UBOT — Audit Report / Information 2023

Dec 28, 2023

Stock Code: 2838

Union Bank of Taiwan Co., Ltd.

Parent Company Only Financial Statement and the Independent Auditor’s Report First Half of 2023 and 2022

Address: 1F and 2F, No.109, Sec. 3, Minsheng E. Rd., Songshan District, Taipei City Tel: (02)2718-0001

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§Table of Contents§

Item I. Cover II. Table of Contents III. Audited Report IV. Parent-Only Balance Sheet V. Parent-Only Statement of Comprehensive Income VI. Parent-Only Statement of Changes in Equity VII. Parent-Only Statement of Cash Flow VIII. Notes to the Parent Company Only Financial Statement (I) Company History (II) Date and Procedures Passing the Financial Statements (III) Standards Recently Published or Amended, and the Applications of the Interpretations (IV) Summaries of the Material Accounting Policies (V) Material Accounting Judgement, Estimations, and the Main Sources of Uncertainties for Estimation (VI) Descriptions of Key Accounts (VII) Transactions with Related Parties (VIII) Assets Pledged or Mortgaged (IX) Material Contingent Liabilities and the Contractual Commitments not Recognized (X) Material Losses from Disasters (XI) Material Matters after the Period (XII) Others (XIII) Disclosed Matters in Notes 1. Information Related to Material Transactions 2. Information of the Re- investees 3. Information of Investments in Mainland China 4. Information of Major Shareholders (XIV) Department Information IX. Financial Statement Information of Independent Securities Department Disclosed Additionally	Page 1 2 3~7 8 9~11 12 13~15 16 16 17~22 22~31 31 32~73 74~81 81 81 - - 82~132 132 132 132 133 133 133 134~147	Note Number of the Financial Statement
		- - - - - - - I II III IV V VI~XL XLI XLII XLIII - - XLIV~XLIX L LI -

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Audited Report

To: The Board of Directors and Stockholders Union Bank of Taiwan

Auditor’s Opinion

We have audited the accompanying consolidated financial statements of Union Bank of Taiwan (the “Bank”), which comprise the parent-only balance sheets as of June 30, 2023, and December 31 and June 30, 2022, as well as the consolidated statements of comprehensive income, changes in equity and cash flows for January 1 to June 30, 2023 and 2022, and the notes to the Parent Company Only Financial Statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the parent company only financial position of the Bank as of June 30, 2023, and December 31 and June 30, 2022, as well as the parent company only financial performance and the parent company only cash flows for January 1st to June 30, 2023 and 2022.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the first half of 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

For the Bank’s Parent Company Only Financial Statements for the first half of 2023, the key audit matters are specified as follows:

Estimated impairment of discounts and loans

As of June 30, 2022, the carrying net amount of discounts and loans of the Bank accounted for approximately 63% of total assets, and thus it was deemed material to the Parent Company Only Financial Statements. Please refer to Note XIV of the Parent Company Only Financial Statements. It involves the material judgement such as accounting estimate and the management’s assumptions to determine whether discounts and loans are impaired; therefore we deem the estimated impairment of discounts and loans as one of the key audit matters.

The Bank’s management review the loan impairments regularly; when determining if any impairment loss shall be recognized, it is mainly to assess the possible impairment generated from ECL. The amount of impairment loss is the carrying amount and the 12-month ECL of lifetime ECL. In addition, the provision of discount and loan impairment shall comply with the legal requirements of credit asset classification and allowance of doubtful accounts.

Please refer to Note IV, V, and XIV for the accounting policies regarding allowance of doubtful accounts and related information.

The major audit procedures implemented by us including:

1. Understand and test the Company’s internal control regarding assessment of loan impairment

2. Test if credit assets are classified by following the treatment methods of the management and the requirements of the competent authorities, and check if the allowance of doubtful accounts to be provided comply with the related legal requirements.

3. Evaluate the reasonableness and consistency of the methodology adopted by the management to calculated the ECL, and randomly inspect the integrity and accuracy of the calculated amount of ECL from loan cases.

4. 4 -

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Statements by Public Banks and the Regulations Governing the Preparation of Financial Statements by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including (the audit committee), are responsible for overseeing the Bank’s Financial Statementing process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. 5 -

3. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank's internal control.

4. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

5. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

6. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

7. Obtain sufficient and adequate audit evidence for the components of the parent-only financial information, in order to express opinions regarding the Parent Company Only Financial Statements. We are responsible for direct, supervise, and execute the audit case, as well as form the audit opinions for the Bank.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the first half of 2023, and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Deloitte & Touche CPA Li Kuan-Hao CPA Shih Chun-Hung

Document Number of Approval by the FSC Jin-Guan-Zheng-Shen-Zhi No. 1100372936

Document Number of Approval by the FSC Jin-Guan-Zheng-Shen-Zhi No. 1110348898

August 29, 2023

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Union Bank of Taiwan Co., Ltd.

Parent-Only Balance Sheet

June 30, 2023, December 31 and June 30, 2022

Unit: NTD thousand

Code 11000 11500 12000 12100 12200 12500 13000 13200 13500 15000 15500 18500 18600 19007 19009 19300 19500 10000 Code 21000 22000 22500 23000 23200 23500 24000 25600 26000 29300 29500 20000 31101 31103 31121 31100 31500 32001 32003 32011 32000 32500 30000	Asset CASH AND CASH EQUIVALENTS (Note VI) DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS (Note VII and XLII) FINANCIAL ASSETS MEASURED AT FVTPL (Note VIII) FINANCIAL ASSETS MEASURED AT FVTOCI (Notes V, IX, and XI) INVESTMENT OF DEBT INSTRUMENT MEASURED AT AMORTIZED COSTS (Notes V, X, and XI) SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL (Note XII) RECEIVABLES, NET (Notes V, XIII and XV) CURRENT TAX ASSETS (Notes IV) DISCOUNTS AND LOANS, NET (Notes V, XIV, and XLI) INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET (Note XVI) OTHER FINANCIAL ASSETS, NET (Notes XVII and XLII) PROPERTY AND EQUIPMENT, NET (Notes XVIII) RIGHT-OF-USE ASSETS, NET (Notes XIX) GOODWILL (Notes IV and XX) COMPUTER SOFTWARE DEFERRED TAX ASSETS (Note IV) OTHER ASSETS, NET (Notes XXI, XLI, and XLIII) TOTAL ASSETS LIABILITIES AND EQUITY LIABILITIES Deposits from the central bank and other banks (Note XXII) Financial liabilities measured at fvtpl (Note VIII) Securities sold under agreements to repurchase (Note XXIII) Payables (Note XXV and XLI) Current tax liabilities (Notes IV) Deposits and remittances (Notes XXV and XLI) Financial bonds payable (Note XXVI) Provisions (Notes V, XXVII, and XLI) Lease liabilities (Notes XIX and XLI) Deferred tax liabilities (Note IV) Other liabilities (Notes XXIX, XLI and XLIII) Total EQUITY Share capital Share capital of common shares Share capital of preferential shares Capital increase reserve Total share capital Capital reserve Retained earnings Legal reserve Special surplus reserve Undistributed earnings Total retained earnings Other equity Total equity TOTAL LIABILITIES AND EQUITY		June 30, 2023 Amount ％ $ 6,721,226 1 30,747,073 4 52,164,255 6 63,485,574 7 82,840,985 9 39,595,963 5 30,675,376 3 105,746 - 551,173,468 63 7,180,663 1 1,533,718 - 8,672,237 1 1,225,294 - 1,985,307 - 168,090 - 435,433 - 2,442,060 - $ 881,152,468 100 $ 11,087,351 1 675,348 - 57,947,165 7 7,285,875 1 467,716 - 729,540,263 83 5,000,000 1 395,149 - 1,206,810 - 1,857,079 - 1,020,397 - 816,483,153 93 35,940,460 4 2,000,000 - 1,881,331 - 39,821,791 4 8,093,466 1 11,518,843 1 757,036 - 3,419,879 1 15,695,758 2 1,058,300 - 64,669,315 7 $ 881,152,468 100		December 31, 2022 Amount ％ $ 11,806,105 2 24,624,316 3 27,316,180 3 58,665,959 7 82,519,002 10 43,731,932 5 26,655,389 3 - - 528,761,720 64 7,044,344 1 1,520,811 - 8,155,271 1 1,341,040 - 1,985,307 - 186,741 - 504,970 - 3,871,175 1 $ 828,690,262 100 $ 4,790,895 1 931,500 - 34,298,607 4 7,033,812 1 637,420 - 710,745,127 86 5,000,000 1 327,115 - 1,325,495 - 1,735,860 - 794,009 - 767,619,840 93 35,940,460 4 2,000,000 - - - 37,940,460 4 8,076,826 1 10,589,878 1 627,440 - 4,473,399 1 15,690,717 2 637,581) - 61,070,422 7 $ 828,690,262 100		June 30, 2022	June 30, 2022
			Amount $ 6,721,226 30,747,073 52,164,255 63,485,574 82,840,985 39,595,963 30,675,376 105,746 551,173,468 7,180,663 1,533,718 8,672,237 1,225,294 1,985,307 168,090 435,433 2,442,060 $ 881,152,468 $ 11,087,351 675,348 57,947,165 7,285,875 467,716 729,540,263 5,000,000 395,149 1,206,810 1,857,079 1,020,397 816,483,153 35,940,460 2,000,000 1,881,331 39,821,791 8,093,466 11,518,843 757,036 3,419,879 15,695,758 1,058,300 64,669,315 $ 881,152,468		Amount $ 11,806,105 24,624,316 27,316,180 58,665,959 82,519,002 43,731,932 26,655,389 - 528,761,720 7,044,344 1,520,811 8,155,271 1,341,040 1,985,307 186,741 504,970 3,871,175 $ 828,690,262 $ 4,790,895 931,500 34,298,607 7,033,812 637,420 710,745,127 5,000,000 327,115 1,325,495 1,735,860 794,009 767,619,840 35,940,460 2,000,000 - 37,940,460 8,076,826 10,589,878 627,440 4,473,399 15,690,717 637,581) 61,070,422 $ 828,690,262		Amount $ 7,984,525 23,361,258 36,774,363 63,805,400 84,298,265 27,121,014 24,919,274 54,102 525,525,546 6,431,004 1,722,659 7,939,661 1,486,266 1,985,307 188,900 465,061 3,450,657 $ 817,513,262 $ 5,517,745 730,754 58,009,888 7,759,355 435,453 676,700,356 5,000,000 352,037 1,468,670 1,565,074 741,049 758,280,381 32,952,187 2,000,000 3,013,115 37,965,302 8,051,984 10,589,878 627,440 2,715,877 13,933,195 717,600) 59,232,881 $ 817,513,262	％
				(		(		1 3 5 8 10 3 3 - 64 1 - 1 - - - - 1 100 1 - 7 1 - 83 1 - - - - 93 4 - - 4 1 1 - 1 2 - 7 100

The attached notes are the integral part of the Parent Company Only Financial Statement.

Chairman: Lin Hung-Lian

Managerial Officer: Hsu Wei-Wen

Chief Accounting Officer: Lu Wen-Chuan

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Union Bank of Taiwan Co., Ltd.

Parent-Only Statement of Comprehensive Income

January 1 to June 30, 2023 and 2022

Unit: NTD thousand, Except NTD for Earnings Per Share

Code NET INTEREST INCOME (Notes XXXI and XLI) 41000 Interest income 51000 Interest expense 49010 Total net interest income NET INCOME OTHER THAN INTEREST 49100 Commissions and fee revenue, net (Notes XXXII) 49200 Gain (loss) on financial assets and liabilities at FVTPL (Note XXXIII) 49310 Realized gain on financial assets at FVTOCI (Note XXXIV) 49750 Share of gain/loss of subsidiaries and affiliates adopted the equity method 49600 Exchange gain (loss) 49700 Asset impairment loss (Note XXXV) 49831 Securities brokerage fee revenue, net 49863 Net loss from property transactions 49899 Other noninterest gains, net 4xxxx NET INCOME 58200 ALLOWANCE FOR DOUBTFUL ACCOUNTS - PROVISION FOR LOSSES ON COMMITMENTS AND GUARANTEES (Note XV)	January 1 to June 30, 2023 Amount ％ $ 9,566,619 122 5,231,536 67 4,335,083 55 1,723,669 22 2,408,975 31 174,609 2 80,056 1 ( 970,181 ) ( 12 ) ( 43,812 ) - 90,868 1 ( 1,361 ) - 16,143 - 7,814,049 100 365,927 5	January 1 to June	30, 2022	30, 2022
				％
			116 29 87 29 ( 3 ) 10 - ( 3 ) ( 22 ) 2 - - 100 4

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(Cont’)

Code OPERATING EXPENSES 58500 Employee benefit expense (Notes XXIX, XXXVII and XLII) 59000 Depreciation and amortization (Notes XIX and XXXVII) 59500 Other operating and management expenses (Notes XXXVIII and XLI) 58400 Total operating expenses 61001 NET PROFIT BEFORE TAX 61003 INCOME TAX EXPENSE (Note IV and XXXIX) 64000 CURRENT NET PROFIT OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: 65204 Valuation gain/loss of the equity instruments measured at fair value through other comprehensive income 65207 Shares in other comprehensive income of the subsidiaries and affiliates recognized with the equity method - not reclassified subsequently to profit or loss 65220 Income tax expenses relating to items that will not be reclassified subsequently to profit or loss (Note XXXIX) 65200 Total items that will not be reclassified subsequently to profit or loss (after tax)	January 1 to June 30, 2023 Amount ％ $ 2,104,845 27 391,276 5 2,030,176 26 4,526,297 58 2,921,825 37 427,009 5 2,494,816 32 1,535,706 20 188,249 2 ( 170,297) ( 2) 1,553,658 20	January 1 to June 30, 2023 Amount ％ $ 2,104,845 27 391,276 5 2,030,176 26 4,526,297 58 2,921,825 37 427,009 5 2,494,816 32 1,535,706 20 188,249 2 ( 170,297) ( 2) 1,553,658 20	January 1 to June 30, 2023 Amount ％ $ 2,104,845 27 391,276 5 2,030,176 26 4,526,297 58 2,921,825 37 427,009 5 2,494,816 32 1,535,706 20 188,249 2 ( 170,297) ( 2) 1,553,658 20	January 1 to June	30, 2022	30, 2022
		Amount $ 2,104,845 391,276 2,030,176 4,526,297 2,921,825 427,009 2,494,816 1,535,706 188,249 170,297) 1,553,658				％
	(		(		32 7 29 68 28 8 20 ( 31 ) - 1 (30)

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(Cont’)

Code 65300 Items that may be reclassified subsequently to profit or loss: 65301 Exchange difference from translating the financial statements of overseas operations 65307 Shares in other comprehensive income of the subsidiaries and affiliates recognized with the equity method - may be reclassified subsequently to profit or loss 65308 Gain/loss of the debt instruments measured at fair value through other comprehensive income 65320 Income tax expenses relating to items that may be reclassified subsequently to profit or loss (Note XXXIX) Items that may be reclassified subsequently to profit or loss (after tax) 65000 Other comprehensive income for the period (net of tax) 66000 TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE (Note XL) 67500 Basic earnings per share 67700 Diluted earnings per share	January 1 to June 30, 2023 Amount ％ $ 203,899 3 ( 126,993 ) ( 2 ) 252,749 3 ( 40,779) - 288,876 4 1,842,534 24 $ 4,337,350 56 $ 0.53 $ 0.53	January 1 to June	30, 2022
	Amount $ 203,899 ( 126,993 ) 252,749 ( 40,779) 288,876 1,842,534 $ 4,337,350 $ 0.53 $ 0.53	Amount $ 987,326 ( 148,467 ) ( 5,086,419 ) ( 197,465) (4,445,025) (6,171,235) ($ 5,024,994) $ 0.18 $ 0.18	％
			17 ( 3 ) ( 90 ) ( 3) (79) (109) (89)

The attached notes are the integral part of the Parent Company Only Financial Statement.

Chairman: Lin Hung-Lian Managerial Officer: Hsu Wei-Wen Chief Accounting Officer: Lu Wen-Chuan

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Union Bank of Taiwan Co., Ltd.

Parent-Only Statement of Changes in Equity

January 1 to June 30, 2023 and 2022

Unit: NTD thousand

																		Other Equity (Note XXX)	Other Equity (Note XXX)	Other Equity (Note XXX)	Other Equity (Note XXX)	Other Equity (Note XXX)
																	Exchange
			Share	capital							Retained earnings					difference from
			(Notes XXX	and	XXXVI)						(Note XXX)					translating the
																	financial		Unrealized gain
			Share capital of													statements of				(loss) on
		Share capital of	preferential	Capital		increase		Capital reserve		Special surplus			Undistributed				overseas		financial assets
Code		common shares	shares		reserve		Total	(Note XXX)	Legal reserve		reserve		earnings	Total			operations		at FVTOCI				Total		TOTAL
A1	Balance at January 1, 2022	$ 32,952,187	$ 2,000,000	$		-	$ 34,952,187	$ 8,051,984	$ 8,924,700	$	627,440		$ 6,932,579	$ 16,484,719		( $	1,636,613 )		$	7,283,034		$	5,646,421		$ 65,135,311
	2021 Earning appropriation and
	distribution
B1	Legal reserve provision	-	-			-	-	-	1,665,178			- (	1,665,178 )		-			-			-			-	-
B5	Cash dividends of common shares	-	-			-	-	-	-			- (	494,282 ) (	494,282 )				-			-			- (	494,282 )
B7	Cash dividends of preferential shares	-	-			-	-	-	-			- (	480,000 ) (	480,000 )				-			-			- (	480,000 )
B9	Share dividends of common shares	-	-		2,916,269		2,916,269	-	-			- (	2,916,269 ) (	2,916,269 )				-			-			-	-
D1	Net profit, January 1 to June 30, 2022	-	-			-	-	-	-			-	1,146,241	1,146,241				-			-			-	1,146,241
D3	Other comprehensive income after tax,
	January 1 to June 30, 2022	-	-			-	-	-	-			-	-		-		641,394		(	6,812,629 )		(	6,171,235 ) (		6,171,235 )
N1	Share-based payment transaction	-	-			96,846	96,846	-	-			-	-		-			-			-			-	96,846
Q1	Disposal of the equity instruments
	measured at fair value through other
	comprehensive income	-	-			-	-	-	-			-	192,786	192,786				-	(	192,786)		(	192,786)		-
Z1	Balance at June 30, 2022	$ 32,952,187	$ 2,000,000	$	3,013,115		$ 37,965,302	$ 8,051,984	$ 10,589,878	$	627,440		$ 2,715,877	$ 13,933,195		($	995,219)		$	277,619		($	717,600)		$ 59,232,881
A1	Balance at January 1, 2023	$ 35,940,460	$ 2,000,000	$		-	$ 37,940,460	$ 8,076,826	$ 10,589,878	$	627,440		$ 4,473,399	$ 15,690,717		( $	508,759 )		( $	128,822 )		( $	637,581 )		$ 61,070,422
	2022 Earning appropriation and
	distribution
B1	Legal reserve provision	-	-			-	-	-	928,965			- (	928,965 )		-			-			-			-	-
B3	Provision of special surplus reserve	-	-			-	-	-	-		129,596 (		129,596 )		-			-			-			-	-
B5	Cash dividends of common shares	-	-			-	-	-	-			- (	359,405 ) (	359,405 )				-			-			- (	359,405 )
B7	Cash dividends of preferential shares	-	-			-	-	-	-			- (	480,000 ) (	480,000 )				-			-			- (	480,000 )
B9	Share dividends of common shares	-	-		1,797,023		1,797,023	-	-			- (	1,797,023 ) (	1,797,023 )				-			-			-	-
C7	Changes in affiliates and joint ventures
	accounted for using the equity method	-	-			-	-	16,640	-			-	-		-			-			-			-	16,640
D1	Net profit, January 1 to June 30, 2023	-	-			-	-	-	-			-	2,494,816	2,494,816				-			-			-	2,494,816
D3	Other comprehensive income after tax,
	January 1 to June 30, 2023	-	-			-	-	-	-			-	-		-		36,127			1,806,407			1,842,534		1,842,534
N1	Share-based payment transaction	-	-			84,308	84,308	-	-			-	-		-			-			-			-	84,308
Q1	Disposal of the equity instruments
	measured at fair value through other
	comprehensive income	-	-			-	-	-	-			-	146,653	146,653				-	(	146,653)		(	146,653)		-
Z1	Balance at June 30, 2023	$ 35,940,460	$ 2,000,000	$	1,881,331		$ 39,821,791	$ 8,093,466	$ 11,518,843	$	757,036		$ 3,419,879	$ 15,695,758		($	472,632)		$	1,530,932		$	1,058,300		$ 64,669,315
						The	attached notes are	the integral part of the Parent Company		Only Financial Statement.

Chairman: Lin Hung-Lian

Managerial Officer: Hsu Wei-Wen

Chief Accounting Officer: Lu Wen-Chuan

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Union Bank of Taiwan Co., Ltd. Parent-Only Statement of Cash Flow January 1 to June 30, 2023 and 2022

Unit: NTD thousand

Code CASH FLOWS FROM OPERATING ACTIVITIES A10000 Current net income before income tax Adjustments to reconcile profit (loss) A20100 Depreciation expense A20200 Amortization expense A20300 Expected credit losses/provision of allowance for doubtful accounts A20400 Net (profit) loss of financial assets and liabilities measured at fair value through profit or loss A20900 Interest expense A21200 Interest income A21300 Dividend incomes A22300 Share of gain/loss of subsidiaries and affiliates adopted the equity method A22500 Loss on disposal and scrape of properties and equipment A23100 Gain on disposal of investments A23500 Impairment loss on financial assets A23800 Reversal of impairment loss on non- financial assets A24400 Loss (gain) on disposal of collaterals Changes in operating assets and liabilities, net A41110 Due from the Central Bank and call loans to banks A41120 Financial assets measured at fair value through profit or loss A41123 Financial assets measured at fair value through other comprehensive income A41125 Investment of debt instrument measured at amortized costs A41150 Accounts receivable A41160 Discounts and loans A41190 Other financial assets A42110 Deposits from the Central Bank and peers	January 1 to June 30, 2023 $ 2,921,825 346,410 44,866 365,927 ( 2,374,513 ) 5,231,536 ( 9,566,619 ) ( 209,071 ) ( 80,056 ) 1,361 - 44,170 ( 358 ) 121 ( 6,122,757 ) ( 21,132,468 ) ( 3,077,427 ) ( 397,372 ) ( 3,771,347 ) ( 22,705,694 ) 1,794 6,296,456	January 1 to June 30, 2022
		$ 1,604,498 346,946 41,604 216,054 181,143 1,652,457 ( 6,555,704 ) ( 461,029 ) 1,896 3,759 ( 123,171 ) 1,231,408 ( 2,108 ) 1,008 6,191,853 9,794,173 ( 11,104,457 ) ( 6,919,616 ) 833,528 ( 32,061,897 ) ( 107,790 ) ( 3,778,568 )

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(Cont’)

(Cont’)
Code A42120 Financial liabilities measured at fair value through profit or loss A42140 Securities sold under agreements to repurchase A42150 Accounts payable A42160 Deposits and remittances A42170 Other financial liabilities A33000 Cash outflow generated from operations A33100 Interest received A33200 Dividends received A33300 Interest paid A33500 Income tax paid AAAA Cash outflow from operating activities, net CASH FLOWS FROM INVESTING ACTIVITIES B01800 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD B02700 Acquisition of properties and equipment B02800 Disposal of properties and equipment B03500 Increase in settlement fund B03600 Decrease in settlement fund B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B04500 Acquisition of intangible assets B04700 Disposal of collaterals B06700 Increase in other assets B06800 Decrease in other assets BBBB Cash inflow (outflow) from investment activities, net CASH FLOWS FROM FINANCING ACTIVITIES C00400 Decrease in due to Central Bank and other banks C01500 Repayment of financial bonds C03000 Increase in guarantee deposits C03100 Decrease in guarantee deposits C04020 Repayment of lease liability principals C04300 Increase in other liabilities C04400 Decrease in other liabilities CCCC Cash outflow from financing activities, net DDDD EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	January 1 to June 30, 2023 ( $ 1,597,246 ) 23,648,558 ( 1,030,648 ) 18,795,136 - ( 14,367,416 ) 9,423,269 212,880 ( 4,703,922 ) ( 722,780) (10,157,969) - ( 653,768 ) 15 - 872 - 1,315,702 ( 20,304 ) 237 - 112,541 755,295 - - 4,055 - ( 219,833 ) 171,471 - ( 44,307) 226,133	January 1 to June 30, 2022
		( $ 680,921 ) 6,730,132 ( 1,374,292 ) 3,874,751 ( 6,446) ( 30,470,789 ) 6,318,350 461,029 ( 1,551,222 ) ( 462,874) (25,705,506) ( 89,993 ) ( 186,865 ) - ( 324 ) - ( 439,510 ) - ( 22,859 ) 1,100 ( 40,570 ) - ( 779,021) ( 6,741,390 ) ( 2,700,000 ) - ( 23,488 ) ( 219,061 ) - ( 239,340) ( 9,923,279) 1,002,516

(continued at next page)

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(Cont’)

Code EEEE DECREASE IN CASH AND CASH EQUIVALENTS E00100 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD E00200 Balance of cash and cash equivalents at the end of the period RECONCILATION OF CASH AND CASH EQUIVALENTS Code E00210 Cash and cash equivalents in the parent-only balance sheets E00230 Securities purchased under agreements to resell that meet the definition of cash and cash equivalents in IAS 7 “Cash Flow Statements” E00200 CASH AND CASH EQUIVALENTS	January 1 to June 30, 2023 January 1 to June 30, 2022 ( $ 9,220,848 ) ( $ 35,405,290 ) 55,538,037 70,510,829 $ 46,317,189 $ 35,105,539 AT THE END OF THE PERIOD June 30, 2023 June 30, 2022 $ 6,721,226 $ 7,984,525 39,595,963 27,121,014 $ 46,317,189 $ 35,105,539	January 1 to June 30, 2022	January 1 to June 30, 2022
	June 30, 2023 $ 6,721,226 39,595,963 $ 46,317,189
			$ 7,984,525 27,121,014 $ 35,105,539

The attached notes are the integral part of the Parent Company Only Financial Statement.

Chairman: Lin Hung-Lian Managerial Officer: Hsu Wei-Wen Chief Accounting Officer: Lu Wen-Chuan

• 15 -

Union Bank of Taiwan Co., Ltd.

Notes to the Parent Company Only Financial Statement

January 1 to June 30, 2023 and 2022

(In NTD thousand, unless specified otherwise)

I. Company History

The Union Bank of Taiwan (the “Bank”) was incorporated on December 31, 1991 after obtaining approval from the Ministry of Finance (MOF) on August 1, 1991 and started operations on January 21, 1992. The Bank is mainly engaged in activities including deposits, loans, discounts, remittances, acceptances, issuance of guarantees and letters of credit, short-term bills transactions, investments, foreign exchange transactions, savings, trust, and other agent business.

On the Bank’s merger with Chung Shing Bank on March 19, 2005, the Bank took over all of its assets, liabilities and operating units.

The Bank merged with Union Bills Finance Corporation (UBF) on August 16, 2010, with the Bank as the surviving entity.

On August 26, 2015, the board of directors of the Bank resolved to merge UIB in order to integrate the resources, and strengthen management and business synergy. The merger was approved by the Financial Supervisory Commission (FSC) under Rule No. 10502022990 dated March 21, 2016. The effective date of this merger was August 1, 2016.

As of June 30, 2023, the Bank’s operating units included Trust, Wealth Management, Security Finance, Bills Finance, International Banking, Insurance Agency, Offshore Banking Units (OBU), overseas representative offices in Hong Kong, Ho Chi Minh City and Hanoi, Vietnam, and 90 domestic branches (including the business department).

The operations of the Bank’s trust department are (1) trust business planning, managing and operating; and (2) custody of nondiscretionary trust funds in domestic and overseas securities and mutual funds. These foregoing operations are regulated under the Banking Act and Trust Act.

The Bank’s shares are traded on the Taiwan Stock Exchange.

The Parent Company Only Financial Statements are presented in NTD, the Bank’s functional currency.

II. Date and Procedures Passing the Financial Statements

The Parent Company Only Financial Statements were approved by the Company’s board of directors on August 28, 2023.

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III. Standards Recently Published or Amended, and the Applications of the Interpretations

• (I) Initial application of the amendments to the Regulations Governing the Preparation of Financial Statements by Public Banks and the International Financial Statementing Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

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

1. Amendment to IAS 1 “Disclosure of Accounting Policies”

2. When the amendment is adopted, the Company refers to the definition of

3. 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. In addition,

4. ⚫ Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;

5. ⚫ The Bank 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

6. ⚫ Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The 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 Bank 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 Bank chose the accounting policy from options permitted by the standards;

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• (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 Bank is required to make significant judgments or assumptions in applying an accounting policy, and the Bank discloses those judgments 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.

Please refer to Note 4 for the disclosure of relevant accounting policies.

1. Amendment to IAS 8 “Definition of Accounting Estimates

The Company adopted the amendment since January 1, 2023, and it defines that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Bank may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Bank uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

1. Amendment to IAS 12 “Deferred Tax Related to Assets and Liabilities Arising From a Single Transaction”

The amendment clarifies that the initial recognition exemption under IAS 12 does not apply to transactions in which equal taxable and deductible temporary differences arise on initial recognition. The Company recognizes a deferred tax asset (to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized) and a deferred tax liability for all deductible and taxable temporary differences associated with leases and decommissioning obligations on January 1, 2022 by applying this amendment. The Company will apply the amendments prospectively to transactions other than leases and decommissioning obligations that occur on or after January 1, 2022.

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• Amendments to IAS 12 "International Tax Reform—Pillar Two Model Rules."

The amendments introduce an exception to IAS 12, which specifies that the Company shall not recognize deferred income tax assets and liabilities in respect of Pillar Two income tax, and shall not disclose information related to such deferred income tax. However, it shall disclose that it has applied the exception and separately disclose the income tax expense (profit) of the current period related to the income tax of Pillar Two. In addition, during the period when Pillar Two legislation is enacted or substantively enacted but not yet in effect, the Company shall disclose qualitative and quantitative information that is helpful to users in understanding their exposure to Pillar Two income tax, which is known or can be reasonably estimated. After the promulgation of this amendment, the exceptions to this subparagraph shall be applied retrospectively immediately and the facts that have applied shall be disclosed; other disclosure requirements shall be applicable for the annual reporting period beginning on or after January 1, 2023. These other disclosure requirements are not applicable to the interim financial reports with reporting period ending before December 31, 2023.

• (II) IFRSs endorsed by the FSC applicable since 2024

Standards Recently Published /Amended/Applications of the Interpretations Amendments to IFRS 16, “Lease Liability in a Sale and Leaseback”

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

Amendments to IAS 1, “Non-current Liabilities with Covenants”

Effective dates issued by IASB (Note 1) January 1, 2024 (Note 2) January 1, 2024

January 1, 2024

IAS 7 and IFRS 7 Amendments "Supplier Financing January 1, 2024 (Note 3) Arrangements."

• Note 1: Unless noted otherwise, the above said standards recently released/amended/amended standards or interpretations take effects from the year of reporting period after the dates of release or amendment.

• Note 2: The seller concurrently the lessee shall retrospectively apply the amendment to IFRS 16 to the sale and leaseback transactions entered after the initial application date of IFRS 16.

• Note 3: When these amendments are applied for the first time, part of the disclosure requirements are exempted.

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1. Amendments to IFRS 16, “Lease Liability in a Sale and Leaseback”

The amendments clarify that for a sale and leaseback transaction, if the transfer of an asset meets the requirements of "Revenue from Contracts with Customers" in IFRS 15 and it is classified as a sale, the liabilities that arise from the leaseback by the seller and lessee, shall be treated according to the lease liability of IFRS 16. However, if it involves variable lease payments that are not dependent on the index or rate, the seller and lessee shall measure the liability in a manner that does not recognize the gain or loss related to the retained right of use. Subsequently, the difference between the current lease payment amount and the actual payment amount included in the calculation of lease liabilities is recognized as profit or loss.

1. IAS 7 and IFRS 7 Amendments "Supplier Financing Arrangements."

Financing arrangements with suppliers are characterized by a commitment by one or more financing providers to pay an enterprise for the amount payable to its supplier, and the enterprise agrees to the terms and conditions arranged for the payment which is to take place on the same day (or at a later date) its supplier is paid. According to the amendments, the Company shall provide disclosures that enable users of financial statements to assess the impact of supplier financing arrangements on the Company's liabilities, cash flows, and liquidity risk exposure.

In addition to the above effects, as of the date, the parent company only financial statements were authorized for issue. The Company is continuously assessing the possible impact that the amendments of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

(III) New IFRSs in issue but not yet endorsed and issued into effect by the FSC

Standards Recently Published /Amended/Applications of the Interpretations 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 IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information”

Effective dates issued by IASB (Note 1) To be determined.

January 1, 2023 January 1, 2023 January 1, 2023

Amendments to IAS 21 "Lack of Convertibility." January 1, 2025 (Note 2)

• 20 -

• Note 1: Unless noted otherwise, the above said standards recently released/amended/amended standards or interpretations take effects from the year of reporting period after the dates of release or amendment.

• Note 2: Applicable to annual reporting periods beginning on or after January 1, 2025. When the amendment is applied for the first time, the effect is recognized in the retained earnings on the date of initial application. When the Company uses a non-functional currency as the presentation currency, it will affect the exchange differences of foreign operations under equity on the date of initial application.

• Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture”

According to the amendments, if the Company sells or invests assets to an affiliate (or joint venture), or the Company loses control of a subsidiary but retains significant influence (or joint control) over the subsidiary, or, if the aforementioned assets or former subsidiary meets the definition of "business" in IFRS 3 "Business Combination," the Company recognizes all gains and losses arising from the transaction.

In addition, if the Company sells or invests assets to an affiliated enterprise (or joint venture), or the Company loses control of a subsidiary in a transaction with an affiliated enterprise (or joint venture), but retains significant influence (or joint control) over the subsidiary, or, if the aforementioned assets or the former subsidiary do not meet the definition of "business" in IFRS 3, the Company only recognizes the profit or loss arising from the transaction to the extent of unrelated investors’ interests in the affiliated enterprise (or joint venture). That is, the Company's share of the profit or loss shall be eliminated.

• 21 -

2. Amendments to IAS 21 "Lack of Convertibility."

The amendments clearly stipulate that if an enterprise is able to exchange a currency for another through an exchange transaction with enforceable rights and obligations established in the market or through the exchange mechanism within the normal time range of management delay, the currency is considered convertible. When the currency is not convertible on the measurement date, the Company shall estimate the spot exchange rate to reflect the exchange rate that would be used by market participants to conduct an orderly transaction on the measurement date by taking into account the prevailing economic conditions. Under such circumstances, the Company shall also disclose information that will enable users of financial statements to assess how the lack of convertibility of currencies has affected or is expected to affect its results of operations, financial position and cash flows.

