	$ (1,796,491) 1,796,491	$ 876,160 (876,160)
Exchange rate risk	USD/NTD, CNY/NTD, AUD/NTD increase by 3% USD/NTD, CNY/NTD, AUD/NTDdecrease by 3%	125,310 (125,310)	(3,336) 3,336
Equity securities price risk	Equity securities prices rise by 15% Equity securities prices fall by 15%	476,416 (476,416)	198,337 (198,337)

	June 30, 2021
Main Risk	Range of Change	Influence Amount
		Other Equity	Income
Interest risk	Interest rate curve rises 100BPS Interestrate curvefalls100BPS	$ (2,274,832) 2,274,832	$ 667,544 (667,544)
Exchange rate risk	USD/NTD, CNY/NTD, AUD/NTD increase by 3% USD/NTD, CNY/NTD, AUD/NTDdecrease by 3%	11,240 (11,240)	10,527 (10,527)
Equity securities price risk	Equity securities prices rise by 15% Equity securities prices fall by 15%	410,866 (410,866)	136,114 (136,114)

2) Credit risk

a) The source and definition of credit risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group. Credit risk exists in both on and off-balance sheet items. The on-balance sheet exposures to credit risks are mainly from notes discounted ad loans, the credit card business, due from other banks and call loans to other banks, acceptance, investment in debt instrument and derivatives. The off-balance sheet exposures to credit risks are mainly from financial guarantees, letter of credits and loan commitments.

b) Credit risk management policy

Before launching new products or businesses, the Group ensures compliance with all applicable rules and regulations and identifies relevant credit risks. On June 30, 2021, the ratio of loans with collateral to the total amount of loans was approximately 77%. The ratio of financing guarantees to commercial letters of collateral holdings was approximately 29%, and the collateral required for loans, loan commitments or guarantees is usually in the forms of cash, inventories, liquid securities or other property in circulation. If the customers default, the Group will execute its rights on collateral in accordance with the terms of contracts.

73 -
c) Credit risk management program

The measurement and management of credit risks from the Group’s main businesses were as follows:

i. Loans business (including loan commitment and guarantees)
i) Determination that credit risk has increased significantly since the initial recognition.

The Group assesses the change in the probability of default of loans during the lifetime on each reporting date to determine if the credit risk has increased significantly since the initial recognition. In order to make this assessment, the Group considerations show the reasonable and supportable information that the credit risk has increased significantly since the initial recognition (including forward-looking information). The main considerations include:

Quantitative indicators

Changes in external credit ratings of Taiwan Corporate Credit Rating Index (TCRI)

The TCRI rating of the listed cabinet company corresponding to the external rating has been reduced from the investment grade to the non-investment grade, that is, the credit risk has significantly increased since the initial recognition.

Information on overdue status

When the contract amount is overdue for more than one month, it is determined that the credit risk of the financial asset has increased significantly since the initial recognition.

Qualitative indicators

Unfavorable changes in the current or projected operating, financial or economic conditions that are expected to result in significant changes in the ability of the debtor to perform debt obligations.
Significant changes in actual or expected results of the debtor’s operations.
The credit risk of other financial instruments from the same debtor has increased significantly.
ii) Definition of default and credit impairment financial assets

The definition of financial asset default is the same as that of financial asset credit impairment. If one or more of the following conditions are met, the Group determines that the financial asset has defaulted and becomes credit impaired:

Quantitative indicators

Changes in external TCRI credit ratings

The TCRI rating of the listed cabinet company is default grade, which means that the credit has been deducted since the initial recognition.

74 -
Information on overdue status

When the contract amount is overdue for more than three months, it is determined that the credit of the financial asset has been impaired since the initial recognition.

Qualitative indicators

If there is evidence that the borrower will not be able to pay the contract, or that the borrower has significant financial difficulties, such as:

The debtor has gone bankrupt or may have called for bankruptcy or financial restructuring.
Other debt instrument contracts of the debtor have defaulted.
Due to the economic or contractual reasons associated with the debtor’s financial difficulties, the debtor’s creditors give the borrower an unconfirmed concession and report the overdue loan.

The aforementioned default and credit impairment definitions are used to consolidate all financial assets held by the company and are consistent with the definitions used for the internal credit risk management purposes of the financial assets, and are also applied to the relevant impairment assessment model.

iii) Measurement of expected credit losses

In order to assess the expected credit losses, the combined company divides the credit assets into the following combinations according to the credit risk characteristics such as the use of borrowing, industrial nature, collateral type and borrowing status.

Product Portfolio Corporate loans - secured Corporate loans Corporate loans - unsecured House mortgage Consumer loans - secured Consumer loans - unsecured Consumer loans Credit loans Debit card Credit card

The Group evaluates loss allowance of financial assets, which credit risk does not significantly increase after initial recognition based on 12 months expected credit losses. The Group evaluates loss allowance of financial assets, which credit risk significantly increases after initial recognition based on lifetime expected credit losses.

In order to evaluate expected credit losses, the Group takes into consideration the debtor’s probability of default (“PD”) within the next 12 months, which includes the loss given default (“LGD”), the results are then multiplied by the exposure at default (“EAD”), while also considering the effect of time value of money to calculate the expected credit losses during the duration of 12 months.

75 -

PD is the default percentage of a borrower. LGD is the loss ratio once a borrower default. The Group applied PD and LGD to evaluate loan business impairment based on each portfolio’s historical information calculated internally (i.e. credit loss experience), and adjusted historical data based on current observable information and forward-looking macroeconomic information calculated by using packet direct estimation method.

The Group evaluates the loan default risk by packet direct estimation method. The Group calculates 12 months and lifetime ECLs of financing commitment based on packet direct estimation method. The Group uses credit conversion factor to calculate the portion of financing commitment expected to be used in 12 months after record date and the credit duration to calculate the default exposure amount of ECLs.

Consideration of forward-looking estimation

In considering the expected credit losses, the Group uses forward looking economic factors that affect credit risk and expected credit losses to consider forward looking information. Forward looking information is based on the Taiwan National Development Council’s regular promulgation of the “Benefit Strategy Signal” of Taiwan’s overall prosperity as indicators, which are divided into boom expansion period, contraction period and flat period. The Group evaluates the economic situation to adjust the default probability every quarter, and then incorporates it into the overall expected credit loss assessment.

ii. Debt instrument investment

The Group considers the historical default loss rate provided by the external rating agencies and the current financial status of the debtor to calculate 12-month and lifetime ECLs of financing commitment in debt instrument investment.

The securities held by the Group recognize the expected credit losses according to the expected credit losses during the lifetime ECLs of financing commitment. The credit quality of the Group’s judgment securities was as follows:

i) The determination since the initial recognition of the credit risk has increased significantly.

The Group assesses the change in the probability of default of debt instrument investment during the lifetime on each reporting date to determine if the credit risk has increased significantly since the initial recognition. In order to make this assessment, the Group considerations show the reasonable and supportable information that the credit risk has increased significantly since the initial recognition. The main considerations include:

Quantitative indicators

At the time of initial recognition, the issuer’s credit rating is above the investment grade, but at the financial reporting date, the issuer’s credit rating is reduced to a non-investment grade.
For debt instrument investments on the initial recognition date, the issuer’s credit rating is below the non-investment grade and the credit rating on the reporting day has not changed.
When the issuer’s credit rating is a non-investment grade, the reported daily credit rating is reduced to a certain extent.
76 -

Qualitative indicators

The credit rating of the issuer indicates that its credit risk has increased significantly.
The fair value of the debt instrument investment is significantly and adversely changed on the reporting date.
ii) Definition of default and credit impairment financial assets

If the debt instrument investment meets one or more of the following conditions, it determines that the financial asset has defaulted and the credit is impaired.

Quantitative indicators

Debt instrument investment is the credit impairment bond when it is purchased.
The default rate for credit rating of the issuer or debt instrument investment will be adjusted on the reporting day.

Qualitative indicators

The issuer modifies the issue conditions of the debt instrument investment due to financial difficulties or fails to pay the principal or interest according to the conditions of the issue.
The issuer or the guarantee institution has ceased operations or has applied for reorganization, bankruptcy, dissolution, and sale of major assets that have a significant impact on the company’s continued operations.

Measurement of expected credit losses

In order to evaluate expected credit losses, the Group takes into consideration the debtor’s probability of default (“PD”) within the next 12 months, which includes the loss given default (“LGD”), the results are then multiplied by the exposure at default (“EAD”), while also considering the effect of time value of money to calculate the expected credit losses during the duration of 12 months.
Comparing the risk of default on the dated debt instrument with the default risk at the time of initial recognition, and considering the reasonable and corroborative information for a significant increase in credit risk since the initial recognition, to determine whether the financial instrument’s credit risk has increased significantly since the initial recognition.
Those who meet the normal credit risk status will estimate the expected loss amount based on the one-year probability of default (PD).
Those who meet the significant increase in credit risk status must consider the duration of the asset project and calculate the probability of default (PD) for each duration. If the cash flow of the contract in the future period (i.e., the default exposure amount of each period) can be assessed, the cash flow method is used to assess the expected amount of credit loss, and if the cash flow of each period cannot be assessed, and the current risk calculation method is used it.
77 -
- Those who meet the abnormal credit risk status are considered to be 100%, and will not consider the probability of default in each duration. Only consider the relevant recoverable amount and evaluate the overall expected credit loss amount.
- Debt instrument investment probability of default is the value released by external credit rating agencies, which implies the possibility of future market fluctuations.
d) Credit risk hedging or mitigation policies
i. Collaterals

The Group implements a series of polices and measures to reduce credit risks when granting of credit. One of the commonly used methods is to require borrowers to provide collaterals. To enforce the rights to collaterals, the Group manages and assesses the collaterals according to the procedures adopted in determining the scope of collateralization and valuation of collaterals.

The main types of collateral for granting credit are as follows:

i) Real estate.

ii) Chattels and rights of pledge.

iii) Guarantee from external agency.

To enhance guarantee of transaction risk, the Group’s demand for collaterals depends on the nature of derivative transactions as follows:

i) Guarantee of amount invested: Asking different ratio of guarantee depends on the credit rating scale of clients.
ii) Guarantee of high-risk transactions: Asking for collaterals when option contracts are under resell agreement.
iii) Performance bond (loss on investment position): Asking for collaterals when loss on investment position exceeds the limit of approved market value.
78 -

The Group closely observed the value of pledged financial assets and evaluated which financial assets had been impaired in order to recognize allowance for impairment. Credit impaired financial assets and its pledged values which eliminate potential loss, are as follows:

June 30, 2021

Financial assets that were impaired Notes discounted and loans Receivables Guarantees and letters of credit Debt instrument Others Total financial assets that were impaired December 31, 2020 Financial assets that were impaired Notes discounted and loans Receivables Guarantees and letters of credit Debt instrument Others Total financial assets that were impaired	Total Book Value $ 7,652,524 209,778 92,522 7,604 32,000 $ 7,994,428 Total Book Value $ 8,410,617 313,418 93,398 7,668 42,651 $ 8,867,752	Allowance for Impairment Loss Total Value of Exposure $ (1,740,432) $ 5,912,092 (139,772) 70,006 (35,203) 57,319 (7,604) - (1,867) 30,133 $ (1,924,878) $ 6,069,550 Allowance for Impairment Loss Total Value of Exposure $ (1,856,155) $ 6,554,462 (174,311) 139,107 (36,355) 57,043 (7,668) - (2,555) 40,096 $ (2,077,044) $ 6,790,708	Fair Value of Collateral $ 5,912,092 66,949 39,124 - - $ 6,018,165 Fair Value of Collateral $ 6,554,462 135,350 38,599 - - $ 6,728,411

79 -

June 30, 2020

Financial assets that were impaired Notes discounted and loans Receivables Guarantees and letters of credit Debt instrument Total financial assets that were impaired	Total Book Value $ 10,392,772 342,490 145,190 17,187 $ 10,897,639	Allowance for Impairment Loss Total Value of Exposure $ (2,359,240) $ 8,033,532 (175,483) 167,007 (47,301) 97,889 (17,187) - $ (2,599,211) $ 8,298,428	Fair Value of Collateral $ 8,033,532 103,480 55,640 -
			$ 8,192,652

ii. Credit risk concentration limits and control

To avoid the concentration of credit risks, the Group has included credit limits for the same person (entity) and for the same related-party corporation (group) based on the credit risk arising from loans, securities investment and derivatives transactions.

Meanwhile, for trading and banking book investments, the Group has set a ratio, which is the credit limit of a single issuer in relation to the total security position. The Group has also included credit limits for a single counterparty and a single group.

