HNFHC 2Q 2017 Analyst Meeting (Bloomberg: 2880 TT)

Transcription

1 HNFHC 2Q 2017 Analyst Meeting (Bloomberg: 2880 TT) Executive Vice President Mr. King-Huo Lu 2017/8/17 1

2 Disclaimer This document is provided by Hua Nan Financial Holdings Co. Ltd. ( HNFHC ). The information contained in this document is not audited or reviewed by any accountant or any independent expert. HNFHC makes no warranties or representations expressly or impliedly as to the fairness, accuracy, completeness or correctness of such information or opinions. The document is provided as of the date herein and will not be updated to reflect any change hereafter. No responsibility is accepted by HNFHC, its affiliates and their representatives, no matter for their negligence or any other reason, for any loss or damages arising from the use of this document or the information contained herein or anything related to this document. This document may contain forward-looking statements, including but not limited to all statements that address activities, events or developments that HNFHC expects or anticipates to occur in the future, which is based on the projects of HNFHC toward the future, and various factors and uncertainness beyond HNFHC s control. Therefore, the actual results may differ materially from those contained in the forward-looking statements. This document 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. This document may not be directly or indirectly reproduced, redistributed or forwarded to any other person and my not be published in whole or in part for any purpose. 2

3 Agenda 2Q2017 Highlights.....P.4 Operating Results HNFHC......P.6 Operating Results Subsidiaries...P.9 Asset Quality...P.19 Outlook and Achievement....P.23 3

4 4 2Q2017 Highlights

5 2Q2017 Highlights HNFHC Profits Rise Moderately Group s net income of NT$6,019 million and the EPS of NT$0.57 for 2017H1, which is slightly decline compared to NT$76.90 million in 2016H1. Core earnings of HNCB s Net Revenue is NT$17,385 million in 2017H1 and decline 3.30% YoY. HNCB FX Spread On the Widening trend Contributed by the robust FX loans demand, HNCB s FX Spread were widen compared to 2016H1. FX spread rose 17bps from 1.85% in 2Q2016 to 2.02% in 2Q2017. The overall spread decline slightly with 1.42%. Performance Expand Overseas Operation Philippines Manila Branch and Myanmar Representative Office are grand opened in June and July HNCB is going to expand the overseas operation in Loan and Investment field. There is 33% of HNCB revenue were generated from overseas networks in by the end of 2017H1. Innovative Financial Products & Services In the FinTech aspect, HNCB is the first Operation Performance of Government Banks in Taiwan which obtains above 20 patents for FinTech. In addition, the items of financial services for FinTech are the leader in financial institutions sector. 5 Note:2Q2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

6 6 Operating Results HNFHC

7 HNFHC-Net Income Achieved NT$37 Billion in 2Q2017 (NT$mn or NT$ dollar) 1Q2017 2Q2017 QoQ 6M2016 6M2017 YoY Net income 2,296 3,723 62% 7,690 6, % Total assets 2,543,720 2,537,743 0% 2,498,742 2,537,743 2% Book value 161, ,656-2% 155, ,656 2% EPS % % Book value per share % % Capital stock 105, ,205 0% 99, ,205 6% ROA(%) ROE(%) CAR(%) Double Leverage Ratio(%) Debt/Equity Ratio(%) Note:2Q2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

8 Subsidiaries-Operating Results (NT$mn) 1Q2017 Net Income 2Q2017 Net Income QoQ 6M2016 Net Income 6M2017 Net Income HNCB 2,166 3,605 66% 7,456 5,771-23% HNSC % % SCIC % % HNIT 1 1 0% % HNVC 2 (3) -250% 2 (1) -150% HNAMC (9) % % Total 2,448 3,890 59% 7,934 6,338-20% YoY Net income contribution (6M2016) 2% 0% 0% 1% Net income contribution (6M2017) 0% 0% 0% 3% 4% 4% 94% 92% HNCB HNSC SCIC HNIT HNVC HNAMC HNCB HNSC SCIC HNIT HNVC HNAMC 8 Note:2Q2017 and 6M2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