As of the date the Parent Company Only Financial Statements were authorized for issue, the Bank has assessed that the aforesaid amendments to standards and interpretations will not have any material impact on the Bank’s financial position and financial performance; provided, the Bank is continuously assessing the possible impact that the application of other standards and interpretations will have on the Bank’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

IV. Summaries of the Material Accounting Policies

(I) Statement of Compliance

The Parent Company Only Financial Statements are prepared pursuant to the Regulations Governing the Preparation of Financial Statements by Public Banks and the Regulations Governing the Preparation of Financial Statements by Securities Issuers. The Parent Company Only Financial Statements do not include all the IFRSs disclosure information required for the full-year Parent Company Only Financial Statements.

(II) Other material accounting policies

Except for the following explanation, please refer to the summery of the material accounting policies in the 2022 Parent Company Only Financial Statements

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(III) Financial instruments

Financial assets and financial liabilities are recognized in the parent-only balance sheet when an entity becomes a party to the contractual provisions of the instruments.

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1. Financial assets

All regular transactions of financial assets are recognized and derecognized on a trade date basis.

• (1) Measurement categories

Financial assets held by the Bank are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, investments in debt instruments at FVTOCI and investments in equity instruments at FVTOCI.

A. Financial assets measured at fair value through profit or loss

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments that are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

A financial asset may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note XLVI.

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• B. Financial assets measured at amortized costs

Financial assets invested by the Bank that meet the both conditions below are subsequently measured at amortized cost:

• a. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• b. The contractual terms of the debt instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents and trade receivables at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

• a. Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

• b. Financial assets that are not credit-impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred: i) significant financial difficulty of the issuer or the borrower; ii) breach of contract, such as a default; iii) becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or iv) the disappearance of an active market for that financial asset because of financial difficulties.

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Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• C. Investments of the debt instruments measured at fair value through other comprehensive income

Debt instruments that meet the both following conditions are subsequently measured at FVTOCI:

• a. The debt instrument is held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of such financial assets; and

• b. The contractual terms of the debt instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in debt instruments at FVTOCI are subsequently measured at fair value. Changes in the carrying amounts of these debt instruments relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and impairment losses or reversals are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of.

• D. Investments of the equity instruments measured at fair value through other comprehensive income

On initial recognition, the Bank may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

• 25 -

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Bank’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

(2) Impairment of financial and contractual assets

The Bank recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including loans, trade receivables, and non-accrual loans), investments in debt instruments at FVTOCI, lease receivables, as well as contract assets.

For the aforesaid financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

• 26 -

In determining the allowance for credit losses and the reserve for losses on guarantees, the Bank assesses the balances of discounts and loans, receivables, nonperforming loans, and other financial assets as well as guarantees and acceptances for their collectability and their specific risks or general risks as of the balance sheet date. Under the regulations issued by the Ministry of Finance (MOF), the Bank evaluates credit balances on the basis of their estimated collectability. The MOF regulations also require the grouping of credit assets into these five classes: Normal, special mention, substandard, doubtful and losses; the minimum loan loss provision and guarantee reserve for the unsound credit assets (those other than normal) should be 2%, 10%, 50% and 100%, respectively, of the outstanding credit balance. The MOF issued a guideline stating that from January 1, 2014, the minimum loan loss provision and guarantee should be the sum of 1% of the outstanding balance of the normal credit asset’s claim, 2% of the balance of special mention credit assets, 10% of the balance of substandard credit assets, 50% of the balance of doubtful credit assets, and the full balance of losses credit assets (excluding assets that represent claims against the central and local government in Taiwan). Also, in accordance with Rule No. 10300329440 issued by FSC, the minimum allowance for mortgage loans should be 1.5% (the policy loans added since January 1, 2011 may be excluded) as the minimum provision standard for NPL and guarantee liability reserve; the higher between this allowance and the assessment result of the aforesaid ECL is taken to measure the allowance loss.

The Bank assesses the probability of collection for non-accrual loans and overdue loans and values of collaterals when determining the writeoffs. The credits deemed uncollectable may be written off if the write-off is approved by the board of directors. Recoveries of amounts previously written off are credited to the allowance account.

• 27 -

The Company recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of such a financial asset.

(3) Derecognition of financial assets

The Bank derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and any associated liability for amounts it may have to pay. On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI in its entirety, the cumulative gain or loss is transferred directly to retained earnings, without being reclassified to profit or loss.

2. Equity instrument

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments refer to any contract representing the remaining equity of the Bank by deducting all liabilities from the assets. Equity instruments issued are recognized at the proceeds received, net of direct issue costs.

• 28 -

The repurchase of the Bank’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Bank’s own equity instruments.

3. Financial liabilities

• (1) Subsequent measurement

Other than the following circumstance, all financial liabilities are measured at amortized costs with the effective interest method:

• A. Financial liabilities measured at fair value through profit or loss

The financial liabilities at FVTPL include these held for trading and designated as measured at FVTPL.

A financial liability may be designated as at FVTPL upon initial recognition when doing so results in more relevant information and if:

• a. Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• b. The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and has performance evaluated on a fair value basis, in accordance with the Bank’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• c. The contract contains one or more embedded derivatives so that the entire combined contract (asset or liability) can be designated as at FVTPL.

For a financial liability designated as at FVTPL, the amount of changes in fair value attributable to changes in the credit risk of the liability is presented in other comprehensive income and will not be subsequently reclassified to profit or loss. The gain or loss accumulated in other comprehensive income will be transferred to retained earnings when the financial liability is derecognized. If this accounting treatment related to credit risk would create or enlarge an accounting mismatch, all changes in the fair value of the liability are presented in profit or loss. Provided, if recognizing the changes in fair values of credit risks will result in or intensify the improper accounting proportions, all the

• 29 -

change in the entire fair value of the liability will be presented in profit and loss. Fair value is determined in the manner described in Note XLVI.

B. Financial guarantee contracts

Financial guarantee contracts issued by the Bank, if not designated as at FVTPL, are subsequently measured at the higher of a) the amount of the loss allowance reflecting expected credit losses; and b) the amount initially recognized less, where appropriate, the cumulative amount of income recognized in accordance with the revenue recognition policies.

(2) Derecognition of financial liabilities

The Bank only derecognizes financial liabilities when obligations are released, cancelled, or expire. When derecognizing a financial liability, the difference between carrying amount and the proceed paid (including all the non-cash assets transferred or liabilities assumed) are recognized as profit and loss.

4. Derivative instruments

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the host contracts are not measured at FVTPL.

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(IV) Defined benefits and post-employment benefits

The pension costs for the interim period are calculated with the pension cost rate determined by the actuarial calculation at the end date of the previous year from the beginning of the year to the end of the period; adjustments are made as well for the material market fluctuation, material plan modification, repayment, or other material one-time-off events during the period, if any.

(V) Income taxes

Income tax expense are the sum of the current income tax and deferred income taxes. The income tax for the interim period is assessed on the annual basis, to calculate the interim profit before tax with the expected applicable tax rate for the total annual earnings.

V. Material Accounting Judgement, Estimations, and the Main Sources of Uncertainties for Estimation

In the application of the Bank’s accounting policies, 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 to be relevant. Actual results may differ from these estimates.

The Group, when making significant accounting estimates, incorporated the potential impact of the Russo-Ukrainian War and relevant international sanctions on the economic environment into relevant material accounting estimates, such as cash flows, growth rates, discount rates, and profitability. Management will continue to review the estimates and underlying assumptions. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

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Estimated Impairment of Financial Assets

The provision for impairment of loan, receivables, investments in debt instruments, and financial guarantee contracts is based on assumptions about risk of default and expected loss rates. The Bank uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Bank’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. For details of the key assumptions and inputs used, see Note XLVII. Where the actual future cash inflows are less than expected, a material impairment loss may arise. Moreover, the impacts of market fluctuations due to the Russo-Ukrainian War and relevant international sanctions on the credit risk of financial assets, result in greater uncertainty regarding the estimation of the probability of default.

VI. Cash and Cash Equivalents

Cash and Cash Equivalents
Cash on hand Checks for clearing Due from banks	June 30, 2023 $ 4,756,621 1,057,028 907,577 $ 6,721,226	December 31, 2022 $ 7,085,212 3,191,491 1,529,402 $ 11,806,105	June 30, 2022
				$ 4,656,495 1,064,961 2,263,069 $ 7,984,525

VII. Due from the Central Bank and Call Loans to Other Banks

Deposit reserve - checking account Deposit reserve - Account B (Note 42) Deposit reserve - foreign- currency deposits	June 30, 2023 $ 9,131,276 21,500,598 115,199 $ 30,747,073	December 31, 2022 $ 3,633,854 20,882,984 107,478 $ 24,624,316	June 30, 2022	June 30, 2022
				$ 4,314,975 18,942,242 104,041 $ 23,361,258

Under a directive issued by the Central Bank of the ROC, the Company determines monthly NTD-denominated reserve deposits at prescribed rates based on the average balances of customers’ NTD-denominated deposits, which are subject to withdrawal restrictions.

In addition, the foreign-currency reserve deposits are determined at rates prescribed for balances of foreign-currency deposits. These reserves may be withdrawn anytime and do not bear interest.

• 32 -

VIII. Financial Products Measured at Fair Value Through Profit or Loss

Financial assets mandatorily measured at fair value Commercial paper Overseas government bonds Domestic listed shares Fund beneficiary certificates Asset-backed securities Future exchange margins - self owned Subtotal Derivative financial products Foreign exchange forward contracts Currency swap contracts Option contracts Subtotal Financial liabilities held for trading Derivative financial products Currency swap contracts Foreign exchange forward contracts Option contracts	June 30, 2023 $ 48,297,889 598,913 1,517,641 297,028 24,026 64,593 50,800,090 54,965 1,169,267 139,933 1,364,165 $ 52,164,255 $ 505,813 30,794 138,741 $ 675,348	December 31, 2022 $ 26,558,195 - 1,632 64,996 26,637 62,175 26,713,635 79,851 360,420 162,274 602,545 $ 27,316,180 $ 763,931 5,304 162,265 $ 931,500	June 30, 2022	June 30, 2022
				$ 34,584,438 - 915,166 282,922 31,682 62,424 35,876,632 77,698 656,838 163,195 897,731 $ 36,774,363 $ 538,526 32,093 160,135 $ 730,754

The Bank engaged in derivative transactions mainly to accommodate customers’ needs and manage its exposure positions. The financial risk management objective of the Bank was to minimize risks due to changes in fair value or cash flows.

The contract amounts (notional amounts) of the derivative transactions for accommodating customers’ needs and managing its exposure positions as of June 30, 2023, December 31s and June 30, 2022 are as follows:

• 33 -

Currency swap contracts Foreign exchange forward contracts Futures Option contracts Call options Put options		Contract amount
	June 30, 2023 $ 91,405,418 2,455,426 15,568 4,925,871 4,925,871	December 31, 2022 $ 72,703,788 2,104,766 15,354 4,565,524 4,565,524	June 30, 2022 $ 88,109,927 2,462,418 - 4,685,235 4,685,235

As of June 30, 2023, December 31 and June 30, 2022, financial assets at fair value through profit and loss in the amounts of NT$27,444,718 thousand, NT$9,700,254 thousand and NT$18,062,223 thousand, respectively, were sold under repurchase agreements.

The open positions of futures transactions of the Bank were as follows:

June 30, 2023

Item Futures Contract	Products US 10-year treasury 2309	Open Position Buy/Sell Number of Contracts Buyer 5	Contract amount $ 15,568	Fair value
		Buy/Sell Buyer
				$ 15,544

December 31, 2022

Item Futures Contract	Products US 10-year treasury 2023	Open Position	Open Position	Contract amount	Fair value
		Buy/Sell Seller	Number of Contracts
			5	$ 15,354	$ 15,560

There was no opening future contract as of June 30, 2022.

The Bank’s futures trading margins receivable are as follows:

The Bank’s futures trading margins	receivable are as follows:
Account balance Gains (losses) from opening future contracts Account net worth	June 30, 2023 $ 64,617 ( 24) $ 64,593	December 31, 2022
	(		$ 61,969 206 $ 62,175

• 34 -

IX. Financial Assets Measured at Fair Value Through Other Comprehensive Income

June 30, 2023 December 31, 2022 June 30, 2022

Investments of the equity instruments measured at fair value through other comprehensive income Domestic listed shares Overseas listed shares Unlisted shares, domestic and overseas Subtotal Investments of the debt instruments measured at fair value through other comprehensive income Overseas corporate bonds Overseas financial bonds Overseas government bonds Domestic corporate bonds Domestic government bonds Subtotal	$ 4,801,119 6,853,209 1,772,950 13,427,278 16,618,781 3,138,099 15,100,435 7,784,020 7,416,961 50,058,296 $ 63,485,574	$ 2,392,899 6,001,722 1,779,550 10,174,171 15,433,031 3,172,576 14,591,455 8,028,546 7,266,180 48,491,788 $ 58,665,959	$ 5,808,028 5,570,769 1,743,506 13,122,303 16,350,573 3,133,518 14,701,476 9,199,393 7,298,137 50,683,097 $ 63,805,400

Details of the Bank’s investments in foreign and domestic unlisted shares are as follows:

follows:
Taiwan Futures Exchange LINE Bank Taiwan Limited Financial Information Service Co., Ltd. Taiwan Asset Management Corporation Taiwan Depository & Clearing Corporation Taiwan Financial Asset Service Corporation Others	June 30, 2023 $ 550,805 577,921 410,634 79,652 83,691 48,911 21,336 $ 1,772,950	December 31, 2022 $ 548,734 602,263 397,193 79,982 81,609 48,147 21,622 $ 1,779,550	June 30, 2022
				$ 516,693 641,682 359,814 77,483 76,585 48,776 22,473 $ 1,743,506

• 35 -

(I) Investments of the equity instruments measured at fair value through other comprehensive income

The Bank holds the listed, emerging, and unlisted shares for long-term strategic purposes, and expects to earn profits via the long-term investment. The management believes it is inconsistent to the aforesaid long-term investment planning if the short-term fair value fluctuations of such investments are listed to profit and loss, and thus elected to designate these investments in equity instruments as at FVTOCI.

Due to the consideration of the investment strategy, the Company sold the equity instrument investment measured at fair value through other comprehensive income from January 1 to June 30, 2023 and 2022. The fair value of the sale was NT$845,121 thousand and NT$3,442,297 thousand, respectively. Meanwhile, the unrealized valuation gains of NT$146,653 thousand and gains of NT$192,786 thousand accumulated during the disposal were transferred from other equity to retained earnings.

In 2023 and for the six months ended June 30, 2022, the dividend revenue recognized by the Company as investments in equity instruments measured at fair value through other comprehensive income were NT$174,609 thousand and NT$439,303 thousand, respectively, of which up to 2023 and those still held on June 30, 2022, amounted to NT$174,384 thousand and NT$412,849 thousand, respectively.

(II) Investments of the debt instruments measured at fair value through other comprehensive income

For further information regarding credit risk management and impairment assessment of financial assets at FVTOCI, refer to Note XI.

The Bank had sold NT$14,802,551 thousand, NT$8,999,616 thousand and NT$23,203,939 thousand of its financial assets at FVTOCI under a repurchase agreement on June 30, 2023, December 31 and June 30, 2022, respectively.

• 36 -

X. Financial Assets Measured at Amortized Costs

Negotiable certificates of deposit Debt instruments Domestic government bonds Overseas asset-backed securities Subtotal	June 30, 2023 $ 42,900,000 9,646,778 30,294,207 39,940,985 $ 82,840,985	December 31, 2022 $ 42,900,000 9,745,645 29,873,357 39,619,002 $ 82,519,002	June 30, 2022	June 30, 2022
				$ 44,600,000 9,877,106 29,821,159 39,698,265 $ 84,298,265

For further information regarding credit risk management and impairment assessment on financial assets at amortized cost, refer to Note XI.

The Bank sold financial assets at amortized cost under repurchase agreements in the amounts of NT$25,400,394 thousand, NT$27,540,026 thousand and NT$26,250,796 thousand on June 30, 2023, December 31 and June 30, 2022, respectively.

XI. Credit Risk Management for Investments in Debt Instruments

Debt instruments that the Bank invested in have been further split into two categories, financial assets at FVTOCI and financial assets at amortized cost:

Total carrying amount Loss allowance Fair value adjustment Total carrying amount Loss allowance Fair value adjustment		June 30, 2023
	At fair value through other comprehensive income At amortized costs $ 57,661,630 $ 40,162,547 ( 1,469,711 ) ( 221,562 ) ( 6,133,623) - $ 50,058,296 $ 39,940,985 December 31, 2022		Total
			$ 97,824,177 ( 1,691,273 ) ( 6,133,623) $ 89,999,281
	At fair value through other comprehensive income $ 56,262,594 ( 1,427,072 ) ( 6,343,734) $ 48,491,788	At amortized costs $ 39,815,632 ( 196,630 ) - $ 39,619,002		Total
			$ 96,078,226 ( 1,623,702 ) ( 6,343,734) $ 88,110,790

• 37 -

June 30, 2022

		June 30, 2022
Total carrying amount Loss allowance Fair value adjustment	At fair value through other comprehensive income $ 57,602,950 ( 1,342,797 ) ( 5,577,056) $ 50,683,097	At amortized costs $ 39,888,511 ( 190,246 ) - $ 39,698,265	Total
			$ 97,491,461 ( 1,533,043 ) ( 5,577,056) $ 90,381,362

The Bank continuously monitors the external credit rating information and price movements of the debt instruments invested in to assess whether their credit risks have significantly increased since initial recognition.

The Company takes into consideration the multi-period default probability table for each ratings of securities issued by credit rating agencies and the recovery rates of different types of bonds to assess the 12-month expected credit losses or lifetime expected credit losses. The carrying values of financial assets at FVTOCI and at amortized cost sorted by credit rating are as follows:

Credit Risk Ratings Low credit risk Significant increase in credit risk Breach of agreement Credit Risk Ratings Low credit risk Significant increase in credit risk Breach of agreement	Terms and definitions	ECL Recognition Basis 12-month expected credit losses Lifetime expected credit losses (no credit impairment) Lifetime expected credit losses (with credit impairment) ECL Recognition Basis 12-month expected credit losses Lifetime expected credit losses (no credit impairment) Lifetime expected credit losses (with credit impairment)	Expected Credit Loss Rate 0%~0.201% 0.3530% 31.56%~50% Expected Credit Loss Rate 0%~3.6518% 0.3872%~ 30.4296% 50%	Carrying amount (Including Premiums and Discounts) on June 30, 2023
	Low credit risk at the reporting date Credit risk has increased significantly since initial recognition Evidence of impairment at the reporting date Terms and definitions			$ 89,232,662 160,971 605,648 Carrying amount (Including Premiums and Discounts) on December 31, 2022
	Low credit risk at the reporting date Credit risk has increased significantly since initial recognition Evidence of impairment at the reporting date			$ 87,514,229 440,869 155,692

• 38 -

Credit Risk Ratings Low credit risk Significant increase in credit risk Breach of agreement	Terms and definitions Low credit risk at the reporting date Credit risk has increased significantly since initial recognition Evidence of impairment at the reporting date	ECL Recognition Basis 12-month expected credit losses Lifetime expected credit losses (no credit impairment) Lifetime expected credit losses (with credit impairment)	Expected Credit Loss Rate 0%~1.8538% 29.7290%~ 30.4296% 50%	Carrying amount (Including Premiums and Discounts) on June 30, 2022
				$ 89,996,519 190,657 194,186

The following table shows changes in balances of loss allowances of financial assets at FVTOCI and debt instruments at amortized cost, sorted by credit risk ratings:

Balance at January 1, 2023 Changes in credit risk ratings - Low credit risk to significant increase in credit risk - Significant increase in credit risk to low credit risk		Credit Rating
	Low credit risk (12-month expected credit losses) $ 263,895 - -	Significant increase in credit risk (lifetime expected credit losses without credit impairment) $ 192,013 - -	With objective evidence of impairment Lifetime expected credit losses (with credit impairment)
			$ 1,167,794 - -

(continued at next page)

• 39 -

(Cont’)

- Significant increase in credit risk to default New debt instruments purchased Derecognition Changes in risk or model parameters Change in exchange rates Loss allowance on June 30, 2023 Balance at January 1, 2022 Changes in credit risk ratings - Low credit risk to significant increase in credit risk - Significant increase in credit risk to low credit risk - Significant increase in credit risk to default New debt instruments purchased Derecognition Changes in risk or model parameters Change in exchange rates Loss allowance on June 30, 2022		Credit Rating
	Low credit risk (12-month expected credit losses) $ - 258 ( 27 ) 8,079 4,492 $ 276,697 $ 257,033 ( 417 ) - ( 2,985 ) 42,986 ( 15,175 ) ( 81,780 ) 44,353 $ 244,015	Significant increase in credit risk (lifetime expected credit losses without credit impairment) ( $ 201,661 ) - ( 15 ) 10,363 12 $ 712 $ - 417 - - - - 185,027 31 $ 185,475	With objective evidence of impairment Lifetime expected credit losses (with credit impairment)
				$ 201,661 - - 25,512 18,897 $ 1,413,864 $ - - - 2,985 - - 1,100,350 218 $ 1,103,553

• 40 -

XII.

Securities Purchased Under Agreements to Resell

Commercial paper Corporate bonds Negotiable certificates of deposits Maturity date Proceeds agreed for resale	June 30, 2023 $ 21,830,543 17,365,013 400,407 $ 39,595,963 July 2023 $ 39,617,442	December 31, 2022 $ 25,018,878 15,124,824 3,588,230 $ 43,731,932 January 2023 $ 43,755,477	June 30, 2022	June 30, 2022
				$ 21,281,764 5,338,815 500,435 $ 27,121,014 July 2022 $ 27,131,436

The Bank’s investments of notes under reverse repurchase agreement and bonds are not offered to be sold with repurchase agreement conditions.

XIII. Receivables, Net

Receivables, Net
Credit card receivables Interbank clearing fund receivable Interest receivable Collections receivable Accounts receivable factoring without recourse Proceed of delivery Acceptances receivable Incomes from shares and beneficiary certificates receivable Notes and accounts receivable Receipts under custody for non-peers receivable Others Less: Allowance for doubtful accounts Net Amount	June 30, 2023 $ 23,147,796 3,009,950 1,688,940 1,302,087 495,334 352,128 209,814 134,101 125,392 100,089 295,272 30,860,903 185,527 $ 30,675,376	December 31, 2022 $ 19,796,531 3,500,661 1,494,729 720,444 799,996 26,455 111,093 - - 81,765 288,506 26,820,180 164,791 $ 26,655,389	June 30, 2022
				$ 17,284,322 3,000,720 1,245,750 1,317,894 799,996 188,375 216,541 397,054 292,618 81,281 271,638 25,096,189 176,915 $ 24,919,274

• 41 -

The changes in gross carrying amounts of receivables are as follows:

June 30, 2023

June 30, 2023
Balance at the beginning of the period Receivables assessed collectively Receivables purchased or originated Write-offs Derecognition Balance at the end of the period December 31, 2022 Balance at the beginning of the year Receivables assessed collectively Receivables purchased or originated Write-offs Derecognition End of year balance June 30, 2022	12-month expected credit losses $ 25,817,531 ( 17,515 ) 11,903,188 - ( 7,845,309) $ 29,857,895 12-month expected credit losses $ 24,431,998 ( 256,378 ) 8,807,591 - ( 7,165,680) $ 25,817,531	Lifetime expected credit losses $ 137,013 ( 22,448 ) 102,989 - ( 61,498) $ 156,056 Lifetime expected credit losses $ 110,189 43,779 35,601 - ( 52,556) $ 137,013	Lifetime expected credit losses Credit impaired financial assets) $ 865,636 39,963 131,384 ( 79,607 ) ( 110,424) $ 846,952 Lifetime expected credit losses Credit impaired financial assets) $ 1,014,621 212,599 56,049 ( 141,130 ) ( 276,503) $ 865,636		Total
				( (	$ 26,820,180 - 12,137,561 79,607 ) 8,017,231) $ 30,860,903 Total
	( (	(	( (	( (	$ 25,556,808 - 8,899,241 141,130 ) 7,494,739) $ 26,820,180

June 30, 2022
Balance at the beginning of the period Receivables assessed collectively Receivables purchased or originated Write-offs Derecognition Balance at the end of the period	12-month expected credit losses $ 24,431,998 ( 144,639 ) 6,976,921 - ( 7,239,606) $ 24,024,674	Lifetime expected credit losses $ 110,189 18,293 16,059 - ( 31,555) $ 112,986	Lifetime expected credit losses Credit impaired financial assets) $ 1,014,621 126,346 14,692 ( 72,958 ) ( 124,172) $ 958,529		Total
	( (	(	( (	( (	$ 25,556,808 - 7,007,672 72,958 ) 7,395,333) $ 25,096,189

Refer to Note XLVII for the impairment loss analysis of receivables.

• 42 -

The Bank had set up an allowance for doubtful accounts on accounts receivable. The details of and changes in allowance for doubtful accounts on accounts receivable are as follows:

follows:
Receivables Balance at the beginning of the period Changes of financial instruments recognized at the beginning of the current reporting period －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12- month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Write-offs Recovery of written-off receivables Change in risk parameters and others Change in exchange rate Balance at the end of the period			June 30,2023
	12-month expected creditlosses	Lifetime expected creditlosses	Lifetime expected credit losses (Credit- impaired Financial Assets)	Impairment Loss under IFRS 9	Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”		Total
	$ 77,404 ( 250 ) ( 12,940 ) 594 ( 12,138 ) 31,082 - - - 170 44 $ 83,966	$ 12,129 356 ( 24,903 ) ( 350 ) ( 2,763 ) 28,787 - - - ( 33 ) - $ 13,223	$ 51,911 ( 106 ) 37,843 ( 244 ) ( 14,827 ) 65,317 - ( 79,607 ) 96,318 ( 93,524 ) - $ 63,081	$ 141,444 - - - ( 29,728 ) 125,186 - ( 79,607 ) 96,318 ( 93,387 ) 44 $ 160,270		$ 23,347 - - - - - 1,910 - - - - $ 25,257	$ 164,791 - - - ( 29,728 ) 125,186 1,910 ( 79,607 ) 96,318 ( 93,387 ) 44 $ 185,527

• 43 -

2022

Receivables Balance at the beginning of the year Changes of financial instruments recognized at the beginning of the current reporting year －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12- month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Write-offs Recovery of written-off receivables Change in risk parameters and other changes Change in exchange rate End of year balance	12-month expected creditlosses	Lifetime expected creditlosses	Lifetime expected credit losses (Credit- impaired Financial Assets)	Impairment Loss under IFRS 9	Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”	Total
	$ 28,599 ( 310 ) ( 54,059 ) 292 ( 11,720 ) 109,328 - - - 4,972 302 $ 77,404	$ 10,864 550 ( 24,385 ) ( 230 ) ( 3,662 ) 28,897 - - - 95 - $ 12,129	$ 85,923 ( 240 ) 78,444 ( 62 ) ( 16,756 ) 45,582 - ( 141,130 ) 206,960 ( 206,810 ) - $ 51,911	$ 125,386 - - - ( 32,138 ) 183,807 - ( 141,130 ) 206,960 ( 201,743 ) 302 $ 141,444	$ 79,984 - - - - - ( 56,637 ) - - - - $ 23,347	$ 205,370 - - - ( 32,138 ) 183,807 ( 56,637 ) ( 141,130 ) 206,960 ( 201,743 ) 302 $ 164,791

• 44 -

June 30, 2022

Receivables Balance at the beginning of the period Changes of financial instruments recognized at the beginning of the current reporting period －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12- month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Write-offs Recovery of written-off receivables Change in risk parameters and others Change in exchange rate Balance at the end of the period	12-month expected creditlosses	Lifetime expected creditlosses	Lifetime expected credit losses (Credit- impaired Financial Assets)	Impairment Loss under IFRS 9	Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”	Total
	$ 28,599 ( 215 ) ( 11,456 ) 280 ( 10,530 ) 22,432 - - - ( 54 ) 204 $ 29,260	$ 10,864 486 ( 20,048 ) ( 227 ) ( 3,003 ) 21,497 - - - 124 - $ 9,693	$ 85,923 ( 271 ) 31,504 ( 53 ) ( 13,701 ) 60,947 - ( 72,958 ) 105,331 ( 104,590 ) - $ 92,132	$ 125,386 - - - ( 27,234 ) 104,876 - ( 72,958 ) 105,331 ( 104,520 ) 204 $ 131,085	$ 79,984 - - - - - ( 34,154 ) - - - - $ 45,830	$ 205,370 - - - ( 27,234 ) 104,876 ( 34,154 ) ( 72,958 ) 105,331 ( 104,520 ) 204 $ 176,915

• 45 -

XIV. Discounts and Loans, Net

Discounts and Loans, Net
Discounts and overdraft Accounts receivable - financing Short-term loans Secured short-term borrowing Medium-term loans secured mid-term borrowing Long-term loans Secured long-term borrowing Bill negotiations Non-accrual loans from loans Subtotal Less: Allowance for doubtful accounts		June 30, 2023 $ 39,784 18,870 29,464,459 115,141,747 42,188,556 127,311,930 8,171,981 234,393,994 2,695 1,007,514 557,741,530 6,568,062 $ 551,173,468	December 31, 2022 $ 51,920 13,440 33,172,547 106,808,688 42,309,556 117,975,043 8,835,580 225,206,590 17,184 595,291 534,985,839 6,224,119 $ 528,761,720		June 30, 2022
					$ 60,460 28,900 59,901,596 93,699,356 39,537,630 110,744,834 9,277,722 217,522,446 157,481 419,902 531,350,327 5,824,781 $ 525,525,546

As of June 30, 2023, December 31 and June 30, 2022, the balances of nonaccrual loans were NT$1,007,514 thousand, NT$595,291 thousand and NT$419,902 thousand, respectively. The unrecognized interest revenues on nonperforming loans were NT$13,465 thousand and NT$6,165 thousand during January 1 to June 30, 2023 and 2022. The Bank has no credit re-sold without collection during January 1 to June 30, 2023 and 2022.

The changes in gross carrying amounts on receivables are as follows: June 30, 2023

June 30, 2023
Balance at the beginning of the period Discount and loans assessed collectively Discount and loans purchased or originated Write-offs Derecognition Balance at the end of the period	12-month expected credit losses $ 530,620,874 ( 960,627 ) 178,375,432 - (155,110,097) $ 552,925,582	Lifetime expected credit losses $ 2,423,258 548,706 235,882 - ( 480,655) $ 2,727,191	Lifetime expected credit losses (Credit-impaired Financial Assets) $ 1,941,707 411,921 175,244 ( 59,697 ) ( 380,418) $ 2,088,757	Total
		(		$ 534,985,839 - 178,786,558 ( 59,697 ) (155,971,170) $ 557,741,530

• 46 -

December 31, 2022

December 31, 2022
Balance at the beginning of the year Discount and loans assessed collectively Discount and loans purchased or originated Write-offs Derecognition End of year balance June 30, 2022 Balance at the beginning of the period Discount and loans assessed collectively Discount and loans purchased or originated Write-offs Derecognition Balance at the end of the period	12-month expected credit losses $ 495,836,049 ( 1,690,994 ) 272,892,217 - (236,416,398) $ 530,620,874 12-month expected credit losses $ 495,836,049 ( 769,932 ) 171,341,083 - (138,552,336) $ 527,854,864	Lifetime expected credit losses $ 1,972,967 646,746 661,760 - ( 858,215) $ 2,423,258 Lifetime expected credit losses $ 1,972,967 462,655 248,000 - ( 596,764) $ 2,086,858	Lifetime expected credit losses (Credit-impaired Financial Assets) $ 1,337,678 1,044,248 104,558 ( 67,205 ) ( 477,572) $ 1,941,707 Lifetime expected credit losses (Credit-impaired Financial Assets) $ 1,337,678 307,277 53,742 ( 28,858 ) ( 261,234) $ 1,408,605	Total
				$ 499,146,694 - 273,658,535 ( 67,205 ) (237,752,185) $ 534,985,839 Total
		(		$ 499,146,694 - 171,642,825 ( 28,858 ) (139,410,334) $ 531,350,327

June 30, 2022

Refer to Note XLVII for impairment loss analysis of discounts and loans.