In addition, to manage the concentration risk of the financial assets, the Group has set credit limits by industry, conglomerate, country and transactions collateralized by shares, and integrated within one system to supervise the concentration of credit risk in these categories. The Group monitors concentration of each asset and controls various types of credit risk concentration in a single transaction involving counterparties, groups, related-party corporations, industries and nations.

iii. Other credit enhancements

To reduce its credit risks, the Group stipulates in its credit contracts the term for offsetting which clearly stated that the Group reserves the right to offset the borrowers’ debt against their deposits in the Group.

e) Maximum exposure to credit risk

The maximum exposures of assets on the consolidated balance sheets to credit risks without consideration of guarantees or other credit enforcement instruments approximate the assets’ carrying amounts. The maximum exposures of off-balance sheet items to credit risks without consideration of guarantees or other credit enforcement instrument were as follows:

			December 31,	December 31,
	June 30, 2021			2020	June 30, 2020
Irrevocable loan commitments	$	9,474,096	$	9,034,662	$	8,015,975
Credit card commitments		13,455,985		12,799,065		12,475,261
Guarantee receivables		25,121,561		22,879,091		18,409,380
Letters of credit		4,073,558		3,430,243		2,866,245

80 -

The management of the Group believes their abilities to minimize the credit risk exposures of the off-balance sheet items are mainly attributed to their rigorous evaluation of extended credit and the periodic reviews of these credits.

f) Credit risk concentration of the Group

When the counterparty of financial product transactions is concentrated on one person, or when there are several counterparties but they are mostly engaged in similar economic activities and have similar economic characteristics, causing their abilities to fulfill contract obligations to be similarly affected by economic or other situations, credit risk concentration is deemed to have occurred. The characteristics of significant credit risk concentration include the nature of the debtor’s activities. The Group’s transactions are not concentrated on a single customer or counterparty but spread among counterparties with similar industry types and operating regions. The contract amounts of significant credit risk concentration was as follows:

Counterparty Private enterprise Natural person Government agencies Others Credit Risk Profile by Group or Industry Natural person Manufacturing Commercial Real estate and leasing Construction industry Servicing Finance and insurance Transportation warehousing and information communication Others Credit Risk Profile by Regions Domestic Asia North America Others	June 30, 2021 $ 269,630,852 237,860,229 1,000,000 2,099,968 $ 510,591,049 June 30, 2021 $ 237,860,229 80,485,318 55,080,169 68,487,029 19,670,432 11,917,256 19,998,548 9,379,615 7,712,453 $ 510,591,049 June 30, 2021 $ 476,103,251 19,168,031 11,355,716 3,964,051 $ 510,591,049	December 31, 2020 $ 258,337,959 233,179,736 2,000,000 2,115,584 $ 495,633,279 December 31, 2020 $ 233,179,736 79,457,394 55,547,537 64,886,449 18,197,580 11,949,359 16,104,068 8,304,507 8,006,649 $ 495,633,279 December 31, 2020 $ 464,495,184 18,134,544 9,234,010 3,769,541 $ 495,633,279	June 30, 2020 $ 255,364,698 223,102,014 1,000,000 2,212,612
			$ 481,679,324
			June 30, 2020 $ 223,102,014 84,657,671 56,324,586 63,930,534 15,081,460 10,842,695 11,427,780 8,465,136 7,847,448
			$ 481,679,324
			June 30, 2020 $ 448,263,711 18,251,470 11,169,767 3,994,376
			$ 481,679,324

81 -

Credit Risk Profile by Collaterals Unsecured Secured Real estate Letter of bank guarantee Chattel Debenture Notes receivable Stocks Others	June 30, 2021 $ 80,287,813 379,421,303 17,666,842 6,616,736 15,503,224 1,921,432 5,041,606 4,132,093 $ 510,591,049	December 31, 2020 $ 73,988,829 373,358,179 17,302,660 6,075,503 15,051,165 1,656,269 4,634,756 3,565,918 $ 495,633,279	June 30, 2020 $ 75,172,681 363,053,144 16,991,166 5,961,748 13,310,195 1,473,820 2,648,345 3,068,225
			$ 481,679,324

g) Write-off policy

If one of the following events have occurred, overdue loans and delinquent receivables should have the estimated recoverable amount deducted and should then be written off as bad debt:

The debtor may not recover all or part of the obligatory claim due to dissolution, escape, settlement, bankruptcy or other reasons.
The appraisal of collateral and properties of the main and subordinate debtors are very low, or the compensation is not available after deducting the amount of the first mortgage, or it is not beneficial that execution fee is close to or may exceed the Bank’s reimbursable amount.
The collateral and the properties of the main and subordinate debtors are auctioned off at multiple auctions and the Bank did not bear the benefit.
Overdue loans and delinquent receivables which have been overdue for more than 2 years have been collected but not yet received.
The minimum payable amount of credit card which is overdue for six months that should be written off in three months.
h) Information of credit quality
i. Notes discounted, loans and receivables

June 30, 2021

Product category Corporate loans Consumer loans Others Total book value Allowance for doubtful accounts Difference of impairment loss under regulations			Notes Discounted and Loans	Notes Discounted and Loans	Notes Discounted and Loans
	Stage 1		Stage 2 Lifetime ECL $ 4,181,853 11,248,196 583 15,430,632 (767,318 ) - $ 14,663,314		Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ 4,890,704 $ - 2,762,040 - (220) - 7,652,524 - (1,740,432 ) - - (2,426,250) $ 5,912,092 $ (2,426,250)	Total $ 236,101,661 237,257,973 30,368 473,390,002 (3,935,965 ) (2,426,250) $ 467,027,787
	12-month ECLs $ 227,029,104 223,247,737 30,005 450,306,846 (1,428,215 ) - $ 448,878,631

82 -

		Receivables
Stage 1 12-month ECLs $ 12,436,412 3,471,977 60,960,325 76,868,714 (105,770 ) - $ 76,762,944	Difference of Impairment Loss Stage 2 Stage 3 under Lifetime ECL Lifetime ECL Regulations $ 352,067 $ 123,693 $ - 21,456 35,970 - 6 50,115 - 373,529 209,778 - (9,557 ) (139,772 ) - - - (75,015) $ 363,972 $ 70,006 $ (75,015) Irrevocable Loan Commitments		Total $ 12,912,172 3,529,403 61,010,446 77,452,021 (255,099 ) (75,015) $ 77,121,907

	Difference of Impairment Loss Stage 2 Stage 3 under Lifetime ECL Lifetime ECL Regulations $ 14,250 $ 32,000 $ - - - - 14,250 32,000 - (307 ) (1,867 ) - - - (5,811) $ 13,943 $ 30,133 $ (5,811) Credit Card Commitments		Total $ 8,511,307 962,789 9,474,096 (47,093 ) (5,811) $ 9,421,192

	Difference of Impairment Loss Stage 2 Stage 3 under Lifetime ECL Lifetime ECL Regulations $ 1,326 $ - $ - 1,326 - - (152 ) - - - - (2,320) $ 1,174 $ - $ (2,320) Guarantee Receivables		Total $ 13,455,985 13,455,985 (5,062 ) (2,320) $ 13,448,603

	Stage 2 Lifetime ECL $ 617,070 617,070 (24,252 ) - $ 592,818	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ 92,522 $ - 92,522 - (35,203 ) - - (49,138) $ 57,319 $ (49,138)	Total $ 25,121,561 25,121,561 (214,825 ) (49,138) $ 24,857,598

83 -

Product category Corporate loans Total book value Allowance for doubtful accounts Difference of impairment loss under regulations			Letters of Credit
	Stage 1 12-month ECLs $ 4,073,558 4,073,558 (9,020 ) - $ 4,064,538	Stage 2 Lifetime ECL $ - - - - $ -	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ - $ - - - - - - (7,845) $ - $ (7,845)	Total $ 4,073,558 4,073,558 (9,020 ) (7,845) $ 4,056,693

December 31, 2020

	Notes Discounted and Loans	Notes Discounted and Loans
Stage 1 12-month ECLs $ 222,080,175 217,504,666 23,787 439,608,628 (1,725,305 ) - $ 437,883,323	Stage 2 Lifetime ECL $ 2,875,763 11,981,206 499 14,857,468 (925,826 ) - $ 13,931,642	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ 5,459,606 $ - 2,951,357 - (346) - 8,410,617 - (1,856,155 ) - - (1,828,105) $ 6,554,462 $ (1,828,105) Receivables	Total $ 230,415,544 232,437,229 23,940 462,876,713 (4,507,286 ) (1,828,105) $ 456,541,322

	Stage 2 Lifetime ECL $ 347,443 23,982 11 371,436 (9,199 ) - $ 362,237	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ 224,116 $ - 37,115 - 52,187 - 313,418 - (174,311 ) - - (49,220) $ 139,107 $ (49,220)	Total $ 10,071,035 2,225,562 61,819,086 74,115,683 (274,822 ) (49,220) $ 73,791,641

84 -

Product category Corporate loans Consumer loans Total book value Allowance for doubtful accounts Difference of impairment loss under regulations			Irrevocable Loan Commitments	Irrevocable Loan Commitments	Irrevocable Loan Commitments
	Stage 1 12-month ECLs $ 7,906,111 1,040,000 8,946,111 (54,238 ) - $ 8,891,873		Stage 2 Lifetime ECL $ 45,900 - 45,900 (5,349 ) - $ 40,551		Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ 42,651 $ - - - 42,651 - (2,555 ) - - (2,536) $ 40,096 $ (2,536)	Total $ 7,994,662 1,040,000 9,034,662 (62,142 ) (2,536) $ 8,969,984

	Credit Card Commitments	Credit Card Commitments
Stage 1 12-month ECLs $ 12,726,008 12,726,008 (4,730 ) - $ 12,721,278	Difference of Impairment Loss Stage 2 Stage 3 under Lifetime ECL Lifetime ECL Regulations $ 73,057 $ - $ - 73,057 - - (1,856 ) - - - - (796) $ 71,201 $ - $ (796) Guarantee Receivables		Total $ 12,799,065 12,799,065 (6,586 ) (796) $ 12,791,683

	Stage 2 Lifetime ECL $ 78,172 78,172 (4,799 ) - $ 73,373		Total $ 22,879,091 22,879,091 (210,112 ) (25,851) $ 22,643,128

	Stage 2 Lifetime ECL $ 70,000 70,000 (3,263 ) - $ 66,737	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ - $ - - - - - - (677) $ - $ (677)	Total $ 3,430,243 3,430,243 (12,420 ) (677) $ 3,417,146

85 -

June 30, 2020

	Notes Discounted and Loans	Notes Discounted and Loans
Stage 1 12-month ECLs $ 220,017,078 205,737,141 19,067 425,773,286 (1,710,886 ) - $ 424,062,400	Stage 2 Lifetime ECL $ 4,668,552 13,452,485 1,512 18,122,549 (1,133,871 ) - $ 16,988,678	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ 7,137,809 $ - 3,255,173 - (210) - 10,392,772 - (2,359,240 ) - - (1,290,529) $ 8,033,532 $ (1,290,529) Receivables	Total $ 231,823,439 222,444,799 20,369 454,288,607 (5,203,997 ) (1,290,529) $ 447,794,081

	Difference of Impairment Loss Stage 2 Stage 3 under Lifetime ECL Lifetime ECL Regulations $ 454,818 $ 255,794 $ - 24,388 35,780 - 15 50,916 - 479,221 342,490 - (10,252 ) (175,483 ) - - - (43,367) $ 468,969 $ 167,007 $ (43,367) Irrevocable Loan Commitments		Total $ 9,495,984 1,984,961 58,215,512 69,696,457 (267,720 ) (43,367) $ 69,385,370

	Difference of Impairment Loss Stage 2 Stage 3 under Lifetime ECL Lifetime ECL Regulations $ - $ - $ - - - - - - - - - - - - (741) $ - $ - $ (741) Credit Card Commitments		Total $ 7,890,375 125,600 8,015,975 (49,018 ) (741) $ 7,966,216

	Stage 2 Lifetime ECL $ 82,119 82,119 (2,201 ) - $ 79,918	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ - $ - - - - - (2,258) $ - $ (2,258)	Total $ 12,475,261 12,475,261 (7,124 ) (2,258) $ 12,465,879

86 -

	Guarantee Receivables	Guarantee Receivables
Stage 1 12-month ECLs $ 18,209,856 18,209,856 (123,287 ) - $ 18,086,569	Stage 2 Lifetime ECL $ 54,334 54,334 (3,237 ) - $ 51,097		Total $ 18,409,380 18,409,380 (173,825 ) (14,638) $ 18,220,917

	Stage 2 Lifetime ECL $ 11,894 11,894 (556 ) - $ 11,338	Difference of Impairment Loss Stage 3 under Lifetime ECL Regulations $ - $ - - - - - - (2,249) $ - $ (2,249)	Total $ 2,866,245 2,866,245 (8,408 ) (2,249) $ 2,855,588

ii. Debt instrument investments

June 30, 2021

	Financial Assets	at FVTOCI
Stage 1 Stage 2 Stage 3 12-month ECLs Lifetime ECL Lifetime ECL Total $ 40,773,727 $ - $ - $ 40,773,727 - - - - 40,773,727 - - 40,773,727 (25,854 ) - - (25,854 ) - - - - $ 40,747,873 $ - $ - $ 40,747,873 Investments in Debt Instruments at Amortized Cost
	Stage 2 Lifetime ECL $ - - - - - - $ -	Stage 3 Lifetime ECL $ - 7,604 - 7,604 (7,604 ) - $ -	Total $ 48,375,414 7,604 62,400,000 110,783,018 (31,884 ) - $110,751,134

Note: The bond rating is based on the original credit rating of Moody’s, Fitch (Fitch), Standard & Poor’s (S&P) and China Credit Rating.