9 9 Operating Results - Subsidiaries

10 HNCB-Operating Results Profitability Market Share Net Income Unit: NT$100mn Deposits 5.86% 5.82% 5.73% 5.66% Loans 5.88% 5.77% M2016 6M2017 Returns M2016 6M2017 CAR & Tier I ROE (after tax) ROA (after tax) 9.69% 8.61% 7.14% 0.57% 0.63% 0.47% 12.83% 12.18% 12.35% 9.78% 9.25% 9.60% CAR Tier M2016 6M M2016 6M Note:6M2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

11 HNCB-Net Revenue Comparison Unit: NT$mn +1% Net Revenue 6M2016 6M2017 YoY 17,979 17, % 12,941 13,014 6M2016 6M2017 2,956 +2% 3,028-13% -74% 1,312 1, NII Fee Income Financial Assets Others and Liabilities 11 Note:6M2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

12 HNCB-Spread On The Widening Trend 1.62% 1.64% Spread (NTD) 1.68% 1.83% 1.85% 1.88% 1.96% Spread (FX) 2.06% 2.02% Spread (FX) YoY+17bps 1.40% 1.41% 1.42% 1.40% 1.39% 1.39% 1.37% 1.32% 1.32% Spread (NTD) YoY-7bps 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q % 1.44% 1.46% 1.47% 1.47% 1.47% 1.47% 1.43% 1.42% Spread (Overall) YoY-5bps 1.09% 1.09% 1.08% 1.06% 1.04% 1.03% 1.03% 0.99% 0.99% NIM YoY-5bps Spread (Overall) NIM 2Q2016 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q

13 HNCB-Loans Grew 4% YoY Unit:NT$100mn NTD Deposits Breakdown 15,816 NTD Demand Deposit Ratio 66 % Loan-Deposit Ratio 2Q2016 3Q2016 4Q2016 1Q2017 2Q % 75.71% 77.27% 77.04% 76.31% Total Loans Breakdown YoY +4 % QoQ % 15,831 15,906 15,231 15,858 15,824 5,593 5,337 5,373 35% 34% 34% 5,776 38% 5,767 36% 5,829 37% 10,223 65% 10,494 66% 10,533 66% 7,189 7,895 7,764 47% 50% 49% 2,266 15% 2,196 14% 2,231 14% 2Q2016 1Q2017 2Q2017 Demand Deposit Time Deposit 2Q2016 1Q2017 2Q2017 Overseas & OBU Corporate Consumer 13

14 HNCB-Overseas & OBU Loans Grew Strongly Unit:NT$100mn 15,231 15,824 YoY +4 % Overseas & OBU* -2%* 15% 6 % 32 % 2, ,937 Overseas & OBU Other Consumer Mortgage 2, , % 6 % 31 % Other Consumer Mortgage +7% -0.2% 14 Other Corp. Loan SME 17 SME +6% 29 % 4,361 Large Corp. Government 4, % Large Corp. +7% 15 % 3 % 2, Q2016 2, Q % 4 % Government +29% *2Q2017: USD7,335 million *2Q2016: USD7,014 million 14

15 HNCB-Net Fee Income Grew 2% YoY Unit: NT$mn +0.2% Net Fee Income 6M2016 6M2017 YoY 2,956 3, % 1,729 1,733 6M2016 6M % % % % Wealth Management F/X Loans Credit Cards Others 15 Note:6M2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

16 HNCB- Cost Income Ratio Unit: NT$mn Operating Expenses Cost-Income Ratio YoY % YoY +2.13% 9,096 9, % 52.72% 2,890 3,145 9,096 9, ,782 5,567 17,979 17,385 6M2016 Employee Benefits Other general admin expenses 6M2017 Depreciation and amortization 6M2016 Net Revenue 6M2017 Operating Expenses 16 Note:6M2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

17 HNSC-Operating Results Profitability Brokerage Market Share 2.49 Net Income Unit: NT$100mn 2.67 Brokerage % 2.67% 3.01% Returns M2016 6M M2016 6M2017 Margin Lending Market Share ROE(after tax) ROA(after tax) 4.65% Margin Lending 2.16% 0.81% 2.42% 0.99% 1.46% 3.58% 3.53% 3.91% M2016 6M M2016 6M Note:6M2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