The Bank had set up an allowance for doubtful accounts on discounts and loans. The details of and changes in allowance for doubtful accounts on discounts and loans are as follows:

• 47 -

June 30, 2023

June 30, 2023
Discounts and loans Balance at the beginning of the period Changes of financial instruments recognized at the beginning of the current reporting period －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12- month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Write-offs Recovery of written-off receivables Change in risk parameters and others Change in exchange rate Balance at the end of the period	12-month expected credit losses	Lifetime expected credit losses	Lifetime expected credit losses (Credit- impaired Financial Assets)	Impairment Loss under IFRS 9	Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”		Total
	$ 690,741 ( 458 ) ( 74 ) 12-month expected credit losses	$ 202,615 2,680 ( 30,241 ) Lifetime expected credit losses	$ 351,831 ( 2,222 ) 30,315 Lifetime expected credit losses (Credit- impaired Financial Assets)	$ 1,245,187 - - Impairment Loss under IFRS 9	$ 4,978,932 - - Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”		$ 6,224,119 - - Total
	$ 21,925 ( 336,460 ) 331,942 - - - ( 5,933 ) 1,787 $ 703,470	( $ 17,952 ) ( 46,555 ) 83,471 - - - ( 25,042 ) - $ 168,976	( $ 3,973 ) ( 86,598 ) 85,467 - ( 59,697 ) 107,907 ( 68,455 ) - $ 354,575	$ - ( 469,613 ) 500,880 - ( 59,697 ) 107,907 ( 99,430 ) 1,787 $ 1,227,021		$ - - - 362,109 - - - - $ 5,341,041	$ - ( 469,613 ) 500,880 362,109 ( 59,697 ) 107,907 ( 99,430 ) 1,787 $ 6,568,062

(continued at next page)

• 48 -

(Cont’)

December 31, 2022

December 31, 2022
Discounts and loans Balance at the beginning of the year Changes of financial instruments recognized at the beginning of the current reporting year －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12- month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Write-offs Recovery of written-off receivables Change in risk parameters and other changes Change in exchange rate End of year balance	12-month expected credit losses	Lifetime expected credit losses	Lifetime expected credit losses (Credit- impaired Financial Assets)	Impairment Loss under IFRS 9	Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”		Total
	$ 429,117 ( 466 ) ( 422 ) 23,892 ( 352,297 ) 541,405 - - - 38,318 11,194 $ 690,741	$ 110,659 2,362 ( 9,651 ) ( 16,948 ) ( 42,002 ) 145,439 - - - 12,756 - $ 202,615	$ 373,914 ( 1,896 ) 10,073 ( 6,944 ) ( 76,592 ) 50,337 - ( 67,205 ) 260,706 ( 190,562 ) - $ 351,831	$ 913,690 - - - ( 470,891 ) 737,181 - ( 67,205 ) 260,706 ( 139,488 ) 11,194 $ 1,245,187		$ 4,482,269 - - - - - 496,663 - - - - $ 4,978,932	$ 5,395,959 - - - ( 470,891 ) 737,181 496,663 ( 67,205 ) 260,706 ( 139,488 ) 11,194 $ 6,224,119

(continued at next page)

• 49 -

(Cont’)

June 30, 2022

	June 30, 2022
XV.	12-month expected credit losses Lifetime expected credit losses Lifetime expected credit losses (Credit- impaired Financial Assets) Impairment Loss under IFRS 9 Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Total Discounts and loans Balance at the beginning of the period $ 429,117 $ 110,659 $ 373,914 $ 913,690 $ 4,482,269 $ 5,395,959 Changes of financial instruments recognized at the beginning of the current reporting period －Transferred to lifetime ECL ( 337 ) 2,069 ( 1,732 ) - - - －Transferred to credit-impaired financial assets ( 138 ) ( 11,083 ) 11,221 - - - －Transferred to 12- month ECL 17,224 ( 13,893 ) ( 3,331 ) - - - －Derecognition of financial assets in the current reporting period ( 208,033 ) ( 35,018 ) ( 15,609 ) ( 258,660 ) - ( 258,660 ) New financial assets purchased or originated 295,836 34,495 29,487 359,818 - 359,818 Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” - - - - 150,325 150,325 Write-offs - - ( 28,858 ) ( 28,858 ) - ( 28,858 ) Recovery of written-off receivables - - 162,863 162,863 - 162,863 Change in risk parameters and others 57,214 47,536 ( 69,147 ) 35,603 - 35,603 Change in exchange rate 7,731 - - 7,731 - 7,731 Balance at the end of the period $ 598,614 $ 134,765 $ 458,808 $ 1,192,187 $ 4,632,594 $ 5,824,781 Allowance for Doubtful Accounts, Provision for Losses on Commitments and Guarantees	12-month expected credit losses	Lifetime expected credit losses		Lifetime expected credit losses (Credit- impaired Financial Assets)		Impairment Loss under IFRS 9	Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”		Total
	Provision (reversal) of allowance for doubtful accounts on accounts receivable Provision for doubtful accounts on discounts and loans Provision (reversal) for doubtful accounts on guarantees					June 30, 2023 $ 3,981 293,946 68,000 $ 365,927			June 30, 2022
									( $ 61,032 ) 287,086 ( 10,000) $ 216,054

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XVI. Investments Accounted for Using the Equity Method, Net

Subsidiaries invested Affiliate (I) Subsidiaries invested Union Finance & Leasing (Int’l) Corporation Union Securities Investment Trust Corporation (USITC) Union Finance International (HK) Limited Union Information Technology Corporation (UIT) Union Venture Capital Co., Ltd.	June 30, 2023 $ 5,349,033 1,831,630 $ 7,180,663 June 30, 2023 $ 2,837,643 425,048 161,829 116,975 1,807,538 $ 5,349,033	December 31, 2022 $ 5,219,886 1,824,458 $ 7,044,344 December 31, 2022 $ 2,897,355 402,038 159,724 109,322 1,651,447 $ 5,219,886	June 30, 2022	June 30, 2022
			$ 4,583,218 1,847,786 $ 6,431,004 June 30, 2022
				$ 2,734,727 395,481 155,020 81,282 1,216,708 $ 4,583,218

On the balance sheet date, the Bank has the ownership interests and voting	On the balance sheet date, the Bank has the ownership interests and voting	On the balance sheet date, the Bank has the ownership interests and voting	On the balance sheet date, the Bank has the ownership interests and voting
rights in the subsidiaries with the following percentage:
Company name	June 30, 2023	December 31, 2022	June 30, 2022
Union Finance & Leasing
(Int’l) Corporation	100.00%	100.00%	100.00%
Union Securities
Investment Trust
Corporation (USITC)	99.60%	99.60%	99.60%
Union Finance
International (HK)
Limited	100.00%	100.00%	100.00%
Union Information
Technology Corporation
(UIT)	99.99%	99.99%	99.99%
Union Venture Capital Co.,
Ltd.	100.00%	100.00%	100.00%

To extend the dynamics of investment capital, on January 12, 2023, the Board

of the Bank resolved to agree for the Bank to increase the capital by NT$40,000 thousand in cash for a total of NT$400,000 thousand. As of the date the Financial Statements were approved, the capital increase process is still underway.

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(II) Affiliate

June 30, 2023 December 31, 2022 June 30, 2022

Not individually material Union Construction Management Co., Ltd. LINE Pay Taiwan Limited iPASS Corporation	$ 51,832 1,534,787 245,011 $ 1,831,630	$ 51,966 1,510,914 261,578 $ 1,824,458	$ 51,953 1,494,739 301,094
			$ 1,847,786

The summarized financial information in respect of the Bank’s affiliates not individually material is set out below:

Share attributed to the Bank Current net loss	January 1 to June 30, 2023 $ 5,793	January 1 to June 30, 2022	January 1 to June 30, 2022
		(	$ 6,233)

To promote innovative financial technology services and popularize mobile payment endorsed by the government, the board of directors of the Bank approved the investment in LINE Pay Taiwan Limited (Line Pay) on July 25, 2018 and later acquired 5,471 thousand shares with a price of NT$1,579,977 thousand on September 21, 2018 resulting in a 10% shareholding. Line Pay processed the employee stock option in April 2023 which resulted in the Bank’s share ownership to decline to 9.76%.

The Bank is a director of Line BIZ+ Taiwan with substantial influence; therefore the latter is recognized with the equity method. Acquired Line BIZ+ Taiwan Limited has generated NT$977,235 thousand of goodwill and was included in the investment’s cost.

For long-term strategic purpose, with the board approval on July 23, 2021, the Bank invested the cash capital increase of iPass Corporation, and purchased all the iPass shares held by LINE Pay Taiwan Limited, for total 35,788 thousand shares. Therefore, the Company has increased the equity share from 11.4% to 33.94% and become materially influential to iPass since July 28, 2021; hence the equity method was adopted to recognize the investment.

The investment accounted for using the equity methods, the Bank’s shares of profit and loss in such investments and other profit and loss, are calculated based on the unaudited Financial Statements, except for Union Finance & Leasing (Int’l) Corporation that is calculated based on the Financial Statements reviewed by CPAs; provided, the management of the Company considers the Financial Statements of the investees are not audited by CPAs, with no material effect.

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XVII. Other Financial Assets, Net

Other Financial Assets, Net
Assets Pledged (Note XLII) Due from banks - time deposit Others	June 30, 2023 $ 1,524,997 - 8,721 $ 1,533,718	December 31, 2022 $ 1,513,611 - 7,200 $ 1,520,811	June 30, 2022 $ 1,520,109 195,350 7,200 $ 1,722,659
				$ 1,520,109 195,350 7,200 $ 1,722,659

The amount of due from banks - time deposits with maturities longer than three months or certificate of deposits that cannot be cancelled or used.

XVIII. PROPERTY AND EQUIPMENT, NET

Carrying amount of each category Land Buildings Machinery and Computer Equipment Transportation Equipment Lease Improvements Prepayment for equipment and property	June 30, 2023 $ 4,085,895 3,083,825 317,692 52,470 171,406 960,949 $ 8,672,237	December 31, 2022 $ 3,972,484 3,126,313 338,043 53,530 174,838 490,063 $ 8,155,271	June 30, 2022	June 30, 2022
				$ 3,972,484 3,171,674 325,671 53,824 167,977 248,031 $ 7,939,661

The Bank’s property and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

ted useful lives as follows:
Buildings
Main buildings	33-55 years
Equipment installed in
buildings	3-20 years
Machinery and Computer
Equipment	1-5years
Transportation Equipment	1-8 years
Lease Improvements	5 years

In January 2023, with the approval of the Board of Directors, the Bank purchased the land and buildings in Taoyuan District, Taoyuan City, out of considerations of business sustainability and to provide a good working environment for branches. The total transaction price for the land and buildings was NT$354,019 thousand. Since January 2023, the Company has successively signed contracts with landowners for payment. As of June 30, 2023, NT$349,205 thousand has been paid.

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XIX. Lease Arrangements

(I)	Right-of-use assets
		June 30, 2023 December 31, 2022		June 30, 2022
Carrying amounts of right-
	of-use assets
	Buildings	$ 1,225,294 $ 1,341,040		$ 1,486,266
		January 1		January 1
		to June 30, 2023	to	June 30, 2022
Increase in right-of-use assets		$ 109,683		$ 113,875
Depreciation expense of right-
	of-use assets
	Land and buildings	$ 216,894		$ 214,934
(II)	Lease liabilities
		June 30, 2023 December 31, 2022		June 30, 2022
Carrying amounts of lease
	liabilities	$ 1,206,810 $ 1,325,495		$ 1,468,670
	Range of discount rate for lease liabilities was as follows:
		June 30, 2023 December 31, 2022		June 30, 2022
Buildings		0.72%～1.62% 0.72%～1.34%		0.72%～0.98%

(III) Other lease information

) Other lease information
Expenses relating to short-term leases Total cash (outflow) for leases	January 1 to June 30, 2023 $ 89,707 ($ 309,540)	January 1 to June 30, 2022
	(	(	$ 90,294 $ 309,355)

The Bank has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

XX. Goodwill

The Bank acquired Chung Shing Bank (Chung Shing) on March 19, 2005 and recognized goodwill amounting to $3,309,000 thousand. The goodwill amortization period was five years, and the amortization expense in 2005 was $551,500 thousand. However, the amortization of goodwill was no longer required from January 1, 2006. The Bank merged with Union Bills Finance Corporation on August 16, 2010, with the Bank as the survivor entity, and recognized goodwill amounting to $130,498 thousand.

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For the impairment test on Chung Shing, the Bank treated individual business units as cash-generating units (CGUs). Goodwill resulting from the merger was allocated to the relevant CGUs. The recoverable amount was determined by the value in use of each CGU, and the key assumptions adopted use the actual operations and business of CGUs or the objective information of the economic cycles as the basis of future cash flow estimation; based on the going-concern assumption, the net cash flows generated from the operations of each CGU in the next five years are forecasted. As of June 30, 2023 and 2022, the Bank has cumulatively recognized goodwill impairment loss for NT$902,691 thousand. As of June 30, 2023, December 31 and June 30, 2022, no impairment occurred based on the Bank’s assessment.

XXI. Other Assets, Net

Other Assets, Net
Refundable deposits Prepaid expenses Prepaid pension Others	June 30, 2023 $ 2,137,743 219,118 84,993 206 $ 2,442,060	December 31, 2022 $ 3,454,317 256,206 160,407 245 $ 3,871,175	June 30, 2022
				$ 2,924,102 286,674 239,777 104 $ 3,450,657

XXII. Deposits from the Central Bank and peers

Deposits from the Central Bank	and peers
Deposits from Chunghwa Post Co., Ltd. Call loans from banks Deposits from the Central Bank and peers Overdraft from other banks	June 30, 2023 $ 3,574,680 7,247,240 140,435 124,996 $ 11,087,351	December 31, 2022 $ 4,574,680 - 113,753 102,462 $ 4,790,895	June 30, 2022
				$ 4,574,680 700,000 124,219 118,846 $ 5,517,745

XXIII. Securities Sold Under Agreements to Repurchase

	June 30, 2023	December 31, 2022	June 30, 2022
Commercial paper	$ 27,472,626	$ 9,701,184	$ 18,168,912
Asset-backed securities	15,283,327	15,447,083	16,562,058
Corporate bonds	3,702,121	5,395,172	10,454,144
Government bonds	11,129,015	3,399,339	12,476,917
Financial bonds	360,076	355,829	347,857
	$ 57,947,165	$ 34,298,607	$ 58,009,888
Maturity date	July to	January to	July to
	September 2023	February 2023	September 2022
Agreed repurchase price	$ 58,242,592	$ 34,519,536	$ 58,120,806

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XXIV. Accounts Payable

XXIV.	Accounts Payable
XXV. XXVI.	Collection payable Interest payable Exchange clearing payable Dividend payable Expense payables Accrued payable Bank acceptance bill Tax payable Share and fund payables Proceed of delivery Remittance Others Deposits and Remittances Checking deposits Demand deposits Savings deposits Time deposits Negotiable certificates of deposit Inward and outward remittances Bank Debentures First issue of subordinated bank debentures in 2019; fixed rate at 1.10%; maturity: September 2026 First issue of subordinated bank debentures in 2019; fixed rate at 1.23%; maturity: September 2029 First issue of subordinated bank debentures in 2021; no maturity date and non- cumulative; redeemable at face value plus interest accrued under the approval of the authorities when the issue term is above 5.6 years; fixed rate at 1.92% (the benchmark interest rate is +1.1183%)		June 30, 2023 $ 1,475,129 1,351,242 1,057,028 839,405 627,695 238,751 210,016 204,341 197,527 182,573 115,347 786,821 $ 7,285,875 June 30, 2023 $ 5,063,171 140,956,837 420,807,743 161,958,250 651,800 102,462 $ 729,540,263 June 30, 2023 $ 500,000 1,500,000 3,000,000 $ 5,000,000	December 31, 2022 $ 670,206 818,269 3,191,491 - 1,001,125 191,124 111,305 161,495 - 73,094 138,724 676,979 $ 7,033,812 December 31, 2022 $ 7,229,222 145,395,102 406,072,520 149,206,592 2,604,500 237,191 $ 710,745,127 December 31, 2022 $ 500,000 1,500,000 3,000,000 $ 5,000,000		June 30, 2022
						$ 1,198,579 583,164 1,064,961 974,282 394,966 1,777,224 216,541 126,436 17,875 300,582 112,852 991,893 $ 7,759,355 June 30, 2022
						$ 5,682,981 149,034,337 394,534,383 125,970,033 1,324,200 154,422 $ 676,700,356 June 30, 2022
							$ 500,000 1,500,000 3,000,000 $ 5,000,000

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XXVII. Provisions

Provisions
Reserve for losses on guarantees and loan commitment Others	June 30, 2023 $ 366,571 28,578 $ 395,149	December 31, 2022 $ 298,537 28,578 $ 327,115	June 30, 2022
				$ 323,458 28,579 $ 352,037

Details and changes in allowances for guarantees and financial commitments are as follows:

June 30, 2023

June 30, 2023
Reserve for losses on guarantees and loan commitment Balance at the beginning of the period Changes of financial instruments recognized at the beginning of the current reporting period －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12-month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Change in risk parameters and others Change in exchange rate Balance at the end of the period	12-month expected credit losses		Lifetime expected credit losses		Lifetime expected credit losses (Credit-impaired Financial Assets)		Impairment Loss under IFRS 9		Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”			Total
	( ( (	$ 77,447 49 ) 26 ) 503 37,223 ) 73,898 - - 34 $ 114,584	( ( (	$ 3,647 49 1 ) 501 ) 2,751 ) 1,766 - - - $ 2,209	( (	$ 321 - 27 2 ) 173 ) 69 - - - $ 242	(	$ 81,415 - - - 40,147 ) 75,733 - - 34 $ 117,035		$ 217,122 - - - - - 32,414 - - $ 249,536	(	$ 298,537 - - - 40,147 ) 75,733 32,414 - 34 $ 366,571

December 31, 2022

December 31, 2022
Reserve for losses on guarantees and loan commitment Balance at the beginning of the year Changes of financial instruments recognized at the beginning of the current reporting year －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12-month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Change in risk parameters and other changes Change in exchange rate End of year balance	12-month expected credit losses		Lifetime expected credit losses		Lifetime expected credit losses (Credit-impaired Financial Assets)		Impairment Loss under IFRS 9		Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”			Total
	( ( (	$ 60,190 79 ) 64 ) 195 34,864 ) 51,827 - - 242 $ 77,447	( ( (	$ 1,825 79 5 ) 195 ) 1,058 ) 3,001 - - - $ 3,647	(	$ 271 - 69 - 133 ) 114 - - - $ 321	(	$ 62,286 - - - 36,055 ) 54,942 - - 242 $ 81,415	(	$ 271,009 - - - - - 53,887 ) - - $ 217,122	( (	$ 333,295 - - - 36,055 ) 54,942 53,887 ) - 242 $ 298,537

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June 30, 2022

June 30, 2022
Reserve for losses on guarantees and loan commitment Balance at the beginning of the period Changes of financial instruments recognized at the beginning of the current reporting period －Transferred to lifetime ECL －Transferred to credit-impaired financial assets －Transferred to 12-month ECL －Derecognition of financial assets in the current reporting period New financial assets purchased or originated Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans” Change in risk parameters and others Change in exchange rate Balance at the end of the period	12-month expected credit losses		Lifetime expected credit losses		Lifetime expected credit losses (Credit-impaired Financial Assets)		Impairment Loss under IFRS 9		Difference of Impairment Loss under the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-accrual Loans”			Total
	( ( ( (	$ 60,190 38 ) 31 ) 210 31,598 ) 47,097 - 1 ) 163 $ 75,992	( ( (	$ 1,825 38 9 ) 210 ) 919 ) 696 - - - $ 1,421	(	$ 271 - 40 - 208 ) 82 - - - $ 185	( (	$ 62,286 - - - 32,725 ) 47,875 - 1 ) 163 $ 77,598	(	$ 271,009 - - - - - 25,149 ) - - $ 245,860	( ( (	$ 333,295 - - - 32,725 ) 47,875 25,149 ) 1 ) 163 $ 323,458

XXVIII. Post-Employment Benefit Plan

(I) Defined contribution plans

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

The total expenses recognized in consolidated statement of comprehensive income during January 1 to June 30, 2023 and 2022, for NT$86,091 thousand and NT$75,810 thousand, respectively, as the contributions payable to these plans by the Bank at proportion specified in the defined contribution plan.

(II) Defined benefit plans

The Bank has adopted the defined benefit plan under the Labor Standards Act. 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 2% 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 and in the Bank’s Business Department in the committee’s name (opened at the Bank’s Department of Business) The fund is deposited in the Bank of Taiwan under management of Bureau of Labor Funds, Ministry of Labor. The Bank has no right to influence the investment policy and strategy. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension

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fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year.

The Bank recognized the pension expenses of NT$3,626 thousand and NT$5,255 thousand during January 1 to June 30, 2023 and 2022, based on the pension cost rates determined by the actuarial calculation on December 31, 2022 and 2021.

XXIX. Other Liabilities

Other Liabilities
Advance receipts Guarantee deposits Others Equity (I) Share capital Common shares Authorized number of shares (thousand shares) Authorized share capital Number of shares issued and fully paid (thousand shares) Issued share capital	June 30, 2023 $ 858,541 96,698 65,158 $ 1,020,397 June 30, 2023 4,500,000 $ 45,000,000 3,594,046 $ 35,940,460	December 31, 2022 $ 639,629 92,643 61,737 $ 794,009 December 31, 2022 4,500,000 $ 45,000,000 3,594,046 $ 35,940,460	June 30, 2022
			$ 584,984 100,073 55,992 $ 741,049 June 30, 2022
(I)
				4,500,000 $ 45,000,000 3,295,219 $ 32,952,187

XXX. Equity

Issued common shares with the par value of NT$10 per share, and carry one vote per share and carry a right to dividends.

Preferential shares

Due to the capital needs of the Bank for future long-term business development and operational scale expansion, the Bank’s shareholders approved and authorized the board of directors to issue ordinary shares or special shares for domestic cash capital increase (one or both, as appropriate) on June 20, 2017, in accordance with the provisions of the Articles of Incorporation or the relevant laws and regulations, in order to raise the long-term funds. The total funds to be raised through issuing new shares as authorized this time shall not be more than NT$10 billion (inclusive) as the principle. The number of shares for issue shall not be more than 800,000,000 shares (inclusive) as the principle. On June 28, 2017, the Banks’s board of directors resolved to issue preferred stock - A totaling 200,000 thousand shares, with a par value of NT$10 per share, at NT$50 per share. The issuance of shares has been approved by the FSC under Order No. 1060033586 issued on September 1, 2017.

• 59 -

On October 24th, 2017, the capital from issue of preferred stock - A amounted to NT$10,000,000 thousand. The preferential shares - A was listed on Taiwan Stock Exchange on December 1, 2017.

The rights and other important conditions of issuance of the preferential shares - A are as follows:

1. Maturity: Perpetual for the preferential shares A of the Bank.

2. Dividend: The annual interest rate is 4.8% per annum (5-year IRS interest rate, 0.89125%+3.90875%) for the preferential shares A, based on the price per share. The 5-year IRS will be reset on the next business day after each fifth and half anniversary day after issuance thereafter. The pricing date for reset is the second business day of financial industry in Taipei immediately preceding each reset date. The 5-year IRS rate is the arithmetic mean of 5-year IRS rates appearing on Reuters pages “PYTWDFIX” and “COSMOS3” at 11:00 a.m. (Taipei time) on the relevant pricing date for reset. As the price of “PYTWDFIX” at the five-year IRS rate at 11:00 a.m. was not available, the Company decided to adopt the arithmetic mean of 5-year IRS rates of “TAIFXIRS” and “COSMOS3” appearing on Reuters pages at 11:00 a.m. dated April 20, 2023 as the 5-year IRS rate based on the integrity principle and reasonable market conditions. The dividend yield (annual rate) reset for the Company’s Class A preference shares from April 24, 2023 is 5.26125%.

3. Dividend payment: Whereas Union Bank of Taiwan makes profit in a fiscal year, apart from paying the income tax by law, it shall first compensate for the deficits in previous years, appropriate the legal reserve, and appropriate or reverse the special reserve with respect to these Articles of Incorporation before distributing dividends deserved for preferential shares of the year. Union Bank of Taiwan shall enjoy the discretionary power over the distribution of dividends for preference shares, including but not limited to no earnings or earnings are insufficient for distribution of the dividend of preference shares after the annual account is closed; or should the distribution of the dividend for preference shares will cause this Bank’s capital adequacy to become lower than the minimum requirements by law or as specified by competent authorities; or should there be other necessary considerations, this Bank may decide not to distribute the dividend for preference shares, and under no circumstances shall shareholders make objections thereof. In addition,

4. 60 -

the undistributed dividends or the shortfall in distributed dividends shall not be accumulated for compensation in future years with earnings. The shareholders’ meeting of the Union Bank of Taiwan has on June 9, 2023 passed the resolution for the amendment to the Articles of Incorporation. Dividends of preferential shares if distributed will be in cash and in one payment in a year. After the annual general meeting of shareholders ratifies the financial statements, the Board of Directors shall determine the base date to disburse the dividends for the previous year. The year of issuance and the recovery of the number of dividends issued of the year shall be calculated based on the actual number of days of issuance in the year. The amount of dividends distributed should be recognized on the dividend statements.

1. Exceeding dividend distribution: Preferential shares A, other than the dividends received as dividend rate prescribed in the preceding paragraph, under no circumstances shall holders of preference shares be entitled to receive the dividend distributed for common shares from this Bank’s earnings and legal reserves in cash or capital reserves.

2. Redemption of preferential shares A: After 5 years from the issue date, the Bank may redeem a portion or all of the outstanding shares of preferential shares at any time at the issue price. The rights and obligations of all types of issuance conditions of unrecovered preferential shares will continue. Should the board meeting resolution of the Bank determine to issue dividends for preferential shares A in the recovery year, the dividends to be distributed shall be calculated by the day of recovery based on the actual number of days issued in the year.

3. Liquidation preference: In the event of liquidation, when the competent authority assigned officials to take receivership over the Bank, order the Bank to suspend and wind up business, or liquidate the Bank, in accordance with the “Regulations Governing the Capital Adequacy and Capital Category of Banks”, the order of priority for the distribution of the earnings and assets of the shareholders of preferential shares A is the same as that of a common shareholder, otherwise the shareholders of preferential shares shall be given priority to claim on the Bank’s remaining assets over the shareholders of common shares, and equal to shareholders of other preferential shares issued by the Bank, but subordinate to the holders of Tier 2 capital, depositors, and

4. 61 -

other general creditors, and not more than the issuance amount of outstanding shares of preferential shares A.

1. Voting rights or election rights: The shareholders of preferential shares A are not entitled to any voting rights or election rights in shareholders’ meeting. However, they may vote in preferential shares A shareholders’ meetings and in general shareholder meetings with regard to agenda items concerning rights and obligations of the shareholders of preferential shares A.

2. Convertibility to common shares: Under no circumstances shall the conversion from preferential shares A into common shares be allowed, nor shall holders of preferential shares be entitled to request the Bank to recover their preference shares held.

3. When the Bank issues new shares in cash to increase the capital, the shareholders of preferential shares A, and the common stock shall be entitled to equivalent rights on subscribing new shares.

Capital increase reserve

On June 9, 2023, the AGM resolved to increase the capital by issuing new shares for 179,702 thousand shares and 5,204 thousand shares from earnings from earnings and employees’ remuneration, respectively. The face value is NT$10 per share, for total NT$1,881,331 thousand. The said capital increase has been reported to and approved by Securities and Futures Bureau, Financial Supervisory Commission on July 5, 2023, and the base date of capital increase was August 1, 2023.

• 62 -

(II) Capital reserve

Capital reserve
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Premium of issuing preferential shares Treasury share transactions Premium of issuing common shares May only be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2) Changes in net values of equities of affiliates recognized with the equity method	June 30, 2023 $ 8,000,000 32,413 38,123 659 22,271 $ 8,093,466	December 31, 2022 $ 8,000,000 32,413 38,123 659 5,631 $ 8,076,826	June 30, 2022
				$ 8,000,000 32,413 13,281 659 5,631 $ 8,051,984

1. The capital surplus from shares issued in excess of par (additional paid-in capital from issuance of ordinary shares and treasury stock transactions) and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital limited to a certain percentage of the Company’s capital surplus and to once a year.

2. The changes in ownership of subsidiaries under the capital reserve, are generated from the effects of equity transaction recognized due to changes of the subsidiaries’ equities, but not actually acquiring or disposing the subsidiaries’ equities.

(III) Legal reserve

Legal reserve should be appropriated until it equals the Company’s paid-incapital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of its paid-in capital, the excess may be transferred to capital or distributed in cash. In addition, pursuant to the Banking Act, if the legal reserve is less than the Company’s paid-in capital, the amount that may be distributed in cash should not exceed 15% of the Company’s paid-incapital. These who possess the legal reserve equal to the total capital, or are

• 63 -

financially and operationally health and provide the legal reserve as required by the Company Act, are not subject to the restriction in the preceding paragraph.

(IV) Special surplus reserve

The Bank appropriates and reverses the special reserve pursuant to Rule No. 109015022 issued by the FSC dated on March 31st, 2021 and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Bank. For the reversal of balance for other shareholders’ equity deduction, earning distributions may be made from the reversed portion.

If a special reserve appropriated on the first-time adoption of IFRSs relates to investment properties other than land, the special reserve may be reversed continuously over the period of use. The special reserve relating to land may be reversed on the disposal or reclassification of the related assets.

The above special reserve may be used to offset a deficit; if the reserve has reached at least 50% of the paid-in capital, half of this special reserve may be capitalized.

According to May 25, 2016 Rule 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. Since 2017, the Company is allowed to reverse the special reserve at the amount of the costs of employee transfer and arrangement in connection with the development of financial technology.

Balance at the beginning of the period Special reserves appropriated of the period Balance at the end of the period	January 1 to June 30, 2023 $ 627,440 129,596 $ 757,036	January 1 to June 30, 2022	January 1 to June 30, 2022
			$ 627,440 - $ 627,440

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(V) Retained earnings and dividend policy

Should there be net earnings after the account is closed, apart from paying the income tax by law, the Bank shall first compensate for the deficits in previous years and then appropriate thirty percent (30%) as the legal reserve. Next, the balance shall be appropriated or reversed as the special reserve by law or based on business needs. Then, the balance after that, if any, shall be combined to the accumulative unappropriated earnings of the previous year for BOD to draw up a proposal for earnings distribution and submit to AGM for adoption of the distribution of dividends and bonuses.

BOD shall draw up the proportion of distribution in cash or in stock for dividends and bonuses based on the temporal financial trend, future status of profitability, and the Bank’s budget planning. On principle, if the regulatory capital to risk-weighted assets ratio of the Bank is lower than the ratio required by competent authorities plus one percentage point after earnings distribution, distribution in stock shall first be adopted. When the legal reserve is lower than the total capital, the maximum amount of earnings distribution in cash shall not exceed fifteen percent (15%) of the total capital.

The Bank’s AGM resolved the earning distributions for 2022 and 2021 on June 9, 2023 and May 27, 2022 as below:

Legal reserve Special surplus reserve Share dividends of common shares Cash dividends of common shares Cash dividends of preferential shares	Earning distribution 2022 2021 $ 928,965 $ 1,665,178 129,596 - 1,797,023 2,916,269 359,405 494,282 480,000 480,000	Dividends per share (NT$)	Dividends per share (NT$)
	2022 $ 928,965 129,596 1,797,023 359,405 480,000	2022 $ 0.500 0.100 2.400	2021
			$ 0.885 0.150 2.400

• 65 -

• (VI) Other equity items

• Exchange difference from translating the financial statements of overseas

  • operations

operations
January 1 to June 30, 2023 Balance at the beginning of the period ( $ 508,759 ) Exchange differences arising on translation the foreign operations 203,899 Income tax on exchange differences on translation of the net assets of foreign operations ( 40,779 ) Share in the translation difference from the subsidiaries with the equity method ( 126,993) Balance at the end of the period ($ 472,632) Unrealized gain (loss) on financial assets at FVTOCI January 1 to June 30, 2023 Balance at the beginning of the period ($ 128,822) Generated in the current period Unrealized gain (loss) Debt instruments 210,111 Equity instrument 1,365,409 Adjustments to loss allowance for debt instruments 42,638 Share in the subsidiaries with the equity method 188,249 Disposal of debt instruments - Other comprehensive income for the period 1,806,407 Accumulated gain (loss) transferred to retained earnings from disposal of equity instruments ( 146,653) Balance at the end of the period $ 1,530,932	January 1 to June 30, 2022
	( $ 1,636,613 ) 987,326 ( 197,465 ) ( 148,467) ($ 995,219) January 1 to June 30, 2022
	$ 7,283,034 ( 6,234,535 ) ( 1,720,360 ) 1,271,287 ( 5,850 ) ( 123,171) (6,812,629) ( 192,786) $ 277,619

2. Unrealized gain (loss) on financial assets at FVTOCI

• 66 -

XXXI. Net Interest Income

Net Interest Income
Interest income Discounts and loans Interests from revolving credit Due from the Central Bank and call loans to other banks Investment of bonds under reverse repurchase agreement Interests from debt instruments measured at amortized costs Interests from financial assets measured at fair value through other comprehensive income Other interest income Subtotal Interest expense Deposit interest Interests from financial bonds Interests from notes under repurchase agreement and bonds Postage and remittance interest Other interest expense Subtotal Total	January 1 to June 30, 2023 $ 7,234,382 416,233 126,888 269,709 $ 790,202 664,536 64,669 9,566,619 4,259,407 40,775 854,376 31,239 45,739 5,231,536 $ 4,335,083	January 1 to June 30, 2022
			$ 4,892,601 396,459 33,097 65,591 $ 530,695 629,951 7,310 6,555,704 1,393,522 60,149 157,709 17,463 23,614 1,652,457 $ 4,903,247

• 67 -

XXXII. Commission and Fee Income, Net

Commission and Fee Income, Net
Fee income Fees from credit cards and debit cards COMMISSION AND FEE REVENUE, NET Fees from trust Fees from loans Incomes from interbank service Fees from underwriting Fees from guarantee Others Subtotal Commission and fee expense Fees from credit cards Fees from acquiring liquidation deal Fees from credit inquiry Fees from interbank service Agency service fee expense Others Subtotal Total	January 1 to June 30, 2023 $ 1,527,102 502,887 338,299 244,989 33,504 83,107 73,990 169,873 2,973,751 504,633 644,933 20,049 18,418 6,131 55,918 1,250,082 $ 1,723,669	January 1 to June 30, 2022
			$ 1,206,736 532,046 243,687 225,018 39,271 73,627 69,665 165,351 2,555,401 369,239 472,633 14,903 14,444 7,480 50,415 929,114 $ 1,626,287

• 68 -

XXXIII. Gain on Financial Assets and Liabilities at Fair Value Through Profit or Loss

January 1 to June 30, 2023 Realized gain or loss on financial assets at fair value through profit or loss Currency swap contracts $ 817,010 Foreign exchange forward contracts 5,610 Commercial paper 11,794 Beneficiary securities and shares 131,216 Option contracts 2,979 Interest income 340,114 Dividend incomes 34,462 Principal guaranteed notes 12,316 Futures exchange margins 1,662 Subtotal 1,357,163 Profit or loss of financial assets or liabilities at FVTPL Beneficiary securities and shares 36,507 Government bonds and corporate bonds ( 2,394 ) Commercial paper ( 1,586 ) Derivative financial assets and liabilities 1,019,515 Futures exchange margins ( 230) Subtotal 1,051,812 Total $ 2,408,975 Realized Gain on Financial Assets at FVTOCI January 1 to June 30, 2023 Dividend incomes $ 174,609 Net income on disposal - debt instruments - Total $ 174,609	January 1 to June 30, 2023 Realized gain or loss on financial assets at fair value through profit or loss Currency swap contracts $ 817,010 Foreign exchange forward contracts 5,610 Commercial paper 11,794 Beneficiary securities and shares 131,216 Option contracts 2,979 Interest income 340,114 Dividend incomes 34,462 Principal guaranteed notes 12,316 Futures exchange margins 1,662 Subtotal 1,357,163 Profit or loss of financial assets or liabilities at FVTPL Beneficiary securities and shares 36,507 Government bonds and corporate bonds ( 2,394 ) Commercial paper ( 1,586 ) Derivative financial assets and liabilities 1,019,515 Futures exchange margins ( 230) Subtotal 1,051,812 Total $ 2,408,975 Realized Gain on Financial Assets at FVTOCI January 1 to June 30, 2023 Dividend incomes $ 174,609 Net income on disposal - debt instruments - Total $ 174,609	January 1 to June 30, 2022	January 1 to June 30, 2022
		$ 41,235 ( 43,276 ) 4,539 ( 543,474 ) 1,278 143,999 21,726 6,480 81 ( 367,412) ( 153,150 ) ( 5,388 ) 4,868 361,665 - 207,995 ($ 159,417) January 1 to June 30, 2022
Dividend incomes Net income on disposal - debt instruments Total
			$ 439,303 123,171 $ 562,474

XXXIV. Realized Gain on Financial Assets at FVTOCI

• 69 -

XXXV. Impairment (Impairment Loss) Reversal Gain on Assets

Debt instruments measured at fair value through other comprehensive income Financial assets measured at amortized costs Collaterals Total	January 1 to June 30, 2023 ( $ 22,378 ) ( 21,792 ) 358 ($ 43,812)	January 1 to June 30, 2022
		( $ 1,239,820 ) 8,412 2,108 ($ 1,229,300)

XXXVI. Employee Benefits

Employee Benefits
Salaries and wages Bonus Post-employment benefits Defined contribution plans Defined benefit plans Labor insurance and national health insurance Other employee benefits Total	January 1 to June 30, 2023 $ 1,235,019 534,517 86,091 3,626 185,502 60,090 $ 2,104,845	January 1 to June 30, 2022
			$ 1,167,727 321,618 75,810 5,255 169,938 47,139 $ 1,787,487

The Bank accrued remuneration of employees and directors at the rates of between

1% and 5% and no higher than 0.1%, respectively, of net profit before income tax (in case of accumulated losses, the amount to offset the losses shall be set aside in advance). The remuneration of employees and directors estimated for January 1 to June 30, 2023 and 2022 are as follows:

Accrual rate

Accrual rate
Remuneration of employees Remuneration of directors	January 1 to June 30, 2023 1.84% 0.09%	January 1 to June 30, 2022
		1.84% 0.09%

Amount

Amount
Remuneration of employees Remuneration of directors	January 1 to June 30, 2023 $ 54,820 $ 2,681	January 1 to June 30, 2022
			$ 30,104 $ 1,472

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

The Bank held the board meetings on March 13, 2023 and March 7, 2022, to resolve the remuneration of employees and directors for 2022 and 2021, respectively, as below:

Remuneration of employees Remuneration of directors	2022 Cash Shares $ - $ 84,308 4,124 -	2021	2021
	Cash $ - 4,124	Cash $ - 4,737	Shares
			$ 96,846 -

The remunerations of employees for 2022 and 2021 were 5,204 thousand shares and 7,200 thousand shares, and the calculation were based on the closing prices, NT$16.20 and NT$13.45, of the day before the board’s resolution date.