87 -

The breakdown below shows the Group’s investments in debt instruments classified as financial assets at FVTOCI and financial assets at amortized cost:

June 30, 2021

		Financial Assets
	Financial Assets	at Amortized
	at FVTOCI	Cost
Total book value	$ 40,398,171	$ 110,783,018
Loss allowance	(25,854)	(31,884)
Amortized cost	40,372,317	110,751,134
Fair value adjustment	375,556	-
	$ 40,747,873	$ 110,751,134

The Group’s current credit risk rating mechanism and the total book value of the investments in debt instruments of each credit rating are as follows:

Credit Rating	Definition	Recognition Basis	Expected Credit Loss	Total Book Value	Total Book Value
				Financial Assets at FVTOCI	Financial Assets at Amortized Cost
Normal (Stage 1) Abnormal (Stage 2) Default (Stage 3) Write offs	The debtor has a low credit risk and is fully capable of paying off contractual cash flows. Credit risk has increased significantly since the initial recognition. There is evidence that the credit is impaired. There is evidence that the debtor is facing serious financial difficulties and the Bank cannot reasonably expect to recover the debt.	12-month expected credit losses Lifetime expected credit losses (no credit impaired) Lifetime expected credit losses (credit impaired) Write-off	0.00%-0.42% 100%	$ 40,398,171 - - -	$ 110,775,414 - 7,604 -

88 -

With respect to the Group’s investments in debt instruments at FVTOCI and at amortized cost, information on the changes in its loss allowance summarized by credit risk rating is as follows:

Financial assets at FVTOCI
Balance, January 1, 2021
Change credit rating
Normal turned to abnormal
Abnormal turned to default
Default turned to write off
Purchase new debt instruments
Dispose
Model/risk parameter change
Exchange rate and other changes
Loss allowance, June 30, 2021
Financial assets at amortized cost
Balance, January 1, 2021
Change credit rating
Normal turned to abnormal
Abnormal turned to default
Default turned to write off
Purchase new debt instruments
Dispose
Model/risk parameter change
Exchange rate and other changes
Loss allowance, June 30, 2021

Credit Rating

Normal
(12-month
Expected
Credit Losses)
Abnormal
(Lifetime ECL
and Not Credit
Impaired)
Default
(Lifetime ECL
and Credit
Impaired)
$ 20,708
$ -
$ -
-
-
-
-
-
-
-
-
-
6,268
-
-
(333)
-
-
-
-
-

(789)

-

-
$ 25,854
$ -
$ -
Credit Rating

Normal
(12-month
Expected
Credit Losses)
Abnormal
(Lifetime ECL
and Not Credit
Impaired)
Default
(Lifetime ECL
and Credit
Impaired)
$ 26,472
$ -
$ 7,668
-
-
-
-
-
-
-
-
-
1,146
-
-
(2,463)
-
-
-
-
-

(875)

-

(64)
$ 24,280
$ -
$ 7,604

December 31, 2020

Product category (Note) Investment grade bond Non-investment grade bond Total book value Allowance for impairment Difference of impairment loss under regulations			Financial Assets	Financial Assets	at FVTOCI
	Stage 1 12-month ECLs $ 37,854,441 - 37,854,441 (20,708 ) - $ 37,833,733		Stage 2 Lifetime ECL $ - - - - - $ -		Stage 3 Lifetime ECL $ - - - - - $ -	Total $ 37,854,441 - 37,854,441 (20,708 ) - $ 37,833,733

89 -

Product category (Note) Investment grade bond Non-investment grade bond Others (NCDs issued by the CBC) Total book value Allowance for impairment Difference of impairment loss under regulations	Investments in Debt Instruments at Amortized Cost	Investments in Debt Instruments at Amortized Cost	Investments in Debt Instruments at Amortized Cost	Investments in Debt Instruments at Amortized Cost	Investments in Debt Instruments at Amortized Cost	Investments in Debt Instruments at Amortized Cost
	Stage 1 12-month ECLs $ 48,601,326 - 64,970,000 113,571,326 (26,472 ) - $ 113,544,854		Stage 2 Lifetime ECL $ - - - - - - $ -		Stage 3 Lifetime ECL $ - 7,668 - 7,668 (7,668 ) - $ -	Total $ 48,601,326 7,668 64,970,000 113,578,994 (34,140 ) - $ 113,544,854

Note: The bond rating is based on the original credit rating of Moody’s, Fitch (Fitch), Standard & Poor’s (S&P) and China Credit Rating.

The breakdown below shows the Group’s investments in debt instruments classified as financial assets at FVTOCI and financial assets at amortized cost:

December 31, 2020

		Financial Assets
	Financial Assets	at Amortized
	at FVTOCI	Cost
Total book value	$ 37,437,409	$ 113,578,994
Loss allowance	(20,708)	(34,140)
Amortized cost	37,416,701	113,544,854
Fair value adjustment	417,032	-
	$ 37,833,733	$ 113,544,854

The Group’s current credit risk rating mechanism and the total book value of the investments in debt instruments of each credit rating are as follows:

Credit Rating	Definition	Recognition Basis	Expected Credit Loss	Total Book Value	Total Book Value
				Financial Assets at FVTOCI	Financial Assets at Amortized Cost
Normal (Stage 1) Abnormal (Stage 2) Default (Stage 3) Write offs	The debtor has a low credit risk and is fully capable of paying off contractual cash flows. Credit risk has increased significantly since the initial recognition. There is evidence that the credit is impaired. There is evidence that the debtor is facing serious financial difficulties and the Bank cannot reasonably expect to recover the debt.	12-month expected credit losses Lifetime expected credit losses (no credit impaired) Lifetime expected credit losses (credit impaired) Write-off	0.00%-0.44% 100%	$ 37,437,409 - - -	$ 113,571,326 - 7,668 -

90 -

With respect to the Group’s investments in debt instruments at FVTOCI and at amortized cost, information on the changes in its loss allowance summarized by credit risk rating is as follows:

Financial assets at FVTOCI
Balance, January 1, 2020
Changes in credit rating of debt
instruments recognized in the
beginning of the year
Normal turned to abnormal
Abnormal turned to default
Default turned to write off
Purchase of new debt instruments
Disposal
Model/risk parameter change
Exchange rate and other changes
Loss allowance, December 31,
2020
Financial assets at amortized cost
Balance, January 1, 2020
Changes in credit rating of debt
instruments recognized in the
beginning of the year
Normal turned to abnormal
Abnormal turned to default
Default turned to write off
Purchase of new debt instruments
Disposal
Model/risk parameter change
Exchange rate and other changes
Loss allowance, December 31,
2020

Credit Rating

Normal
(12-month
Expected
Credit Losses)
Abnormal
(Lifetime ECL
and Not Credit
Impaired)
Default
(Lifetime ECL
and Credit
Impaired)
$ 15,405
$ -
$ -
-
-
-
-
-
-
-
-
-

8,900
-
-
(4,556)
-
-
-
-
-

959

-

-
$ 20,708
$ -
$ -
Credit Rating

Normal
(12-month
Expected
Credit Losses)
Abnormal
(Lifetime ECL
and Not Credit
Impaired)
Default
(Lifetime ECL
and Credit
Impaired)
$ 24,185
$ -
$ 17,477
-
-
-
-
-
-
-
-
-

1,777
-
-
(2,178)
-
(9,136)
-
-
-

2,688

-

(673)
$ 26,472
$ -
$ 7,668

91 -

June 30, 2020

	Financial Assets	at FVTOCI
Stage 1 Stage 2 Stage 3 12-month ECLs Lifetime ECL Lifetime ECL Total $ 35,477,144 $ - $ - $ 35,477,144 - - - - 35,477,144 - - 35,477,144 (19,465 ) - - (19,465 ) - - - - $ 35,457,679 $ - $ - $ 35,457,679 Investments in Debt Instruments at Amortized Cost
	Stage 2 Lifetime ECL $ - - - - - - $ -	Stage 3 Lifetime ECL $ - 17,187 - 17,187 (17,187 ) - $ -	Total $ 50,281,482 17,187 61,305,000 111,603,669 (44,307 ) - $ 111,559,362

Note: The bond rating is based on the original credit rating of Moody’s, Fitch (Fitch), Standard & Poor’s (S&P) and China Credit Rating.

The breakdown below shows the Group’s investments in debt instruments classified as financial assets at FVTOCI and financial assets at amortized cost:

June 30, 2020

		Financial Assets
	Financial Assets	at Amortized
	at FVTOCI	Cost
Total book value	$ 35,139,547	$ 111,603,669
Loss allowance	(19,465)	(44,307)
Amortized cost	35,120,082	111,559,362
Fair value adjustment	337,597	-
	$ 35,457,679	$ 111,559,362

92 -

The Group’s current credit risk rating mechanism and the total book value of the investments in debt instruments of each credit rating are as follows:

Credit Rating	Definition	Recognition Basis	Expected Credit Loss	Total Book Value	Total Book Value
				Financial Assets at FVTOCI	Financial Assets at Amortized Cost
Normal (Stage 1) Abnormal (Stage 2) Default (Stage 3) Write offs	The debtor has a low credit risk and is fully capable of paying off contractual cash flows. Credit risk has increased significantly since the initial recognition. There is evidence that the credit is impaired. There is evidence that the debtor is facing serious financial difficulties and the Bank cannot reasonably expect to recover the debt.	12-month expected credit losses Lifetime expected credit losses (no credit impaired) Lifetime expected credit losses (credit impaired) Write-off	0.00%-0.74% 100%	$ 35,139,547 - - -	$ 111,586,482 - 17,187 -

With respect to the Group’s investments in debt instruments at FVTOCI and at amortized cost, information on the changes in its loss allowance summarized by credit risk rating is as follows:

Financial assets at FVTOCI Balance, January 1, 2020 Change credit rating Normal turned to abnormal Abnormal turned to default Default turned to write off Purchase new debt instruments Dispose Model/risk parameter change Exchange rate and other changes Loss allowance, June 30, 2020	Credit Rating
	Normal (12-month Expected Credit Losses) Abnormal (Lifetime ECL and Not Credit Impaired) Default (Lifetime ECL and Credit Impaired) $ 15,405 $ - $ - - - - - - - - - - 3,340 - - (209) - - - - - 929 - - $ 19,465 $ - $ -

93 -

Financial assets at amortized cost Balance, January 1, 2020 Change credit rating Normal turned to abnormal Abnormal turned to default Default turned to write off Purchase new debt instruments Dispose Model/risk parameter change Exchange rate and other changes Loss allowance, June 30, 2020	Credit Rating
	Normal (12-month Expected Credit Losses) Abnormal (Lifetime ECL and Not Credit Impaired) Default (Lifetime ECL and Credit Impaired) $ 24,185 $ - $ 17,477 - - - - - - - - - 1,523 - - (919) - - - - - 2,331 - (290) $ 27,120 $ - $ 17,187

3) Liquidity risk
a) The source and definition of liquidity risk:

Liquidity risk refers to the potential loss resulting from the shortage of funds in acquiring assets or repaying debts on maturity, such as the cash outflow arising from the depositors’ withdrawal of deposits, loan drawdown, other interests, expenses, or off-balance sheet transactions. To ensure sufficient capital liquidity, measures that can be taken include enough cash buffer in stock or readily realizable marketable securities, allocation of the period, absorbing deposits or financing borrowing, etc.

b) The Group’s liquidity risk policies

The Group establishes a strategy based on the conservatism principle to diversify the source and duration of funds, participates in the fund’s lending market and maintains strong relationship with fund providers to ensure the stability and reliability of funding sources.

The Group formulates relevant standards including risk identification, measurement, monitoring and reporting in order to control and grasp the potential adverse effects, regularly performs stress tests and analyzes the crisis situation to mitigate impact of excessive capital flows, establishes a limit monitoring mechanism, and sets management indicators such as liquidity ratios, cash flow gaps, etc.