18 SCIC-Operating Results Gross Written Premium Unit: NT$100mn Market Share Written Premium Written Premium Market Share 6.03% 5.89% 5.77% Returns M2016 6M2017 ROE(after tax) ROA(after tax) 13.98% 12.70% 12.60% M2016 6M2017 Net Combined Ratio Net Claim Ratio Net Expense Ratio 96.07% 92.96% 89.16% 35.61% 33.74% 33.44% 3.57% 3.20% 3.16% 60.46% 59.24% 55.72% M2016 6M M2016 6M Note:6M2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

19 19 Asset Quality

20 HNCB-Asset Quality Unit: NT$mn 6M2016 6M2017 YoY Provision 873 3, % Write-Off 998 3, % Recovery 528 1, % Reserve 16,188 18, % 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% NPL YoY+1,700 million Unit: NT$100mn Q16 3Q16 4Q16 1Q17 2Q17 NPL Ratio & Coverage Ratio NPL Ratio Coverage Ratio % % % 500% % 400% % 300% 200% 0.36% 0.36% 0.26% 0.27% 0.27% 100% 0% 2Q16 3Q16 4Q16 1Q17 2Q17 20 Note:2Q2017 figures were preliminary based on IFRS. The others were audited based on IFRS.

21 HNCB-Corp. NPL Large Corp. NPL ratio & NPL 1.50% 1.00% 0.50% 0.00% Unit: NT$100mn YoY+0.84% % 0.91% % 0.04% 0.05% 2Q16 3Q16 4Q16 1Q17 2Q17 SME NPL ratio & NPL Large Corp. New NPL formation Unit: NT$100mn Q16 3Q16 4Q16 1Q17 2Q17 SME New NPL formation 1.00% 0.80% 0.60% Unit: NT$100mn YoY+0.17% 0.56% 0.52% 0.50% 0.39% 0.37% 0.40% % % 2Q16 3Q16 4Q16 1Q17 2Q Unit: NT$100mn Q16 3Q16 4Q16 1Q17 2Q17 21

22 HNCB-Mortgage NPL Unit: NT$100mn Mortgage NPL ratio & NPL Mortgage New NPL formation YoY+0.04% 0.50% 0.40% 0.25% 0.22% 0.28% 0.26% % 0.20% 0.10% 0.00% 0.22% Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 22

23 23 Outlook

24 Strategy & Achievement Diversify Source of Income Balance Group s Profit Contribution Government s 5+2 innovative industries initiative loans Financing for urban renewal business Strength Wealth Management Consumer Loans Products Expand financial products and improve revenue Boost Cross-Selling Capabilities Looking for the M&A and investment opportunities in New Southbound Countries A First-Class Regional Financial Holding Company Expand Overseas Operation Innovation of Financial Products & Service In response to the government s policy, Manila Branch and Myanmar Representative Office are grand opened 40% of HNCB revenue from overseas networks Strength Group s OSU and OIU benefit Big Data Technology Application and Analysis Digitization financial service Build digital social circles and work with FinTech entity Promote physical channel transformation Sound Management Implement risk and internal control management Sound compliance and strengthen IT security Establish AML&CTF Division Strengthen Overseas Units supervision and management Corporate Social Responsibility Trust for the care of the elderly and the disabled Maintain environmental sustainability Adapt Equator Principles 24

25 Outlook and Achievement for 2Q2017 HNCB Diversify Source of Income Promote government s 5+2 innovative industries initiative loans, and the outstanding amount has reached 163% of target 2017 targeted NTD18 billion as of June 30, Financing for urban renewal business. In response to the government s policy, Manila Branch and Myanmar Representative Office are grand opened. As of June 30, 2017, the outstanding amount for the New Southbound loans has reached 93% of 2017 target. HNCB will expand the income generated from overseas operation to 40% of profit before tax. By the end of 2Q2017, the income generated from overseas operation to 33% of profit before tax. Having more than a million credit cards in circulation, and becoming the top one pan-government credit cards issuers in Taiwan. Innovation of Financial Products and Service Big data technology application and analysis in banking business. Promote physical channel transformation to increase operation efficiency and reduce operating costs. Sound Management and Corporate Social Responsibility Implement risk and internal control management, sound compliance and establish AML&CTF Division. Strengthen Overseas Units supervision and management. Adapt Equator Principles into credit and loan businesses. Maintain environmental sustainability. Provide the products of trust for the care of the elderly and the disabled 25