There was no difference remunerations of employees and directors paid and the amounts recognized in the Parent Company Only Financial Statements for 2022 and 2021.

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

XXXVII. Depreciation and Amortization

.Depreciation and Amortization
Depreciation of properties and equipment Depreciation of right-of-use assets Amortization of intangible assets Total	January 1 to June 30, 2023 $ 129,516 216,894 44,866 $ 391,276	January 1 to June 30, 2022
			$ 132,012 214,934 41,604 $ 388,550

XXXVIII. Other Operating and Management Expenses

Advertisement fee Taxation and levies Outsourcing service Postage and telecom Computer operating Rent Deposit insurance Repair expenses Business promotion Printing and binding Others Total	January 1 to June 30, 2023 $ 553,048 487,633 186,862 124,100 110,938 89,707 88,383 67,413 30,755 21,062 270,275 $ 2,030,176	January 1 to June 30, 2022	January 1 to June 30, 2022
			$ 411,048 353,377 181,726 114,393 93,066 90,294 84,050 59,282 17,813 20,574 230,874 $ 1,656,497

• 71 -

XXXIX. Income taxes

(I) Income tax recognized in profit or loss

The main components of income tax expense were as follows:

January 1 to June 30, 2023 Current income tax Incurred in the current year $ 467,716 Adjustment for prior year ( 20,385 ) Deferred tax Incurred in the current year (20,322) Income tax expense recognized in profit or loss $ 427,009 Income tax recognized in other comprehensive income January 1 to June 30, 2023 Deferred tax Recognized in other comprehensive income: －Translating the financial statements of overseas operations ( $ 40,779 ) －Unrealized gain (loss) on financial assets at FVTOCI (170,297) Income tax expenses recognized in other comprehensive income ($ 211,076)	January 1 to June 30, 2022
	$ 435,453 ( 2,786 ) 25,590 $ 458,257 January 1 to June 30, 2022
	( $ 197,465 ) 20,815 ($ 176,650)

(II) Income tax recognized in other comprehensive income

(III) Income tax assessments

Up to the filing in 2020, the Bank’s profit-seeking enterprise income tax returns have been assessed by the tax authorities.

XL. Earnings Per Share

Earnings Per Share
Basic earnings per share Diluted earnings per share	January 1 to June 30, 2023 $ 0.53 $ 0.53	January 1 to June 30, 2022
			$ 0.18 $ 0.18

• 72 -

The weighted average number of common shares outstanding (in thousands of shares)

is as follows:

Net profit of the year

Net profit of the year
Net profit Less: Dividends on preferential shares announced (Note) Earnings used in the computation of basic earnings per share Earnings used in the computation of diluted earnings per share Number of shares Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Remuneration of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	January 1 to June 30, 2023 January 1 to June 30, 2022 $ 2,494,816 $ 1,146,241 ( 480,000) ( 480,000) $ 2,014,816 $ 666,241 $ 2,014,816 $ 666,241 Unit: thousand shares January 1 to June 30, 2023 January 1 to June 30, 2022 3,776,911 3,771,163 5,374 4,553 3,782,285 3,775,716

If the Bank offered to settle the compensation or bonuses paid to employees in cash or shares, the Bank 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.

The weighted average number of shares outstanding used for the earnings per share computation was adjusted retrospective for the issuance of bonus shares on August 1, 2023. The basic and diluted earnings per share were both adjusted from NT$0.19 to NT$0.18 for the period between January 1 to June 30, 2023 due to the retrospective adjustment.

• 73 -

XLI. Transactions with Related Parties

The transactions of the Bank with other related parties are as below:

(I) Related parties and their relationships with the Company

Related Party Relationship with the Bank Union Finance and Leasing (Int’l) Corp (UFLIC) SUBSIDIARIES Union Information Technology Corporation (UIT) SUBSIDIARIES Union Finance Co., Ltd. (Hong Kong) (Union Finance) SUBSIDIARIES Union Securities Investment Trust Corporation (USITC) SUBSIDIARIES Union Venture Capital Co., Ltd. (UVC) SUBSIDIARIES Union Capital (Cayman) Corp. (UCCC) SUBSIDIARIES Union Capital (Singapore) Holding Pte. Ltd (UCSH) SUBSIDIARIES Uflc Capital (Singapore) Holding Pte. Ltd (UFLC) SUBSIDIARIES Kabushiki Kaisha UCJ1 (KK) SUBSIDIARIES Tokutei Mokuteki Kaisha SSG15 (TMK SSG15) SUBSIDIARIES Tokutei Mokuteki Kaisha SSG12 (TMK SSG12) SUBSIDIARIES Tokutei Mokuteki Kaisha SSG16 (TMK SSG16) SUBSIDIARIES Corner Union Venture Capital, LLC (Delaware) SUBSIDIARIES Corner Union LLC DAG I-U, LLC SUBSIDIARIES Corner Union LLC SUBSIDIARIES Na He Yi Hau Electric Power Inc. (Na He Yi Hau) SUBSIDIARIES Union Energy Co., Ltd. (Union Energy) SUBSIDIARIES Ting Jie Electric Power Inc. (Ting Jie Electric Power) SUBSIDIARIES Union Private Equity Co., Ltd. (Union Private Equity) SUBSIDIARIES Tian Ji Smart Energy Co., Ltd. (Tian Ji Smart) SUBSIDIARIES Ting Syu Energy Co., Ltd. (Ting Syu Energy) SUBSIDIARIES Bei Chen Yi Hau Electric Power Inc. (Bei Chen Yi Hau) SUBSIDIARIES Union Construction Management Co., Ltd. (Union Affiliate Construction Management) Blue Borders Medical and Health Management Affiliate Consulting Co., Ltd. (Blue Borders) iPass Corporation (iPass) Affiliate LINE Pay Taiwan Limited (LINE Pay Taiwan) Affiliate Horng Gow Construction Co., Ltd. (Horng Gow) Related party in substance The Liberty Times Co., Ltd. (the Liberty Times) Related party in substance Long Shan Lin Corporation (Long Shan Lin) Related party in substance Yung Hsuan Co., Ltd Related party in substance Lianhe Investment Co., Ltd. (Lianhe Investment) Related party in substance Union Enterprise Construction Co., Ltd. (Union Related party in substance Enterprise Construction) Yu-Bon Limited Co. (Yu-Bon) Related party in substance Union Recreation Enterprise Corporation (Union Related party in substance Recreation Enterprise) Union Optronics Corp. (Union Optronics) Related party in substance Hi-Life International Co., Ltd. (Hi-Life International) Related party in substance Hope Vision Co., Ltd. (Hope Vision) Related party in substance

(continued at next page)

• 74 -

(Cont’)

Related Party Relationship with the Bank RFD Micro Electricity Co., Ltd. (RFD Micro) Substantive related party (non-related party after June 28, 2023, and has no significant influence because the Bank does not serve as a director) Issued by Union Securities Investment Trust Issued by subsidiary Union Securities Investment Trust Union Green Energy Private Equity Limited Partnership Union Private Equity Co., Ltd. and UFLIC are general partner and limited partner, respectively Union Green Energy I Private Equity Limited Subsidiary, Union Private Partnership Equity Co., Ltd. is general partner Union Green Energy II Private Equity Limited Subsidiary, Union Private Partnership Equity Co., Ltd. is general partner Others Directors, managerial officers, and their relatives and affiliates, as well as related parties in substance of the Bank

• 75 -

(II) Material transactions with related parties

Other than the material transactions of the Bank with other related parties

disclosed in notes, others are indicated below:

1. Loans

June 30, 2023

Type	Number of Account or Related Parties	Highest Balance in the period	Balance at the end of the period	Fulfillment Status	Fulfillment Status	Collaterals	Differences in Terms of Transaction with Those for Unrelated Parties
				Normal Loans	Overdue loan
Consumer loans	20 households	$ 20,174	$ 16,818	$ 16,818	$ -	Land, buildings, securities (certificates of deposit, stocks), and vehicles	None
Self-used housing mortgage loans	43 households	173,075	124,727	124,727	-	Real estates	None
Other loans	Union Finance and Leasing (Int’l) Corp	1,097,592	1,097,592	1,097,592	-	Land, buildings and certificates of deposit of the Bank	None
Other loans	Hope Vision	26,000	26,000	26,000	-	Small and Medium Enterprise Credit Guarantee Fund of Taiwan	None
Other loans	12 households	40,490	27,672	27,672	-	Land, buildings, securities (certificates of deposit, stocks), and vehicles	None

December 31, 2022

Type	Number of Account or Related Parties	Highest Balance in the period	Balance at the end of the period	Fulfillment Status	Fulfillment Status	Collaterals	Differences in Terms of Transaction with Those for Unrelated Parties
				Normal Loans	Overdue loan
Consumer loans	23 households	$ 18,880	$ 12,925	$ 12,925	$ -	Lands, buildings and vehicles	None
Self-used housing mortgage loans	44 households	136,035	90,041	90,041	-	Real estates	None
Other loans	Union Finance and Leasing (Int’l) Corp	647,518	693,119	643,119	-	Lands and buildings	None
Other loans	11 households	43,875	33,299	33,299	-	Lands and buildings	None

• 76 -

June 30, 2022

Type	Number of Account or Related Parties	Highest Balance in the period	Highest Balance in the period	Balance at the end of the period	Balance at the end of the period	Fulfillment Status	Fulfillment Status	Fulfillment Status	Collaterals	Differences in Terms of Transaction with Those for Unrelated Parties	Differences in Terms of Transaction with Those for Unrelated Parties
						Normal Loans	Overdue loan
Consumer loans	18 households	$ 10,576		$ 9,093		$ 9,093	$	-	Lands, buildings and vehicles		None
Self-used housing mortgage loans	50 households	111,583		89,556		89,556		-	Real estates		None
Other loans	Union Finance and Leasing (Int’l) Corp	515,860		506,372		506,372		-	Lands and buildings		None
Other loans	9 households	25,192		24,404		24,404		-	Lands and buildings		None
Year			% in the account 0.23% 0.12% % in the account 1.19% 1.50%		Annual interest rate 1.44%-2.99% 1.11%-2.99% Annual interest rate (Note) 0%-5.00% 0%-3.50%			Interest income from January 1 to June 30 $ 9,833 5,278 Interest expenses from January1to June 30 $ 53,379 10,849			% in the account
											0.10% 0.08% % in the account
											1.02% 0.66%

Note: Interest rates of foreign currencies included.

3. Guarantees and letters of credit

June 30, 2023

Related Party	Highest Balance in the period	Balance at the end of the period	Balance of Guarantees and Letters of Credit (Note)	Rate Range	Collaterals
Union Recreation Enterprise Corporation	$ 7,265	$ 7,265	$ -	1%	Time Deposit
The Liberty Times Co., Ltd.	2,740	2,740	-	0.05%	Time Deposit
Long Shan Lin Corporation	71,040	71,040	-	0.5%	Time Deposit
Hi-Life International Co., Ltd.	19,830	18,530	-	0.4%	Time Deposit

• 77 -

December 31, 2022

Related Party	Highest Balance in the period	Balance at the end of the period	Balance of Guarantees and Letters of Credit (Note)	Rate Range	Collaterals
Union Recreation Enterprise Corporation	$ 14,530	$ 7,265	$ -	1%	Time Deposit
The Liberty Times Co., Ltd.	2,793	-	-	0.05%	Time Deposit
Long Shan Lin Corporation	71,040	71,040	-	0.5%	Time Deposit
Hi-Life International Co., Ltd.	19,830	19,830	-	0.4%	Time Deposit

June 30, 2022

Related Party	Highest Balance in the period	Balance at the end of the period	Balance of Guarantees and Letters of Credit (Note)	Rate Range	Collaterals
Union Recreation Enterprise Corporation	$ 14,530	$ 14,530	$ -	1%	Time Deposit
The Liberty Times Co., Ltd.	2,594	-	-	0.05%	Time Deposit
Long Shan Lin Corporation	71,040	71,040	-	0.5%	Time Deposit
Hi-Life International Co., Ltd.	16,300	7,500	-	0.4%	Time Deposit

Note: the guarantee obligations reserves are provided based on the entire credit.

4. Lease agreement

(1) The Company as the lessee

Under operating lease agreements with terms of one year to five years, the Bank rents office spaces from related parties for use by the Bank’s Head Office, Trust, International Banking Department, Wealth Management, Information Technology Department, Consumer Banking Department, Insurance Agency Department, Credit Card Department, Northern Collaterals Appraisal Center, some branches. Rentals are paid quarterly or are taken from lease deposits. Rental expenses and lease deposits were as follows:

• 78 -

Year 2023 2022	Lessor Yu-Bon Horng Gow Yung Hsuan UECC Yu-Bon Horng Gow Yung Hsuan UECC	Balance of Lease Deposit at Balance at June 30 (Other Assets - Refundable Deposits) Amount % in the account $ 456,046 21.33% 219,464 10.27% 16,156 0.76% 5,019 0.23% 456,046 15.60% 219,464 7.51% 16,067 0.55% 5,019 0.17%	June 30 Lease liabilities	June 30 Lease liabilities
		Amount $ 456,046 219,464 16,156 5,019 456,046 219,464 16,067 5,019	Amount $ 41,613 214,880 7,158 21,384 22,899 284,422 72,050 38,037	% in the account
				3.45% 17.81% 0.59% 1.77% 1.56% 19.37% 4.91% 2.59%

During January 1 to June 30, 2023 and 2022, the Bank leased vehicles for operation from UFLIC with the rent expenses of NT$6,844 thousand and NT$6,546 thousand, respectively; the rents payable on June 30, 2023, December 31 and June 30, 2022 were NT$307 thousand, NT$33 thousand, and NT$95 thousand.

The Bank rented space to install an ATM of Hi-life International Corporation, the rent expense was NT$220 thousand and NT$25 thousand January 1 to July 30, 2023 and 2022.

(2) The Company as the lessee

Some offices of the Bank’s Taoying, Kaohsiung, Juru, Xingzhong, and previous Tunhua Branch, office of Zhongxiao Rd. Branch, Taichung, and some offices of Songjiang Branch, have been leased to UFLIC, HiLife, Blue Border, and UVC for December 2014 to August 2024, January 2021 to December 2025, May 2017 to April 2027, November 2017 to October 2022, January 2021 to January 2032, March 2020 to April 2030, and January 2022 to December 2026; during January 1 to June 30 2023 and 2022, the rent incomes were both NT$8,109 thousand. The rents are received on the monthly basis. In addition, the lease deposits received were both NT$6,474 thousand. (accounted in Other Liabilities - guarantee deposits).

• 79 -

• Union Information Technology Corporation purchased the computer peripheral devices, information software and provided the network service to the Bank. For January 1 to June 30, 2023 and 2022, the expenses related to the purchase and services were NT$89,235 thousand and NT$66,853 respectively.

• LINE PAY provided the use of its consumer platform to the Bank starting in July 2019. During January 1 to June 30, 2023 and 2022, the maintenance fees of the platform was NT$18,245 thousand and NT$15,053 thousand, respectively.

• LINE PAY provided the credit card bonus points and cooperative marketing campaigns to the Bank. The advertising fee was $393,519 thousand and $324,149 thousand, respectively, during January 1 to June 30, 2023 and 2022,

• Hi-Life provided the product bonus redemptions and marketing campaigns to the Bank. The advertising fees were $4,527 thousand and $255 thousand, respectively, during January 1 to June 30, 2023 and 2022.

• RFD Micro Electricity Co., Ltd provided the Bank with credit card marketing of sustainable development and eco-consumption; during January 1 to June 30, 2023 and 2022, the rebate incomes were NT$7,977 thousand and NT$28,751 thousand.

Under Articles 32 and 33 of the Banking Act, no unsecured loan may be provided to the stakeholders except for within the consumer loan limits and government loans, credits extended by the Bank to any related party should be fully secured, and the credit terms for related parties should not be favorable to those for unrelated parties.

(III) Rewards and compensations to major management

During January 1 to June 30, 2023 and 2022, the rewards and compensations to directors and other major management are as follows:

Short-term employment benefits Salary and wages Honoraria Post-employment benefits	January 1 to June 30, 2023 $ 18,499 646 19,145 414 $ 19,559	January 1 to June 30, 2022	January 1 to June 30, 2022
			$ 18,221 534 18,755 532 $ 19,287

• 80 -

Compensation of directors and management is determined by the remuneration committee on the basis of individual performance and market trends.

XLII. Assets Pledged

As of June 30, 2023, December 31 and June 30, 2022, government bonds and bank debentures, which amounted to NT$364,005 thousand, NT$349,305 thousand, and $352,405 thousand (all amounts included in other financial assets), respectively, had been provided to the courts and the Bank of Taiwan as guarantee deposits on provisional seizures against the debtors’ properties, as reserve for credit card receivables, as guarantee deposits on bills finance operations, brokering life insurance, property and casualty insurance, and as trust reserve.

As of June 30, 2023, December 31 and June 30, 2022, the Bank pledged a time deposit of both $1,100,000 thousand (listed under other financial assets) to Mega International Commercial Bank and Mizuho Bank to be part of the latter’s online bankto-bank payment system.

XLIII. Material Contingent Liabilities and the Contractual Commitments not Recognized

(I) As of June 30, 2023, December 31 and June 30, 2022, the Bank’s commitments consisted of the following:

Unused standby loan commitment Unused credit card commitment Unused letters of credit Other guarantees Collections for customers Guarantee notes payable Trust assets Marketable securities under custody	June 30, 2023 $ 155,601,249 318,501,547 1,400,533 24,274,097 18,936,536 1,368,000 101,568,406 4,107,281	December 31, 2022 $ 145,119,660 303,890,640 2,769,934 19,222,176 20,173,503 1,363,300 99,416,079 3,907,911	June 30, 2022
			$ 137,702,940 294,961,476 2,682,528 22,425,581 21,512,882 1,366,400 99,198,340 5,328,741

(II) Computer equipment purchase contracts

As of June 30, 2023, December 31 and June 30, 2022, the Bank had contracts to purchase computer equipment and software for NT$906,594 thousand, NT$929,654 thousand and NT$811,924 thousand, respectively, of which NT$244,708 thousand, NT$267,896 thousand and NT$63,379 thousand had been paid as of June 30, 2023, December 31 and June 30, 2022.

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XLIV. Other Matters

Since the start of Russia-Ukraine War in February 2022, the credit rating agencies lowered the sovereign rating of Russia and thus the credit risks of the financial instruments of the Bank in investment positions in Russia increased. The Bank has considered the related impacts and reflected in Note XI and XXXV of the financial statements

XLV. Description and Amounts of Trust Business Under the Trust Act

Balance Sheet of Trust Accounts

June 30, 2023

Trust assets Bank deposits Investment Fund investments Bond investment Investments in common shares Accounts receivable Marketable securities under custody Real estate - land and building Total trust assets		Amount $ 14,246,288 62,639,338 9,079 415,216 19,385 11,933,198 12,305,902 $101,568,406	Trust Liabilities and Capital Management fees payable Income tax payable Marketable securities under custody payable Trust capital Reserves and cumulative profit/deficit Total trust liabilities and capital		Amount
					$ 92 1,536 11,933,198 89,393,243 240,337 $101,568,406

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Balance Sheet of Trust Accounts

December 31, 2022

	Amount			Amount
		Trust Liabilities and
Trust assets		Capital
		Management fees
Bank deposits	$ 12,828,231	payable	$	89
Investment		Income tax payable		951
		Marketable securities
Fund investments	58,256,451	under custody payable		15,470,010
Bond investment	8,948	Trust capital		83,740,302
Investments in		Reserves and cumulative
common shares	388,917	profit/deficit		204,727
Accounts receivable	12,145
Marketable securities
under custody	15,470,010
Real estate - land and
building	12,451,377
		Total trust liabilities and
Total trust assets	$ 99,416,079	capital	$	99,416,079
	Balance Sheet of Trust Accounts
	June 30, 2022
	Amount			Amount
		Trust Liabilities and
Trust assets		Capital
		Management fees
Bank deposits	$ 11,310,570	payable	$	56
Investment		Income tax payable		424
		Marketable securities
Fund investments	60,427,384	under custody payable		15,583,002
Bond investment	8,549	Trust capital		83,445,360
Investments in		Reserves and cumulative
common shares	329,022	profit/deficit		169,498
Accounts receivable	8,877
Marketable securities
under custody	15,583,002
Real estate - land and
building	11,530,936
		Total trust liabilities and
Total trust assets	$ 99,198,340	capital	$	99,198,340

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Income Statement of Trust Accounts

January 1 to June 30, 2023

January 1 to June 30, 2023
Trust Income Interest revenue - demand account Interest revenue - time deposit Interest revenue - bond Income distributed from beneficiary certificate Realized capital gain - fund Unrealized capital gain - fund Unrealized capital gain - unlisted common share Total trust income Trust expenses Administrative expenses Unrealized capital loss - listed common share Unrealized capital loss - bond Realized capital loss - fund Unrealized capital loss - fund Other expenses Total trust expense Net profit before tax Income tax expense Gain after tax for the period		Amount
	(	$ 10,995 27,735 238 294 18 26 138,162 177,468 6,830 470 2,991 231 1,266 606 12,394 165,074 3,464) $ 161,610

Note: The above trust income statements were only the income of the trusted assets under the Bank’s Department of Trust, and not included in the Bank’s income statements.

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Income Statement of Trust Accounts

January 1 to June 30, 2022

January 1 to June 30, 2022
Trust Income Interest revenue - demand account Interest revenue - time deposit Interest revenue - bond Income distributed from beneficiary certificate Realized capital gain - fund Unrealized capital gain - fund Unrealized capital gain - unlisted common share Total trust income Trust expenses Administrative expenses Monitoring fees Unrealized capital loss - listed common share Unrealized capital loss - bond Business expenses - lawyer fees Unrealized capital loss - fund Other expenses Total trust expense Net profit before tax Income tax expense Gain after tax for the period		Amount
	(	$ 571 16,377 195 589 1 3 103,109 120,845 9,418 120 328 2,424 190 4,367 1,944 18,791 102,054 1,166) $ 100,888

Note: The above trust income statements were only the income of the trusted assets under the Bank’s Department of Trust, and not included in the Bank’s income statements.

Trust Property and Equipment Accounts

June 30, 2023

June 30, 2023
Investment Portfolio Bank deposits Investment Fund investments Bond investment Investments in common shares Accounts receivable Marketable securities under custody Real estate - land and building Total		Amount
		$ 14,246,288 62,639,338 9,079 415,216 19,385 11,933,198 12,305,902 $ 101,568,406

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Trust Property and Equipment Accounts

December 31, 2022

December 31, 2022
Investment Portfolio Bank deposits Investment Fund investments Bond investment Investments in common shares Accounts receivable Marketable securities under custody Real estate - land and building Total		Amount
		$ 12,828,231 58,256,451 8,948 388,917 12,145 15,470,010 12,451,377 $ 99,416,079

Trust Property and Equipment Accounts

June 30, 2022

June 30, 2022
Investment Portfolio Bank deposits Investment Fund investments Bond investment Investments in common shares Accounts receivable Marketable securities under custody Real estate - land and building Total		Amount
		$ 11,310,570 60,427,384 8,549 329,022 8,877 15,583,002 11,530936 $ 99,198,340

XLVI. Disclosure of Financial Instruments

(I) Information on fair value

1. Overview

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

When initially recognizing a financial instrument, its fair value is accounted for; in many cases, it usually refers to the transaction price. Other than some financial instruments are measured at the amortized costs, the subsequent measurements are at fair values. The best evidence of fair values are the public quotations in active markets. Where the market of a financial instrument is not activate, the Bank applies the valuation models, or the quotations from Bloomberg, Reuters, or transaction counterparties to measure the fair values of the financial instruments.

• 86 -

2. Definitions of fair value hierarchy

(1) Level 1

Level 1 financial products are traded in an active market in which there are quoted prices for identical financial products. An active market has the following characteristics:

• A. All financial instruments in the market are homogeneous.

• B. There are willing buyers and sellers in the market all the time.

• C. The public can access the price information easily.

The products in this level, such as listed shares and beneficiary securities, usually have high liquidity or are traded in exchanges.

(2) Level 2

The products in Level 2 have fair values that can be inferred from either directly or indirectly observable inputs other than quoted prices in an active market. Examples of these inputs are:

• A. Quoted prices from the similar products in an active market. This means the fair value can be derived from the current trading prices of similar products, and whether they are similar products should be judged on the characteristics and trading rules. The fair price valuation in this circumstance may be adjusted due to time differences, trading rule’s differences (time apart from present), related parties’ prices, and the correlation of observable transaction price between itself and the similar goods;

• B. Quoted prices for identical or similar financial instruments in inactive markets;

• C. For the valuation model method, the inputs to this model (such as interest rates, yield curves and volatilities) should be data available in the market (the observable inputs mean that they can be obtained from the market and can reflect the expectation of market participants);

• D. Inputs that are derived from observable market data through correlation or other means.

The fair values of products categorized in this level are usually calculated using a valuation model generally accepted by the market. Examples are forward contracts, cross-currency swap, simple interest bearing bonds, convertible bonds and commercial paper.

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(3) Level 3

The fair values of the products in Level 3 are typically based on management assumptions or expectations other than the direct market data. For example, historical volatility used in valuing options is an unobservable input because it cannot represent the entire market participants’ expectation on future volatility.

The products in this level are complex derivate financial instruments or products with prices that are provided by brokers. Examples are investments in equities unlisted or without active markets, or complex foreign exchange options.

1. Measured at fair value on a recurring basis

2. (1) Information of the fair value hierarchies

The Bank’s financial instruments measured at fair value are all measured at fair value on a recurring basis. The fair value hierarchies of the Bank’s financial instruments are as follows:

Unit: NTD thousand

Asset and liability items		June 30,2023	June 30,2023
	Total	Level 1	Level 2	Level 3
Measured at fair value on a recurring basis Nonderivative financial instruments Asset Financial assets measured at fair value through profit or loss Financial assets mandatorily classified as at FVTPL Fund beneficiary certificates Commercial paper Asset-backed securities Share investments	$ 297,028 48,297,889 24,026 1,517,641	$ 297,028 - - 1,517,641	$ - 48,297,889 24,026 -	$ - - - -

(continued at next page)

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(Cont’)

Asset and liability items		June 30, 2023	June 30, 2023
	Total	Level 1	Level 2	Level 3
Future exchange margins - self owned Bond investment Financial assets measured at fair value through other comprehensive income Share investments Bond investment Derivative financial products Asset Financial assets measured at fair value through profit or loss Liabilities Financial liabilities measured at fair value through profit or loss	$ 64,593 598,913 13,427,278 50,058,296 1,364,165 675,348	$ 64,593 - 11,654,328 - - -	$ - 598,913 - 50,058,296 1,224,232 536,607	$ - - 1,772,950 - 139,933 138,741

Unit: NTD thousand

Asset and liability items		December 31, 2022	December 31, 2022
	Total	Level 1	Level 2	Level 3
Measured at fair value on a recurring basis Nonderivative financial instruments Asset Financial assets measured at fair value through profit or loss Financial assets mandatorily classified as at FVTPL Fund beneficiary certificates Commercial paper Asset-backed securities Share investments Future exchange margins - self owned Financial assets measured at fair value through other comprehensive income Share investments Bond investment Derivative financial products Asset Financial assets measured at fair value through profit or loss Liabilities Financial liabilities measured at fair value through profit or loss	$ 64,996 26,558,195 26,637 1,632 62,175 10,174,171 48,491,788 602,545 931,500	$ 64,996 - - 1,632 62,175 8,394,621 - - -	$ - 26,558,195 26,637 - - - 48,491,788 440,271 769,235	$ - - - - - 1,779,550 - 162,274 162,265

• 89 -

Unit: NTD thousand

Asset and liability items		June 30, 2022	June 30, 2022
	Total	Level 1	Level 2	Level 3
Measured at fair value on a	$ 282,922 34,584,438 31,682 915,166 62,424 13,122,303 50,683,097 897,731 730,754	$ 282,922 - - 915,166 62,424 11,378,797 - - -	$ - 34,584,438 31,682 - - - 50,683,097 734,536 570,619	$ - - - - - 1,743,506 - 163,195 160,135
recurring basis Nonderivative financial
instruments Asset Financial assets measured at fair value through profit or loss Financial assets mandatorily classified as at FVTPL Fund beneficiary certificates Commercial paper Asset-backed securities Share investments Future exchange margins - self owned Financial assets measured at fair value through other comprehensive income Share investments Bond investment Derivative financial products Asset Financial assets measured at fair value through profit or loss Liabilities Financial liabilities measured at fair value through profit or loss

(2) Valuation technique of measurement at fair value

A fair value refers to the amount for asset exchange or debt repayment between two parities with sufficient understanding and willingness of transaction in an arm-length transaction. The fair values of financial instruments at fair value, financial assets at fair value through other comprehensive income, available-for-sale financial assets and hedging derivative financial instruments with quoted price in an active market are based on their market prices. Financial instruments with no quoted prices in an active market are estimated by valuation methods.

A. Marking to market

This method should be used first to determine fair value. Following are the principles to follow in marking to market:

a. Ensure the consistency and integrity of market data.

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• b. The source of market data should be transparent and easy to access and can be referred to by independent resources.

• c. Listed securities with tradable prices should be valued at closing prices.

• d. Evaluating unlisted securities that lack tradable closing prices should use quoted prices from independent brokers.

• B. Marking to model

The use of marking to model is suggested if marking to market is infeasible. This valuation methodology is based upon model inputs that are used to derive the value of the trading positions. The Bank uses the same estimations and assumptions as those used by market participants to determine the fair value.

The Bank uses the forward rates provided by Reuters to estimate the fair values of forward contracts, foreign exchange swap contracts, interest rate swap and cross-currency swap contracts and the discounted cash flow method to calculate the fair values of each contract. For foreign exchange option transactions, the Company uses the option pricing models which are generally used by other market participants (e.g., the Black-Scholes model) to calculate the fair value of the contracts.

• (3) Fair value adjustment

• A. Credit risk assessment adjustment

Credit risk assessment adjustment refers to the fair value of the over the counter (OTC) derivative financial commodity contracts, which also reflects the credit risk of both parties. It can be mainly divided into “credit evaluation adjustment” and “debit evaluation adjustment”:

• a. Credit value adjustments (CVA): A transaction in a non-concentrated trading market, that is, the adjustment of the derivatives contract evaluation in the OTC transaction, which reflects the possibility of the Company may not be able to collect the full market value or the counterparty may default on the repayment on the fair value.

• 91 -

b. Debit value adjustments (DVA): It refers to the transactions of the non-concentrated trading market, that is, the adjustment of the derivatives contract evaluation in the OTC transaction, which reflects the possibility that the Company may not be able to collect the full market value or the counterparty may default on the repayment of the fair value.

Both CVA and DVA are concepts of estimated loss, calculated as the probability of default (PD) multiplied by the default loss rate (LGD) and multiplied by the exposure at default (EAD).

For customers with external credit ratings, the default probability is based on the default probability corresponding to the external rating; for customers without external credit ratings, the impairment rate calculated according to the Bank’s loan and receivable impairment assessment and the average incidence of impairment is taken as the default probability.

The Bank uses the fair value of OTC derivatives to calculate the amount of default risk (EAD).

The Bank uses 60% as the default loss rate based on the recommendation of “IFRS 13 CVA and DVA Related Disclosure Guidelines” of the Stock Exchange.

The Bank incorporates the credit risk assessment adjustment into the fair value calculation of financial instruments to reflect the counterparty’s credit risk and the Company’s credit quality.

• (4) Transfers between Level 1 and Level 2

During January 1 to June 30, 2023 and 2022, there was no material transfer between Level 1 and Level 2.

• (5) Reconciliation of Level 3 items of financial instruments

• A. Changes in Level 3 financial assets at fair value

January 1 to June 30, 2023

Unit: NTD thousand

Name	Balance at the beginning of the period	ValuationG	ains (Losses)	Increasefo	r the period	Decreasefo	r the period	Balance at the end of the period
		In Net Income	In Other Comprehensi veIncome	Purchased or issued	Transfer to Level 3	Sale, disposal, or delivery	Transfer from Level 3
Financial assets measured at fair value through profit or loss Derivative financial products Financial assets measured at fair value through other comprehensive income Shareinvestments	$ 162,274 1,779,550	( $ 11,068 ) -	$ - ( $ 2,970 )	$ 51,635 -	$ - -	( $ 62,908 ) ( $ 3,630 )	$ - -	$ 139,933 1,772,950

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January 1 to June 30, 2022

Unit: NTD thousand

Name	Balance at the beginning of the period	ValuationG	ains (Losses)	Increasefo	r the period	Decreasefo	r the period	Balance at the end of the period
		In Net Income	In Other Comprehensi veIncome	Purchased or issued	Transfer to Level 3	Sale, disposal, or delivery	Transfer from Level 3
Financial assets measured at fair value through profit or loss Derivative financial products Financial assets measured at fair value through other comprehensive income Shareinvestments	$ 94,064 1,465,894	$ 39,265 -	$ - ( 97,388 )	$ 63,128 375,000	$ - -	( $ 33,262 ) -	$ - -	$ 163,195 1,743,506

The valuation profit and loss above are listed in the current profit and loss, and attributed to the amount of profit and loss of the assets held in the accounts as of June 30, 2023 and 2022; with a loss of NT$11,068 thousand and a profit of NT$39,265 thousand, respectively. B. Changes in Level 3 financial liabilities at fair value

January 1 to June 30, 2023

Unit: NTD thousand

Name	Balance at the beginning of the period	ValuationG	ains (Losses)	Increasefo	r the period	Decreasefo	r the period	Balance at the end of the period
		In Net Income	In Other Comprehensi veIncome	Purchased or issued	Transfer to Level 3	Sale, disposal, or delivery	Transfer from Level 3
Financial liabilities measured at fair value through profit or loss Derivative financial products	$162,265	( $ 34,499 )	$ -	$ 62,098	$ -	( $ 51,123 )	$ -	$138,741

January 1 to June 30, 2022

Unit: NTD thousand

Name	Balance at the beginning of the period	ValuationG	ains (Losses)	Increasefo	r the period	Decreasefo	r the period	Balance at the end of the period
		In Net Income	In Other Comprehensi veIncome	Purchased or issued	Transfer to Level 3	Sale, disposal, or delivery	Transfer from Level 3
Financial liabilities measured at fair value through profit or loss Derivative financial products	$94,042	$97,280	$ -	$33,471	$ -	( $64,658)	$ -	$160,135

The valuation profit and loss above are listed in the current profit and loss, and attributed to the amount of profit and loss of the liabilities assumed in the accounts as of June 30, 2023 and 2022, with a profit of NT$34,499 thousand and a loss of NT$97,280 thousand, respectively. (6) Quantitative information of significant unobservable inputs - Level 3 fair value measurement

The Bank’s Level 3 fair value assets are investments in unlisted stocks or equity without an active market and derivative financial instruments.