The Group’s liquidity risk management unit is the Asset and Liability Management Committee (hereinafter referred to as the “Committee”). The Committee must adopt necessary monitoring steps to maintain adequate liquidity and ensure that certain committees should regularly report to the board of directors for effective management of liquidity risks.

94 -

Maturity analysis of non-derivative financial liabilities

The Group disclosed the analysis of cash outflows from non-derivative financial liabilities by the residual maturities as of the balance sheet date. The amounts used in the maturity analyses of derivative financial liabilities are based on contractual cash flows, so some of these amounts may not correspond to the amounts shown on the consolidated balance sheets.

June 30, 2021	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Due to Central Bank and other banks Funds borrowed from Central Bank and other banks Securities sold under repurchase agreements Payables Deposits and remittances Bank debentures Lease liabilities Other items ofcashoutflow on maturity	$ 5,400,751 1,958,730 1,716,465 5,957,623 55,454,999 97,250 22,649 2,122,892	$ 419,788 2,848,690 1,248,603 647,326 76,241,304 16,359 44,866 596,417	$ 164,379 1,645,266 - 315,165 95,445,604 113,631 65,981 65,000	$ 730 1,137,717 - 888,621 131,243,212 59,149 130,292 96,127	$ - 2,462,549 - 325,134 289,926,642 11,500,000 875,512 408,414	$ 5,985,648 10,052,952 2,965,068 8,133,869 648,311,761 11,786,389 1,139,300 3,288,850

December 31, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Due to Central Bank and other banks Funds borrowed from Central Bank and other banks Securities sold under repurchase agreements Payables Deposits and remittances Bank debentures Lease liabilities Other items ofcashoutflow on maturity	$ 6,349,048 1,539,096 500,808 5,001,989 45,141,230 - 23,102 1,240,211	$ 520,616 2,216,952 1,800,700 1,109,106 72,625,586 - 45,988 430,793	$ 730 1,356,893 - 200,384 74,402,845 - 67,624 110,947	$ 166,944 1,369,444 - 458,730 159,652,783 64,553 132,372 158,947	$ - 2,028,267 - 273,148 285,008,498 11,500,000 863,279 322,063	$ 7,037,338 8,510,652 2,301,508 7,043,357 636,830,942 11,564,553 1,132,365 2,262,961

June 30, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Due to Central Bank and other banks Funds borrowed from Central Bank and other banks Securities sold under repurchase agreements Payables Deposits and remittances Bank debentures Lease liabilities Other items ofcashoutflow on maturity	$ 5,600,750 1,191,711 3,867,910 7,900,149 58,945,579 - 17,873 1,062,245	$ 1,828 2,387,861 2,808,969 338,066 68,309,092 17,467 28,742 538,261	$ 164,379 375,744 - 1,383,770 101,906,620 121,557 42,875 45,779	$ 159,150 1,430,274 - 789,829 132,488,919 63,291 82,694 132,319	$ - 399,637 - 507,605 253,388,841 11,603,784 779,469 348,733	$ 5,926,107 5,785,227 6,676,879 10,919,419 615,039,051 11,806,099 951,653 2,127,337

Maturity analysis of derivative financial liabilities

a) Derivative instruments settled at net amounts

Derivative instruments settled at net amounts include:

Foreign exchange derivative instruments: Foreign exchange forward contracts and cross-currency option contracts

The Group assesses the maturity dates of derivative contracts to understand the basic elements of all derivative financial instruments shown on the consolidated balance sheets. The amounts used in the consolidated balance sheets are based on contractual cash flows. Therefore, some amounts may not correspond to the consolidated balance sheets. The maturity analysis of derivative financial liabilities was as follows:

June 30, 2021	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Derivative financial liabilities at FVTPL Foreign currency derivative	$ 82,630	$ 55,175	$ 81,721	$ 40,139	$ -	$ 259,665
Total	$ 82,630	$ 55,175	$ 81,721	$ 40,139	$ -	$259,665

95 -

December 31, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Derivative financial liabilities at FVTPL Foreign currency derivative	$ 24,773	$ 44,804	$ 43,391	$ 116,105	$ -	$ 229,073
Total	$ 24,773	$ 44,804	$ 43,391	$116,105	$ -	$229,073

June 30, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Derivative financial liabilities at FVTPL Foreign currency derivative	$ 18,547	$ 30,511	$ 31,111	$ 43,336	$ -	$ 123,505
Total	$ 18,547	$ 30,511	$ 31,111	$ 43,336	$ -	$ 123,505

b) Derivative instruments settled at gross amounts

Derivative instruments settled at gross amounts include:

Foreign exchange derivatives instruments: Foreign exchange forward contracts and cross-currency swap contracts.

The Group disclosed the analysis of derivative instruments to be settled at gross amount by the residual maturities as of the balance sheet date. The Group assesses the maturity dates of derivative contracts to understand the basic elements of all derivative financial instruments shown in the balance sheets. The amounts used in the maturity analyses of derivative financial liabilities are based on contractual cash flows, so some of these amounts may not correspond to the amounts shown on the consolidated balance sheets. The maturity analysis of derivative financial liabilities settled at gross amounts was as follows:

June 30, 2021	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Derivative financial liabilities at FVTPL Foreign currency derivatives Outflows Inflows	$ 1,013,205 992,995	$ 4,702,626 4,553,242	$ 2,476,209 2,400,566	$ 1,965,019 1,933,674	$ - -	$ 10,157,059 9,880,477
Total outflows Total inflows	1,013,205 992,995	4,702,626 4,553,242	2,476,209 2,400,566	1,965,019 1,933,674	- -	10,157,059 9,880,477
Net flows	$ (20,210)	$ (149,384)	$ (75,643)	$ (31,345)	$ -	$ (276,582)

December 31, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Derivative financial liabilities at FVTPL Foreign currency derivatives Outflows Inflows	$ 2,614,662 2,594,219	$ 3,270,267 3,212,438	$ 2,811,080 2,682,555	$ 3,880,455 3,698,415	$ - -	$ 12,576,464 12,187,627
Total outflows Total inflows	2,614,662 2,594,219	3,270,267 3,212,438	2,811,080 2,682,555	3,880,455 3,698,415	- -	12,576,464 12,187,627
Net flows	$ (20,443)	$ (57,829)	$ (128,525)	$ (182,040)	$ -	$ (388,837)

June 30, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Derivative financial liabilities at FVTPL Foreign currency derivatives Outflows Inflows	$ 2,309,302 2,293,756	$ 2,799,796 2,752,726	$ 2,171,161 2,153,740	$ 2,116,463 2,076,746	$ - -	$ 9,396,722 9,276,968
Total outflows Total inflows	2,309,302 2,293,756	2,799,796 2,752,726	2,171,161 2,153,740	2,116,463 2,076,746	- -	9,396,722 9,276,968
Net flows	$ (15,546)	$ (47,070)	$ (17,421)	$ (39,717)	$ -	$ (119,754)

96 -
4) Maturity analysis of off-balance-sheet items

The following table shows the Group’s maturity analysis of off-balance sheet items based on the residual maturities from the consolidated balance sheets. For the financial guarantee contract issued, the maximum amount of guarantee is included in the earliest period that may be required to perform the guarantee. The amounts in the table below were prepared on contractual cash flow basis; therefore, some disclosed amounts would not match with the consolidated balance sheets.

June 30, 2021	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Loan commitment Letters of credit Guarantee receivables Lease contract commitment	$ 8,205,342 1,158,320 5,247,873 1,195,621	$ 19,892,792 2,642,597 7,518,888 104,259	$ 27,371,768 256,752 1,800,366 61,110	$ 59,307,701 6,364 2,696,704 39,238	$ 39,168,972 9,525 7,857,730 -	$ 153,946,575 4,073,558 25,121,561 1,400,228
Total	$ 15,807,156	$ 30,158,536	$ 29,489,996	$ 62,050,007	$ 47,036,227	$184,541,922

December 31, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Loan commitment Letters of credit Guarantee receivables Lease contract commitment	$ 7,704,768 979,316 6,861,342 1,814,198	$ 19,126,700 2,071,735 5,126,641 222,188	$ 29,632,011 347,453 705,627 10,582	$ 62,958,367 31,739 2,513,448 64,393	$ 37,007,287 - 7,672,033 10,283	$ 156,429,133 3,430,243 22,879,091 2,121,644
Total	$ 17,359,624	$ 26,547,264	$ 30,695,673	$ 65,567,947	$ 44,689,603	$184,860,111

June 30, 2020	0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year	Total
Loan commitment Letters of credit Guarantee receivables Lease contract commitment	$ 8,360,051 610,457 5,606,907 1,018,380	$ 21,337,245 2,039,886 5,090,203 127,344	$ 29,828,318 182,295 954,296 24,773	$ 61,975,099 33,607 1,827,292 32,321	$ 33,210,521 - 4,930,682 -	$ 154,711,234 2,866,245 18,409,380 1,202,818
Total	$ 15,595,795	$ 28,594,678	$ 30,989,682	$ 63,868,319	$ 38,141,203	$177,189,677

5) Cash flow and fair value risk of interest rate fluctuation

The floating-rate assets/liabilities held by the Group may be exposed to risks of future cash inflow/outflow. Since the risk is considered substantial, it is therefore hedged by the Group.

40. TRANSFERS OF FINANCIAL ASSETS

The Transferred Financial Assets That Do Not Qualify for Derecognition

Most of the transferred financial assets of the Group that are not derecognized in their entirety are securities sold under repurchase agreements. According to these transactions, the right of the receiving cash flows from transferred financial assets would be transferred to other entities and the associated liabilities of the Group’s obligation to repurchase the transferred financial assets at a fixed price in the future would be recognized. As the Group is restricted to use, sell or pledge the transferred financial assets throughout the term of transaction, and is still exposed to interest rate risks and credit risks on these instruments, the transferred financial assets are not derecognized in their entirety. The details of financial assets that were not derecognized in their entirety and the associated financial liabilities were as follows:

		June 30, 2021
Category of Financial Assets	Carrying Amount of Transferred Financial Assets	Carrying Amount of Associated Financial Liabilities	Fair Value of Transferred Financial Assets	Fair Value of Associated Financial Liabilities	Fair Value of Net Position
Investments in debt instruments at amortized cost Securities sold under repurchase agreements	$2,993,188	$2,963,834	$ 3,070,610	$2,963,834	$ 106,776

97 -

	December 31, 2020	December 31, 2020	December 31, 2020
Category of Financial Assets	Carrying Amount of Transferred Financial Assets	Carrying Amount of Associated Financial Liabilities	Fair Value of Transferred Financial Assets	Fair Value of Associated Financial Liabilities	Fair Value of Net Position
Investments in debt instruments at amortized cost Securities sold under repurchase agreements	$ 2,342,355	$ 2,300,077	$ 2,392,483	$ 2,300,077	$ 92,406

		June 30, 2020
Category of Financial Assets	Carrying Amount of Transferred Financial Assets	Carrying Amount of Associated Financial Liabilities	Fair Value of Transferred Financial Assets	Fair Value of Associated Financial Liabilities	Fair Value of Net Position
Investments in debt instruments at amortized cost Securities sold under repurchase agreements	$ 7,046,039	$ 6,660,862	$ 7,304,521	$ 6,660,862	$ 643,659

41. OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The Group did not hold financial instruments covered by Section 42 of the IAS 32 “Financial Instruments: Presentation” endorsed by the Financial Supervisory Commission; thus, it made an offset of financial assets and liabilities and reported the net amount in the consolidated balance sheets.

The Group engages in transactions on the following financial assets and liabilities that are not subject to balance sheet offsetting based on IAS 32 but are under master netting arrangements or similar agreements. These agreements allow both the Group and its counterparties to opt for the net settlement of financial assets and financial liabilities. If one party defaults, the other party may choose net settlement.