26 Outlook for 2017-Achievement HNSC Diversify Source of Income: Promote Wealth Management Services by offering products such as securities lending, insurance, mutual funds and trust. By training the existing securities sales force to become qualified wealth management advisor. Expand Market Share: Develop corporations and high equity customers business to expand market share. As of June 30, 2017, HNSC s market share was 3.01% which was the top one of five pan-government security companies. SCIC Diversify Source of Income: By expanding interest income, increasing the revenue generated from financial business and enhance consumer financial activities. Expand Overseas Operation: As OIU open its door for business, which will allow SCIC to participate business opportunities internationally and diversify the associated risks. Innovative Financial Products & Services: Optimizing internet platform to increase sales from digital channels. 26

27 27 Q & A

28 28 Appendix

29 HNFHC Condensed Consolidated Income Statements Expressed In Millions of New Taiwan Dollars, Except Earnings Per Share Year (IFRSs) Period(IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change (%) (%) (%) Interest Income 39,826 39, % 9,734 9,911 9,974 10,021 10,102 10, % 19,645 20, % Interest Expense (13,506) (12,800) -5.23% (3,220) (3,214) (3,147) (3,219) (3,431) (3,542) 3.24% (6,434) (6,973) 8.38% Interest Income, Net 26,320 26, % 6,514 6,697 6,827 6,802 6,671 6, % 13,211 13, % Service fee and commission income, net 7,313 7, % 1,617 2,098 2,124 1,874 1,980 1, % 3,715 3, % Income from insurance premiums, net 2,581 2, % % 1,602 1, % Gains(losses) on financial assets and 3,707 1, % (1,236) 1,270 (2,122) 3,682 (4,775) 1, % 34 (3,593) % liabilities at fair value through profit or Realized gains(losses) of available-for-sale 615 1, % % % financial assets Share of the profit or loss of associates and joint ventures (7) (6) % (2) (1) 0 (3) (1) 0 (3) (1) % Gains on investment properties % % % Foreign exchange gains, net (2,077) % 1,607 (867) 2,286 (2,799) 4,378 (337) % 740 4, % Impairment loss 5 (11) % (11) Other non-interest income 873 1, % % % Net Income Excluding Interest Income 13,245 15, % 3,761 3,838 4,152 3,641 2,805 4, % 7,599 7, % Net Revenues 39,565 42, % 10,275 10,535 10,979 10,443 9,476 10, % 20,810 20, % Bad-debt expenses (1,187) (3,446) % (109) (248) (2,357) (732) (896) (706) % (357) (1,602) % Provisions for the insurance reserve (388) (226) % (345) (110) (293) (265) -9.56% (455) (558) 22.64% Operating Expenses (21,796) (22,516) 3.30% (5,503) (5,676) (5,584) 5,753 (5,474) (5,837) 6.63% (11,179) (11,311) 1.18% Employee Benefits (13,697) (14,004) 2.24% (3,510) (3,623) (3,389) (3,482) (3,283) (3,589) 9.32% (7,133) (6,872) -3.66% Depreciation and amortization (927) (1,061) 14.46% (264) (254) (268) (275) (278) (274) -1.44% (518) (552) 6.56% Other general and administrative expenses (7,172) (7,451) 3.89% (1,729) (1,799) (1,927) (1,996) (1,913) (1,974) 3.19% (3,528) (3,887) 10.18% Consolidated income before income tax from continuing operations 16,194 16, % 4,318 4,501 3,070 4,155 2,813 4, % 8,819 6, % Income Tax Expense (2,114) (1,957) -7.43% (629) (500) (245) (583) (517) (439) % (1,129) (956) % Consolidated net income 14,081 14, % 3,689 4,001 2,825 3,572 2,296 3, % 7,690 6, % Basic earnings per share % % % Other comprehensive income 832 (1,932) % (1,137) (1,727) (170) 1, % 932 1, % Othe comprehensive income for the period, net of income tax 14,913 12, % 3,709 4,913 1,688 1,845 2,126 4, % 8,622 7, % Attributable to: Owner of the Company 14,081 14, % 3,689 4,001 2,825 3,572 2,296 3, % 7,690 6, % Non-controlling interests (Audited) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) (Audited) (Preliminary) 29

