UBOT — Interim / Quarterly Report 2019

Jul 30, 2019

Union Bank of Taiwan

Financial Results of 1H19

July 30th, 2019

1

DISCLAIMER

• This presentation is provided by Union Bank of Taiwan (”UBOT”).The information contained within is not audited or reviewed by any accountant or any independent third party. Users should read this material in conjunction with all other financial and information filed to the authorities UBOT. While we public operational competent by

• endeavor to provide accurate, complete and consistent information herein, UBOT makes no guarantee or warranties as to the accuracy or correctness of all the material contained. After this presentation is released to the public, we undertake no obligation to update any relevant data to reflect any change hereafter.

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

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

Financial Highlights of 1H19

 Steady growth of business

• Total deposits (avg. balance) was increased 12.43% YoY .

• Total loans (avg. balance) was increased 12.06% YoY.

• Valid cards in 6 months was increased 1.6% YoY.

• Operating income was increased 14.13% YoY.

• Telemarketing credit loans was increased 33.02% YoY.

 Capital is adequate and robust

• CAR was 13.37%, Tier 1 ratio was 12.12%, and CET1 ratio was 9.12% as of June 30, 2019.

• Good asset quality and overdue loan coverage

• NPL was 528 million, NPL ratio was 0.14%, and NPL coverage ratio was 780.07% as of June 30, 2019.

Revenue and profit- Consolidated

			NT$ mn, %
Items	2Q19*	2Q18	Diff. %*
Net interest income	3,216	3,349	-3.97%
Net fee income	1,251	1,225	+2.17%
Net other income	2,132	1,833	+16.26%
Operating revenue	6,599	6,407	+2.99%
Pre-Tax Income	1,761	1,723	+2.21%

Note：Because of application of foreign currency reserves, net interest income is changed to net other income in financial statement, and net other income is increased TWD 468 million(16.26%).

Net Revenue Breakdown- Consolidated

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NT$ mn NT$ mn, %
Operating Revenue
9,000
12,012 12,471 12,732 6,599
6,599
6,407
27.33% 28.72% 28.33%
6,000 32.31%
20.18% 18.43% 19.03%
18.96%
3,000
52.49% 52.85% 52.64%
48.73%
0
2Q18 2Q19 2016 2017 2018 2Q19
NII% Fee Income% Other Income%
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Financial Performance- Consolidated

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NT$ mn
Operating Revenue
12,471 12,732
12,012
6,599
2016 2017 2018 2Q19
Net Income NT$ mn EPS NT$ dollar
2,955 1.01 1.02 1.07 0.53
2,662 2,766
0.2
1,442
2016 2017 2018 2Q19 2016 2017 2018 2Q19
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• Without considering the declaration of cash dividend of preferred stock TWD 480 million on May 31, 2019, EPS is TWD 0.53, otherwise, EPS is decreased TWD 0.2.

Operating revenue analysis- Alone

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+2.78 %
38.34%
Corporate Busibess 35.56%
Others +0.39 %
15.54% 19.95% -3.62 %
16.10% +0.61 % 20.34% 19.72%
15.54% 14.93% -0.16 % 16.10%
9.68% 9.84%
Corporate Consumer Trust & Ｗealth Investment Others
Business Business Mgmt.
Investment
1H19 1H18
20.34%
2019.6 2018.6
Items portion in portion in Diff%
revenues revenues
Corporate Business 15.54% 14.93% 0.61%
Consumer
Trust & Ｗ ealth
Consumer Business 38.34% 35.56% 2.78%
Business
Mgmt.
38.34%
9.68% Trust & Wealth Mgmt. 9.68% 9.84% (0.16%)
Investment 20.34% 19.95% 0.39%
Others 16.10% 19.72% (3.62%)
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Business Performance

				NT$ mn, %
Items	2019.6	2018.6	Diff. Amt	Diff. %
Total deposits (avg. bal.)	513,651	456,878	56,773	12.43%
Demand deposits	206,940	186,912	20,028	10.72%
Time deposits	236,876	203,185	33,691	16.58%
Foreign exchange deposits	69,835	66,781	3,054	4.57%
Total Loans (avg. bal.)	367,551	327,994	39,557	12.06%
Corporate loans	163,370	148,979	14,391	9.66%
Consumer loans	204,181	179,015	25,166	14.06%
Indirect Finance (end bal.)	22,432	21,765	667	3.06%

Deposits analysis

Total deposits（avg. bal.）

YoY Comparison

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TWD$ 514 billion NT$ bn
+16.58%
Demand deposits,
Foreign exchange deposits,
+10.7% 236.9
40.28%
13.60%
206.9 203.2
186.9
+4.5%
66.8 69.8
Time deposits, Demand deposits Time deposits Foreign exchange
deposits
46.12% 6M18 6M19
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Deposits balance steady growth

Demand Deposits YoY NT$ mn +9.2%

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228,031
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219,547
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208,826
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205,242
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196,360
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192,697
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Dec. 2016 Jun. 2017 Dec. 2017 Jun. 2018 Dec. 2018 Jun. 2019
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YoY Total Deposits +12.81%

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519,727
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517,555
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458,790
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450,552
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439,971
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433,329
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Dec. 2016 Jun. 2017 Dec. 2017 Jun. 2018 Dec. 2018 Jun. 2019
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Time Deposits

YoY +15.83%

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300,180
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289,524
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249,964
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245,310
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243,611
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240,632
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Dec. 2016 Jun. 2017 Dec. 2017 Jun. 2018 Dec. 2018 Jun. 2019