• 93 -

The quantitative information of significant unobservable inputs - Level 3 fair value measurement is shown in the following table:

	Name	Products	Fair value on June 30, 2023	Valuation Technique	Significant Unobservable Inputs	Interval (Weighted- average)	Relation Between Input and Fair Value
M D	easured at fair value on a recurring basis erivative financial assets nancial assets measured at fair value through profit or loss onderivative financial instruments nancial assets measured at fair value through other comprehensive income erivative financial liabilities nancial liabilities measured at fair value through profit or loss	Foreign exchange options Share investments Foreign exchange options	$ 139,933 1,772,950 138,741	Option pricing model Asset method Option pricing model	Fluctuation Allowance of minor equity and liquidity Fluctuation	GBP/AUD 8.62% AUD/USD 9.64%~10.74% EUR/GBP 6.01%~6.59% USD/TWD 5.07%~7.08% USD/ZAR 15.09%~15.18% 5%~20% GBP/AUD 8.62% AUD/USD 9.64%~10.74% EUR/GBP 6.01%~6.59% USD/TWD 5.07%~7.08% USD/ZAR 15.09%~15.18%	The higher the fluctuation is, the higher the fair value The higher the allowance is, the lower the fair value The higher the fluctuation is, the higher the fair value
Fi N
Fi D
Fi

	Name	Products	Fair value on December 31, 2022	Valuation Technique	Significant Unobservable Inputs	Interval (Weighted- average)	Relation Between Input and Fair Value
M Fi	easured at fair value on a recurring basis nancial assets measured at fair	Foreign exchange options Share investments Foreign exchange options	$ 162,274 1,779,550 162,265	Option pricing model Asset method Option pricing model	Fluctuation Allowance of minor equity and liquidity Fluctuation	AUD/JPY 14.36%~14.85% AUD/USD 12.21%~12.47% EUR/GBP 7.81%~7.82% EUR/USD 8.53% USD/TWD 5.98%~7.09% USD/ZAR 15.67%~15.68% 5%~20% AUD/JPY 14.36%~14.85% AUD/USD 12.21%~12.47% EUR/GBP 7.81%~7.82% EUR/USD 8.53% USD/TWD 5.98%~7.09% USD/ZAR 15.67%~15.68%	The higher the fluctuation is, the higher the fair value The higher the allowance is, the lower the fair value The higher the fluctuation is, the higher the fair value
D Fi	value through profit or loss erivative financial assets nancial assets measured at fair
N Fi	value through other comprehensive income onderivative financial instruments nancial liabilities measured at fair value through profit or loss
D
	erivative financial liabilities

• 94 -

	Name	Products	Fair value on June 30, 2022	Valuation Technique	Significant Unobservable Inputs	Interval (Weighted- average)	Relation Between Input and Fair Value
M D	easured at fair value on a recurring basis erivative financial assets nancial assets measured at fair value through profit or loss onderivative financial instruments nancial assets measured at fair value through other comprehensive income erivative financial liabilities nancial liabilities measured at fair value through profit or loss	Foreign exchange options Share investments Foreign exchange options	$ 163,195 1,743,506 160,135	Option pricing model Asset method Option pricing model	Fluctuation Allowance of minor equity and liquidity Fluctuation	AUD/JPY 15.23%~15.69% AUD/USD 12.43% EUR/GBP 7.56% USD/TWD 5.34%~6.49% USD/ZAR 16.57% 5%~20% AUD/JPY 15.23%~15.69% AUD/USD 12.43% EUR/GBP 7.56% USD/TWD 5.34%~6.49% USD/ZAR 16.57%	The higher the fluctuation is, the higher the fair value The higher the allowance is, the lower the fair value The higher the fluctuation is, the higher the fair value
Fi N
Fi D
Fi

• (7) The valuation process of Level 3 fair value measurement

To ensure that the product assessment results can be close to the market, the risk management department of the Bank is responsible for the verification of the independent fair value. For products valuated by the model, before daily valuation, the information required for the valuation will be verified as correct and consistent with each other and the department will calibrate the model to the market quotation and update the input value required for the valuation model. In addition to regular checking of the accuracy of the valuation model, the reasonableness of the prices provided by third parties will also be checked.

The asset method is adopted for the Bank’s equity investment unlisted or without active market. By valuating the total value of the individual asset and liability covered by the valuation target, the overall value of the target is reflected.

• (8) Sensitivity analysis of Level 3 fair value if reasonably possible alternative assumptions were used

The Bank’s Level 3 financial instruments are foreign exchange options. When engaging in foreign exchange option transactions, the Bank makes a match for other banks and customers. Thus, the Company does not hold positions, and its source of profit and loss is from receiving and paying premiums. The sensitivity analysis has no effect on profit and loss since the Bank does back-to-back transactions and the assets offset the liabilities.

• 95 -

The fair value measurement of equity investment unlisted or without active market is reasonable; provided, the use of different valuation models or parameters may lead to different results. For financial instruments classified in Level 3, if the parameter changes by 10%, the effects on profit or loss or other comprehensive income for the current periods are as follows:

June 30, 2023

June 30, 2023
Equity instruments under financial assets measured at fair value through other comprehensive income December 31, 2022 Equity instruments under financial assets measured at fair value through other comprehensive income June 30, 2022 Equity instruments under financial assets measured at fair value through other comprehensive income	Changes in Fair Value Are Reflected in Other Comprehensive Income for the Current Period
	Favorable Changes Unfavorable Changes $ 177,295 ( $ 177,295 ) Changes in Fair Value Are Reflected in Other Comprehensive Income for the Current Period	Unfavorable Changes
	Favorable Changes Unfavorable Changes $ 177,955 ( $ 177,955 ) Reflection of changes in fair value Other comprehensive income for the period	Unfavorable Changes
	Favorable Changes $ 174,351	Unfavorable Changes
		( $ 174,351 )

• 96 -

3. Not measured at fair value

(1) Information on fair value

For the Bank’s financial assets not measured at fair values, other than the items listed in the following table, the book amounts of cash and cash equivalents, dues from the Central Bank and other banks, investments of notes under reverse repurchase agreement and bonds, accounts receivable, discounts and loans, some of other financial assets, deposits from the Central Bank and other banks, dues to the Central Bank and other banks, liabilities of notes under repurchase agreement and bonds, accounts payable, deposits and remittances, corporate bonds payable, and other financial liabilities are the reasonable approximation of their fair values, so their fair values are not disclosed.

Financial assets Financial assets measured at amortized costs Financial liabilities BANK DEBENTURES	June 30,2023	June 30,2023	December	31,2022	June 30,2022	June 30,2022
	CarryingAmount	Fair value	CarryingAmount	Fair value	CarryingAmount	Fair value
	$ 82,840,985 5,000,000	$ 79,082,347 4,945,158	$ 82,519,002 5,000,000	$ 78,524,889 4,922,683	$ 84,298,265 5,000,000	$ 82,440,573 4,951,508

(2) Information of the fair value hierarchies

Asset and liability items		June 30, 2023	June 30, 2023
	Total	Level 1	Level 2	Level 3
Financial assets Financial assets measured at amortized costs Financial liabilities BANK DEBENTURES	$ 79,082,347 4,945,158	$ - -	$ 79,082,347 4,945,158	$ - -

Asset and liability items		December 31, 2022	December 31, 2022
	Total	Level 1	Level 2	Level 3
Financial assets Financial assets measured at amortized costs Financial liabilities BANK DEBENTURES	$ 78,524,889 4,922,683	$ - -	$ 78,524,889 4,922,683	$ - -
Asset and liability items		June 30, 2022
	Total	Level 1	Level 2	Level 3
Financial assets Financial assets measured at amortized costs Financial liabilities BANK DEBENTURES	$ 82,440,573 4,951,508	$ - -	$ 82,440,573 4,951,508	$ - -

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XLVII. Financial Risk Management

(I) Overview

To deal with any expected or unexpected business risk, the Bank has established a comprehensive risk management system to allocate resources effectively and efficiently, strengthen business competitiveness, mitigate operational risk to a tolerable or acceptable level, and maintain the capital adequacy ratio to meet the minimum requirements of the authorities and the Basel Accord framework.

(II) Risk management framework

The board of directors, which occupies the highest level in the Bank’s risk management framework, reviews risk management policies, the overall risk management framework and the organizational structure for carrying out responsibilities and exercising accountability. The Asset/Liability Management Committee inspects management reports or information provided by business units and the Risk Management Division. The Risk Management Division is an independent unit that is in charge of reviewing the risk management system designed by business units and the compliance with risk management requirements; this division also submits risk management reports to the authorities and develops a series of risk management tools to assess the risks identified. Business units establish risk control procedures, and manage and monitor the implementation of those controls in operation units. Operation units perform daily risk management work and internal controls to ensure the accuracy and completeness of the risk management information generated.

(III) Credit risk

1. Definitions and sources of credit risks

Credit risk refers to the risk of losses caused by clients or counterparties’ failure to fulfill their contractual obligations. The sources of credit risks cover the in- and off-balance sheet items.

1. Strategy/objectives/policies and processes

2. (1) Credit risk management strategy: The Bank has established the “Credit Risk Management Standards of Union Bank of Taiwan” as the basis of planning, implementing, and managing credit risk management system.

3. 98 -

4. (2) Credit risk management objective: The objectives are to establish and implement an effective credit risk management mechanism to mitigate credit risk, archive operational and management goals, and balance business development and risk control.

5. (3) Credit risk management policy: The policies are meant to ensure that credit risk falls within an acceptable range and that adequate capital is maintained to meet credit risk management objectives and create maximum riskadjusted returns.

6. (4) Credit risk management process: The Bank carries out credit risk identification, credit risk measurement, credit risk mitigation, credit risk monitoring and control and credit risk reporting process as part of its credit risk management mechanism.

7. Credit risk management organization and framework

8. (1) The board of directors: The board of directors, the top risk supervisor of the Bank, reviews risk management policies, operational risk limits and the design and change of credit risk management framework.

9. (2) Asset/Liability Management Committee: This committee deliberates the management reports or information provided by business units and the Risk Management Division.

10. (3) Risk Management Division: The Risk Management Division is an independent unit that is in charge of work related to three pillars of Basel and reviews the risk management system designed by business units and the compliance with risk management requirements; the division also submits risk management reports to the authorities and develops risk management tools to assess the risk identified.

11. (4) Business units: Business units are responsible for establishing risk management regulations and risk control procedures and managing and monitoring the implementation of those controls in operation units.

12. (5) Operation units: Under the risk management regulations and procedures set by business units, operation units perform daily risk management work and internal controls and prepares reports on these tasks.

13. 99 -

14. Scope and features of credit risk report and the measurement system

15. (1) Scope of credit risk report

    • A. Each business unit will regularly report the promotion of the business and the allocation of risk assets to the Assets/Liability Management Committee (ALMC).

    • B. The Bank’s risk management department regularly monitors the credit limit control situations and reports to the ALMC the credit and investment concentration and the status of each business’ achieving BIS (Bank for International Settlements) goals. The department also presents the volume of business NPL situation, credit concentration and the execution of credit risk control to the board of directors.

16. (2) Measurement system: The Bank’s credit risk management adopts the use of the standardized approach to calculate capital charge and regularly submits related reports to the government. The risk management division and business units implement the Bank’s management system and monitors the credit exposure of the business, industry, and countries as well as the concentration of credit and collateral to effectively measure and manage investment portfolio.

17. Policy for mitigation of risks or hedging of credit risk, and the strategies/processes to monitor the continuing effectiveness of risk hedging and mitigation tools

The Bank is exposed to loss on each credit risk faced by its business. Thus, depending on the nature of the business and the cost considerations, the Bank will take appropriate remeasures to control risk. The Bank’s information systems provide information that can be used in managing risk control procedures, and the risk management division reports to the board every six months the business risk management status.

1. Maximum exposure to credit risk of the Bank

The maximum credit exposures of assets in the balance sheets are almost equivalent to their carrying values, without considering the collaterals or other credit enhancement tools. These off-balance sheet maximum credit exposures (excluding collaterals and other credit enhancement instruments) are shown as follows:

• 100 -

Off-balance sheet items	Maximum exposure to credit risk	Maximum exposure to credit risk	Maximum exposure to credit risk
	June 30, 2023	December 31, 2022	June 30, 2022
Irrevocable standby loan commitment	$ 10,225,457	$ 5,839,357	$ 8,567,215
Unused letters of credit	1,400,533	2,769,934	2,682,528
Other guarantees	24,274,097	19,222,176	22,425,581
Unused credit card commitments	318,501,547	303,890,640	294,961,476

The financial effects on the maximum credit risk exposure from the collaterals, netting arrangements, and other credit enhancement held in the assets in the balance sheets and off-balance sheet items are shown in the table below.

below.
June 30, 2023 In-balance sheet items Discounts and loans December 31, 2022 In-balance sheet items Discounts and loans June 30, 2022 In-balance sheet items Discounts and loans	Collaterals $ 503,190,816 Collaterals $ 476,363,475 Collaterals $ 447,602,481	Netting Arrangements $ - Netting Arrangements $ - Netting Arrangements $ -	Other Credit Enhancement $ - Other Credit Enhancement $ - Other Credit Enhancement $ -	Total
				$ 503,190,816 Total
				$ 476,363,475 Total
				$ 447,602,481

The Bank’s management believes that the credit risk exposure of these offbalance sheet items may be controlled continuously and minimized because the Bank adopts a more rigorous review process with subsequent regular reviews when granting credits.

7. Concentrations of credit risk exposure

Concentrations of credit risk arise when a number of counterparties or exposure have comparable economic characteristics, or such counterparties are engaged in similar activities, or operate in the same geographical areas or industry sectors, so that their collective ability to meet contractual obligations is uniformly affected by changes in economic or other conditions.

• 101 -

There can be credit risk concentrations in a bank’s assets, liabilities, or offbalance sheet items through the execution or processing of transactions (either product or service), or through a combination of exposures across these broad categories. These exposures can cover credits, loans and deposits, call loans to banks, investments, receivables and derivatives. The Bank does not concentrate transactions with a single client or counterparty, nor any total transaction amount of a single client or counterparty accounts for a significant share in the Bank’s discounts and loans (including non-accrual loan), accounts receivable factoring without recourse, acceptances receivable, and balance of guarantee deposit receivable. The Bank’s most significant concentrations of credit risk by industry, by geographical area, and by collaterals are summarized as follows:

(1) By industry

By industry
By industry	June 30, 2023		December 31, 2022		June 30, 2022
	Amount	％	Amount	％	Amount	％
Private enterprises Public enterprises Government organizations Nonprofit organizations Natural person Financial institutions Overseas	$ 181,920,958 370,506 11,457,954 654,685 387,096,769 420,227 808,397	31.22 0.06 1.97 0.11 66.43 0.07 0.14	$ 168,018,996 417,628 16,154,967 642,258 367,744,123 250,307 1,890,825	30.27 0.08 2.91 0.11 66.25 0.04 0.34	$ 158,333,703 454,807 43,745,585 599,386 349,854,961 387 1,803,616	28.53 0.08 7.89 0.11 63.06 - 0.33
Total	$ 582,729,496	100.00	$ 555,119,104	100.00	$ 554,792,445	100.00

(2) By geographic area

The Bank’s operations are mainly in Taiwan except for the OBU business, and thus no significant credit risk concentration in terms of geographical area.

(3) By collaterals

By collaterals
By collaterals	June 30, 2023		December 31, 2022		June 30, 2022
	Amount	％	Amount	％	Amount	％
Unsecured Secured －Financial collaterals －Share collaterals －Property collaterals －Movable collaterals －Guarantee －Others	$ 66,678,465 13,720,780 20,048,491 443,640,667 23,786,426 12,199,432 2,655,235	11.44 2.35 3.44 76.14 4.08 2.09 0.46	$ 68,053,401 11,799,400 18,308,121 419,166,177 21,999,813 12,535,616 3,256,576	12.26 2.13 3.30 75.50 3.96 2.26 0.59	$ 96,561,232 12,349,684 16,118,766 392,214,541 21,947,613 13,875,424 1,725,185	17.40 2.23 2.91 70.70 3.96 2.50 0.3
Total	$ 582,729,496	100.00	$ 555,119,104	100.00	$ 554,792,445	100.00

• 102 -

8. Description of the collaterals and other credit enhancement

On the basis of the result of a credit evaluation, the Bank may require collaterals before the credit facilities are granted. To minimize credit risk, appropriate collaterals are required on the basis of the borrowers’ financials and debt service capabilities. All guarantees and appraisal procedures follow the authorities’ relevant regulations and the Bank’s internal rules. The Bank’s internal rules describe the acceptable types of collaterals, appraisal methods, appraisal process, and post-approval collateral management, which require close monitoring of the value of collaterals to ensure repayment. The main collateral types are summarized as follows:

• (1) Real estates

• (2) Movable

• (3) Negotiable securities/shares

• (4) Deposits/certificates of deposits

• (5) Credit guarantee fund or government guarantee

The Bank observes the value of collateral for financial instruments and takes into consideration the impairment loss that should be recognized for financial assets that are credit-impaired. The values of the credit-impaired financial assets and the values of collateral to mitigate potential losses are as follows:

follows:
June 30, 2023 Credit-impaired Financial Assets: Receivables －Credit card business －Others Discounts and loans Total impaired financial assets	Total carrying amount $ 820,572 26,380 2,088,757 $ 2,935,709	Allowance for Impairment Loss $ 43,222 19,859 354,575 $ 417,656	Exposure Amount (Amortized Cost) $ 777,350 6,521 1,734,182 $ 2,518,053		Fair Value of Collateral
					$ - 40,557 2,994,947 $ 3,035,504

• 103 -

December 31, 2022 Credit-impaired Financial Assets: Receivables －Credit card business －Others Discounts and loans Total impaired financial assets June 30, 2022 Credit-impaired Financial Assets: Receivables －Credit card business －Others Discounts and loans Total impaired financial assets	Total carrying amount $ 844,187 21,449 1,941,707 $ 2,807,343 Total carrying amount $ 894,727 63,802 1,408,605 $ 2,367,134	Allowance for Impairment Loss $ 32,797 19,114 351,831 $ 403,742 Allowance for Impairment Loss $ 68,214 23,918 458,808 $ 550,940	Exposure Amount (Amortized Cost) $ 811,390 2,335 1,589,876 $ 2,403,601 Exposure Amount (Amortized Cost) $ 826,513 39,884 949,797 $ 1,816,194		Fair Value of Collateral
					$ - 34,826 5,260,897 $ 5,295,723 Fair Value of Collateral
					$ - 30,327 3,996,472 $ 4,026,799

1. Judgment that credit risk has increased significantly since the initial recognition

On each reporting date, the Bank assesses the change in the default risk of financial assets, as well as considers reasonable and corroborative information that shows the credit risk has increased significantly since initial recognition, to determine whether the credit risk has increased significantly. For the assessment, the Bank considers the supporting evidence showing that the credit risk has increased significantly since the initial recognition (including the forward-looking information). The main considerations include: Quantitative indicators:

• A. The borrower pays the amount for contracts overdue for at least one month (more than or equal to 30 days for the credit card business), or the amounts for other contracts that are overdue for at least one month (more than or equal to 30 days for the credit card business).

• B. Debt instruments whose prices on the reporting date have fallen more than 40% from the original price since the acquisition date.

• 104 -

• C. Debt instruments that have non-investment grades based on the debt (priority), issuer, and guarantor’s credit rating and that have fallen by more than two grades and whose prices have fallen by more than 15% on the reporting date.

Qualitative indicators

• A. The borrower’s check bounced due to insufficient funds in the Bank’s checking account, or announced as a rejected account.

• B. The borrower’s collateral was seized.

• C. The borrower’s debt has been recognized as a non-accrual loan or transferred to bad debt by other financial institutions.

• D. The borrower has request restructured and ruled for the restructure.

• E. An auditors’ report on the borrower has been released where it was stated that a material uncertainty exists that may cast significant doubt on the borrower’s ability to continue as a going concern.

• F. The borrower has other bad debts that indicate that the borrower’s ability to perform its debt obligations is weak or has signs of impairment, which has been assessed to affect its operations or solvency.

• Definition of default and credit impaired financial assets

The Bank uses the same definitions for default and credit impairment of financial assets. If one or more of the conditions below are met, the Bank determines that the financial assets have defaulted and are credit impaired:

• A. The borrower pays the amount for contracts overdue for at least 3 months (90 days and above for the credit card business).

• B. The debtor has significant financial difficulties (e.g., the debtor has ceased operations, is bankrupt, or has liquidated).

• C. Economic or legal considerations, concessions to borrowers with financial difficulties (such as debt negotiations).

If the financial assets no longer meet the definition of default and credit impairment, they are judged as regaining their status of meeting performance obligations and are no longer regarded as financial assets that have defaulted and are credit impaired.

• 105 -

11. Write-off policy

When the Bank is not reasonably expected to recover all or part of the financial assets, the indicators that all or part of the financial assets that cannot be reasonably expected to be recovered include the following:

(1) Recourse activities have stopped.

• (2) The borrower is assessed to have insufficient assets or sources of income to pay the outstanding amount.

The financial assets that have been written off by the Bank may still have ongoing recourse activities in accordance with the relevant policies.

1. Contractual cash flow modification of financial assets

The Bank may modify the contractual cash flow of financial assets due to the borrower’s financial difficulties, increase in the recovery rate of the doubtful borrowers, or to maintain customer relationships. The modification of the contractual terms of the financial assets may include extending the contract period, modifying the interest payment time, and modifying the agreed interest rate or the exemption of some of the outstanding debts. The modification of contractual cash flows of financial assets may result in the delisting of existing financial assets in accordance with the Bank’s financial assets delisting policy and recognition of new financial assets at fair value.

If the contractual cash flow modification of a financial asset does not result in a derecognition, the Bank assesses whether the credit risk of the financial asset has increased significantly by comparing the following:

(1) Risk of default on the reporting date (based on modified contract terms).

• (2) The risk of default at the time of original recognition (based on the original unmodified contract terms).

The Bank considers the borrower’s subsequent payment in accordance with the revised terms and several relevant behavioral indicators to assess the probability of default of the revised financial assets and confirm whether the contract modification improves or restores the ability of the Bank to recover the relevant contract payments. If the borrower pays the contract amount according to the revised terms and shows good payment behavior, it can be determined that the credit risk is reduced and the loss allowance will be measured by the 12-month expected credit loss.

• 106 -

The Bank regularly reviews the changes in credit risk of the revised financial assets in accordance with relevant policies, and evaluates whether there is a significant increase in credit risk following the revised financial assets based on a specific model.

13. Measurement of expected credit losses

For the purpose of assessing expected credit losses, credit assets are classified into the following groups based on the credit risk characteristics of the borrower’s industry, credit risk rating, collateral type and remaining maturity period:

Business	Group	Terms and definitions
Corporate banking	Corporate banking	Corporate Finance
Consumer banking	Home loans	Mortgages business
	Financial loans	Financial loan business
	Credit card	Credit card business
	Others	Other business

The Bank adopts the 12-month ECL model to evaluate the loss allowance of financial instruments whose credit risk have not increased significantly since initial recognition, and adopt the lifetime ECL model to evaluate the loss allowance of financial instruments whose credit risk has increased significantly since initial recognition or of that are credit-impaired.

The Bank considers both the 12-month and lifetime probability of default (“PD”) of the borrower with the loss given default (“LGD”), multiplied by the exposure at default (“EAD”), as well as the impact of time value, to calculate the 12-month ECLs and lifetime ECLs, respectively.

“PD” refers to the borrower’s probability to default and “LGD” refers to losses caused by the default. The Bank calculates the “PD” and “LGD” used in the impairment assessment of the credit business according to each group’s historical information (such as credit loss experience) from internal statistical data, and after adjustment of the historical data based on current observable and forward-looking macroeconomic information.

• 107 -

Total carrying amount Less: Allowance for impairment Less: Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and Bad Debts” Total Total carrying amount Less: Allowance for impairment Less: Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and Bad Debts” Total Total carrying amount Less: Allowance for impairment Less: Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and Bad Debts” Total Total carrying amount Less: Allowance for impairment Less: Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and Bad Debts” Total					Ac	countsreceivable
						June 30,2023
		Stage 1 12-month expected credit losses		Stage 2 LifetimeECL		Stage 3 LifetimeECL		Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and BadDebts”		Total
		$ 29,857,895 83,966 - $ 29,773,929		$ 156,056 13,223 - $ 142,833	Ac	$ 846,952 63,081 - $ 783,871 countsreceivable		$ - - 25,257 $ 25,257		$ 30,860,903 160,270 25,257 $ 30,675,376
					D	ecember31,2022
		Stage 1 12-month expected credit losses		Stage 2 LifetimeECL		Stage 3 LifetimeECL		Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and BadDebts”		Total
		$ 25,817,531 77,404 - $ 25,740,127		$ 137,013 12,129 - $ 124,884	Ac	$ 865,636 51,911 - $ 813,725 countsreceivable		$ - - 23,347 $ 23,347		$ 26,820,180 141,444 23,347 $ 26,655,389
						June 30,2022
		Stage 1 12-month expected credit losses		Stage 2 LifetimeECL		Stage 3 LifetimeECL		Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and BadDebts”		Total
		$ 24,024,674 29,260 - $ 23,995,414		$ 112,986 9,693 - $ 103,293	Di	$ 958,529 92,132 - $ 866,397 scounts andloans		$ - - 45,830 $ 45,830		$ 25,096,189 131,085 45,830 $ 24,919,274
						June 30,2023
		Stage 1 12-month expected credit losses		Stage 2 LifetimeECL		Stage 3 LifetimeECL		Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and BadDebts”		Total
		$ 552,925,582 703,470 - $ 552,222,112		$ 2,727,191 168,976 - $ 2,558,215		$ 2,088,757 354,575 - $ 1,734,182		$ - - 5,341,041 $ 5,341,041		$ 557,741,530 1,227,021 5,341,041 $ 551,173,468

• 108 -

Total carrying amount Less: Allowance for impairment Less: Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and Bad Debts” Total Total carrying amount Less: Allowance for impairment Less: Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and Bad Debts” Total					Di	scounts andloans
					D	ecember31,2022
		Stage 1 12-month expected credit losses		Stage 2 LifetimeECL		Stage 3 LifetimeECL		Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and BadDebts”		Total
		$ 530,620,874 690,741 - $ 529,930,133		$ 2,423,258 202,615 - $ 2,220,643	Di	$ 1,941,707 351,831 - $ 1,589,876 scounts andloans		$ - - 4,978,932 $ 4,978,932		$ 534,985,839 1,245,187 4,978,932 $ 528,761,720
						June 30,2022
		Stage 1 12-month expected credit losses		Stage 2 LifetimeECL		Stage 3 LifetimeECL		Impairment required to be provided pursuant to the “Bank Assets Assessment Loss Provision and Overdue Loan Collections and BadDebts”		Total
		$ 527,854,864 598,614 - $ 527,256,250		$ 2,086,858 134,765 - $ 1,952,093		$ 1,408,605 458,808 - $ 949,797		$ - - 4,632,594 $ 4,632,594		$ 531,350,327 1,192,187 4,632,594 $ 525,525,546

When the Bank estimates the 12-month and lifetime expected credit losses for its loan commitments, it will give different credit conversion factors according to the characteristics of each product. The Bank will also take into consideration the amount that is expected to be utilized within 12 months from the reporting date and the expected lifetime of each commitment in determining the default risk amount that is used to calculate the expected credit loss.

The estimation techniques or material assumptions used to assess expected credit losses have not changed significantly during the current period. 14. Consideration of forward-looking information

The Bank’s credit (including credit card) segments are based on different loan properties, such as corporate banking, consumer finance, credit, car loans and credit cards, and forward-looking model estimates are carried out, based on actual default rates and overall economic variables of each segment in the past quarters. The default rate for the next year is estimated using the credit risk chain model, by estimating the relationship between the default rate and the overall economic variables. The investment function makes reference to external credit ratings in their consideration of forward-looking information.

• 109 -

(IV) Liquidity Risks

1. Source and definition of liquidity risk

Liquidity risk means banks cannot provide sufficient funding for asset size growth and for meeting obligations on matured liabilities or have to make late payments to counterparties or raise emergency funding to cover funding gaps.

1. Liquidity risk management strategy and principles

2. (1) The Board of Directors shall be the top decision-making unit of the Bank to review and approve policies for liquidity risk management. The Asset/Liability Management Committee shall be the top implementation unit of liquidity risk management to establish appropriate monitoring processes and take necessary actions.

3. (2) In making internal transfer pricing, performance evaluation and new product development decisions, the operation units take liquidity cost and product effectiveness and risks into consideration and align their decisions with the Company’s overall liquidity risk management policies.

4. (3) Capital management departments shall establish a conservative and steady capital management strategy, effectively disperse capital sources and time limits, constantly participate in the lending market, maintain a close relationship with capital providers, and maintain fluency in all fund-raising channels, in order to ensure the stability and reliability of capital sources.

5. (4) To strengthen the Bank’s liquidity risk management, related regulations shall be established to define the routine handling process and implementation details to maintain appropriate liquidity.

6. (5) The risk management units report the Bank’s liquidity position to the Asset/Liability Management Committee monthly and report the Bank’s liquidity risk management to the board of directors regularly.

7. 110 -

8. The maturity analysis of financial assets held for managing the liquidity risks and non-derivative financial liabilities

9. (1) Financial assets held for managing the liquidity risks

The Bank holds cash and quality profit-generating assets with high liquidity to fund the debt-repaying obligation, and the assets held for managing the liquidity risk to fund the needs of potential emergent fund deployment existing in the market, including: cash and cash equivalents, dues from the Central Bank and other banks, financial assets measured at FVTPL, financial assets measured at FVTOCI, investment of debt instrument measured at amortized costs, and discounts and loans.

• (2) The maturity analysis of non-derivative financial liabilities

The following table shows the analysis of cash outflows from nonderivative financial liabilities by the residual maturities between the parent-only balance sheet dates to maturities. The amounts of cash outflows are based on contractual cash flows, so some amounts may not correspond to those that shown in the parent-only balance sheets.

A. The maturity analysis of financial liabilities

Deposits from the Central Bank and peers Notes and bonds sold under agreements to repurchase Accounts payable Deposits and remittances BANK DEBENTURES Other liabilities			June3	0,2023
	DueinOneMonth	Due Between after One Month and ThreeMonths	Due Between after Three Months and Six Months	Due Between after Six Months and OneYear	DueafterOneYear	Total
	$ 7,512,671 44,497,962 4,156,583 59,516,521 - 9,595	$ - 13,744,630 1,625,786 86,876,956 - -	$ 2,515,000 - 503,651 117,618,739 - -	$ 1,059,680 - 964,342 200,552,712 - -	$ - - 35,513 264,975,335 5,000,000 87,103	$ 11,087,351 58,242,592 7,285,875 729,540,263 5,000,000 96,698

Further information on the maturity analysis of lease liabilities on June 30, 2023 is as follows:

Lease liabilities		Less than 1 Year		Over 1 year to 5years		5-10years		10-15years		15-20years		More than 20 years $ -	Total
		$ 371,029		$ 635,928		$ 175,477		$ 53,840		$ 1,641			$ 1,237,915

Deposits from the Central Bank and peers Notes and bonds sold under agreements to repurchase Accounts payable Deposits and remittances BANK DEBENTURES Other liabilities			Decembe	r 31,2022
	DueinOneMonth	Due Between after One Month and ThreeMonths	Due Between after Three Months and Six Months	Due Between after Six Months and OneYear	DueafterOneYear	Total
	$ 216,215 14,637,984 4,475,184 59,094,678 - 4,410	$ 59,680 19,881,552 991,546 90,647,028 - -	$ 2,000,000 - 1,349,913 93,245,487 - -	$ 2,515,000 - 195,648 202,878,439 - -	$ - - 21,521 264,879,495 5,000,000 88,233	$ 4,790,895 34,519,536 7,033,812 710,745,127 5,000,000 92,643

• 111 -

Further information on the maturity analysis of lease liabilities on

December 31, 2022 is as follows:

Lease liabilities Deposits from th Bank and peer Notes and bonds under agreeme repurchase Accounts payable Deposits and rem BANK DEBENT Other liabilities		Less than 1 Year	Less than 1 Year		Over 1 year to 5years	Over 1 year to 5years		5-10years	5-10years		10-15years	10-15years		15-20years	15-20years		More than 20 years		Total
	e C s sol nts itt U	$ 394,731 Duein entral $ 1 d to 43 4 ances 54 RES			$ 703,776			$ 187,220			$ 64,863 June30,202		2	$ 2,400			$ -		$ 1,352,990
		entral d to ances RES									June3
			Duein	One	Month	Due B One Thre	etw Mo e	een after nth and Months	Due Thre Si	Bet e M x	ween after onths and Months	Due Si	B x M O	etween after onths and neYear	D	uea	fterOneYear		Total
			$ 1 43 4 54	,44 ,63 ,72 ,79	3,065 8,549 4,350 0,638 - 9,025	$ 1 8	1, 4, 2, 8,	000,000 482,257 125,645 331,805 - -	$	2 86	,515,000 - 283,315 ,562,005 - -	$	18	559,680 - 608,490 6,239,151 - -		$ 2	- - 17,555 60,776,757 5,000,000 91,048		$ 5,517,745 58,120,806 7,759,355 676,700,356 5,000,000 100,073

Further information on the maturity analysis of lease liabilities on June 30, 2022 is as follows:

Lease liabilities		Less than 1 Year		Over 1 year to 5 years		5-10 years		10-15 years		15-20 years		More than 20 years	Total
		$ 427,716		$ 803,595		$ 195,644		$ 75,597		$ 3,815		$ -	$ 1,506,367

B. The maturity analysis of derivatives financial liabilities - forward

exchange contracts and currency swap contracts

Derived liabilities with delivery Outflow Inflow Subtotal Derived liabilities without delivery Non-deliverable forward Total						June 30,	June 30,	2023
		Due in One Month		Due Between after One Month and ThreeMonths		Due Between after Three Months and Six Months		Due Between after Six Months and OneYear		Due after One Year		Total
		$ 11,364,809 11,000,144 364,665 1,178 $ 365,843		$ 5,428,025 5,322,819 105,206 - $ 105,206		$ 1,822,797 1,796,547 26,250 - $ 26,250		$ 1,637,524 1,595,218 42,306 - $ 42,306		$ - - - - $ -		$ 20,253,155 19,714,728 538,427 1,178 $ 539,605

Derived liabilities with delivery Outflow Inflow Subtotal Derived liabilities without delivery Non-deliverable forward Total						December	31,2022	31,2022
		Due in One Month		Due Between after One Month and ThreeMonths		Due Between after Three Months and Six Months		Due Between after Six Months and OneYear		Due after One Year		Total
		$ 9,735,191 9,544,469 190,722 - $ 190,722		$ 29,818,552 29,297,427 521,125 - $ 521,125		$ 1,033,696 990,960 42,736 - $ 42,736		$ 977,209 959,277 17,932 - $ 17,932		$ - - - $ -		$ 41,564,648 40,792,133 772,515 - $ 772,515

Derived liabilities with delivery Outflow Inflow Subtotal Derived liabilities without delivery Non-deliverable forward Total						June 30,	June 30,	2022
		Due in One Month		Due Between after One Month and Three Months		Due Between after Three Months and Six Months		Due Between after Six Months and One Year		Due after One Year		Total
		$ 13,586,085 13,329,580 256,505 - $ 256,505		$ 14,952,621 14,866,329 86,292 - $ 86,292		$ 1,847,223 1,739,468 107,755 - $ 107,755		$ 4,001,583 3,876,745 124,838 - $ 124,838		$ - - - - $ -		$ 34,387,512 33,812,122 575,390 - $ 575,390

• 112 -

• C. The maturity analysis of derivatives financial liabilities-option contracts

contracts
Without delivery Without delivery Without delivery						June 30,		2023
		Due in One Month		Due Between after One Month and ThreeMonths		Due Between after Three Months and Six Months		Due Between after Six Months and OneYear		Due after One Year		Total
		$ 6,807		$ 17,107		$ 10,374 December	$ 16,634 31,2022			$ -		$ 50,922
		Due in One Month		Due Between after One Month and ThreeMonths		Due Between after Three Months and Six Months		Due Between after Six Months and OneYear		Due after One Year		Total
		$ 7,030		$ 13,257				$ 16,879 2022		$ -		$ 64,894
		Due in One Month		Due Between after One Month and Three Months		Due Between after Three Months and Six Months		Due Between after Six Months and One Year		Due after One Year		Total
		$ 10,522		$ 15,629		$ 14,606		$ 24,512		$ -		$ 65,269

• (V) Market risks

1. Source and definition of market risk

Market risk is defined as an unfavorable change in market prices (such as interest rates, exchange rates, stock prices and commodity prices), which may cause financial instruments classified in the trading book to give rise to a potential loss in- or off-balance sheet items.