The netting information of financial assets and financial liabilities is set out below:

June 30, 2021

Gross Amounts Gross Amounts of Recognized Financial Liabilities Net Amounts of Financial Assets Presented in Financial Assets of Recognized Financial Assets Offset in the Balance Sheets the Balance Sheets Securities purchased under resell agreements$ 14,604,913 $ - $ 14,604,913 Gross Amounts of Recognized Gross Amounts of Recognized Financial Assets Offset Net Amounts of Financial Liabilities Presented in Financial Liabilities Financial Liabilities in the Balance Sheets the Balance Sheets Securities sold under repurchase agreements$ 2,963,834 $ - $ 2,963,834	Related Amounts Not Offset in the Balance Sheets Financial Instruments Cash Collateral Received $ 14,604,913 $ - Related Amounts Not Offset in the Balance Sheets Financial Instruments Cash Collateral Pledged $ 2,963,834 $ -	Net Amount $ -
		Net Amount $ -

98 -

December 31, 2020

Gross Amounts Gross Amounts of Recognized Financial Liabilities Net Amounts of Financial Assets Presented in Financial Assets of Recognized Financial Assets Offset in the Balance Sheets the Balance Sheets Securities purchased under resell agreements$ 12,773,121 $ - $ 12,773,121 Gross Amounts of Recognized Gross Amounts of Recognized Financial Assets Offset Net Amounts of Financial Liabilities Presented in Financial Liabilities Financial Liabilities in the Balance Sheets the Balance Sheets Securities sold under repurchase agreements$ 2,300,077 $ - $ 2,300,077 June 30, 2020	Related Amounts Not Offset in the Balance Sheets Financial Instruments Cash Collateral Received $ 12,773,121 $ - Related Amounts Not Offset in the Balance Sheets Financial Instruments Cash Collateral Pledged $ 2,300,077 $ -	Net Amount $ -
		Net Amount $ -

Gross Amounts Gross Amounts of Recognized Financial Liabilities Net Amounts of Financial Assets Presented in Financial Assets of Recognized Financial Assets Offset in the Balance Sheets the Balance Sheets Securities purchased under resell agreements$ 13,181,595 $ - $ 13,181,595 Gross Amounts of Recognized Gross Amounts of Recognized Financial Assets Offset Net Amounts of Financial Liabilities Presented in Financial Liabilities Financial Liabilities in the Balance Sheets the Balance Sheets Securities sold under repurchase agreements$ 6,660,862 $ - $ 6,660,862	Related Amounts Not Offset in the Balance Sheets Financial Instruments Cash Collateral Received $ 13,181,595 $ - Related Amounts Not Offset in the Balance Sheets Financial Instruments Cash Collateral Pledged $ 6,660,862 $ -	Net Amount $ -
		Net Amount $ -

99 -

42. INFORMATION ABOUT THE BANK

a. Asset quality

Category	Items	Items			June 30, 2021					June 30, 2020
			Non-performing Loan (Note 1)	Total Loan	NPL Ratio (Note 2)	Allowance For Loan Losses	Coverage Ratio (Note 3)	Non-performing Loan (Note 1)	Total Loan	NPL Ratio (Note 2)	Allowance For Loan Losses	Coverage Ratio (Note 3)
Corporate loans	Secured		$ 647,717	$153,501,299	0.42%	1,537,869	237.43%	$ 985,607	$151,192,094	0.65%	$ 1,551,256	157.39%
	Unsecured		212,678	82,569,148	0.26%	2,343,100	1,101.71%	388,701	80,621,435	0.48%	3,040,576	782.24%
Consumer loans	Mortgage (Note4)		131,075	60,134,104	0.22%	937,777	715.45%	121,431	55,147,883	0.22%	842,313	693.66%
	Cashcard		-	6	-	-	-	-	21	-	2	-
	Microcredit(Note5)		2,040	918,199	0.22%	61,417	3,010.64%	2,182	855,108	0.26%	82,497	3,780.80%
	Other (Note 6)	Secured	212,636	150,539,054	0.14%	1,140,595	536.41%	440,934	147,912,890	0.30%	594,250	134.77%
		Unsecured	26,312	24,418,974	0.11%	340,887	1,295.56%	63,959	17,688,140	0.36%	383,234	599.19%
Loans			1,232,458	472,080,784	0.26%	6,361,645	516.18%	2,002,814	453,417,571	0.44%	6,494,128	324.25%

Category		Items			June 30, 2021					June 30, 2020
			Overdue Receivable	Accounts Receivable	Delinquency Ratio	Allowance for Credit Losses	Coverage Ratio	Overdue Receivable	Accounts Receivable	Delinquency Ratio	Allowance for Credit Losses	Coverage Ratio
Credit card			3,799	602,256	0.63%	26,620	700.71%	$ 2,419	$ 657,215	0.37%	$ 23,811	984.33%
Accounts rec	eivable without reco	urse(Note 7)	-	315,360	-	4,661	-	-	191,318	-	5,982	-

100 -

Non-reportable overdue loans and receivables

	June 30, 2021	June 30, 2021	June 30, 2020	June 30, 2020
	Non-Reportable NPL Balance	Non-reportable Overdue Receivable Balance	Non-Reportable NPL Balance	Non-reportable Overdue Receivable Balance
Non-reportable amount upon performance of debt negotiationprogram(Note 8)	$ 1,331	$ 735	$ 1,820	$ 993
Amount received from performance of debt negotiation program (Note 9)	8,837	18,343	8,340	19,131
Total	10,168	19,078	10,160	20,124

Note 1: The amount recognized as non-performing loans (NPL) is in compliance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans”. Non-performing credit loans represent the amounts of non-performing loans reported to the FSC, as required by the FSC in its letter dated July 6, 2005 (Ref. No. 0944000378).
Note 2: Non-performing loan ratio = Non-performing loans ÷ Outstanding loan balance; Non-performing credit loan ratio = Non-performing loans ÷ Accounts receivable balance.
Note 3: Allowance for doubtful accounts ratio = Allowance for doubtful accounts in loans ÷ Overdue loans; Allowance for doubtful accounts ratio of credit card = Allowance for doubtful accounts in credit cards ÷ Overdue loans.
Note 4: Home mortgage refers to financing obtained to buy, build, or fix houses owned by the borrowers’ spouse or children, with the house used as loan collateral.
Note 5: Micro credit is covered by the FSC pronouncement dated December 19, 2005 (Ref No. 09440010950) and is excluded from credit card and cash card loans.
Note 6: “Others” under consumer loans refers to secured or unsecured loans other than mortgage loans, cash cards, micro credit, and credit cards.
Note 7: As required by the FSC in its letter dated July 19, 2005 (Ref No. 094000494), provision for bad-debt is recognized once no compensation is made by a factor or insurance company for accounts receivable factored without recourse.
Note 8: Accounts under “loans not required to be classified as NPL upon performance of a debt negotiation program” and “accounts receivable not required to be classified as overdue receivable upon debt negotiation program” were processed according the FSC pronouncement dated April 25, 2006 (Ref No. 09510001270).
Note 9: Accounts under “loans not required to be classified as NPL upon performance of a debt discharge program and rehabilitation program” and “accounts receivable not required to be classified as overdue receivable upon debt discharge program and rehabilitation program” were processed according the FSC pronouncement dated September 15, 2008 (Ref No. 09700318940).
101 -

b. Concentration of credit extensions

(In Thousands of New Taiwan Dollars, %)

Year	June 30, 2021
Top 10 Rank (Note 1)	Group (Note 2)	Total Credit (Note 3)	Percentage of Net Worth (%)
1	Group A 016700 real estate development activities	$ 4,130,161	6.89
2	Group B 016700 real estate development activities	2,684,400	4.48
3	Group C 016700 real estate development activities	2,541,470	4.24
4	Group D 010892 manufacture of macaroni, noodles, couscous and similar farinaceous products	2,323,860	3.88
5	Group E 016700realestate development activities	2,196,191	3.67
6	Group F 012411 smelting and refining of iron and steel	2,159,224	3.60
7	Group G 012630 bare printed circuit boards manufacturing	1,739,760	2.90
8	Group H 016700realestate development activities	1,720,129	2.87
9	Group I 013822 hazardousindustrialwaste treatment	1,390,699	2.32
10	Group J 016499 other financial intermediation	1,385,516	2.31

102 -

Year	June 30, 2020
Top 10 Rank (Note 1)	Group (Note 2)	Total Credit (Note 3)	Percentage of Net Worth (%)
1	Group B 016811 real estate activities for sale and rental with own or leased property	$ 2,522,606	4.81
2	Group F 012411smelting andrefining of ironand steel	2,449,043	4.67
3	Group C 016700realestate development activities	2,421,260	4.62
4	Group D 010892 manufacture of macaroni, noodles, couscous and similar farinaceous products	2,398,773	4.58
5	Group A 016700 real estate development activities	2,296,279	4.38
6	Group E 016700 real estate development activities	2,274,166	4.34
7	Group K 015500 accommodation	2,085,229	3.98
8	Group L 012699 manufacture of other electronic parts and components not elsewhere classified	1,613,312	3.08
9	Group H 016700 real estate development activities	1,520,525	2.90
10	Group M 014612 wholesale of brick, sand, cement and products	1,500,392	2.86

Note 1: The ranking is arranged in descending order of the outstanding loan balance, excluding all the government entities and nation-owned enterprises. If the borrower is a member company of a group, then the disclosed amount will be the total granted loan amount for that entire group. (i.e., Group A real estate development activities).
Note 2: According to Article 6 of the “Supplementary Provisions to the Stock Exchange Corporation Criteria for the Review of Securities Listings”, Group refers to the entity that has a controlling or subordinate relationship with the counterparty that obtained loans from the Bank.
Note 3: Credit balance means the sum of all the loans (including import bill negotiated, discounted export bills negotiated, overdrafts, short-term secured and unsecured loans, securities margin loan receivables, medium-term secured and unsecured loans, long-term secured and unsecured loans and delinquent receivables), exchange bills negotiated, accounts receivable factored without recourse, acceptances receivable, and guarantees issued.
103 -

c. Interest rate sensitivity information

Interest Rate Sensitivity June 30, 2021

(In Thousands of New Taiwan Dollars, %)

Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest-sensitive assets	$ 511,148,970	$ 7,743,608	$ 8,424,119	$ 93,632,943	$ 620,949,640
Interest-sensitive liabilities	143,357,850	364,823,295	77,372,966	6,689,453	592,243,564
Interest sensitivity gap	367,791,120	(357,079,687)	(68,948,847)	86,943,490	28,706,076
Net equity					59,909,236
Ratio of interest-sensitive assets toliabilities					104.85%
Ratio of interest sensitivity gap to net equity					47.92%

June 30, 2020

(In Thousands of New Taiwan Dollars, %)	(In Thousands of New Taiwan Dollars, %)	(In Thousands of New Taiwan Dollars, %)	(In Thousands of New Taiwan Dollars, %)	(In Thousands of New Taiwan Dollars, %)	(In Thousands of New Taiwan Dollars, %)
Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest-sensitive assets	$472,250,948	$ 7,496,459	$12,074,688	$ 95,014,119	$ 586,836,214
Interest-sensitive liabilities	146,230,925	331,051,844	79,267,744	5,234,078	561,784,591
Interest sensitivity gap	326,020,023	(323,555,385)	(67,193,056)	89,780,041	25,051,623
Net equity					52,393,816
Ratio of interest-sensitive assets to liabilities					104.46%
Ratio of interest sensitivity gap tonet equity					47.81%

Note 1: The above amounts included only the New Taiwan dollar amounts held by the head office and branches of the Bank (i.e., excluding foreign currency).
Note 2: Interest rate-sensitive assets and liabilities mean the revenues or costs of interest-earning assets and interest-bearing liabilities affected by interest rate changes.
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 (in New Taiwan dollars).