30 HNFHC Condensed Balance Sheets Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Year(IFRSs) 同期比較表 (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change Balance Sheets (%) (%) (%) Investments accounted for using equity method 173, , % 177, , , , , , % 172, , % Total assets 175, , % 179, , , , , , % 184, , % Total liabilities 22,494 25, % 22,669 29,085 24,636 25,072 25,139 32, % 29,085 32, % Total Stockholders' equity 153, , % 156, , , , , , % 155, , % Consolidated Balance Sheets Total assets 2,350,289 2,545, % 2,393,863 2,498,742 2,529,500 2,545,942 2,543,720 2,537, % 2,498,742 2,537, % Total liabilities 2,197,219 2,386, % 2,237,084 2,343,291 2,372,361 2,386,958 2,382,610 2,379, % 2,343,291 2,379, % Total Stockholders' equity Parent stockholders' equity 153, , % 156, , , , , , % 155, , % Minority Interest % % % Capital Stock 99, , % 99,063 99, , , , , % 99, , % (Audited) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) (Audited) (Preliminary) 30

31 HNFHC Condensed Income Statements Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Year(IFRSs) Comparison (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change Operating Income (%) (%) (%) Income from investments accounted for using equity method 14,250 14, % 3,850 4,084 2,970 3,688 2,448 3, % % Other revenue % (3) 0 60 (2) (3) (1) % (3) (4) 33.33% Operating Expenses (481) (526) 9.36% (110) (115) (159) (142) (99) (116) 17.17% (225) (215) -4.44% Interest and Other Expenses And (189) (188) -0.53% (48) (47) (46) (47) (50) (50) 0.00% (95) (100) 5.26% Losses Income before income tax 13,617 13, % 3,689 3,922 2,825 3,497 2,296 3, % % Income after income tax 14,081 14, % 3,689 4,001 2,825 3,572 2,296 3, % % Basic earnings per share(before tax) % % % Basic earnings per share(after tax) % % % (Audited) (Audited) (Review) (Audited) (Review) (Audited) (Review)(Preliminary) (Audited)(Preliminary) 31

32 HNFHC Key Financial Ratios UNIT:% Year(IFRSs) Comparison (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change ROA(after tax) ROE(after tax) Double Leverage Ratio (Note1) Capital Adequacy Ratio (Consolidated basis) (Note2) Note1:Double Leverage Ratio=Long-term Investment/Stockholders' Equity Note2:Revise semiannually. (Review) (Audited) (Review) (Audited) (Review) (Preliminary) (Audited) (Preliminary) 32