1. Market risk management strategy and processes

2. (1) The Bank implements the “Market Risk Management Standards of Union Bank of Taiwan”, which had been approved by the board of directors, as the basis of market risk management.

3. (2) The market risk management processes are risk identification, risk measurement, risk monitoring and control, risk reporting and risk mitigation.

   • A. Risk identification: For balance sheet and off-balance sheet items, the Company identifies and assesses market risk factors of products and the investment business and subjects them to risk management, monitoring and control procedures.

   • B. Risk measurement: In principle, each investment or transaction has at least one risk measurement tool - such as sensitivity analysis, value at risk and stress testing, which can be applied to variables, such as fair market value and notional amounts, to quantify market risk.

4. 113 -

   • C. Risk monitoring and control: Each operation unit observes the risk limit regulation stated in its operating manual and regularly monitors risk control. The department of risk management is responsible for summarizing and reporting the Company’s overall market risk monitoring.

   • D. Risk reporting: The risk management reports are classified as regular report, over-limit report and exception report. Regular reports are the management statements sent to the appropriate level in accordance with certain requirements. Over-limit reports are about situations in which risk limits are exceeded. Exception reports contain operation units’ recommendations on how to meet temporary business needs.

   • E. Risk mitigation: An operation unit may take certain action to reduce risk, such as hedging, investment combination adjustment, position adjustment, setting a break-even point, halting new transactions, etc.

5. Market risk management organization and framework

6. (1) The board of directors: The board of directors, the top market risk supervisor of the Bank, reviews market risk management policies, operational risk limits and the design and change of market risk management framework.

7. (2) Asset/Liability Management Committee: This committee deliberates the management reports or information provided by business management units and the Risk Management Division.

8. (3) Risk Management Division: The Risk Management Division is an independent unit in charge of the work related to three pillars of Basel and of the development of market risk management tools to assess and control the risk identified through setting risk limits.

9. (4) Operation units: Operation units perform daily market risk management work and report the market risk of investment positions and related information to the authorities.

10. Scope and features of market risk report and the measurement system

11. (1) The market risk of the trading book financial instruments is measured in accordance with the fair market value or evaluation model and the profit and loss situation is evaluated regularly.

12. 114 -

13. (2) The business units and the risk management division prepares management reports periodically and report to the appropriate level.

14. (3) The market risk management system combines the evaluation of the front and middle offices to generate information that will assist management in risk monitoring. Moreover, the system supports the capital accrual method being used by the Company through generating internal and external reports for management’s decision making.

15. Market risk measurement of trading book

The Bank assesses the market risk exposure of the trading book in conformity with an assessment model using publicly quoted market prices or other measurement methods, including interest rate sensitivity analysis (DV01 value) and stress tests. The interest rate sensitivity analysis (DV01 value) refers to changes in market interest by 1 basis point (0.01%); the abnormal stress test system deals with market volatility and involves the regular estimation of possible losses (stress loss) and of the impact of stress test scenarios on major asset portfolios and the Bank’s profit and loss.

1. Banking book market risk

2. (1) Interest rate risk

For the loans and deposits and other interest rate-related items in the Bank’s balance sheet, including interest rate sensitive assets and interest rate sensitive liabilities; for the period of January 1 to June 30, 2023 and 2022, assuming all market risk indicators, except interest rates, remained constant, an interest rate increase or decrease by 100bps would result in an increase or decrease in profit before tax by NT$446,562 thousand and NT$336,974 thousand, respectively.

• (2) Exchange rate risk

The exchange rate risk of the banking book refers to the business operation of the International Banking Department of the Bank’s Head Office and the operating funds in foreign currencies required by the ROC or local regulations; if there are adverse exchange rate changes, the income statement or cumulative translation adjustments in equity would be negatively affected.

• 115 -

The International Banking Department (IBD) of the Bank’s Head Office is a going concern, and its operating funds are foreign currencies for business needs. However, the exchange rate risk on these funds is not significant because the percentage of the operating funds to the Bank’s total assets is small, as shown by the immaterial ratio of the IBD’s cumulative translation adjustment to the Bank’s net worth.

1. Exchange rate risk concentration information

The information of significant foreign currency financial assets and liabilities is as follows:

Unit: Each Foreign Currency (In Thousands)/NTD thousand

Financialassets USD JPY GBP AUD HKD CAD RMB SGD ZAR CHF NZD EURO		June 30,2023
	Foreign currency $ 3,973,278 33,999,897 11,420 91,427 99,771 13,525 644,125 4,560 888,794 852 18,129 38,266	Exchange rate 31.1350 0.2150 39.3545 20.6176 3.9737 23.4769 4.2823 22.9525 1.6497 34.6098 18.9581 33.8002	NTD
			$ 123,708,000 7,308,652 449,419 1,885,014 396,460 317,523 2,758,310 104,659 1,466,276 29,480 343,699 1,293,398

(continued at next page)

• 116 -

(Cont’)

Financial liabilities USD JPY GBP AUD HKD CAD RMB SGD ZAR CHF NZD EURO		June 30, 2023
	Foreign currency $ 3,665,060 35,450,650 11,403 91,400 99,715 13,482 643,405 4,591 890,510 809 18,079 38,365	Exchange rate 31.1350 0.2150 39.3545 20.6176 3.9737 23.4769 4.2823 22.9525 1.6497 34.6098 18.9581 33.8002	NTD
			$ 114,111,647 7,620,507 448,776 1,884,444 396,238 316,510 2,755,224 105,379 1,469,107 28,011 342,745 1,296,730

Financialassets USD JPY GBP AUD HKD CAD RMB SGD ZAR CHF NZD EURO Financial liabilities USD JPY GBP AUD HKD CAD RMB SGD ZAR CHF NZD EURO	December 31, 2022	December 31, 2022	December 31, 2022
	Foreign currency $ 3,541,575 22,678,623 12,282 104,672 98,899 15,962 621,067 4,743 885,860 874 18,767 47,451 3,176,744 22,678,503 12,264 104,688 98,995 15,961 621,431 4,696 886,269 900 18,778 47,815	Exchange rate 30.7080 0.2324 37.0553 20.8292 3.9383 22.6611 4.4079 22.8686 1.8118 33.2086 19.4351 32.7132 30.7080 0.2324 37.0553 20.8292 3.9383 22.6611 4.4079 22.8686 1.8118 33.2086 19.4351 32.7132	NTD
			$ 108,754,699 5,269,877 455,110 2,180,239 389,491 361,714 2,737,594 108,458 1,605,019 29,038 364,745 1,552,288 97,551,454 5,269,849 454,464 2,180,577 389,869 361,689 2,739,197 107,380 1,605,760 29,879 364,952 1,564,196

• 117 -

Financial assets USD JPY GBP AUD HKD CAD RMB SGD ZAR CHF NZD EURO Financial liabilities USD JPY GBP AUD HKD CAD RMB SGD ZAR CHF NZD EURO		June 30, 2022
	Foreigncurrency $ 4,009,607 21,349,806 13,227 107,176 130,550 18,278 653,829 16,056 867,147 2,462 21,616 55,440 3,635,622 20,651,714 13,189 107,145 139,495 18,173 654,596 16,043 868,255 2,473 21,617 55,448	Exchangerate 29.7260 0.2183 36.0666 20.4574 3.7888 23.0202 4.4398 21.3733 1.8309 31.1202 18.5015 31.0548 29.7260 0.2183 36.0666 20.4574 3.7888 23.0202 4.4398 21.3733 1.8309 31.1202 18.5015 31.0548	NTD
			$ 119,189,592 4,660,684 477,046 2,192,541 494,624 420,763 2,902,846 343,162 1,587,643 76,630 399,920 1,721,691 108,072,510 4,508,290 475,688 2,191,914 494,415 418,337 2,906,254 342,885 1,589,672 76,956 399,955 1,721,919

8. Effect of interest rate benchmark reform

The Bank’s financial instruments subject to interest rate benchmark reform include the derivative instruments and non-derivative financial assets and liabilities. The type of linked rate benchmark is USD London Interbank Offered Rates (LIBOR). SOFR (Secured Overnight Financing Rate) is expected to replace USD LIBOR, but the two are different in their nature. USD LIBOR is “forward looking”, which implies market expectation over future interest rates, and includes a credit spread over the risk-free rate. SOFR is currently a “backward-looking” rate, based on interest rates from actual transactions, and excludes a credit spread. Therefore, when existing contracts and agreements that reference USD LIBOR transfer to SOFR, adjustments for these differences might need to be applied to SOFR to enable the two benchmark rates to be economically equivalent.

• 118 -

Risks arising from the transition relate principally to the potential impact of interest rate basis risk. If the bilateral negotiations with the Bank’s counterparties are not successfully concluded before the cessation of USD LIBOR, the case will bring significant uncertainties to the future interest rate basis applied to financial instruments, and give rise to additional interest rate risk that was not anticipated when the contracts were entered into. If a hedged financial instrument and the related hedging derivative instruments are transited to alternative benchmark rates at different times, it could result in hedge ineffectiveness.

As of June 30, 2023, the non-derivative financial instruments held by the Bank subject to the reform and have not transitioned to an alternative benchmark interest rate nor the contingent terms added are summarized as follows:

follows:
Non-derivative financial assets which are subject to the reform of interest benchmark Financial assets linked to USD LIBOR Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Discounts and loans		Book amount
		$ 24,881 544,863 3,664,102 $ 4,233,846

• (VI) Transfers of financial assets

Transferred financial assets not entirely derecognized

Most of the transferred financial assets of the Bank during daily operations that are not derecognized in their entirety are debenture securities under repurchase agreements or the equity securities loaned under the securities loaning agreement. According to these transactions, the right on cash flow of the transferred financial assets would be transferred to other entities and the associated liabilities of the Bank’s obligation to repurchase the transferred financial assets at a fixed price in the future are reflected. As the Bank 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 are not derecognized in their entirety and the associated financial liabilities are as follows:

• 119 -

		June 30, 2023
Financial asset classes	Carrying Amount of Transferred Financial Asset	Carrying Amount of Associated Financial Liability	Fair Value of Transferred Financial Asset	Fair Value of Associated Financial Liability	Fair Value of Net Position
Financial assets measured at fair value through profit or loss Repurchase agreements	$27,444,718	$27,472,626	$27,444,718	$27,472,626	( $ 27,908 )
Financial assets measured at fair value through other comprehensive income Repurchase agreements	14,802,551	15,191,212	14,802,551	15,191,212	( 388,661 )
Investment of debt instrument measured at amortized costs Repurchase agreements	25,400,394	15,283,327	22,189,256	15,283,327	6,905,929

	December 31, 2022	December 31, 2022	December 31, 2022
Financial asset classes	Carrying Amount of Transferred Financial Asset	Carrying Amount of Associated Financial Liability	Fair Value of Transferred Financial Asset	Fair Value of Associated Financial Liability	Fair Value of Net Position
Financial assets measured at fair value through profit or loss Repurchase agreements	$ 9,700,254	$ 9,701,184	$ 9,700,254	$ 9,701,184	( $ 930 )
Financial assets measured at fair value through other comprehensive income Repurchase agreements	8,999,616	9,150,340	8,999,616	9,150,340	( 150,724 )
Investment of debt instrument measured at amortized costs Repurchase agreements	27,540,026	15,447,083	23,735,845	15,447,083	8,288,762

		June 30, 2022
Financial asset classes	Carrying Amount of Transferred Financial Asset	Carrying Amount of Associated Financial Liability	Fair Value of Transferred Financial Asset	Fair Value of Associated Financial Liability	Fair Value of Net Position
Financial assets measured at fair value through profit or loss Repurchase agreements	$ 18,062,223	$ 18,168,912	$ 18,062,223	$ 18,168,912	( $ 106,689 )
Financial assets measured at fair value through other comprehensive income Repurchase agreements	23,203,939	23,278,918	23,203,939	23,278,918	( 74,979 )
Investment of debt instrument measured at amortized costs Repurchase agreements	26,250,796	16,562,058	24,516,233	16,562,058	7,954,175

(VII) measured at FVTPL

The Bank has the financial instrument transaction offsetting to which the Paragraph 42 of IAS 32 endorsed by the FSC is applicable; the financial assets and liabilities related to such transactions are presented on a net basis on the balance sheets.

• 120 -

The Bank also has the repurchase or reverse repurchase agreements not complying to the offsetting criteria in IAS but entered the enforceable netting arrangements or similar agreements, such as global master repurchase agreement or global securities lending agreement. When delivering in net amount is elected by both transaction parties under the enforceable netting arrangements or similar agreements, the delivery may be made in the net amount after offsetting the financial assets and liabilities, or in the total amount if no such agreement. However, where any of the transaction party defaults, the counterparty may opt to deliver in the net amount.

The tables below present the information on said financial assets and financial liabilities that have been offset

financial liabilities that have been offset	financial liabilities that have been offset	financial liabilities that have been offset	financial liabilities that have been offset	financial liabilities that have been offset	financial liabilities that have been offset	financial liabilities that have been offset
June 30, 2023
Financial assets subject to offsetting, enforceable master netting arrangements or similar agreements.
Explain	Gross Amount of Recognized Financial Assets (a)	Gross Amount of Recognized Financial Liabilities Offset in the Balance Sheets (b)	Net Amount of Financial Assets Presented in the Balance Sheets (c)=(a)-(b)	Related Amount Not Offset in the Balance Sheets (d)		Net Amount (e)=(c)-(d)
				Financial instruments (Note)	Cash Collateral Received
Derivatives	$1,364,165	$ -	$1,364,165	$ 13,676	$ -	$1,350,489

Note: Including the master netting arrangements and non-cash financial collaterals.

Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.
June 30, 2023
Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements.
Explain	Gross Amount of Recognized Financial Liabilities (a)	Gross Amount of Recognized Financial Assets Offset in the Balance Sheets (b)	Net Amount of Financial Liabilities Presented in the Balance Sheets (c)=(a)-(b)	Related Amount Not Offset in the Balance Sheets (d)		Net Amount (e)=(c)-(d)
				Financial instruments (Note)	Cash Collateral Pledged
Derivatives	$ 675,348	$ -	$ 675,348	$ 13,676	$233,629	$428,043

Note: Including the master netting arrangements and non-cash financial collaterals.

• 121 -

December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
Financial assets subject to offsetting, enforceable master netting arrangements or similar agreements.
Explain	Gross Amount of Recognized Financial Assets (a)	Gross Amount of Recognized Financial Liabilities Offset in the Balance Sheets (b)	Net Amount of Financial Assets Presented in the Balance Sheets (c)=(a)-(b)	Related Amount Not Offset in the Balance Sheets (d)		Net Amount (e)=(c)-(d)
				Financial instruments (Note)	Cash Collateral Received
Derivatives	$ 602,545	$ -	$ 602,545	$ 11,431	$ -	$ 591,114

Note: Including the master netting arrangements and non-cash financial collaterals.

Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.
December 31, 2022
Financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements.
Explain	Gross Amount of Recognized Financial Liabilities (a)	Gross Amount of Recognized Financial Assets Offset in the Balance Sheets (b)	Net Amount of Financial Liabilities Presented in the Balance Sheets (c)=(a)-(b)	Related Amount Not Offset in the Balance Sheets (d)		Net Amount (e)=(c)-(d)
				Financial instruments (Note)	Cash Collateral Pledged
Derivatives	$ 931,500	$ -	$ 931,500	$ 11,431	$ -	$ 920,069

Note: Including the master netting arrangements and non-cash financial collaterals.

June 30, 2022	June 30, 2022	June 30, 2022	June 30, 2022	June 30, 2022	June 30, 2022	June 30, 2022
Financial assets subject to offsetting, enforceable master netting arrangements or similar agreements.
Explain	Gross Amount of Recognized Financial Assets (a)	Gross Amount of Recognized Financial Liabilities Offset in the Balance Sheets (b)	Net Amount of Financial Assets Presented in the Balance Sheets (c)=(a)-(b)	Related Amount Not Offset in the Balance Sheets (d)		Net Amount (e)=(c)-(d)
				Financial instruments (Note)	Cash Collateral Received
Derivatives	$ 897,731	$ -	$ 897,731	$ 5,941	$ -	$ 891,790

Note: Including the master netting arrangements and non-cash financial collaterals.

Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.	Note: Including the master netting arrangements and non-cash financial collaterals.
June 30, 2022
Financial liabilities subject to offsetting, enforceablemaster netting arrangements orsimilaragreements.
Explain	Gross Amount of Recognized Financial Liabilities (a)	Gross Amount of Recognized Financial Assets Offset in the Balance Sheets (b)	Net Amount of Financial Liabilities Presented in the Balance Sheets (c)=(a)-(b)	Related Amount Not Offset in the Balance Sheets (d)		Net Amount (e)=(c)-(d)
				Financial instruments (Note)	Cash Collateral Pledged
Derivatives	$ 730,754	$ -	$ 730,754	$ 5,941	$ 107,308	$ 617,505

Note: Including the master netting arrangements and non-cash financial collaterals.

• 122 -

XLVIII. Capital Management

(I) Strategies to maintain capital adequacy

Under the regulations set by the authorities, the Bank complies with the requirements set each year for the minimum consolidated capital adequacy ratios, including the common equity Tier I capital ratio; the Bank’s leverage ratio is also in accordance with the requirements of the relevant authorities. These ratios are applied in accordance with the regulations announced by the authorities.

(II) Capital assessment procedure

The capital ratios and leverage ratios are applied, analyzed, monitored and reported regularly, and are assigned to each business unit as the target capital adequacy ratios. The business units’ compliance with the ratio requirements is tracked regularly, and remedial action is taken if the capital and leverage ratio requirements are not met.

(III) Capital adequacy

Unit: In NTD thousand, %

			Unit: In NTD thousand, %	Unit: In NTD thousand, %
Year Items			June 30, 2023
			Own Capital Adequacy Ratio	Consolidated Capital Adequacy Ratio
Own Capital	Common share equity		46,858,607	45,419,850
	Other Tier 1 capital		13,000,000	13,000,000
	Tier 2 capital		9,848,762	11,278,462
	Own Capital		69,707,369	69,698,312
Risk-weighted assets	Credit risk	Standard	428,709,244	433,747,714
		Internal rating-based approach	-	-
		Asset securitization	294,024	294,024
	Operational risk	Basic indicator approach	25,243,857	30,213,797
		Standard/alternative standardized approach	-	-
		Advanced measurement approach	-	-
	Market risks	Standard	28,847,696	31,051,772
		Internal model approach	-	-
	Total risk-weighted assets		483,094,821	495,307,307
Capital Adequacy			14.43%	14.07%
Ratio of common share equity to risk- weighted assets			9.70%	9.17%
Ratio of Tier 1 capital to risk-weighted assets			12.39%	11.79%
Leverage Ratio			6.25%	5.98%

• 123 -

Unit: In NTD thousand, %

			Unit: In NTD thousand, %	Unit: In NTD thousand, %
Year Items			December 31, 2022
			Own Capital Adequacy Ratio	Consolidated Capital Adequacy Ratio
Own Capital	Common share equity		44,397,652	43,005,283
	Other Tier 1 capital		13,000,000	13,000,000
	Tier 2 capital		8,973,856	10,370,633
	Own Capital		66,371,508	66,375,916
Risk-weighted assets	Credit risk	Standard	403,074,632	407,119,232
		Internal rating-based approach	-	-
		Asset securitization	288,276	288,276
	Operational risk	Basic indicator approach	25,243,857	30,213,797
		Standard/alternative standardized approach	-	-
		Advanced measurement approach	-	-
	Market risks	Standard	15,438,120	17,445,241
		Internal model approach	-	-
	Total risk-weighted assets		444,044,885	455,066,546
Capital Adequacy			14.95%	14.59%
Ratio of common share equity to risk- weighted assets			10.00%	9.45%
Ratio of Tier 1 capital to risk-weighted assets			12.93%	12.31%
Leverage Ratio			6.38%	6.11%

Total risk-weighted assets Capital Adequacy Ratio of common share equity to risk- weighted assets Ratio of Tier 1 capital to risk-weighted assets Leverage Ratio	Total risk-weighted assets Capital Adequacy Ratio of common share equity to risk- weighted assets Ratio of Tier 1 capital to risk-weighted assets Leverage Ratio	Total risk-weighted assets Capital Adequacy Ratio of common share equity to risk- weighted assets Ratio of Tier 1 capital to risk-weighted assets Leverage Ratio	444,044,885 455,066,546 14.95% 14.59% 10.00% 9.45% 12.93% 12.31% 6.38% 6.11%	444,044,885 455,066,546 14.95% 14.59% 10.00% 9.45% 12.93% 12.31% 6.38% 6.11%
			Unit: NTD thousand, %
Year Items			June 30, 2022
			Own Capital Adequacy Ratio	Consolidated Capital Adequacy Ratio
Own Capital	Common share equity		42,376,759	40,993,848
	Other Tier 1 capital		13,000,000	13,000,000
	Tier 2 capital		8,879,203	10,281,958
	Own Capital		64,255,962	64,275,806
Risk-weighted assets	Credit risk	Standard	384,319,078	388,745,971
		Internal rating-based approach	-	-
		Asset securitization	302,286	302,286
	Operational risk	Basic indicator approach	23,429,481	27,435,045
		Standard/alternative standardized approach	-	-
		Advanced measurement approach	-	-
	Market risks	Standard	25,418,824	27,300,862
		Internal model approach	-	-
	Total risk-weighted assets		433,469,669	443,784,164
Capital Adequacy			14.82%	14.48%
Ratio of common share equity to risk- weighted assets			9.78%	9.24%
Ratio of Tier 1 capital to risk-weighted assets			12.78%	12.17%
Leverage Ratio			6.22%	5.96%

• 124 -

• Note 1: Eligible capital and risk-weighted assets are calculated under the “Regulations Governing the Capital Adequacy Ratio of Banks” and the “Explanation of Methods for Calculating the Eligible Capital and Riskweighted Assets of Banks.”

• Note 2: Formulas used were as follows:

  1. Eligible capital = Common equity Tier 1 capital + 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 Common equity Tier 1 capital to risk-weighted assets = Common equity Tier 1 capital ÷ Risk-weighted assets.

  5. Ratio of Tier 1 capital to risk-weighted assets = (Common equity Tier 1 capital + Other Tier 1 capital) ÷ Risk-weighted assets.

  6. Leverage ratio = Tier 1 capital ÷ Exposure Measurement

• The Banking Act and related regulations require that the Bank maintains its

• unconsolidated and consolidated CARs at a minimum of 10.5%, the Tier 1 Capital Ratio at a minimum of 8.5% and the Common Equity Tier 1 Ratio at a minimum of 7.0%. In addition, if the Bank’s CAR falls below the minimum requirement, the authorities may impose certain restrictions on its distribution of earnings.

• XLIX. Loan Asset Quality, Concentration of Credit Concentration, Interest Rate Sensitivity,

Profitability and Maturity Analysis

• (I) Credit risk

• Loan asset quality: See Annex 6.

• Concentration of credit extensions

• 125 -

	June 30, 2023
Rank	Sector to Which the Company or Group Belongs	Credit Extension Balance	% to Net Asset Value
1	Group H - Retail Sale of Other Food, Beverages and Tobacco in Specialized Stores	4,788,000	7.40
2	Group G - Other Financial Services Not Elsewhere Classified	3,324,000	5.14
3	Group J - Real Estate Development Activities	3,103,376	4.80
4	Company I - Manufacture of Man-made Fibers	2,602,000	4.02
5	Group K - Others Not Elsewhere Classified	2,085,000	3.22
6	Group A - Real Estate Development Activities	1,679,919	2.60
7	Company L - Wholesale of Building Materials	1,552,769	2.40
8	Company T - Manufacture of Grain Mill Products	1,470,000	2.27
9	Company Q-Other Telecommunication	1,145,334	1.77
10	Company B-Financial leasing	1,097,592	1.70

	December 31, 2022	December 31, 2022
Rank	Sector to Which the Company or Group Belongs	Credit Extension Balance	% to Net Asset Value
1	Group H - Retail Sale of Other Food, Beverages and Tobacco in Specialized Stores	5,323,000	8.72
2	Group G - Other Financial Services Not Elsewhere Classified	3,299,000	5.40
3	Group J - Real Estate Development Activities	2,681,000	4.39
4	Company I - Manufacture of Man-made Fibers	2,152,000	3.52
5	Company L - Wholesale of Building Materials	1,596,572	2.61
6	Company T - Manufacture of Grain Mill Products	1,535,000	2.51
7	Company P-Iron and Steel Refining	1,514,983	2.48
8	Company Q-Other Telecommunication	1,499,996	2.46
9	Group A - Real Estate Development Activities	1,452,244	2.38
10	Company S - Manufacture of Motor Vehicles	1,189,935	1.95

• 126 -

	June 30, 2022
Rank	Sector to Which the Company or Group Belongs	Credit Extension Balance	% to Net Asset Value
1	Group H - Retail Sale of Other Food, Beverages and Tobacco in Specialized Stores	3,516,000	5.94
2	Group G - Other Financial Services Not Elsewhere Classified	3,299,000	5.57
3	Company I - Manufacture of Man-made Fibers	2,052,000	3.46
4	Group J - Real Estate Development Activities	1,760,000	2.97
5	Company T - Manufacture of Grain Mill Products	1,485,000	2.51
6	Group A - Real Estate Development Activities	1,383,027	2.33
7	Company Q-Other Telecommunication	1,349,996	2.28
8	Company L - Wholesale of Building Materials	1,307,788	2.21
9	Group V-Management Consulting	1,300,000	2.19
10	Company S - Manufacture of Motor Vehicles	1,263,355	2.13

(II) Market risks

Interest Rate Sensitive Asset/Liability Analysis (NT$)

June 30, 2023

Unit: In NTD thousand, %

Item	1-90 days (inclusive)	91-180 days (inclusive)	181 days to one year (inclusive)	More than one year	Total
Interest rate- sensitive assets	657,393,133	9,080,351	15,453,037	67,388,083	749,314,604
Interest rate- sensitive liabilities	404,768,380	257,101,676	57,302,897	18,691,981	737,864,934
Interest rate- sensitive gap	252,624,753	( 248,021,325 )	( 41,849,860 )	48,696,102	11,449,670
Net worth					64,258,880
Ratio of interest rate-sensitive assets to liabilities					101.55%
Ratio of interest rate sensitivity gap to net worth					17.82%

• 127 -

Interest Rate Sensitive Asset/Liability Analysis (NT$)

December 31, 2022

Unit: In NTD thousand, %

Item	1-90 days (inclusive)	91-180 days (inclusive)	181 days to one year (inclusive)	More than one year	Total
Interest rate- sensitive assets	613,183,639	11,169,784	12,065,406	67,775,779	704,194,608
Interest rate- sensitive liabilities	371,747,777	243,243,317	53,617,925	18,557,763	687,166,782
Interest rate- sensitive gap	241,435,862	( 232,073,533 )	( 41,552,519 )	49,218,016	17,027,826
Net worth					61,308,681
Ratio of interest rate-sensitive assets to liabilities					102.48%
Ratio of interest rate sensitivity gap to net worth					27.77%

Interest Rate Sensitive Asset/Liability Analysis (NT$)

June 30, 2022

Unit: In NTD thousand, %

Item	1-90 days (inclusive)	91-180 days (inclusive)	181 days to one year (inclusive)	More than one year	Total
Interest rate- sensitive assets	593,307,051	12,581,974	13,086,838	72,452,704	691,428,567
Interest rate- sensitive liabilities	367,470,090	245,157,890	52,142,604	15,177,243	679,947,827
Interest rate- sensitive gap	225,836,961	( 232,575,916 )	( 39,055,766 )	57,275,461	11,480,740
Net worth					59,101,970
Ratio of interest rate-sensitive assets to liabilities					101.69%
Ratio of interest rate sensitivity gap to net worth					19.43%

• Note: 1. The above amounts included only the New Taiwan dollar held by the Bank’s head office and branches (excluding foreign currency).

• Interest rate-sensitive assets and liabilities mean the revenues or costs of interest-earning assets and interest-bearing liabilities are affected by interest rate changes.

• Interest rate sensitivity gap = Interest rate-sensitive assets - Interest ratesensitive liabilities.

• Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets ÷ Interest rate-sensitive liabilities (in New Taiwan dollars).

• 128 -

Interest Rate Sensitive Asset/Liability Analysis (USD)

June 30, 2023

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

Item	1-90 days (inclusive)	91-180 days (inclusive)	181 days to one year (inclusive)	More than one year	Total
Interest rate- sensitive assets	2,257,446	76,956	41,274	2,264,585	4,640,261
Interest rate- sensitive liabilities	1,865,333	665,024	622,565	423,058	3,575,980
Interest rate- sensitive gap	392,113	( 588,068 )	( 581,291 )	1,841,527	1,064,281
Net worth					49,255
Ratio of interest rate-sensitive assets to liabilities					129.76%
Ratio of interest rate sensitivity gap to net worth					2,160.76%

Interest Rate Sensitive Asset/Liability Analysis (USD)

December 31, 2022

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

Item	1-90 days (inclusive)	91-180 days (inclusive)	181 days to one year (inclusive)	More than one year	Total
Interest rate- sensitive assets	1,794,924	24,716	44,901	2,268,658	4,133,199
Interest rate- sensitive liabilities	1,645,426	280,881	676,768	555,003	3,158,078
Interest rate- sensitive gap	149,498	( 256,165 )	( 631,867 )	1,713,655	975,121
Net worth					34,890
Ratio of interest rate-sensitive assets to liabilities					130.88%
Ratio of interest rate sensitivity gap to net worth					2,794.84%

Interest Rate Sensitive Asset/Liability Analysis (USD)

June 30, 2022

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

Item	1-90 days (inclusive)	91-180 days (inclusive)	181 days to one year (inclusive)	More than one year	Total
Interest rate- sensitive assets	2,281,765	79,208	75,507	2,282,038	4,718,518
Interest rate- sensitive liabilities	2,147,971	283,421	521,254	666,253	3,618,899
Interest rate- sensitive gap	133,794	( 204,213 )	( 445,747 )	1,615,785	1,099,619
Net worth					47,553
Ratio of interest rate-sensitive assets to liabilities					130.39%
Ratio of interest rate sensitivity gap to net worth					2,312.41%

• 129 -

• Note: 1. The above amounts included only U.S. dollar amounts held by the Bank’s headquarter, domestic branches, OBU and overseas branches and excluded contingent assets and contingent liabilities.

   2. Interest rate-sensitive assets and liabilities mean the revenues or costs of interest-earning assets and interest-bearing liabilities are affected by interest rate changes.
  
   3. Interest rate sensitivity gap = Interest rate-sensitive assets - Interest ratesensitive liabilities
  
   4. Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets ÷ Interest rate-sensitive liabilities (in USD).
  