Interest Rate Sensitivity June 30, 2021

(In Thousands of U.S. Dollars, %)	(In Thousands of U.S. Dollars, %)	(In Thousands of U.S. Dollars, %)	(In Thousands of U.S. Dollars, %)	(In Thousands of U.S. Dollars, %)	(In Thousands of U.S. Dollars, %)
Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest-sensitive assets	$ 1,498,036	$ 262,606	$ 108,063	$ 337,553	$ 2,206,258
Interest-sensitive liabilities	746,623	1,242,395	306,167	-	2,295,185
Interest sensitivity gap	751,413	(979,789)	(198,104)	337,553	(88,927)
Net equity					2,150,059
Ratio of interest-sensitive assets toliabilities					96.13%
Ratio of interest sensitivity gap to net equity					(4.14%)

104 -

June 30, 2020

(In Thousands of U.S. Dollars, %)

Items	1 to 90 Days	91 to 180 Days	181 Days to One Year	Over One Year	Total
Interest-sensitive assets	$ 1,471,026	$ 230,681	$ 50,199	$ 364,457	$ 2,116,363
Interest-sensitive liabilities	821,065	1,027,934	303,516	-	2,152,515
Interest sensitivity gap	649,961	(797,253)	(253,317)	364,457	(36,152)
Net equity					1,776,062
Ratio of interest-sensitive assets toliabilities					98.32%
Ratio of interest sensitivity gap to net equity					(2.04%)

Note 1: The above amounts included only the U.S. dollar amounts held by the head office, domestic branches, OBU and overseas branches of the Bank and excluded contingent assets and contingent liabilities.
Note 2: Interest rate-sensitive assets and liabilities mean the revenues or costs of interest-earning assets and interest-bearing liabilities affected by interest rate changes.
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 (in U.S. dollars)
d. Profitability

Unit: %

	Items	June 30, 2021	June 30, 2020
Return on total assets	Pretax	0.35	0.31
	Aftertax	0.31	0.27
Return on net equity	Pretax	4.42	4.19
	Aftertax	3.88	3.55
Profit margin		37.81	36.81

Note 1: Return on total assets = Income before (after) income tax ÷ Average total assets
Note 2: Return on equity = Income before (after) income tax ÷ Average equity
Note 3: Net income ratio = Income after income tax ÷ Total net revenues
Note 4: Income before (after) income tax represents income for the one month ended June 30, 2021 and 2020.
105 -

e. Maturity analysis of assets and liabilities

Maturity Analysis of Assets and Liabilities June 30, 2021

(In Thousands of New Taiwan Dollars)

	Total		Period	Remaining until D	ue Date and Amo	unt Due
		0-10 Days	11-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year
Main capital inflow on maturity	$ 666,719,778	$ 78,280,143	$ 62,550,258	$ 37,932,893	$ 58,399,903	$ 99,135,973	$ 330,420,608
Main capital outflow on maturity	790,678,436	29,719,846	34,882,691	82,311,680	125,383,234	161,299,648	357,081,337
Gap	(123,958,658)	48,560,297	27,667,567	(44,378,787)	(66,983,331)	(62,163,675)	(26,660,729)

June 30, 2020

(In Thousands of New Taiwan Dollars)

	Total		Period	Remaining until D	ue Date and Amo	unt Due
		0-10 Days	11-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year
Main capital inflow on maturity	$ 630,789,538	$ 71,786,098	$ 58,626,473	$ 38,436,881	$ 49,045,051	$ 99,596,561	$ 313,298,474
Main capital outflow on maturity	746,517,217	28,913,832	36,732,722	77,158,296	130,341,071	160,605,677	312,765,619
Gap	(115,727,679 )	42,872,266	21,893,751	(38,721,415 )	(81,296,020 )	(61,009,116 )	532,855

Note: The above amounts included only the New Taiwan dollar amounts held by the head office and domestic branches of the Bank (excluding foreign currency).

Maturity Analysis of Assets and Liabilities June 30, 2021

(In Thousands of U.S. Dollars)

	Total		Remaining Period to Maturity	Remaining Period to Maturity	Remaining Period to Maturity
		0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year
Main capital inflow on maturity	$ 2,723,539	$ 452,943	$ 418,782	$ 340,046	$ 327,963	$ 1,183,805
Main capital outflow on maturity	3,257,118	591,913	887,548	540,288	929,853	307,516
Gap	(533,579 )	(138,970 )	(468,766 )	(200,242 )	(601,890 )	876,289

June 30, 2020

(In Thousands of U.S. Dollars)

	Total		Remaining Period to Maturity	Remaining Period to Maturity	Remaining Period to Maturity
		0-30 Days	31-90 Days	91-180 Days	181 Days - 1 Year	Over 1 Year
Main capital inflow on maturity	$ 2,523,321	$ 521,339	$ 315,042	$ 211,715	$ 219,244	$ 1,255,981
Main capital outflow on maturity	3,182,275	770,493	752,658	541,351	878,049	239,724
Gap	(658,954 )	(249,154 )	(437,616 )	(329,636 )	(658,805 )	1,016,257

Note 1: The above amounts included only the U.S. dollar amounts held by the head office, domestic branches, OBU and overseas branches of the Bank and excluded contingent assets and contingent liabilities.

Note 2: When the OBU’s assets account for 10% of total assets of the Bank, the Bank should provide complimentary disclosed information.
106 -

43. CAPITAL MANAGEMENT

a. The purpose of capital management is to meet the criteria set by administration which is the basic goal of the Group’s capital management. The calculation method of the relevant qualified eligible capital and legal capital should be handled in accordance with the provisions of the competent authority.

To maintain the ratio of eligible capital to risk - weighted assets above the target level, the capital management structure of the Group should be properly planned depending on the conditions of capital market, the characteristics of various capital instruments, the efficiency of capital utilization and the impact of operational performance.

b. The Group follows the relevant regulations of the competent authority and the internal operating procedures of the Bank, to regularly disclose relevant information on capital adequacy and report to the competent authority on a quarterly basis.

Self-owned capital of the Bank is divided into Tier 1 capital and Tier 2 capital according to principles of capital adequacy management.

1) The term “Net Tier 1 Capital” shall mean the aggregate amount of net common Equity Tier 1 and net additional Tier 1 Capital.
a) The common equity Tier 1 capital consists of the common shares and additional paid-in capital in excess of par - common shares, the capital collected in advance, the capital reserves, the statutory surplus reserves, the special reserves, the accumulated profit or loss, the non-controlling interests and the other items of interest.
b) Additional Tier 1 capital consists of non-cumulative perpetual preferred shares and its capital share premium, the non-cumulative perpetual subordinated debts, the non-cumulative perpetual preferred shares and its capital share premium, and the non-cumulative perpetual subordinated debts which are issued by banks’ subsidiaries, and are not directly or indirectly held by banks.

2) Tier 2 capital

The Tier 2 capital consists of cumulative perpetual preferred shares and its capital share premium, the cumulative perpetual subordinated debts, the convertible subordinated debts, the long-term subordinated debts, the non-perpetual preferred shares and its capital share premium, when applying International Financial Reporting Standards in real estate and using the fair value method or the re-estimated value method as the deemed cost for the first time, the difference in amount between the deemed cost and the book value recognized in retained earnings, the 45% of unrealized gains on changes in the fair value of investment properties using the fair value method, as well as the 45% of unrealized gains on available-for-sale financial assets, the operational reserves and loan-loss provisions and the cumulative perpetual preferred shares and its capital share premium, the cumulative perpetual subordinated debts, the convertible subordinated debts, the long-term subordinated debts, and the non-perpetual preferred shares and its capital share premiums, which are issued by banks’ subsidiaries, and are not directly or indirectly held by banks.

107 -

c. Capital adequacy ratio (CAR)

(Unit: In Thousands of New Taiwan Dollars, %)

Year Items	Year Items	Year Items	June 30, 2021	December 31, 2020	June 30, 2020
Eligible capital	Common equity		$ 58,647,783	$ 56,213,035	$ 51,482,701
	Other Tier 1 capital		11,459,398	11,459,213	11,459,429
	Tier 2 capital		5,788,215	5,546,094	5,047,973
	Eligible capital		75,895,396	73,218,342	67,990,103
Risk-weighted assets	Credit risk	Standardized approach	464,268,169	485,553,191	472,717,624
		Internal ratings-based approach	-	-	-
		Securitization	-	-	-
	Operational risk	Basic indicator approach	22,082,050	22,082,050	21,789,238
		Standardized approach/alternative standardized approach	-	-	-
		Advanced measurement approach	-	-	-
	Market risk	Standardized approach	10,438,925	9,782,200	6,401,163
		Internal model approach	-	-	-
	Risk-weighted assets		496,789,144	517,417,441	500,908,025
Capital adequacy ratio (%)			15.28%	14.15%	13.57%
Ratio of common equity to risk-weighted assets (%)			11.81%	10.86%	10.28%
Ratio of Tier 1 capital to risk-weighted assets (%)			14.11%	13.08%	12.57%
Leverage ratio (%)			8.85%	8.75%	8.42%

Note 1: Eligible capital and risk-weighted assets are calculated under the “Regulations Governing the Capital Adequacy Ratio of Banks” and “Explanation of Methods for Calculating the Eligible Capital and Risk-Weighted Assets of Banks”.
Note 2: Annual financial statements should include capital adequacy ratio of the current and prior year. Semi-annual financial statements in addition to exposing the current and prior year’s financial status, should also include the capital adequacy ratio at the end of prior year.
Note 3: Formulas used were as follows:
1) Eligible capital = Common equity + Other Tier 1 capital + Tier 2 capital.
2) Risk-weighted assets = Risk-weighted asset for credit risk + Capital requirements for operational risk and market risk x 12.5.
3) Capital adequacy ratio = Eligible capital ÷ Risk-weighted assets.
4) Ratio of the common equity to risk-weighted assets = Common equity ÷ Risk-weighted assets.
5) Ratio of Tier 1 capital to risk-weighted assets = (Common equity + Other Tier 1 capital) ÷ Risk-weighted assets.
6) Leverage ratio = Tier 1 capital ÷ Exposure measurement.
Note 4: Exempt from disclosure in the preparation of the first and third quarters of the financial reports.
108 -

44. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

Details of significant assets and liabilities denominated in foreign currencies were as follows:

Financial assets in
foreign currencies
Cash and cash equivalents

Due from the Central Bank
and call loans to other
banks
Financial assets at fair value
through profit or loss
Financial assets at fair value
through other
comprehensive income
Notes discounted and loans
Receivables
Financial assets at
amortized cost
Other assets
Financial liabilities in
foreign currencies
Due to the Central Bank
and other banks
Funds borrowed from
Central Bank and other
banks
Deposits and remittances
Financial liabilities at fair
value through profit or
loss
Other financial liabilities
Payables
Lease liabilities
Securities sold under
repurchased agreements
Provisions
Other liabilities
New Taiwan dollars
exchange rate

Financial assets in
foreign currencies
Cash and cash equivalents

Due from the Central Bank
and call loans to other
banks
Financial assets at fair value
through profit or loss
Financial assets at fair value
through other
comprehensive income
Notes discounted and loans
Receivables
Financial assets at
amortized cost
Other assets
Financial liabilities in
foreign currencies
Due to the Central Bank
and other banks
Funds borrowed from
Central Bank and other
banks
Deposits and remittances
Financial liabilities at fair
value through profit or
loss

June 30, 2021

USD
CNY
JPY
AUD
EUR
Others
Total
$ 5,307,505 $ 865,356 $ 723,666 $ 425,114 $ 209,487 $ 766,108 $ 8,297,236
75,233
107,725
-
-
-
-
182,958
1,204,088
-
-
-
-
135,676
1,339,764
1,721,110
1,933,348
-
125,736
-
-
3,780,194

34,156,416
1,451,434
846,000
157,128
980,795
886,664
38,478,437
845,154
3,453,040
180,674
5,154
33,765
29,207
4,546,994
19,419,273
3,467,738
-
1,382,373
-
876,773
25,146,157
597,156
86,180
-
-
-
255
683,591
417,960
-
-
-
-
-
417,960
-
2,749,572
-
-
-
-
2,749,572
61,712,574
4,247,229
786,752
2,047,510
588,919
1,743,048
71,126,032
301,259
41,947
-
-
-
5,432
348,638
33,158
-
-
-
-
131,850
165,008
610,812
115,922
178,963
1,585
31,633
3,622
942,537
-
38,508
-
-
-
4,014
42,522
1,759,257
-
-
-
-
-
1,759,257
22,669
-
-
-
-
-
22,669
182,594
23,768
7,781
-
12,453
-
226,596
27.86
4.31
0.25
20.95
33.16
December 31, 2020

USD
CNY
JPY
AUD
EUR
Others
Total
$ 3,859,375 $ 487,676 $ 369,085 $ 135,056 $ 137,767 $ 496,070 $ 5,485,029
73,057
86,340
-
-
-
374,987
534,384
1,189,924
-
-
-
3,509
90,688
1,284,121
1,736,382
1,928,804
-
132,488
-
-
3,797,674

31,203,325
1,112,690
413,612
81,659
1,176,027
1,017,500
35,004,813
805,151
2,967,309
209,852
14,156
445,269
68,749
4,510,486
18,565,402
3,842,754
-
1,428,655
-
941,953
24,778,764
495,580
86,340
-
-
-
1
581,921
702,478
-
408,753
-
-
-
1,111,231
-
2,222,528
-
-
-
-
2,222,528
54,085,876
4,231,763
635,885
2,261,598
563,925
2,236,821
64,015,868
304,098
36,706
-
-
3,780
2,154
346,738
(Continued)

109 -

Other financial liabilities

Payables
Lease liabilities
Securities sold under
repurchased agreements
Provisions
Other liabilities
New Taiwan dollars
exchange rate

Financial assets in
foreign currencies
Cash and cash equivalents

Due from the Central Bank
and call loans to other
banks
Financial assets at fair value
through profit or loss
Financial assets at fair value
through other
comprehensive income
Notes discounted and loans
Receivables
Financial assets at
amortized cost
Other assets
Financial liabilities in
foreign currencies
Funds borrowed from
Central Bank and other
banks
Deposits and remittances
Financial liabilities at fair
value through profit or
loss
Other financial liabilities
Payables
Lease liabilities
Securities sold under
repurchased agreements
Provisions
Other liabilities
New Taiwan dollars
exchange rate