Date

End of End of End of End of End of End of 2016 Jun. 2017 2017 Jun. 2018 2018 Jun. 2019 Items Demand 192,697 196,360 205,242 208,826 219,547 228,031 deposits Time deposits 240,632 243,611 245,310 249,964 300,180 289,524 Total deposits 433,329 439,971 450,552 458,790 519,727 517,555 Portion of demand 44% 45% 46% 46% 42% 44% deposits

Loans analysis

Total Loans

YoY Comparison

TWD$ 361.2 billion

NT$ bn

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Government, Large
8.2% Corporate,
250.7
4.1%
220.9
SME,
18.3%
66.0
58.1
32.8
29.7
Individual, 11.4 14.8
69.4%
Government Large Corporate SME Individual
6M18 6M19
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Loans balance steady growth

Corporate Loans

Consumer Loans

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NT$ mn
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127,156
119,073 205,209
194,336
112,673 179,956
168,173
106,295 159,117
154,226
99,076
94,786
2016 Jun. 2017 2017 Jun. 2018 2018 Jun. 2019 2016 6M17 2017 6M18 2018 6M19
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 Government Loans is excluded from Corporate Loans.

Business Performance

Cards, NT$ Mn,%

Items	1H19	1H18	Diff. Amt	Diff. %
Valid cards in 6 months	1,181,425	1,162,846	18,579	1.60%
Cards outstanding	2,070,500	2,088,891	(18,391)	(0.88%)
Operating income	1,365	1,196	169	14.13%
Value of transactions	44,832	45,455	(623)	(1.37%)
Value of acquiring	31,026	28,353	2,673	9.43%
Telephone marketing credit loan	2,393	1,799	594	33.02%
Accounts Receivable	16,081	16,727	(646)	(3.86%)
Revolving banlance	5,765	5,559	206	3.71%
NPL over 90 days	37.728	45.634	(7.906)	(17.32%)
NPL Ratio over 90 days	0.23%	0.27%	-0.04%	-0.04%

Credit Card Business Breakdown

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Active Cards Thousand Card,% Card Consumption NT$mn
4.01% 3.27%
4.11% 3.20%
2.98%
3.24% 3.21% 3.97% 3.88% 2.76% 78,284 86,566 90,3123.10% 2.88%
1,153 1,175 1,181
1,084 67,323
57,881
789 813
45,189
2014 2015 2016 2017 2018 6M19 2014 2015 2016 2017 2018 6M19
Active Cards Market Share-5M19 Card consumption Market Share-5M19
Per Card Spending (Monthly) Gross Fee Income NT$mn
2,527
NT$ dollar
2,346
2,054 2,218
6,901 1,980
6,113 6,019 6,259 6,406 6,375
1,365
2014 2015 2016 2017 2018 6M19 2014 2015 2016 2017 2018 6M19
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NIM and Spread- Alone

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NIM
1.50%
1.46%
1.40% 1.39%
2.24%
2.13% 2.12% 2.17% 1.34%
1.33%
1.34% 1.33% 1.26%
1.31%
1.11%
1.26%
0.78%
0.74% 0.72%
0.67%
2016 2017 2018 2Q19 2016 2017 2018 2Q19
Overall Lending Rate Overall Deposit Rate Interest Spread
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Assets Quality

NPL Ratio

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NPL NPL Ratio
NT$ mn,%
700 0.20%
0.18%
0.19%
600
0.16%
500 551 0.14% 0.14%
528
0.13%
0.12% 0.12%
400 444
0.12%
401 0.10% 0.10%
383
300
0.08%
274
0.06%
200
0.04%
100
0.02%
0 0.00%
2016 2Q17 2017 2Q18 2018 2Q19 2016 2Q17 2017 2Q18 2018 2Q19
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 NPL increased by Foshin Airline 200 million in 2Q17 was written off at the year ended of 2017.

Assets Quality (Conti.)

NT$ mn, % NT$ mn, %

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4,500 1400.00%
4,122
1168.83% 3,853
4,000
1200.00%
3,402
3,500 3,197 959.79%
887.26% 1000.00%
3,000
780.07%
800.00%
2,500
575.44% 572.99%
2,000 600.00%
1,500
502.93% 492.92% 400.00%
1,000
200.00%
500
0 0.00%
2016 2017 2018 2Q19
Allowance for bad debts. NPL Coverage Ratio Avg. NPL Coverage Ratio in TW Banks
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 Avg. NPL Coverage Ratio in TW Banks of 2Q19 was from FSC Statistic of May 2019.

Capital Adequacy

NT$ thousand

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2015 2016 2017 2018 6M19
Regulatory capital 36,390,672 38,935,126 49,740,733 49,204,492 52,111,319
Common share 28,573,380 30,419,225 31,867,478 33,172,535 35,532,709
Other tier 1 capital 0 1,664,565 12,146,864 11,720,972 11,681,131
Tier 2 capital 7,817,292 6,851,336 5,726,391 4,310,985 4,897,479
Risk Weighted Assets 275,981,855 288,993,781 316,857,171 343,502,955 389,670,133
Risk Weighted Assets
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Capital Adequacy Ratio

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15.70%
14.32%
13.92%
13.47% 1.81% 13.37%
13.01%
12.76%
1.25%
1.62%
1.25%
2.37%
3.83%
2.59% 2.08%
3.41%
0.57% 3.37% 3.00%
0.56% 0.70%
10.53%
9.86% 9.98% 10.06% 9.66%
8.93% 9.12%
6M16 2016 6M17 2017 6M18 2018 6M19
CET1 Ratio Other Tier 1 Ratio Tier 2 Ratio
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