• (III) Liquidity Risks

  1. Profitability

Unit: %

			Unit: %
Item		January 1 to June 30, 2023	January 1 to June 30, 2022
Return on total assets	Before tax	0.34	0.20
	After tax	0.29	0.14
Return on common sharenetworth	Before tax	4.62	2.15
	After tax	3.81	1.28
Net income ratio		31.93	20.28

• Note: 1. Return on total assets = Income before (after) income tax ÷ Average total assets

• Return on common share net worth = [Income before (after) income tax] ÷ Average common share net worth

• Net income ratio = Income after income tax ÷ Total net revenues

• Income before (after) income tax represents income for current year up to June 30

• Maturity analysis of assets and liabilities

Maturity Analysis of New Taiwan Dollar

June 30, 2023

Unit: NTD thousand

	Total		RemainingPeriodtoMaturity	RemainingPeriodtoMaturity	RemainingPeriodtoMaturity
		1-30Days	31-90Days	91-180Days	181 Days-1 Year	Over 1 Year
Main capital inflow on maturity	822,157,360	179,903,017	38,534,816	61,153,864	129,928,514	412,637,149
Main capital outflow on maturity	958,969,734	101,413,969	149,252,690	134,360,449	239,405,260	334,537,366
Gap	( 136,812,374)	78,489,048	( 110,717,874)	( 73,206,585)	( 109,476,746)	78,099,783

• 130 -

Maturity Analysis of New Taiwan Dollar

December 31, 2022

Unit: NTD thousand

	Total		RemainingPeriodtoMaturity	RemainingPeriodtoMaturity	RemainingPeriodtoMaturity
		1-30Days	31-90Days	91-180Days	181 Days-1 Year	Over 1 Year
Main capital inflow on maturity	770,357,952	159,256,515	44,770,724	55,928,310	112,283,998	398,118,405
Main capital outflow on maturity	897,396,073	76,643,872	139,164,174	120,152,690	237,103,483	324,331,854
Gap	(127,038,121)	82,612,643	( 94,393,450 )	( 64,224,380 )	(124,819,485 )	73,786,551

Maturity Analysis of New Taiwan Dollar

June 30, 2022

Unit: NTD thousand

	Total		RemainingPeriodtoMaturity	RemainingPeriodtoMaturity	RemainingPeriodtoMaturity
		1-30 Days	31-90 Days	91-180 Days	181 Days-1 Year	Over 1 Year
Main capital inflow on maturity	758,977,333	145,120,872	33,392,914	73,452,814	118,841,882	388,168,851
Main capital outflow on maturity	878,570,228	96,903,065	135,507,824	110,701,823	221,275,090	314,182,426
Gap	( 119,592,895)	48,217,807	( 102,114,910)	( 37,249,009)	( 102,433,208)	73,986,425

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

Maturity Analysis of USD

June 30, 2023

In Thousands of U.S. Dollars

	Total		Remaining Period to Maturity	Remaining Period to Maturity	Remaining Period to Maturity
		1-30 Days	31-90 Days	91-180 Days	181 Days-1 Year	Over 1 Year
Main capital inflow on maturity	4,819,907	369,891	1,970,749	79,285	42,212	2,357,770
Main capital outflow on maturity	4,820,076	1,434,320	1,160,505	751,370	676,398	797,483
Gap	( 169 )	( 1,064,429 )	810,244	( 672,085 )	( 634,186 )	1,560,287

Maturity Analysis of USD

December 31, 2022

In Thousands of U.S. Dollars

	Total		Remaining Period to Maturity	Remaining Period to Maturity	Remaining Period to Maturity
		1-30 Days	31-90 Days	91-180 Days	181 Days-1 Year	Over 1 Year
Main capital inflow on maturity	4,297,854	303,879	1,485,455	65,002	47,222	2,396,296
Main capital outflow on maturity	4,288,316	1,015,543	1,206,915	327,433	819,677	918,748
Gap	9,538	( 711,664 )	278,540	( 262,431 )	( 772,455 )	1,477,548

• 131 -

Maturity Analysis of USD

June 30, 2022

In Thousands of U.S. Dollars

	Total		Remaining Period to Maturity	Remaining Period to Maturity	Remaining Period to Maturity
		1-30 Days	31-90 Days	91-180 Days	181 Days-1 Year	Over 1 Year
Main capital inflow on maturity	4,895,783	855,893	1,475,890	87,318	81,809	2,394,873
Main capital outflow on maturity	4,889,594	1,689,689	1,093,088	350,086	709,885	1,046,846
Gap	6,189	( 833,796 )	382,802	( 262,768 )	( 628,076 )	1,348,027

Note: The above amounts are sum of the U.S. dollar amounts held by the Bank’s headquarter, domestic branches, OBU and overseas branches.

L. Disclosed Matters in Notes

• (I) Information Related to Material Transactions and (II) Information of the Reinvestees

• Loan provided: not applicable to the Bank, and please see Annex 1 for other reinvestees.

• Endorsement/guarantee provided: Annex 2

• Negotiable securities held at the end of the period, and please see Annex 3 for other re-investees.

• Trading shares of the same investee for NT$300 million, or 10% of the paid-in capital or more cumulatively: None.

• Acquisition of individual real estate at costs of NT$300 million or 10% of the paid-in capital or more: Annex 4.

• Disposal of individual real estate at costs of NT$300 million or 10% of the paid-in capital or more: none

• Allowance of service fees to related parties amounting to at least NT$5 million: None

• Receivables from related parties amounting to at least $300 million or 10% of the paid-in capital: Annex 5

• Sale of nonperforming loans: None.

• Asset securitization under the “Financial Asset Securitization Act” or the “Clauses of the Real Estate Securitization Act”: None

• Other significant transactions which may affect the decisions of users of Financial Statements: Annex 6.

• 132 -

• Names, locations and other information of investees on which the Bank exercises significant influence: Annex 7.

• Derivative transactions: Note VIII.

• (III) Investment in Mainland China: None

• (IV) Information of major shareholders which hold ownership of 5% or greater: Annex 8.

LI. Department Information

The Bank has prepared the Consolidated Financial Statements, and disclosed the department information in the Consolidated Financial Statements; thus no department information is disclosed in the Parent Company Only Financial Statements.

• 133 -

LOAN PROVIDED TO OTHERS January 1 to June 30, 2023

Union Bank of Taiwan Co., Ltd.

Annex 1

In NTD thousand (Foreign Currency)

No.	Lender	Borrower	Financial Statement Account	Highest Balance in the period (Note 1)	Balance at the end of the period (Note 2)	Actual Drafted Amount	Interest Rate Range (%)	Nature of loan	Business Transaction Amount (Note 3)	Reason for Short- term Financing	Amount of allowance for doubtful accounts provided	Collaterals	Collaterals	Financing Limit for Each Borrower (Note 4)	Aggregate Financing Limit (Note 5)
												Name	Value
1 2 3 4	UFLIC Union Capital (Singapore) Holding PTE. Ltd. Uflc Capital (Singapore) Holding PTE. Ltd. Union Energy Co., Ltd.	Union Capital (Singapore) Holding PTE. Ltd. Uflc Capital (Singapore) Holding PTE. Ltd. Junwei Development and Construction Co., Ltd. Lihua Interior Decoration Ltd. Qiaoda Social Enterprise Co., Ltd. Sing Hong Yang Construction Co., Ltd. Shan Yue Development and Construction Co., Ltd. Kabushiki Kaisha UCJ1 (Japan) Kabushiki Kaisha UCJ1 (Japan) Union Green Energy I Private Equity Limited Partnership	Accounts receivable from affiliates Accounts receivable from affiliates Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable from affiliates Accounts receivable from affiliates Accounts receivable from affiliates	$ 795,356 ( JPY 3,700,000 ) 1,397,247 ( JPY 6,500,000 ) 9,578 47,840 149,178 26,000 100,000 408,426 ( JPY 1,900,000 ) 709,371 ( JPY 3,300,000 ) 8,000	$ 795,356 ( JPY 3,700,000 ) 1,397,247 ( JPY 6,500,000 ) 9,374 46,170 144,191 25,778 - 408,426 ( JPY 1,900,000 ) 709,371 ( JPY 3,300,000 ) 8,000	$ 564,751 ( JPY 2,627,225 ) 1,187,403 ( JPY 5,523,808 ) 9,374 46,170 144,191 25,778 - 315,104 ( JPY 1,465,865 ) 613,822 ( JPY 2,855,504 ) 8,000	1.97%- 2.05% 1.97%- 2.05% 5%-8% 5%-8% 3%-6% 3%-6% 5%-8% 2.75% 2.75% 3%	Business transaction Business transaction Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Business transaction Business transaction Short-term financing	$ 795,356 ( JPY 3,700,000 ) 1,397,247 ( JPY 6,500,000 ) - - - - - 408,426 ( JPY 1,900,000 ) 709,371 ( JPY 3,300,000 ) -	－ － Business turnover Borrowing repayment and business turnover Investment in equity of affiliates Business turnover Purchase of real estate － － Business turnover	$ - - 94 462 1,442 258 - - - -	－ － Real estates Real estates Real estates Real estates Real estates － － －	$ - - 12,447 165,218 150,380 29,593 366,933 - - -	$ 2,837,616 2,837,616 283,762 283,762 283,762 283,762 283,762 2,837,616 2,837,616 156,905	$ 2,837,616 2,837,616 1,135,047 1,135,047 1,135,047 1,135,047 1,135,047 2,837,616 2,837,616 392,262

Note 1: Highest balance of loans provided to others in the current year.

Note 2: Where the public companies submits the loaning of funds one by one to the board of directors for resolution pursuant to Paragraph 1, Article 14 of the “ Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies,” even though the fund is not disbursed, the amount resolved by the board shall be listed in the announced balance to disclose the risk assumed; provided, when the fund is repaid, the balance after the repayment shall be disclosed to reflect the risk adjustment. Where the public companies have the board of directors to resolve a limit to be loaned for several times or drafted on the revolving basis within the limit during the period of one year pursuant to Paragraph 2, Article 14 of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies,” the resolved limit of loans shall still be announced as the reported balance. Although repayments may be made later, such limit may be used again, and thus the limit approved by the board shall be the announced and reported balance.

Note 3: Where a loaning of funds is a business transaction in the nature, the amount of such transaction shall be entered; the business transaction amounts within a year between the lender and the borrower.

• Note 4: For the transactions with the subsidiaries 100% voting rights held directly and indirectly, and the loaning of funds for short-term financing, the limit is the net worth of Union Finance & Leasing (Int'l) Corp.; in terms of loaning of funds for short-term financing to the non-subsidiaries, the limit is 10% of Union Finance & Leasing (Int'l) Corp.; for these who have business transactions, and in demand of loaning of funds for short-term financing, the limit is 40% of Union Energy Co., Ltd.’s net worth.

• Note 5: For the transactions with the subsidiaries 100% voting rights held directly and indirectly, and the loaning of funds for short-term financing, the limit is the net worth of Union Finance & Leasing (Int'l) Corp.; in terms of loaning of funds for short-term financing to the non-subsidiaries, the limit is 40% of Union Finance & Leasing (Int'l) Corp.; for the inter-company and firms having business transactions, and in demand of loaning of funds for short-term financing, the limit is 100% of Union Energy Co., Ltd.’s net worth.

• Note 6: All the “balance” and “amount” referred in the statement, other than the actual borrowing amount, business transaction amount, and amount of allowance for doubtful accounts provided, are the limit or amount financed to others occurring on the date of occurrence (the earliest among date of the Board’s resolution, date of contract execution, date of payment, or date sufficient to ensure the counterparty and transaction amount) pursuant to Article 7 of the handling standards.

• 134 -

Annex 2

Union Bank of Taiwan Co., Ltd.

Endorsement/guarantee provided January 1 to June 30, 2023

Unit: In NTD thousand, unless specified otherwise

No. (Note 1)	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guarantee Given on Behalf of Each Party (Note 5)	Maximum Amount Endorsed/ Guaranteed During the Period (Note 3)	Outstanding Endorsement/ Guarantee at the End of the Period (Note 4)	Actual Drafted Amount (Note 6)	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 7)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China
		Company name	Relationship (Note 2)
1 2	Union Venture Capital Co., Ltd. Union Energy Co., Ltd.	Na He Yi Hau Electric Power Inc. Ting Jie Electric Power Inc. Ting Jie Electric Power Inc.	4 4 4	$ 18,076,489 18,076,489 9,806,539	$ 1,113,000 7,500,000 7,500,000	$ 1,113,000 7,500,000 7,500,000	$ 242,100 1,702,500 1,702,500	$ - - -	1.7% 11.6% 11.6%	$ 54,229,466 54,229,466 19,613,078	Yes Yes Yes	No No No	No No No

• Note 1: Description of number column

• (1) Issuer: 0

• (2) The investees are numbered from 1 by the companies.

• Note 2: There are seven relationships between the endorser/guarantor and endorsee/guarantee, only the type needs to be indicated.

• (1) Company with business relationships

• (2) Companies in which the Company holds shares for more than 50% voting rights directly or indirectly.

• (3) Companies hold the Company’s shares for more than 50% voting rights directly or indirectly

• (4) Among the companies in which the Company holds shares for more than 90% voting rights directly or indirectly.

• (5) Companies guarantee each other as peers or joint constructors under contracts based on the requirements of construction contracting.

• (6) All the shareholders to the companies they endorse and guarantee due to the joint investment proportionally to their shareholdings.

• Note 3: The maximum balance of the endorsement/guarantee provided to others of the current year.

• Note 4: The endorsement/guarantee limit was approved by the board of directors

• Note 5: The total amount of endorsement or guarantee provided by UVC to a single company shall not exceed 10 times UVC’s and 25 times Union Energy’s net worth.

• Note 6: Enter the actual amount drafted withing the balance of endorsement/guarantee by the endorsee/guarantee.

• Note 7: The total amount of endorsement or guarantee provided by UVC to others shall not exceed 15 times UVC’s and 50 times Union Energy’s net worth.

• Note 8: Ting Jie Electric Power signed a syndicate with 11 financial Institutions with the limit of NT$7,500,000 thousand. The joint guarantors are the parent company, UVC and Union Energy.

• 135 -

Union Bank of Taiwan Co., Ltd.

Details of negotiable securities held at the end of the period

June 30, 2023

Annex 3

Unit: In NTD thousand (foreign currency) for amounts; in thousand shares and thousand units

Held by	Types and names of negotiable securities	Relationship with the negotiable securities issuers	Account		At the end ofthe period	At the end ofthe period		Remark
				Shares/units	Book amount	Shareholdingratio	Fairvalue
UFLIC Union Information Technology Corporation (UIT) Union Securities Investment Corporation	Shares Hey-Song Corporation Funds and beneficiary certificates Union Golden Balanced Fund Union Taiwan Select Income Multi-asset Fund A Union APEC Balanced A Union Low Carbon Target Multiple Asset Fund A Union Utilities and Infrastructure Equity Income Fund Union Green Energy Private Equity Limited Partnership Shares ELTA Technology Co., Ltd. Shares Fundrish Securities Co., Ltd. Funds and beneficiary certificates Union Advantage Global Fixed Income Portfolio Fund Union Money Market Union Golden Balanced Fund Union China Fund Union Technology Fund	－ Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust － － － Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust	Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value throughprofitor loss	4,551 517 3,893 1,102 2,000 1,292 - 3,170 566 1,068 1,230 172 166 446	$ 187,729 18,776 38,930 20,571 19,928 14,202 520,022 44,409 7,042 15,123 16,599 6,248 8,116 11,898	1.13% - - - - - 25.98% 14.39% 0.94% - - - - -	$ 187,729 18,776 38,930 20,571 19,928 14,202 520,022 44,409 7,042 15,123 16,599 6,248 8,116 11,898

(continued at next page)

• 136 -

(Cont’)

Held by	Types and names of negotiable securities	Relationship with the negotiable securities issuers	Account		At the end ofthe period	At the end ofthe period		Remark
				Shares/units	Book amount	Shareholdingratio	Fairvalue
Union Finance International (HK) Limited Union Venture Capital Co., Ltd. Corner Ventures DAG I-U, LLC （Delaware, US）	Union APEC Balanced A Union Asian High Yield Bond A Union Global High Dividend Strategic Investment Fund B Shares Obsidian Mr.Cooper Group Inc Advanced Micro Devices Nviada Corp. United Health Group Inc. Shares Greenway Environmental Technology Co., Ltd. RFD Micro Electricity Co., Ltd. Hope Vision Co., Ltd. Hsinrong Energy Techonology Co., Ltd. Shares Dantari Pharmaceuticals, LLC Get Fabric Ltd. Healthy.io Limited Prismo Systems Inc. Nexar Ltd.	Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust Issued by Union Securities Investment Trust － － － － － － － － － － － － － － －	Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value throughothercomprehensiveincome	1,086 1,983 438 17 1 5 5 5 1,100 10,377 2,132 Preferential shares 64,268 357 1,478 6 25 40 70	$ 20,261 12,697 5,552 USD 99 USD 76 USD 570 USD 2,115 USD 2,163 1,449 429,459 4,560 809,771 USD 510 USD 1,617 USD 321 USD 702 USD 18 USD 747	- - - - - - - - 2.39% 14.59% 2.44% - - - - - - -	$ 20,261 12,697 5,552 USD 99 USD 76 USD 570 USD 2,115 USD 2,163 1,449 429,459 4,560 809,771 USD 510 USD 1,617 USD 321 USD 702 USD 18 USD 747

(continued at next page)

• 137 -

(Cont’)

Held by	Types and names of negotiable securities	Relationship with the negotiable securities issuers	Account		At the end ofthe period	At the end ofthe period		Remark
				Shares/units	Book amount	Shareholdingratio	Fairvalue
	Latigo Biotherapeutics, Inc. Suvalent Therapeutics Inc. Oncovalent Therapeutics Inc. Twin Health, Inc. Meilo Ltd. Pivalent Therapeutics Inc. Boldend Inc. Bookaway Ltd. Cargomatic Inc. Engageli Inc. Garuda Labs Inc. AnyRoad Inc. Assemble Stream Inc. FINDEM Inc Solv Health Inc. Underdog Sport Halcyon Tech Inc. ParaFi Digita Opportunities International LP ParaFi Private Opportunities LLC Sybil Capital Fund I-B Feeder, LP. Folius Digital Opportunities Offshore, LTD.	－ － － － － － － － － － － － － － － － － － － － －	Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value throughothercomprehensiveincome	210 83 16 165 1,167 33 327 51 20 176 14 7 33 5 115 1 - - - - -	USD 188 USD 86 USD 16 USD 2,360 USD 1,200 USD 33 USD 413 USD 592 USD 148 USD 383 USD 356 USD 38 USD 92 USD 38 USD 501 USD 40 USD 722 USD 31 USD 38 USD 252 USD 118	- - - - - - - - - - - - - - - - - - - - -	USD 188 USD 86 USD 16 USD 2,360 USD 1,200 USD 33 USD 413 USD 592 USD 148 USD 383 USD 356 USD 38 USD 92 USD 38 USD 501 USD 40 USD 722 USD 31 USD 38 USD 252 USD 118

(continued at next page)

• 138 -

(Cont’)

Held by	Types and names of negotiable securities	Relationship with the negotiable securities issuers	Account		At the end of the period	At the end of the period		Remark
				Shares/units	Bookamount	Shareholdingratio	Fairvalue
Corner Union LLC （Delaware, US） Union Private Equity Co., Ltd.	Corner Ventures (Cayman) I LP. Shares Healthy.io Limited Beneficiary certificates Union Green Energy Private Equity Limited Partnership Union Green Energy I Private Equity Limited Partnership Union Green Energy II Private Equity Limited Partnership	－ － － － －	Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss	- 30 - - -	USD 86 USD 917 25,271 5,435 17	- - 1.07% 1.34% 16.67%	USD 86 USD 917 25,271 5,435 17

• 139 -

Union Bank of Taiwan Co., Ltd.

Acquisition of individual real estate at costs of NT$300 million or 20% of the paid-in capital or more

January 1 to June 30, 2023

==> picture [1079 x 304] intentionally omitted <==

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

Annex 4 Unit: In NTD thousand,
Unless Stated Otherwise
If the trading counterparty is a related party,
References for Purpose of
Real estate Date of Transaction Status of Counterparty the information of the previous transfer Other
Property name Relationship price acquisition and
acquiring company occurrence amount payment Note 2 Relationship Date of Provisions
All owners Amount determination situation of use
with the issuer transfer
The Bank Lands and January 12, 2023 $ 354,019 Note 1 6 natural Non-related Not Not Not Not Refer to the Used as self- None
buildings persons party applicable applicable applicable applicable professional owned
appraisal property
report
----- End of picture text -----

Note 1: In January 2023, with the approval of the Board of Directors, the Bank purchased the land and buildings in Taoyuan District, Taoyuan City, out of considerations of business sustainability and to provide a good working environment for branches. The total transaction price for the land and buildings was NT$354,019 thousand. Since January 2023, the Company has successively signed contracts with landowners for payment. As of June 30, 2023, NT$349,205 thousand has been paid.

Note 2: If the transaction counterparty is a natural person who is not a related party of the Company, the name may be exempted.

• 140 -

Union Bank of Taiwan Co., Ltd.

Receivables from related parties amounting to at least NT$300 million or 10% of the paid-in capital

June 30, 2023

Annex 5

In NTD thousand (Foreign Currency)

Company accounted for accounts receivable	Counterparty	Relationship	Balance of receivable from related party	Turnover Rate	Overdue receivables from related party	Overdue receivables from related party	Amounts received in subsequent period	Amount of allowance for doubtful accounts provided
					Amount	Actions Taken
UFLIC UFLIC UFLIC Union Capital (Singapore) Holding PTE. Ltd. Uflc Capital (Singapore) Holding PTE. Ltd.	Union Capital (Singapore) Holding PTE. Ltd. Uflc Capital (Singapore) Holding PTE. Ltd. Tian Ji Smart Energy Co., Ltd. Kabushiki Kaisha UCJ1 (Japan) Kabushiki Kaisha UCJ1 (Japan)	Group subsidiary Group subsidiary Group subsidiary Group subsidiary Group subsidiary	$ 564,751 ( JPY 2,627,225 ) 1,187,403 ( JPY 5,523,808 ) 1,620,936 315,104 ( JPY 1,465,865 ) 613,822 ( JPY 2,855,504 )	- - - - -	$ - - - - -	- - - - -	$ - - 12,872 - -	$ - - 16,209 - -

• 141 -

Unit: In NTD thousand, %

Union Bank of Taiwan Co., Ltd.

Overdue loans and accounts

June 30, 2023, December 31 and June 30, 2022

Annex 6

	Year Month	Year Month			June 30, 2023					June 30, 2022
	Business\item		Amount of nonperforming loans (Note 1)	Total loans	Overdue ratio (Note 2)	Amount of allowance for doubtful accounts	Coverage ratio (Note 3)	Amount of nonperforming loans	Total loans	Overdue ratio	Amount of allowance for doubtful accounts	Coverage ratio
Corporate banking	Secured		$ 785,359	$170,584,391	0.46%	$ 2,524,774	266.17%	$ 195,849	$146,479,754	0.13%	$ 2,145,347	965.74%
	Unsecured		163,199	50,877,918	0.32%			26,297	82,172,828	0.03%
Consumer banking	Home mortgage (Note 4)		288,936	244,405,337	0.12%	3,066,583	1,061.34%	222,881	228,656,709	0.10%	2,884,146	1,294.03%
	Debit card		45	5,185	0.87%	174	386.67%	35	8,500	0.41%	261	745.59%
	Small-scale credit loans (Note 5)		159,835	67,702,452	0.24%	728,120	455.54%	149,252	51,426,867	0.29%	553,551	370.88%
	Others (Note 6)	Secured	8,460	21,757,021	0.04%	248,411	2,786.13%	22,257	20,732,621	0.11%	241,476	1,082.41%
		Unsecured	456	2,409,226	0.02%			52	1,873,048	0.00%
Total loan			1,406,290	557,741,530	0.25%	6,568,062	467.05%	616,623	531,350,327	0.12%	5,824,781	944.63%
	Business\item		Nonperforming Loan	Balance of Account Receivables	Ratio of Nonperforming Loan	Amount of allowance for doubtful accounts	Coverage ratio	Nonperforming Loan	Balance of Account Receivables	Ratio of Nonperforming Loan	Amount of allowance for doubtful accounts	Coverage ratio
Credit card business			$ 28,521	$ 22,718,200	0.13%	$ 131,243	460.16%	$ 24,162	$ 16,971,805	0.14%	$ 129,949	537.82%
Accounts receivable factored without recourse			-	495,334	-	4,953	-	-	799,996	-	8,000	-

• Note 1: Nonperforming loans are reported to the authorities and disclosed to the public, as required by the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with

• Nonperforming/Non-accrued Loans.” Nonperforming credit card receivables are reported to the authorities and disclosed to the public, as required by the FSC (IV) dated July 6, 2005 (Ref. No. 0944000378).

• Note 2: Ratio of nonperforming loans: Nonperforming loans ÷ Outstanding loan balance; Ratio of nonperforming credit card receivables: Nonperforming credit card receivables ÷ Outstanding credit card receivables balance.

• Note 3: Coverage ratio of loans: Allowance for possible losses for loans ÷ Nonperforming loans. Coverage ratio of credit card receivables: Allowance for possible losses for credit card receivables ÷ Nonperforming credit card receivables.

Note 4: The mortgage loan is for house purchase or renovation and is fully secured by housing that is purchased (owned) by the borrower, the spouse or the minor children of the borrowers.

Note 5: Based on the FSC (IV) dated December 19, 2005 (Ref. No. 09440010950), small-scale credit loans are unsecured, in small amounts and exclude credit cards and cash cards.

Note 6: Other consumer banking loans refer to secured or unsecured loans that exclude housing mortgage, cash cards, credit cards and small-scale credit loans.

• Note 7: As required by the Banking Bureau in its letter dated July 19, 2005 (Ref. No. 0945000494), accounts receivable factored without recourse are reported as nonperforming receivables within three months after the factors or insurance companies refuse to indemnify banks for any liabilities on these accounts.

• 142 -

	Year Month	Year Month		December 31, 2022	December 31, 2022
	Business\item		Amount of nonperforming loans (Note 1)	Total loans	Overdue ratio (Note 2)	Amount of allowance for doubtful accounts	Coverage ratio (Note 3)
Corporate banking	Secured		$ 765,665	$159,556,150	0.48%	$ 2,361,323	297.83%
	Unsecured		27,166	56,853,293	0.05%
Consumer banking	Home mortgage (Note 4)		334,459	235,236,251	0.14%	2,960,547	885.17%
	Debit card		2	6,625	0.03%	166	8,300.00%
	Small-scale credit loans (Note 5)		141,393	60,138,225	0.24%	651,446	460.73%
	Others (Note 6)	Secured	24,199	21,064,965	0.11%	250,637	1,034.32%
		Unsecured	33	2,130,330	-
Total loan			1,292,917	534,985,839	0.24%	6,224,119	481.40%
			Nonperforming Loan	Balance of Account Receivables	Ratio of Nonperforming Loan	Amount of allowance for doubtful accounts	Coverage ratio
Credit card business			$ 23,337	$ 19,330,615	0.12%	$ 117,993	505.60%
Accounts receivable factored without recourse			-	799,996	-	8,000	-

Not reported as nonperforming loans or nonperforming receivables

	June 30, 2023	June 30, 2023	December 31, 2022	December 31, 2022	June 30, 2022	June 30, 2022
	Not Reported as Nonperforming Loan	Not Reported as Nonperforming Receivable	Not Reported as Nonperforming Loan	Not Reported as Nonperforming Receivable	Not Reported as Nonperforming Loan	Not Reported as Nonperforming Receivable
Amounts of executed contracts on negotiated debts not reported as nonperforming loans and receivables (Note 1)	$ 5,243	$ 27,015	$ 6,648	$ 33,395	$ 8,301	$ 40,651
Amounts of discharged and executed contracts on clearance of consumer debts not reported as nonperforming loans and receivables (Note 2)	253,254	611,135	249,489	644,006	243,607	673,085
Total	258,497	638,150	256,137	677,401	251,908	713,736

Note 1: Amounts of executed contracts on negotiated debts that are not reported as nonperforming loans or receivables are reported in accordance with the FSC (I) dated April 25, 2006 (Ref. No. 09510001270)

Note 2: Amounts of discharged and executed contracts on clearance of consumer debts that are not reported as nonperforming loans or receivables are reported in accordance with the FSC (I) dated September 15, 2008 (Ref. No. 09700318940).

• 143 -

Union Bank of Taiwan Co., Ltd.

Information of the Re-investees

June 30, 2023

Annex 7

Unit: In NTD thousand, In Thousands of New Taiwan Dollars (Foreign Currency), in thousands of shares

Investor	Investee Company (Note 1)	Location	Main Business and Product	Shareholding ratio at the end of the period	Book amount	Investment profit (loss) recognized in the year	Consolidated shareholding of the Bank and affiliates (Note 1)	Consolidated shareholding of the Bank and affiliates (Note 1)	Consolidated shareholding of the Bank and affiliates (Note 1)	Consolidated shareholding of the Bank and affiliates (Note 1)	Remark
							Number of existing shares	Number of shares for fiction shareholding (Note2)	Total
									Number of shares	Shareholding ratio
Union Bank of Taiwan Co., Ltd.	Financial related business UFLIC Union Finance International (HK) Limited Union Securities Investment Trust Corporation (USITC) Union Information Technology Corporation (UIT) Union Venture Capital Co., Ltd. iPASS Corporation Taiwan Asset Management Corporation Taiwan Financial Asset Service Corporation Sunshine Asset Management Corporation Limited Taipei Forex Inc. Financial Information Service Co., Ltd. Taiwan Depository & Clearing Corporation Taiwan Futures Exchange Taiwan Mobile Payment Corporation LINE Pay Taiwan Limited Non-financial related business Union Construction Management Co., Ltd. Li Yu Venture Corporation Lian An Service Corporation Taiwan Power Corporation LINE Bank Taiwan Limited	Taipei City Hong Kong Taipei City Taipei City Taipei City Kaohsiung City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City	Installment, leasing and accounts receivable factoring Import and export financing Securities investment trust Software and hardware product retail and distribution, system programming development, system development outsourcing, website design, e- commerce, etc. Venture Investment Electronic Stored Value Cards Financial Institution Creditor's Right (Money) Purchase Business, Process Financial Institution Creditor's Right (Money) Appraisal and Auction Business, and Credit Management Service for Financial Institutions Fair Third Party Asset Auction Business and Process Financial Institution Creditor's Right (Money) Appraisal and Auction Business Financial Institution Creditor's Right (Money) Purchase Business, Industrial and Commercial Credit Checking Service, Investment Consulting, Information Software Services, Data Processing Services, Electronic Information Supply Services, and General Advertisement Service Foreign exchange trading, foreign currency offering, exchange transactions Type II Telecommunications Business, Information Software Services, Data Processing Services, and Electronic Information Supply Services Centralized Securities Depository Enterprise, Short- term Bill Centralized Custody and Settlement Institution, and Type II Telecommunications Business Futures Exchange and Futures Clearing Houses International Trade, Data Processing Services, and Electronic Information Supply Services Data Processing Services, and Electronic Information Supply Services, and The Third Party Payment Review and consultancy for commissioned constructions and plans Venture Investment Other Industrial and Commercial Services, Other Repair, Rental and Leasing, Wholesale of Precision Instruments, and Retail Sale of Precision Instruments Electric Power Generation, Electric Power Transmission, Electric Power Distribution, Electric Appliance Construction, Manpower Dispatched, Cable Installation Engineering, and Automatic Control Equipment Engineering, Commercial Banking	100.00% 100.00% 99.60% 99.99% 100.00% 33.94% 0.57% 2.94% 6.44% 0.81% 2.61% 0.25% 2.04% 1.00% 9.76% 40.00% 4.76% 5.00% - 5.00%	$ 2,837,643 161,829 425,048 116,975 1,807,538 245,011 79,652 48,911 4,210 7,191 410,634 83,691 550,805 3,244 1,534,787 51,832 3,646 1,491 1,554 577,921	$ 35,079 284 23,128 623 15,148 ( 16,567 ) - - - - - - - - 22,493 ( 133 ) - - - -	171,000 30,000 31,014 9,999 140,000 38,697 6,000 5,000 386 160 13,599 1,454 9,752 600 5,471 2,000 558 125 395 75,000	- - - - - - - - - - - - - - - - - - - -	171,000 30,000 31,014 9,999 140,000 38,697 6,000 5,000 386 160 13,599 1,454 9,752 600 5,471 2,000 558 125 395 75,000	100.00% 100.00% 99.60% 99.99% 100.00% 33.94% 0.57% 2.94% 6.44% 0.81% 2.61% 0.25% 2.04% 1.00% 9.76% 40.00% 4.76% 5.00% - 5.00%	Note 3 Note 3

(continued at next page)

• 144 -

(Cont’)

Investor	Investee Company (Note 1)	Location	Main Business and Product	Shareholding ratio at the end of the period	Book amount	Investment profit (loss) recognized in the year	Consolidated shareholding of the Bank and affiliates (Note 1)	Consolidated shareholding of the Bank and affiliates (Note 1)	Consolidated shareholding of the Bank and affiliates (Note 1)	Consolidated shareholding of the Bank and affiliates (Note 1)	Remark
							Number of existing shares	Number of shares for fiction shareholding (Note2)	Total
									Number of shares	Shareholding ratio
UFLIC Union Capital (Singapore) Holding PTE. Ltd. Kabushiki Kaisha UCJ1 Uflc Capital (Singapore) Holding PTE. Ltd. Union Securities Investment Trust Corporation (USITC) Union Venture Capital Co., Ltd. Union Energy Co., Ltd. Corner Union Venture Capital, LLC.	Non-financial related business Union Capital (Cayman) Corp. Union Capital (Singapore) Holding PTE. Ltd. Uflc Capital (Singapore) Holding PTE. Ltd. Non-financial related business Kabushiki Kaisha UCJ1 Tokutei Mokuteki Kaisha SSG15 Non-financial related business Tokutei Mokuteki Kaisha SSG15 Tokutei Mokuteki Kaisha SSG12 Tokutei Mokuteki Kaisha SSG16 Non-financial related business Kabushiki Kaisha UCJ1 Tokutei Mokuteki Kaisha SSG12 Tokutei Mokuteki Kaisha SSG16 Financial related business Union Private Equity Co., Ltd. Non-financial related business Na He Yi Hau Electric Power Inc. Corner Union Venture Capital, LLC. Union Energy Co., Ltd. Blue Borders Medical and Health Management Consulting Co., Ltd. Ting Syu Energy Co., Ltd. Bei Chen Electric Power Inc. Non-financial related business Ting Jie Electric Power Inc. Na He Yi Hau Electric Power Inc. Tian Ji Smart Energy Co., Ltd. Non-financial related business Corner Ventures DAG I-U, LLC. Corner Union, LLC.	Cayman Singapore Singapore Japan Japan Japan Japan Japan Japan Japan Japan Taiwan Taiwan United States Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan United States United States	Investment, overseas financing, equipment leasing, installment selling, acquisition of accounts receivable, etc. Investment, overseas financing, equipment leasing, installment selling, acquisition of accounts receivable, etc. Investment, overseas financing, equipment leasing, installment selling, acquisition of accounts receivable, etc. Sale, purchasing and leasing of real estates, etc. A real estate securitized special purpose company A real estate securitized special purpose company A real estate securitized special purpose company A real estate securitized special purpose company Sale, purchasing and leasing of real estates, etc. A real estate securitized special purpose company A real estate securitized special purpose company Investment and management of private equity Power Generation, Transmission and Distribution, and Energy Technical Services Overseas Investment Management Consulting General investment advisory and energy management Healthcare service Power Generation, Transmission and Distribution, and Energy Technical Services Power Generation, Transmission and Distribution, and Energy Technical Services Power Generation, Transmission and Distribution, and Energy Technical Services Power Generation, Transmission and Distribution, and Energy Technical Services Power Generation, Transmission and Distribution, and Energy Technical Services Venture Investment Venture Investment	100.00% 100.00% 100.00% 30.55% 49.00% 51.00% 51.00% 51.00% 69.45% 49.00% 49.00% 100.00% 89.70% 100.00% 100.00% 35.80% 60.00% 99.08% 90.00% 0.30% 90.00% 100.00% 100.00%	$ 59,655 ( JPY 277,515 ) 96,117 ( JPY 447,137 ) 106,499 ( JPY 495,435 ) 104,290 ( JPY 485,157 ) 158,202 ( JPY 735,957 ) 164,648 ( JPY 765,944 ) 218,136 ( JPY 1,014,771 ) 137,847 ( JPY 641,263 ) 237,099 ( JPY 1,102,986 ) 209,593 ( JPY 975,026 ) 132,452 ( JPY 616,166 ) 48,892 136,827 397,456 ( USD 12,766 ) 17,262 112,973 595 102,876 ( 821 ) 459 353,581 $ 373,706 ( USD 12,003 ) 24,208 ( USD 778 )	$ 4,839 ( JPY 21,550 ) 5,412 ( JPY 24,101 ) ( 3,789 ) ( JPY 16,873 ) ( 1,004 ) ( JPY 4,473 ) 7,906 ( JPY 35,207 ) 8,228 ( JPY 36,644 ) 6,842 ( JPY 30,471 ) ( 4,881 ) ( JPY 21,737 ) ( 2,284 ) ( JPY 10,170 ) 6,574 ( JPY 29,276 ) ( 4,689 ) ( JPY 20,884 ) ( 11,467 ) ( 1,185 ) ( 19,148 ) ( USD 626 ) 525 ( 23,950 ) 1 ( 4,522 ) ( 6,616 ) ( 4 ) 7,105 ( $ 18,734 ) ( USD 612 ) ( 416 ) ( USD 14 )	50 - - 9 Note 6 Preferential shares 15 Preferential shares 20 Preferential shares 13 21 Note 7 Note 5 3,000 14,890 1,100 9,000 14,500 60 10,800 1,890 50 33,904 - -	- - - - - - - - - - - - - - - - - - - - - - -	50 - - 9 Note 6 Preferential shares 15 Preferential shares 20 Preferential shares 13 21 Note 7 Note 5 3,000 14,890 1,100 9,000 14,500 60 10,800 1,890 50 33,904 - -	100.00% 100.00% 100.00% 30.55% 49.00% 51.00% 51.00% 51.00% 69.45% 49.00% 49.00% 100.00% 89.70% 100.00% 100.00% 35.80% 60.00% 99.08% 90.00% 0.30% 90.00% 100.00% 100.00%	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 3 Note 8

• 145 -

• Note 1: Including the Bank, directors, president, vice president, and the existing shareholding or pro forma shareholding in the investees by the affiliates in line with the definition of the Company Act.