December 31, 2020

USD
CNY
JPY
AUD
EUR
Others
Total
$ - $ - $ - $ - $ - $ 107,246 $ 107,246
1,093,982
193,025
198,722
162,732
61,890
59,780
1,770,131
-
41,981
-
-
-
5,529
47,510
1,096,485
-
-
-
-
-
1,096,485
21,174
-
-
-
-
-
21,174
109,079
7,932
234
-
8,518
-
125,763
28.10
4.32
0.27
21.65
34.55
(Concluded)
June 30, 2020

USD
CNY
JPY
AUD
EUR
Others
Total
$ 6,514,069 $ 1,038,071 $ 451,592 $ 119,240 $ 167,792 $ 423,679 $ 8,714,443
70,800
91,784
-
445,060
-
195,500
803,144
1,031,392
14,396
-
-
3,952
649
1,050,389
1,076,983
-
-
-
-
-
1,076,983

33,640,869
1,031,509
360,555
76,288
1,114,530
762,355
36,986,106
2,494,210
2,613,508
2,590,148
6,017
162,094
56,710
7,922,687
20,564,552
3,548,058
-
1,233,921
-
968,687
26,315,218
234,742
83,440
-
-
-
97
318,279
14,750
2,118,956
-
-
-
-
2,133,706
58,042,426
3,396,265
665,870
2,212,499
597,414
1,741,964
66,656,438
158,895
-
-
-
4,284
649
163,828
-
-
-
-
-
126,021
126,021
3,046,790
106,833
1,295,131
68,959
150,091
10,575
4,678,379
-
43,593
-
-
-
5,978
49,571
5,456,517
-
-
-
-
-
5,456,517
21,315
-
-
-
-
-
21,315
79,704
11,003
907
-
7,092
-
98,706
29.50
4.17
0.27
20.23
33.11

45. CASH FLOW INFORMATION

Changes in Liabilities Arising from Financing Activities

For the six months ended June 30, 2021

Funds borrowed from Central Bank and other banks Commercial papers Bank debentures Guarantee deposit received Lease liabilities	Opening Balance $ 8,510,652 1,588,567 11,500,000 567,148 1,006,781 $ 23,173,148	Cash Inflows (Outflows) $ 1,542,300 864,773 - 103,354 (119,548) $ 2,390,879		Non-cash Changes New Leases Lease Term End $ - $ - - - - - - - 208,522 (92,063) $ 208,522 $ (92,063)	Closing Balance $ 10,052,952 2,453,340 11,500,000 670,502 1,003,692
				New Leases $ - - - - 208,522 $ 208,522
					$ 25,680,486

110 -

For the six months ended June 30, 2020

Funds borrowed from Central Bank and other banks Commercial papers Bank debentures Guarantee deposit received Lease liabilities	Opening Balance $ 6,092,040 1,174,083 14,000,000 582,064 895,285 $ 22,743,472	Cash Inflows (Outflows) $ (306,813 ) 254,504 (2,500,000 ) (9,335 ) (95,094) $ (2,656,738)		Non-cash Changes New Leases Lease Term End $ - $ - - - - - - - 82,591 (50,710) $ 82,591 $ (50,710)	Closing Balance $ 5,785,227 1,428,587 11,500,000 572,729 832,072
				New Leases $ - - - - 82,591 $ 82,591
					$ 20,118,615

46. OTHER SIGNIFICANT EVENT

Due to the impact of the COVID-19 pandemic, future economic and financial development are uncertain. The Group strengthened its management towards the provision of loan, monitored and assessed financial information (including net revenue, expected impairment loss, operating expenses and capital adequacy ratio, etc.) by applying stress testing under additional pressure. Based on the information available as of the balance sheet date, the epidemic did not have significant influence on the Group’s ability to continue as a going concern, asset impairment and financing risk.

47. OPERATING SEGMENT FINANCIAL INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group’s reportable segments are as follows:

Northern area Central area Southern area OBU Overseas branch Head office and others

a. Segment revenues and results

The analysis of the Group’s revenue and results from continuing operations by reportable segment was as follows:

For the six months ended June 30, 2021 Interest revenue Interest expense Net revenue Net income and loss other than interest Service fee income Gain on financial instrument Others Bad-debt expenses and provision for losses on commitments and guarantees Operating expenses Income before income tax	Northern Area $ 1,525,707 (641,351) 884,356 279,130 4,553 8,818 44,701 (410,956) $ 810,602	Central Area $ 2,217,281 (646,534) 1,570,747 438,120 31,542 12,063 157,076 (739,597) $ 1,469,951	Southern Area $ 1,286,655 (401,647) 885,008 274,174 9,583 10,778 (521,640 ) (494,467) $ 163,436	OBU $ 656,405 (258,518) 397,887 64,621 (7,372 ) 49,446 7,617 - $ 512,199	Overseas Branch H $ 41,876 (9,677) 32,199 4,119 - 722 (5,907 ) (17,117) $ 14,016	ea $	d Office and Others Adjustment and Write-off Total 1,559,199 $ (1,204,887 ) $ 6,082,236 (766,379) 1,204,887 (1,519,219) 792,820 - 4,563,017 566,942 - 1,627,106 345,796 - 384,102 (28,589 ) (37,646 ) 15,592 (354,825 ) - (672,978 ) (1,657,378) 37,646 (3,281,869) (335,234) $ - $ 2,634,970 (Continued)
						$

111 -

For the six months ended June 30, 2020 Interest revenue Interest expense Net revenue Net income and loss other than interest Service fee income Gain on financial instrument Others Bad-debt expenses and provision for losses on commitments and guarantees Operating expenses Income before income tax	Northern Area $ 1,634,347 (762,785) 871,562 215,575 10,690 7,682 (449,887 ) (394,542) $ 261,080	Central Area $ 2,393,669 (742,099) 1,651,570 404,769 29,859 12,445 (109,521 ) (722,356) $ 1,266,766	Southern Area $ 1,470,753 (489,037) 981,716 236,509 11,641 10,713 14,382 (494,019) $ 760,942	OBU $ 863,010 (477,015) 385,995 50,113 12,502 (563 ) (41,537 ) - $ 406,510	Overseas Branch H $ 41,550 (13,420) 28,130 5,007 - 7,508 (7,906 ) (14,460) $ 18,279	ead Office and Others Adjustment and Write-off $ 1,198,742 $ (1,325,290 ) (992,080) 1,325,290 206,662 - 444,956 - (101,188 ) - 396 (37,645 ) 414,652 - (1,468,470) 37,645 $ (502,992) $ -	Total $ 6,276,781 (2,151,146) 4,125,635 1,356,929 (36,496 ) 536 (179,817 ) (3,056,202) $ 2,210,585

(Concluded)

This measure is provided to the chief operating decision maker for resources allocation and measurement of segment performance.

b. Segment assets

Segment Assets Northern area Central area Southern area OBU Overseas branch Head office and others	June 30, 2021 $ 139,970,327 199,674,269 85,519,350 59,093,358 3,107,796 266,229,299 $ 753,594,399	December 31, 2020 $ 139,108,081 196,947,682 99,754,054 56,666,372 2,615,256 241,678,576 $ 736,770,021	June 30, 2020 $ 133,789,042 194,599,893 99,613,171 57,058,896 2,442,264 226,422,611 $ 713,925,877

c. Revenue from major products and services

The main business of the Group is interest revenue; therefore, no product or service information is available.

d. Geographical information

Location Taiwan Asia America		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 6,447,461 141,870 486 $ 6,589,817	2020 $ 5,346,236 98,286 2,082 $ 5,446,604

e. Information about major customers

The interest revenue of the Group from any single customer does not exceed 10% of the total interest revenue; therefore, information on major customers is not available.

112 -

48. ADDITIONAL DISCLOSURES

a. Information about significant transactions and investees:

Disclosures of relevant information in accordance with Article 18 of Regulations Governing the Preparation of Financial Reports by Public Banks are as follows:

No.	Item	Note
1	Marketable securities acquired and disposed of at costs or prices of at least NT$300millionor 10% ofthe paid-incapital.	None
2	Acquisition of individual real estate at costs of at least NT$300 million or 10% ofthe paid-incapital.	None
3	Disposal of individual real estate at prices of at least NT$300 million or 10% ofthe paid-incapital.	None
4	Allowance of service fees to related parties amounting to at least NT$5 million.	None
5	Receivables from related parties amounting to at least NT$300 million or 10% ofthe paid-incapital.	None
6	Sale of nonperforming loans.	None
7	Financial asset securitization and real estate securitization.	None
8	Other significant transactions which may affect the decisions of users of financial reports.	None

b. The related information of the Group’s investees (Note):

No.	Item	Note
1	Related information and proportionate share in investees.	Table 1
2	Financing provided.	Table 2
3	Endorsement/guarantee provided.	Table 3
4	Marketable securities held.	Table 4
5	Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 10% of the paid-in capital	None
6	Derivative transactions.	Note 8
7	Other significant transactions which may affect the decisions of users of financial reports.	None

Note: Subsidiaries are exempt from disclosure if they belong to the financial, insurance, and securities industries, and the main business items of business registration include fund loans to others, endorsements, and trading of securities.

c. Investment in mainland China: Table 5 (attached).
d. Business relationships and significant transactions between the parent company and subsidiaries: Table 6 (attached).
e. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 7)
113 -

TABLE 1

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

THE RELATED INFORMATION AND PROPORTIONATE SHARE IN INVESTEES FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

Investor Company	Investee Company (Note 1)	Location	Main Businesses and Products	Percentage of Ownership	Carrying Value	Investment Gain (Loss)	Proportionate Share of the Bank (Note	Proportionate Share of the Bank (Note	and Its Affiliates in Investees 1)	and Its Affiliates in Investees 1)
							Shares (In Thousands)	Pro Forma Shares (Note 2)	Total
									Shares (In Thousands)	Percentage of Ownership
Taichung Commercial Bank Co., Ltd. Taichung Bank Leasing Corporation Limited TCCBL Co., Ltd. (B.V.I.) Taichung Bank Securities Co., Ltd.	Taichung Bank Insurance Brokers Co., Ltd. Taichung Bank Securities Investment Trust Co., Ltd. Taichung Commercial Bank Securities Co., Ltd. Taichung Bank Leasing Corporation Limited TCCBL Co., Ltd. (B.V.I.) Taichung Bank Financial Leasing (Suzhou) Co., Ltd. Taichung Bank Venture Capital Co., Ltd.	Taichung City Taipei City Taichung City Taipei City British Virgin Islands Suzhou Taipei City	Insurance broker industry Securities investment trust industry Securities industry Leasing business Financial leasing and investment business Financial leasing business Venture capital business	100.00 38.46 100.00 100.00 100.00 100.00 100.00	$ 1,820,480 162,407 1,664,241 1,974,682 794,661 750,112 214,916	$ 99,013 (681) 152,727 45,495 15,432 14,993 184	128,600 19,783 146,748 198,964 30,000 - 21,000	- - - - - - -	128,600 19,783 146,748 198,964 30,000 - 21,000	100.00 63.41 100.00 100.00 100.00 100.00 100.00

Note 1: Shares or pro forma shares held by the Bank, directors, supervisors, president, vice president and affiliates have all been included in accordance with the Company Act.

Note 2: a. Pro forma shares are shares assumed to be obtained through buying equity-based securities or entering into equity-linked derivative contracts for purposes defined in Article 74 of the Banking Law. b. Equity-based securities, such as convertible bonds and warrants, are covered by Article 11 of “Securities and Exchange Law Enforcement Rules.”

c. Derivative contracts, such as share options, are those conforming to the definition of derivatives in International Financial Reporting Standard 9.

Note 3: This table of “information of investees’ names, locations, etc.” can only be seen in the second and fourth quarter’s financial statements.

114 -

TABLE 2

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE SIX MONTHS ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Lender	Borrower	Financial Statements Account (Note 2)	Related Party	Highest Balance for the Period (Note 3)	Ending Balance (Note 8)	Actual Amount Borrowed	Interest Rate (%)	Nature of Financing (Note 4)	Business Transaction Amount (Note 5)	Reasons for Short-term Financing (Note 6)	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 7)	Aggregate Financing Limit (Note 7)	Note
													Item	Value
1	Taichung Bank Leasing Corporation Limited	Wan Ku Fu Co., Ltd. Da Fang Skill Color Marketing Consulting Co., Ltd. Qiyi Integrated Marketing Co., Ltd TCCBL Co., Ltd. (B.V.I.)	Other receivables Other receivables Other receivables Other receivables	Not related Not related Not related Related	$ 121,829 178,152 176,081 9,534	$ 106,786 166,837 164,692 9,312	$ 91,181 166,837 164,692 9,312	4-10 4-10 4-10 -	Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing	$ - - - -	Business turnover Business turnover Business turnover Business turnover	$ 912 1,668 1,647 93	Real estate Real estate Real estate None	$ 86,610 180,000 372,093 -	$ 197,468 197,468 197,468 197,468	$ 789,873 789,873 789,873 789,873	Note 9 Note 9 Note 9 Note 9
2	TCCBL Co., Ltd. (B.V.I.)	Cross Border Profits Limited	Other receivables	Not related	5,395	-	-	4-10	Necessary for short-term financing	-	Business turnover	-	Margin	2,786	79,466	317,864	Note 10

Note 1: The description of the number column is as follows:

a. Issuer: 0.

b. The invested company is numbered sequentially by the Arabic number 1 according to the company.