• Note 2: (1) Pro forma shareholding refers to shares to be converted, under the conversion assumption, from the equity-type negotiable securities purchased, or the derivative contracts entered (but not converted to the equity for holding) that are linked to the equity of the re-investees, and for the reinvestment purpose specified in Article 74 of the Act under the agreed transaction conditions and the intentions of the bank for undertaking.

• (2) The aforesaid “equity-type negotiable securities” refer o the negotiable securities specified in Article 11, the “Securities and Exchange Act Enforcement Rules,” including convertible corporate bonds and warrants.

• (3) The aforesaid “derivative contracts” refer to these meeting the definition of derivatives of IFRS 9, such as stock options.

• Note 3: Except that UFLIC recognized the profit and loss of investments based on the financial statements reviewed by CPAs on June 30, 2023, other equity investment adopting the equity method are recognized for the investments based on the self-settled financial statement on June 30, 2023.

• Note 4: Union Capital (Singapore) Holding PTE. Ltd., Uflc Capital (Singapore) Holding PTE. Kabushiki Kaisha UCJ1, Tokutei Mokuteki Kaisha SSG15, SSG12 and SSG16 recognized the investment profit and loss based on the self-settled financial statement on March 31, 2023.

• Note 5: Refers to 1 share of common stock and 13 thousand shares of preferred stock.

• Note 6: Refers to 1 share of common stock and 14 thousand shares of preferred stock.

• Note 7: Refers to 1 share of common stock and 19 thousand shares of preferred stock.

• Note 8: Union Energy Co., Ltd. pledged 1,890 thousand shares of Ting Jie Electric Power Inc. as the collateral for the syndicated loan.

• 146 -

Union Bank of Taiwan Co., Ltd.

Information of Major Shareholders

June 30, 2023

Annex 8

Unit: thousand shares

Name of Major Shareholder		Shares	Shares
		Number of shares		Shareholding ratio
	Common shares	Preferential shares	Total shares
Tsong-Li Investment Co., Ltd.	284,845	-	284,845	7.50%

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual trustor who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to Market Observation Post System.

• 147 -

Union Bank of Taiwan Co., Ltd.

Disclosure of the Securities Department First Half of 2023 and 2022

• 148 -

§Table of Contents§

		Item	Page
I.	Cover		148
II.	Table of	Contents	149
III.	Balance	Sheet of the Securities Department	150
IV.	Statement of Comprehensive Income of the Securities
			151
	Department
V.	Notes to	the Financial Statement of the Securities Department
	(I)	Department History	152
	(II)	Date and Procedures Passing the Financial Statements	152
	(III)	Standards Recently Published or Amended, and the
			152
		Applications of the Interpretations
	(IV)	Summaries of the Material Accounting Policies	152
	(V)	Descriptions of Key Accounts	153~155
	(VI)	Transactions with Related Parties	155
	(VII)	Assets Pledged	-
	(VIII)	Material Commitments and Contingent Matters	-
	(IX)	Material Losses from Disasters	-
	(X)	Financial Information of Operations	-
	(XI)	Material Matters after the Period	-
	(XII)	Others	155~160
	(XIII)	Information Related to Material Transactions	161
	(XIV)	Information of the Re-investees	161
	(XV)	Information of Investments in Mainland China	161
VI.	Details of Key Accounts of the Securities Department		162~169

• 149 -

Union Bank of Taiwan Co., Ltd.

Balance Sheet of the Securities Department

June 30, 2023, December 31 and June 30, 2022

Unit: NTD thousand

Code 111100 113200 114130 114150 119000 110000 123300 129010 129020 129030 129110 120000 906001 Code 214010 214130 214160 214170 210000 229110 220000 906003 301110 304000 305140 906004 906002	Asset Current Assets Cash and cash equivalents Financial assets measured at fair value through other comprehensive income (Note V) Accounts receivable, net (Note VI) Prepaid expenses Other current assets Total current assets Non-current assets Financial assets measured at amortized costs (Note VII) Operating bonds (Note VIII) Settlement and clearing fund (Note IX) Refundable deposits Internal Transactions (Note XIV) Total non-current asset Total assets Liabilities and equity Current Liabilities Liabilities of bonds under repurchase agreement (Note X) Accounts payable (Note XI) Collection for others Other accounts payable Total current liabilities Non-current liabilities Internal Transactions (Note XIV) Toto non-current liabilities Total liabilities Equity Appropriated operating capital Cumulative surplus Other equity Net gains on financial assets at fair value through other comprehensive income TOTAL TOTAL LIABILITIES AND EQUITY		June 30, 2023 Amount ％ $ 200 - 4,383,292 63 1,672,076 24 3,120 - 12,127 - 6,070,815 87 703,283 10 150,000 2 26,592 - 36,225 1 - - 916,100 13 $ 6,986,915 100 $ 4,089,288 59 1,659,597 24 4,170 - 32,289 - 5,785,344 83 462,221 6 462,221 6 6,247,565 89 840,000 12 23,108 1 123,758) ( 2) 739,350 11 $ 6,986,915 100		December 31, 2022 Amount ％ $ 200 - 4,249,119 67 768,265 12 5,972 - 28,852 1 5,052,408 80 705,702 11 150,000 2 27,464 - 36,225 1 351,491 6 1,270,882 20 $ 6,323,290 100 $ 4,758,866 75 745,437 12 30,031 - 36,885 1 5,571,219 88 - - - - 5,571,219 88 840,000 13 71,333 1 159,262) ( 2) 752,071 12 $ 6,323,290 100		June 30, 2022	June 30, 2022
			Amount $ 200 4,383,292 1,672,076 3,120 12,127 6,070,815 703,283 150,000 26,592 36,225 - 916,100 $ 6,986,915 $ 4,089,288 1,659,597 4,170 32,289 5,785,344 462,221 462,221 6,247,565 840,000 23,108 123,758) 739,350 $ 6,986,915		Amount $ 200 4,249,119 768,265 5,972 28,852 5,052,408 705,702 150,000 27,464 36,225 351,491 1,270,882 $ 6,323,290 $ 4,758,866 745,437 30,031 36,885 5,571,219 - - 5,571,219 840,000 71,333 159,262) 752,071 $ 6,323,290		Amount $ 200 5,204,927 1,530,295 2,979 249 6,738,650 708,145 150,000 27,464 36,225 - 921,834 $ 7,660,484 $ 5,271,029 1,500,310 3,556 34,040 6,808,935 123,127 123,127 6,932,062 840,000 44,127 155,705) 728,422 $ 7,660,484	％
		(		(		(		- 68 20 - - 88 9 2 - 1 - 12 100 69 20 - - 89 1 1 90 11 1 ( 2) 10 100

The attached notes are the integral part the Financial Statement.

Chairman: Lin Hung-Lian

Managerial Officer: Hsu Wei-Wen

Chief Accounting Officer: Lu Wen-Chuan

• 150 -

Union Bank of Taiwan Co., Ltd.

Statement of Comprehensive Income of the Securities Department

January 1 to June 30, 2023 and 2022

Unit: NTD thousand

Code Proceeds 401000 Brokerage fee income, net (Note XIV) 404000 Income from underwriting business 421200 Interest income 424100 Income from commissions of futures 428000 Other operating income 425300 Expected credit reversal gains 400000 Total income Expenditures and expenses 501000 Brokerage expense 521200 Financial cost 531000 Employee benefit expense (Notes XII) 532000 DEPRECIATION AND AMORTIZATION 533000 Other operation expenses (Note XIII) 500000 Total expenditures and expenses 602000 Other gain and loss 902001 Net profit before tax 701000 Income tax expense 902005 Current net profit Other comprehensive income 805600 Items that may be reclassified subsequently to profit or loss 805615 Gain/loss of the debt instruments measured at fair value through other comprehensive income 805000 Sum of other comprehensive income 902006 TOTAL CURRENT COMPREHENSIVE INCOME	January 1 to June 30, 2023 Amount ％ $ 99,617 77 368 - 17,145 13 1,024 1 11,300 9 152 - 129,606 100 7,938 6 1,963 2 57,241 44 5,561 4 50,670 39 123,373 95 22,652 17 28,885 22 5,777 4 23,108 18 35,504 27 35,504 27 $ 58,612 45	January 1 to June 30, 2023 Amount ％ $ 99,617 77 368 - 17,145 13 1,024 1 11,300 9 152 - 129,606 100 7,938 6 1,963 2 57,241 44 5,561 4 50,670 39 123,373 95 22,652 17 28,885 22 5,777 4 23,108 18 35,504 27 35,504 27 $ 58,612 45	January 1 to June 30, 2022	January 1 to June 30, 2022	January 1 to June 30, 2022
		Amount $ 99,617 368 17,145 1,024 11,300 152 129,606 7,938 1,963 57,241 5,561 50,670 123,373 22,652 28,885 5,777 23,108 35,504 35,504 $ 58,612		Amount $ 108,976 129 20,627 1,119 16,945 143 147,939 8,292 1,784 61,330 5,910 34,047 111,363 18,582 55,158 11,031 44,127 133,802) 133,802) $ 89,675)	％
			( ( (		74 - 14 1 11 - 100 6 1 41 4 23 75 12 37 7 30 (91) (91) (61)

The attached notes are the integral part the Financial Statement.

Chairman: Lin Hung-Lian Managerial Officer: Hsu Wei-Wen Chief Accounting Officer: Lu Wen-Chuan

• 151 -

Union Bank of Taiwan Co., Ltd.

Notes to the Financial Statement of the Securities Department

January 1 to June 30, 2023 and 2022

(In NTD thousand, unless specified otherwise)

I. History and Business Scope of the Securities Department

The Securities Department of the Bank commence the business officially on July 27, and obtained the permit of securities dealer for proprietary trading business of various bonds on August 11, 2010; the major businesses include: trading negotiable securities in the stock exchange or OTC, and proprietary trading of various bonds and securitized products OTC (limited to the fixed-income negotiable securities). As of June 30, 2023 and 2022, the appropriated operating capital were both NT$840,000 thousand.

As of June 30, 2023 and 2022, there were 129 and 126 employees of the Securities Department, respectively.

II. Date and Procedures Passing the Financial Statements

The Financial Statements of the Securities Department were submitted to, approved by the board of directors on August 28, 2023 before releasing.

III.

Standards Recently Published or Amended, and the Applications of the Interpretations

Please refer to Note III of the Bank’s Parent Company Only Financial Statements for the first half of 2023.

IV. Summaries of the Material Accounting Policies

(I) Statement of Compliance

The Financial Statements of the Securities Department were prepared pursuant to the Regulations Governing the Preparation of Financial Statements by Securities Firms The Financial Statements of the Securities Department do not include all the IFRSs disclosure information required for the full-year Parent Company Only Financial Statements.

(II) Other material accounting policies

The accounting policies adopted by the Securities Department in are the same as the 2022 Financial Statements of the Securities Department.

• 152 -

V.

Financial Assets Measured at Fair Value Through Other Comprehensive Income

Domestic corporate bonds Domestic government bonds	June 30, 2023 $ 2,401,627 1,981,665 $ 4,383,292	December 31, 2022 $ 2,385,334 1,863,785 $ 4,249,119	June 30, 2022	June 30, 2022
				$ 3,337,870 1,867,057 $ 5,204,927

The Securities Department had sold NT$3,773,197 thousand, NT$4,249,119 and NT$4,245,745 thousand of its financial assets at FVTOCI under a repurchase agreement on June 30, 2023, December 31 and June 30, 2022, respectively.

VI. Accounts Receivable, Net

Accounts Receivable, Net	Accounts Receivable, Net
June 30, 2023 Delivery payment receivable - entrusted transactions $ 1,302,087 Proceed of delivery 352,128 Interest receivable 17,861 $ 1,672,076 Financial Assets Measured at Amortized Costs June 30, 2023 Debt instruments Domestic government bonds $ 703,283		December 31, 2022 $ 720,444 26,455 21,366 $ 768,265 December 31, 2022 $ 705,702	June 30, 2022
			$ 1,317,894 188,375 24,026 $ 1,530,295 June 30, 2022
Debt instruments Domestic government bonds
				$ 708,145

VII. Financial Assets Measured at Amortized Costs

The Securities Department has not offer to sell financial assets measured at amortized costs with repurchase agreement conditions as of June 30 2023, December 31 and June 30, 2022.

VIII. Operation Bonds

Operation Bonds
Operation bonds from securities brokers Operation bonds from futures brokers Operation bonds from securities dealers	June 30, 2023 $ 90,000 50,000 10,000 $ 150,000	December 31, 2022 $ 90,000 50,000 10,000 $ 150,000	June 30, 2022
				$ 90,000 50,000 10,000 $ 150,000

Pursuant to the “Regulations Governing Securities Firms” and the “Regulations Governing Futures Commission Merchants,” after a securities firm complete the company registration, it shall lodge an operation bond with a bank designated by the FSC.

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IX. Settlement and Clearing Fund

Settlement and Clearing Fund
Settlement and clearing fund at TWSE TPEx settlement and clearing fund	June 30, 2023 $ 14,120 12,472 $ 26,592	December 31, 2022 $ 14,811 12,653 $ 27,464	June 30, 2022 $ 14,811 12,653 $ 27,464
				$ 14,811 12,653 $ 27,464

The settlement and clearing fund deposited at TWSE and TPEx as required. The fund is deposited in a dedicate account for custody, and utilized and accrues interests as provided in the Securities and Exchange Act. The interests generated are settled every six months and paid at once after deducting the related expenses and taxes.

X. Liabilities of Bonds Under Repurchase Agreement

XI. XII.	Government bonds Corporate bonds Maturity date Agreed repurchase price Accounts Payable Delivery payment payable - entrusted transactions Proceed of delivery Others Employee Benefits Salaries and wages Labor insurance and national health insurance Pension expenses Other employee benefits	June 30, 2023 December 31, 2022 June 30, 2022 $ 1,532,896 $ 2,612,935 $ 1,714,201 2,556,392 2,145,931 3,556,828 $ 4,089,288 $ 4,758,866 $ 5,271,029 July - September 2023 January - February 2023 July - September 2022 $ 4,092,567 $ 4,761,474 $ 5,272,664 June 30, 2023 December 31, 2022 June 30, 2022 $ 1,475,130 $ 670,206 $ 1,198,579 182,573 73,094 300,582 1,894 2,137 1,149 $ 1,659,597 $ 745,437 $ 1,500,310 January 1 to June 30, 2023 January 1 to June 30, 2022 $ 45,333 $ 49,332 5,559 5,498 3,091 3,265 3,258 3,235 $ 57,241 $ 61,330	June 30, 2023 December 31, 2022 June 30, 2022 $ 1,532,896 $ 2,612,935 $ 1,714,201 2,556,392 2,145,931 3,556,828 $ 4,089,288 $ 4,758,866 $ 5,271,029 July - September 2023 January - February 2023 July - September 2022 $ 4,092,567 $ 4,761,474 $ 5,272,664 June 30, 2023 December 31, 2022 June 30, 2022 $ 1,475,130 $ 670,206 $ 1,198,579 182,573 73,094 300,582 1,894 2,137 1,149 $ 1,659,597 $ 745,437 $ 1,500,310 January 1 to June 30, 2023 January 1 to June 30, 2022 $ 45,333 $ 49,332 5,559 5,498 3,091 3,265 3,258 3,235 $ 57,241 $ 61,330	June 30, 2023 December 31, 2022 June 30, 2022 $ 1,532,896 $ 2,612,935 $ 1,714,201 2,556,392 2,145,931 3,556,828 $ 4,089,288 $ 4,758,866 $ 5,271,029 July - September 2023 January - February 2023 July - September 2022 $ 4,092,567 $ 4,761,474 $ 5,272,664 June 30, 2023 December 31, 2022 June 30, 2022 $ 1,475,130 $ 670,206 $ 1,198,579 182,573 73,094 300,582 1,894 2,137 1,149 $ 1,659,597 $ 745,437 $ 1,500,310 January 1 to June 30, 2023 January 1 to June 30, 2022 $ 45,333 $ 49,332 5,559 5,498 3,091 3,265 3,258 3,235 $ 57,241 $ 61,330	June 30, 2022 $ 1,714,201 3,556,828 $ 5,271,029 July - September 2022 $ 5,272,664 June 30, 2022

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XIII. Other Operation Expenses

Other Operation Expenses
Computer operating Postage and telecom Repair expenses Others	January 1 to June 30, 2023 $ 5,103 2,857 3,835 38,875 $ 50,670	January 1 to June 30, 2022
			$ 4,943 2,605 3,535 22,964 $ 34,047

XIV. Transactions with Related Parties

• (I) Related parties and their relationships with the Company

Related Party Relationship with the Company Union Bank of Taiwan Co., Ltd. (Union Bank The head office and branches of Taiwan) of the Company

(II) Material transactions with related parties

Related Party Union Bank of Taiwan	Account	June 30, 2023 ($ 462,221)	December 31, 2022	December 31, 2022	June 30, 2022 ($ 123,127)	June 30, 2022 ($ 123,127)
	Balance of debit (credit) of internal transactions			$ 351,491		$ 123,127)

For the entrusted transactions of negotiable securities between the Bank’s Securities Department and the Finance Department , the brokerage fees generated are automatically adjusted as the internal transactions; the transaction prices are not materially different from general customers.

XV. Disclosure of Financial Products

• (I) Information on fair value - financial instruments not measured at fair value

Other than the items in the following table, the financial assets and liabilities

of Bank’s Securities Department not measured at fair value have the carrying amounts approximate to their fair values, or the fair values cannot be measured reliably:

reliably:
Asset Financial assets measured at amortized costs	June 30,2023 Carrying Amount Fairvalue $ 703,283 $ 702,263	December	31,2022 Fairvalue $ 703,486	June 30,2022
	Carrying Amount $ 703,283	Carrying Amount $ 705,702		Carrying Amount $ 708,145	Fairvalue
					$ 708,100

The aforesaid fair values are measured as follows:

Assets		June 30, 2023	June 30, 2023
	Total	Level 1	Level 2	Level 3
Financial assets Financial assets measured at amortized costs	$ 702,263	$ -	$ 702,263	$ -

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Assets		December 31, 2022	December 31, 2022
	Total	Level 1	Level 2	Level3
Financial assets Financial assets measured at amortized costs	$ 703,486	$ -	$ 703,486	$ -
Assets		June 30,2022
	Total	Level 1	Level 2	Level 3
Financial assets Financial assets measured at amortized costs	$ 708,100	$ -	$ 708,100	$ -

• (II) The Bank’s Securities Department adopts the following methods and assumptions to estimate the fair values of financial products.

• The fair values of short-term financial products are estimated with their carrying values on the balance sheet. Since such products have very short maturities, their carrying values shall be a reasonable basis for estimating the fair values. This method is applied to cash and cash equivalents, accounts receivable - net, other financial assets, other current assets, internal transactions, accounts payable, collection for others, other payables (excluding the tax payables) and other current liabilities.

• Operation bonds, settlement and clearing funds and refundable deposits mostly bear interests, with moderate effect of discounted value; thus, their fair values are estimated as their carrying amounts.

• (III) As of June 30, 2023, December 31 and June 30, 2022, the financial instruments of the Bank’s Securities Department measured at fair value on the recurring basis have the following fair value hierarchies:

Unit: NTD thousand

Asset and liability items		June 30,2023	June 30,2023
	Total	Level 1	Level 2	Level 3
Measured at fair value on a recurring basis Nonderivative financial instruments Asset Financial assets measured at fair value through other comprehensive income Bond investment	$ 4,383,292	$ -	$ 4,383,292	$ -

Asset and liability items		December 31, 2022	December 31, 2022
	Total	Level 1	Level 2	Level 3
Measured at fair value on a recurring basis Nonderivative financial instruments Asset Financial assets measured at fair value through other comprehensive income Bond investment	$ 4,249,119	$ -	$ 4,249,119	$ -

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Asset and liability items		June 30, 2022	June 30, 2022
	Total	Level 1	Level 2	Level3
Measured at fair value on a recurring basis Nonderivative financial instruments Asset Financial assets measured at fair value through other comprehensive income Bondinvestment	$ 5,204,927	$ -	$ 5,204,927	$ -

Please refer to Note 47 of the Bank’s Parent Company Only Financial Statements for the definitions of fair value hierarchies.

During January 1 to June 30, 2023 and 2022, there was no material transfer between Level 1 and Level 2.

• (IV) Information of Financial Risk

1. Market risks

The transactions of the Bank’s Securities Department are measured at fair value, and may be increased or decreased based on the changes in valuation parameters, such as market price of the underlying products, market interest rates, or maturities, and hedged strategically to reduce the exposures to risks.

1. Credit risk

The credit risks of the Bank’s Securities Department come from the entrusted transactions of negotiable securities, and the risks of default by the bond issuers or transaction counterparties. Before engaging in entrusted transactions or tradings, the Bank’s Securities Department assesses the credit profiles of the counterparties, and cites the external credit ratings as the reference timely. For the counterparties or customers with different ratings, the defined transaction limits are assigned to control the loss from default in an extreme circumstance.

Debt instruments that the Securities Department invested in have been further split into two categories, financial assets at FVTOCI and financial assets at amortized cost:

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June 30, 2023

June 30, 2023
Total carrying amount Loss allowance Fair value adjustment December 31, 2022 Total carrying amount Loss allowance Fair value adjustment June 30, 2022 Total carrying amount Loss allowance Fair value adjustment	At fair value through other comprehensive income $ 4,507,705 ( 655 ) ( 123,758) $ 4,383,292 At fair value through other comprehensive income $ 4,409,188 ( 807 ) ( 159,262) $ 4,249,119 At fair value through other comprehensive income $ 5,362,534 ( 951 ) ( 156,656) $ 5,204,927	At amortized costs $ 703,283 - - $ 703,283 At amortized costs $ 705,702 - - $ 705,702 At amortized costs $ 708,145 - - $ 708,145	Total
			$ 5,210,988 ( 655 ) ( 123,758) $ 5,086,575 Total
			( (	$ 5,114,890 807 ) 159,262) $ 4,954,821 Total
			( (	$ 6,070,679 951 ) 156,656) $ 5,913,072

The Securities Department continuously monitors the external credit rating information and price movements of the debt instruments invested in to assess whether their credit risks have significantly increased since initial recognition.

The Securities Department takes into consideration the multi-period default probability table for each ratings of securities issued by credit rating agencies and the recovery rates of different types of bonds to assess the 12month expected credit losses or lifetime expected credit losses. The carrying values of financial assets at FVTOCI and at amortized cost sorted by credit rating are as follows:

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Credit Risk Ratings Low credit risk Significant increase in credit risk Breach of agreement Credit Risk Ratings Low credit risk Significant increase in credit risk Breach of agreement CreditRisk Ratings Low credit risk Significant increase in credit risk Breach of agreement	Terms and definitions Low credit risk at the reporting date Credit risk has increased significantly since initial recognition Evidence of impairment at the reporting date Terms and definitions Low credit risk at the reporting date Credit risk has increased significantly since initial recognition Evidence of impairment at the reporting date Terms and definitions Low credit risk at the reporting date Credit risk has increased significantly since initial recognition Evidence of impairment at the reporting date	ECL Recognition Basis 12-month expected credit losses Lifetime expected credit losses (no credit impairment) Lifetime expected credit losses (with credit impairment) ECL Recognition Basis 12-month expected credit losses Lifetime expected credit losses (no credit impairment) Lifetime expected credit losses (with credit impairment) ECL Recognition Basis 12-month expected credit losses Lifetime expected credit losses (no credit impairment) Lifetime expected credit losses (with credit impairment)	Expected Credit Loss Rate 0%~0.201% (Note) (Note) Expected Credit Loss Rate 0%~0.1984% (Note) (Note) Expected Credit LossRate 0%~0.19% (Note) (Note)	June 30, 2023 Carrying amount (Including Premiums and Discounts)
				$ 5,086,575 - - December 31, 2022 Carrying amount (Including Premiums and Discounts)
				$ 4,954,821 - - June 30, 2022 Carrying amount (Including Premiums andDiscounts)
				$ 5,913,072 - -

Note: Not applicable as the credit rating of investment in debt instruments was

normal as of June 30, 2023, December 31 and June 30, 2022.

The following table shows changes in balances of loss allowances of financial assets at FVTOCI and debt instruments at amortized cost, sorted by credit risk ratings

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Credit Rating

		Credit Rating
Balance at January 1, 2023 Changes in credit risk ratings －Low credit risk to significant increase in credit risk －Significant increase in credit risk to default New debt instruments purchased Derecognition Changes in risk or model parameters Exchange rate and other changes Loss allowance on June 30, 2023 Balance at January 1, 2022 Changes in credit risk ratings －Low credit risk to significant increase in credit risk －Significant increase in credit risk to default New debt instruments purchased Derecognition Changes in risk or model parameters Exchange rate and other changes Loss allowance on June 30, 2022	Low credit risk (12-month expected credit losses) $ 807 - - - - ( 152 ) - $ 655	Significant increase in credit risk (lifetime expected credit losses without credit impairment) $ - - - - - - - $ - Credit Rating	With objective evidence of impairment Lifetime expected credit losses (with credit impairment)
				$ - - - - - - - $ -
	Low credit risk (12-month expected credit losses) $ 1,094 - - - - ( 143 ) - $ 951	Significant increase in credit risk (lifetime expected credit losses without credit impairment) $ - - - - - - - $ -	With objective evidence of impairment Lifetime expected credit losses (with credit impairment)
				$ - - - - - - - $ -

3. Liquidity Risks

The tradings engaged in by the Securities Department are with certain liquidity in the markets, and thus the risk is low. Of which, the positions of negotiable securities held for each trading target are limited.

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• XVI. Information Related to Material Transactions

• (I) Loans provided for others: none

• (II) Endorsement/guarantee provided: none

• (III) Acquisition of individual real estate at costs of NT$100 million or 20% of the paidin capital or more: none

• (IV) Disposal of individual real estate at costs of NT$100 million or 20% of the paidin capital or more: none

• (V) Allowance of service fees to related parties amounting to at least NT$5 million: None

• (VI) Accounts receivable from related parties for NT$100 million or 20% of the paidin capital or more: none

XVII. Information of the Re-Investees: None.

• XVIII. Investment in Mainland China: None.

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Union Bank of Taiwan Co., Ltd.

The Securities Department’s financial assets through other comprehensive income - liquidity details

June 30, 2023

Detail Table 1

Unit: NTD thousand/ face value NTD thousand, but the unit price is NTD However, the unit price is in NTD

Name of negotiable securities Government bonds 2019 Central Bond A 9 2020 Central Bond A 3 Others (Note 2) Corporate bonds P09 TSMC 5B P08 Taipower 4A P09 Taipower 5B Others (Note 2)	Maturity date 2029/10/14 2030/02/21 2027/09/03 2024/12/16 2027/12/15	Interest rate % 0.63% 0.50% 0.58% 0.75% 0.45%		Face value $ 600,000 750,000 700,000 2,050,000 300,000 470,000 500,000 1,180,000 2,450,000 $ 4,500,000	Accumulated impairment $ - - - - 56 118 125 356 655 $ 655	Acquisition costs Unit Price Amount 100.9138 $ 605,483 100.3519 752,639 698,911 2,057,033 100.0723 300,217 99.9993 469,997 100 500,000 1,180,458 2,450,672 $ 4,507,705	Acquisition costs Unit Price Amount 100.9138 $ 605,483 100.3519 752,639 698,911 2,057,033 100.0723 300,217 99.9993 469,997 100 500,000 1,180,458 2,450,672 $ 4,507,705	Fair value	Fair value	Fair value
						Unit Price 100.9138 100.3519 100.0723 99.9993 100		Unit price 97.0665 96.0777 96.7898 99.4869 95.4045		Amount
										$ 582,399 720,583 678,683 1,981,665 290,370 467,588 477,022 1,166,647 2,401,627 $ 4,383,292

Note 1: The traded amount offered for the repurchase agreement condition is NT$3,773,197 thousand.

Note 2: None of the item reaches 5% of the account balance.

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Union Bank of Taiwan Co., Ltd.

Detail Table for the Securities Department’s Liabilities of Bonds under Repurchase Agreement June 30, 2023

Detail Table 2

Unit: NTD thousand

Name of securities Government bonds 2019 Central Bond A 9 2020 Central Bond A 3 Others (Note) Corporate bonds P09 TSMC 5B P08 Taipower 4A P09 Taipower 5B Others (Note) Total	Transaction terms	Transaction terms	Interest rate % 0.95% 0.87% 1.40% 1.38% 1.38%		Face value $ 461,500 458,500 500,000 1,420,000 300,000 470,000 500,000 1,180,000 2,450,000 $ 3,870,000	Concluded amount	Concluded amount
	Starting day 2023/06/30 2023/06/28 2023/05/10 2023/06/19 2023/06/26 2023/06/26 2023/06/06	Maturity date 2023/07/03 2023/07/04 2023/09/11 2023/07/06 2023/07/03 2023/07/03 2023/09/25
							$ 493,422 495,519 543,955 1,532,896 314,714 493,300 524,182 1,224,196 2,556,392 $ 4,089,288

Note: None of the balance of item reaches 5% of the account balance.

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Union Bank of Taiwan Co., Ltd.

Detail Table of the Securities Department’s Financial Assets Measured at Amortized Costs

June 30, 2023

Detail Table 3 Name Government bonds 2014 Central Bond A 6		Face value 700,000	Maturity date 113/03/03	Unamortized discount/premium $ 3,283	Interest rate 1.5%	Accumulated impairment $ -	Unit: In NTD thousand, unless specified otherwise Carrying Amount Collateral or Pledge Remarks $ 703,283 None	Unit: In NTD thousand, unless specified otherwise Carrying Amount Collateral or Pledge Remarks $ 703,283 None

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Union Bank of Taiwan Co., Ltd.

Statement of Income by Business, the Securities Department

January 1 to June 30, 2023

Detail Table 4

Unit: NTD thousand

Item Profit (loss) directly attributable to the business Operating income Income from brokerage fees Income from underwriting business Profit (loss) from sales of securities held for operation - dealership Interest income Income from commissions of futures Other operating income Expected credit reversal gains Total Operating expenses Brokerage expense Financial cost Employee Benefits DEPRECIATION AND AMORTIZATION Other operation expenses Total Profit (loss) by business Other gain and loss Net profit before tax Income tax expense Current net profit Other comprehensive income Comprehensive income of the current year		Broker	Broker	％ 89 - - - 1 10 - 100 7 1 46 5 23 82 18 20 38 5 33 - 33		Dealer	Dealer
		Amount $ 99,617 368 - - 1,024 11,300 - 112,309 7,938 1,963 51,389 5,561 25,575 92,426 19,883 22,652 42,535 5,777 36,758 - $ 36,758

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Union Bank of Taiwan Co., Ltd.

Detail Table of Brokerage Fee Income of the Securities Department January 1 to June 30, 2023

Detail Table 5

Unit: NTD thousand

Month I II III IV V VI Total		Brokerage Fee	Brokerage Fee
	Entrust transactions in centralized trading markets $ 12,111 21,849 29,469 20,994 29,310 34,120 $ 147,853	Entrust transactions over the counter $ 4,171 8,346 10,583 7,824 8,963 9,663 $ 49,550		Fees of securities lending $ 47 244 156 410 174 149 $ 1,180		Subtotal
						$ 16,329 30,439 40,208 29,228 38,447 43,932 $ 198,583

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Union Bank of Taiwan Co., Ltd.

Detail Table for Discounted Brokerage Fee of the Securities Department January 1 to June 30, 2023

Detail Table 6 Month I II III IV V VI Total	Centralized market $ 5,899 11,152 14,362 10,491 15,200 16,990 $ 74,094		OTC $ 2,132 4,293 5,092 3,953 4,504 4,898 $ 24,872	Unit: NTD thousand Subtotal $ 8,031 15,445 19,454 14,444 19,704 21,888 $ 98,966

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Union Bank of Taiwan Co., Ltd. Detail Table for Interest Income of the Securities Department

January 1 to June 30, 2023 Detail Table 7 Item Interest income from investments in bonds Interests from financial assets measured at fair value through other comprehensive income Interests from financial assets measured at amortized costs	Unit: NTD thousand Amount	Unit: NTD thousand Amount
		$ 13,253 3,892 $ 17,145

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Union Bank of Taiwan Co., Ltd.

Detail Table for Operating Expenses of the Securities Department

January 1 to June 30, 2023 and 2022

Detail Table 8

Unit: NTD thousand

Item Employee Benefits Salaries and wages Labor insurance and national health insurance Pension expenses Others (Note) Depreciation and amortization Depreciation expense Amortization expense Other operation expenses Computer operating Postage/cable charge Maintenance charge Others (Note) Total	January 1 to June 30, 2023 $ 45,333 5,559 3,091 3,258 57,241 2,698 2,863 5,561 5,103 2,857 3,835 38,875 50,670 $ 113,472	January 1 to June 30, 2022	January 1 to June 30, 2022
			$ 49,332 5,498 3,265 3,235 61,330 3,253 2,657 5,910 4,943 2,605 3,535 22,964 34,047 $ 101,287

Note 1: There were 129 and 126 employees of the Securities Department, respectively for the first half of this and the previous year.

Note 2: None of the item reaches 5% of the account balance.

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