Note 2: Items such as accounts receivable, corporate receivables, shareholder transactions, prepayments, provisional payments, etc., which are provided by financing are required to be filled in this field.

Note 3: The annual fund is provided to others to the highest balance.

Note 4: Nature of financing should be filled with business contracts or those who have short-term financing.

Note 5: Nature of the loan of the business contracts should be filled with the amount of business transactions. The amount of business transactions refers to the amount of business transactions between the company that lends the funds and the target of last year’s loan.

Note 6: Nature of the loan required for short-term financing should specify the reasons for the loans and the use of funds for the loan, such as repayment of loans, purchase of equipment, business turnover, etc.

Note 7: The company shall fill in the borrowing limit and total limit for individual objects according to the operating procedures and explains the calculation method of the total limit in the column Note.

Note 8: If the board of directors of the public offering company according to Article 14 (1) of the Public Offering Company’s Financing and Endorsement Guarantee Processing Guidelines will make a resolution, the amount of the resolution of the board of directors shall be included in the announcement balance to disclose its risk; however, if the funds are repaid, the balance after repayment should be disclosed to reflect the adjustment of risk. If the public offering company authorizes the chairman of the board to allocate or repay the loan in a certain amount and within one year according to the resolution of the board of directors in accordance with Article 14 (2) of the handling criteria, the fund’s loan and the amount approved by the board of directors shall be the declared balance. Although the funds will be repaid afterwards, the consideration may still be re-loaned. Therefore, the fund loan and the amount approved by the board of directors should still be used as the announced balance.

Note 9: Taichung Bank Leasing Corporation Limited should not exceed 10% of its own net value for a single enterprise. The total amount of financing provided to others is limited to 40% of the net value of Taichung Bank Leasing Corporation Limited

Note 10: TCCBL Co., Ltd. (B.V.I.) should not exceed 10% of its own net value for a single enterprise. The total amount of financing provided to others is limited to 40% of the net value of TCCBL Co., Ltd. (B.V.I.).

115 -

TABLE 3

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guarantee Given on Behalf of Each Party (Note 1)	Maximum Amount Endorsed/ Guaranteed During the Period (Note 2)	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 1)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries (Note 3)	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent (Note 3)	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China (Note 3)
		Name	Relationship
1	Taichung Bank Leasing Corporation Limited	TCCBL Co., Ltd. (B.V.I.)	Direct shareholding of 100% of subsidiary	$ 11,848,092	$ 632,228	$ 543,348	$ -	$ -	27.52	$ 19,746,820	-	-	-
2	Taichung Bank Leasing Corporation Limited	Taichung Bank Financial Leasing (Suzhou) Co., Ltd.	Indirect shareholding of 100% of subsidiary	11,848,092	2,488,421	2,426,756	1,615,895	-	122.89	19,746,820	-	-	Y

Note 1: According to Taichung Bank Leasing Corporation Limited’s “Operating Procedures to Fund Endorsement and Guarantee”, the endorsement limit to single company cannot surpass six times of Taichung Bank Leasing Corporation Limited’s audited net worth. The endorsement limits to all subsidiaries cannot surpass 10 times of Taichung Bank Leasing Corporation Limited’s audited net worth.

Note 2: The maximum balance guaranteed for endorsement of others during the year.

Note 3: It is a guarantor of the listed parent company to the endorsement of the subsidiary, the subsidiary company's endorsement to the listed parent company and the endorsement of the mainland area must be filled with Y.

116 -

TABLE 4

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD JUNE 30, 2021

(In Thousands of New Taiwan Dollars or Shares)

Name of Holding Company	Type and Name of Marketable Securities	Relationship	Financial Statements Account		June 30,	2021		Note
				Number of Shares	Carrying Amount (Note)	Percentage of Ownership (%)	Market Value or Net Asset Value (Note)
Taichung Commercial Bank Co., Ltd. Taichung Bank Leasing Corporation Limited TCCBL Co., Ltd. (B.V.I.) Taichung Bank Securities Co., Ltd.	Domestic unlisted shares Taichung Bank Leasing Corporation Limited Taichung Bank Insurance Brokers Co., Ltd. Taichung Bank Securities Co., Ltd. Taichung Bank Securities Investment Trust Co., Ltd. Foreign unlisted shares TCCBL Co., Ltd. (B.V.I.) Foreign unlisted shares Taichung Bank Financial Leasing (Suzhou) Co., Ltd. Domestic unlisted shares Taichung Bank Venture Capital Co., Ltd.	Subsidiary Subsidiary Subsidiary Association Sub-subsidiary Sub-subsidiary Sub-subsidiary	Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method	198,964 128,600 146,748 12,000 30,000 - 21,000	$ 1,974,682 1,820,480 1,664,241 162,407 794,661 750,112 214,916	100 100 100 38 100 100 100	$ 1,974,682 1,820,480 1,664,241 162,407 794,661 750,112 214,916

Note: The financial industry, the insurance industry and the securities industry are exempt from disclosure.

117 -

TABLE 5

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

INVESTMENT IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company Name	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital	Investment Type	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of June 30, 2021	% Ownership of Direct or Indirect Investment	Investment Gain	Carrying Value as of June 30, 2021	Accumulated Inward Remittance of Earnings as of June 30, 2021
						Outflow	Inflow
Taichung Bank Financial Leasing (Suzhou) Co., Ltd.	Financial leasing business		$ 893,373 (CNY 186,329 thousand)	Investment in mainland China companies through an existing company established in a third region.	$ 893,373 (CNY 186,329 thousand)	$ -	$ -	$ 893,373 (CNY 186,329 thousand)	100	$ 14,993 (CNY 3,461 thousand)	$ 750,112 (CNY 174,080 thousand)	$ -

Accumulated Investment in Mainland China as of June 30, 2021		Investment Amount Approved by the Investment Commission, MOEA		Maximum Investment Allowable (Note 2)
$893,373		$893,373		$1,184,809

Note 1: Recognition of investment gains and losses based on the financial statements audited by the parent company’s accountant.

Note 2: Based on the Investment Commission’s “Regulation on the Examination of Investment or Technical Cooperation in Mainland China”, investments are limited to the regulation of Taichung Bank Leasing Corporation Limited’s calculation.

Note 3: Foreign currency involved translation into the New Taiwan dollar at the spot rate and average exchange rate on the date of the financial statements (CNY1=NT$4.31, CNY1=NT$4.33)

118 -

TABLE 6

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

BUSINESS RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS BETWEEN THE PARENT COMPANY AND SUBSIDIARIES FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Transaction Company	Counterparty	Transaction Flow (Note 2)		Description of Transactions	Description of Transactions
				Financial Statement Account	Amount (Note 3)	Trading Terms	Transaction Amount/Total Consolidated Net Revenue or Total Consolidated Assets (%) (Note 4)
0	June 30, 2021 Taichung Commercial Bank Co., Ltd.	Taichung Insurance Brokers Co. Taichung Insurance Brokers Co. Taichung Insurance Brokers Co. Taichung Commercial Bank Securities Co., Ltd. Taichung Commercial Bank Securities Co., Ltd. Taichung Bank Leasing Corporation Limited. Taichung Bank Venture Capital Co., Ltd.	a a a a a a a	Deposits and remittances Service fee income Receivables Deposits and remittances General and administrative Deposits and remittances Deposits and remittances	$ 1,320,215 100,002 16,667 60,934 18,230 123,729 159,530	The terms for the transactions between the company and related parties are similar to those for unrelated parties. The terms for the transactions between the company and related parties are similar to those for unrelated parties. The terms for the transactions between the company and related parties are similar to those for unrelated parties. The terms for the transactions between the company and related parties are similar to those for unrelated parties. The terms for the transactions between the company and related parties are similar to those for unrelated parties. The terms for the transactions between the company and related parties are similar to those for unrelated parties. The terms for the transactions between the company and related parties are similar to those for unrelated parties.	- 2 - - - - -
1	Taichung Commercial Bank Securities Co., Ltd.	Taichung Commercial Bank Co., Ltd. Taichung Commercial Bank Co., Ltd.	b b	Right-of-use assets Lease liabilities	18,621 18,837	The terms for the transactions between the company and related parties are similar to those for unrelated parties. The terms for the transactions between the company and related parties are similar to those for unrelated parties.	- -

Note 1: The parent company and subsidiaries are numbered as follows:

a. Parent company: 0.
b. Subsidiaries are numbered sequentially from 1.

(Continued)

119 -

Note 2: Transaction flows are as follows:

a. From parent company to subsidiary,
b. From subsidiary to parent company, and c. Between subsidiaries.

Note 3: Have been eliminated on consolidation.

Note 4: Percentage to the consolidated total assets is calculated by dividing the amount of a particular asset or liability account by the consolidated total assets as of June 30, 2021 and 2020. Percentage to the consolidated total revenues is calculated by dividing the amount of a particular revenue or cost or expense account by the consolidated total operating revenues for the six months ended June 30, 2021 and 2020.

Note 5: Referring to transactions exceeding $10,000 thousand.

(Concluded)

120 -

TABLE 7

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

INFORMATION OF MAJOR SHAREHOLDERS JUNE 30, 2021

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
China Man-Made Fiber Corporation Pan Asia Chemical Corporation	913,492,857 234,255,531	22.00 5.64

Note 1: According to Article 25 of the Banking Act of the Republic of China, the same person or same related party who individually, jointly or collectively acquires more than 5% of a bank’s outstanding voting shares shall report such fact to the authorities within 10 days from the date of acquisition.
Note 2: If the shares of the major shareholders in the above table are held by trustees, the shareholdings should be separately disclosed by the trust accounts opened by the trustee. As for shareholders' handling of insider shareholding declarations with more than 10% of their shares in accordance with the Securities Exchange Act, their shareholdings include their own shareholdings plus those shares held under trust accounts with the right to utilize the trust assets, etc. For more information on insider shareholding declarations, please refer to the market observation post system website of the TWSE.
121 -

AI assistant

T.C.C.B. — Interim / Quarterly Report 2021

52197_rns_2021-11-29_0d6b63a2-d948-464f-b3a2-a94a27ff7358.pdf

Taichung Commercial Bank Co., Ltd. and Subsidiaries

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Conclusion

Other Matter

Notice to Readers

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

Amendments to IAS 1 “Disclosure of Accounting Policies”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Retirement benefits

- Other long term employee benefits

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS

8. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

9. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

a. Investments in equity instruments at FVTOCI

b. Investments in debt instruments at FVTOCI

10. INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST

11. SECURITIES PURCHASED UNDER RESELL AGREEMENTS

12. RECEIVABLES, NET

For the six months ended June 30, 2020

For the six months ended June 30, 2020

13. NOTES DISCOUNTED AND LOANS, NET

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET

15. RESTRICTED ASSETS, NET

16. OTHER FINANCIAL ASSETS, NET

17. PROPERTIES AND EQUIPMENT, NET

18. LEASE ARRANGEMENTS

b. Lease liabilities

d. Other lease information

19. INVESTMENT PROPERTIES, NET

20. INTANGIBLE ASSETS, NET

21. OTHER ASSETS, NET

22. DUE TO THE CENTRAL BANK AND OTHER BANKS

23. FUNDS BORROWED FROM CENTRAL BANK AND OTHER BANKS

24. SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

27. BANK DEBENTURES

28. OTHER FINANCIAL LIABILITIES

29. PROVISIONS

a. Details of provision for employee benefits were as follows:

1) Defined contribution plans

2) Defined benefit plans

For the six months ended June 30, 2021

For the six months ended June 30, 2020

For the six months ended June 30, 2020

For the six months ended June 30, 2020

30. OTHER LIABILITIES

31. EQUITY

Ordinary shares

b. Capital surplus

c. Appropriation of earnings and dividend policy

d. Other equity items

32. NET PROFIT FROM CONTINUING OPERATIONS

b. Service fee income, net

c. Gain on financial assets and liabilities at fair value through profit or loss

Accrual rate

33. INCOME TAXES RELATING TO CONTINUING OPERATIONS

c. Income tax assessments

34. EARNINGS PER SHARE

Unit: NT$ Per Share

Net profit for the period

T.C.C.B. Interim / Quarterly Report 2021