33 HNCB Condensed Income Statements Expressed In Millions of New Taiwan Dollars, Except Earnings Per Share Year(IFRSs) 同期比較表 (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change (%) (%) (%) Interest Income 38,959 38, % 9,538 9,716 9,787 9,822 9,924 11, % 19,254 21, % Interest Expense (13,260) (12,563) -5.26% (3,158) (3,155) (3,094) (3,156) (3,362) (4,858) 44.50% (6,313) (8,220) 30.21% Interest Income, Net 25,699 26, % 6,380 6,561 6,693 6,666 6,562 6, % 12,941 13, % Service fee and commission income, net 5,665 6, % 1,281 1,675 1,626 1,450 1,588 1, % 2,956 3, % Gains(losses) on financial assets and liabilities at fair value through profit or loss (8) % (15) 294 (447) % 159 (319) % Realized gains(losses) of available-for-sale financial 442 1, % % % assets Realized gains or losses on held-to-maturity financial assets Share of the profit or loss of associates and joint venture % (74) % % Financial assets carried at cost Foreign exchange gains, net 1,411 1, % % % Impairment loss % Gains on investment properties % % % Other non-interest income % % % Net Income Excluding Interest Income 8,724 10, % 2,489 2,549 2,696 2,927 1,401 2, % 5,038 4, % Net Revenues 34,423 36, % 8,869 9,110 9,389 9,593 7,963 9, % 17,979 17, % Bad-debt expenses (1,121) (3,194) % (101) (244) (2,099) (750) (908) (693) % (345) (1,601) % Provisions for the insurance reserve Operating Expenses (17,757) (18,190) 2.44% (4,501) (4,595) (4,449) (4,645) (4,428) (4,737) 6.98% (9,096) (9,165) 0.76% Employee Benefits (11,091) (11,311) 1.98% (2,847) (2,935) (2,713) (2,816) (2,620) (2,947) 12.48% (5,782) (5,567) -3.72% Depreciation and amortization (759) (873) 15.02% (217) (207) (220) (229) (230) (223) -3.04% (424) (453) 6.84% Other general and administrative expenses (5,907) (6,006) 1.68% (1,437) (1,453) (1,516) (1,600) (1,578) (1,567) -0.70% (2,890) (3,145) 8.82% Income before income tax from continuing operations 15,545 15, % 4,267 4,271 2,841 4,198 2,627 3, % 8,538 6, % Income Tax Expense (2,304) (1,924) % (579) (503) (218) (624) (461) (387) % (1,082) (848) % Net income 13,241 13, % 3,688 3,768 2,623 3,574 2,166 3, % 7,456 5, % Basic earnings per share % % % Other comprehensive income 921 (1,398) % (38) 955 (1,085) (1,230) (210) 1, % % Total comprehensive income for the period 14,162 12, % 3,650 4,723 1,538 2,344 1,956 4, % 8,373 6, % (Audited) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Premilinary) (Audited) (Premilinary) 33

34 HNCB Condensed Balance Sheets Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Year(IFRSs) Comparison (IFRSs) Assets Cash and cash equivalents, due from the Central Bank and other banks Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change (%) (%) (%) 294, , % 233, , , , , , % 223, , % Financial assets at fair value through profit or loss, net 60,788 59, % 57,743 69,579 66,475 59,426 64,128 63, % 69,579 63, % Available-for-sale financial assets, net 85, , % 119, ,214 96, , , , % 106, , % Held-to-maturity financial assets, net 269, , % 311, , , , , , % 369, , % Investments accounted for using equity method 2,123 1, % 2,194 1,997 1,892 1,995 2,091 1, % 1,997 1, % Receivables, net 19,972 24, % 34,722 33,659 37,690 24,715 35,534 34, % 33,659 34, % Loans, net 1,479,315 1,578, % 1,483,826 1,511,119 1,522,784 1,578,384 1,573,801 1,569, % 1,511,119 1,569, % Plant, property, and equipment 28,763 28, % 28,489 28,229 28,269 28,351 28,359 30, % 28,229 30, % Other assets 60,187 69, % 70,095 98,549 85,133 69,320 63,441 30, % 98,549 30, % Total Assets 2,300,232 2,489, % 2,342,512 2,442,008 2,473,466 2,489,255 2,482,780 2,471, % 2,442,008 2,471, % Liabilities Deposits and remittances 1,921,637 2,066, % 1,937,812 2,028,847 2,033,965 2,066,261 2,065,898 2,081, % 2,028,847 2,081, % Other liabilities 224, , % 246, , , , , , % 259, , % Total Liabilities 2,146,096 2,326, % 2,184,726 2,288,345 2,312,765 2,326,210 2,317,779 2,311, % 2,288,345 2,311, % Stockholders' Equity 154, , % 157, , , , , , % 153, , % Total Liabilities and Stockholders' Equity 2,300,232 2,489, % 2,342,512 2,442,008 2,473,466 2,489,255 2,482,780 2,471, % 2,442,008 2,471, % (Audited) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Premilinary) (Audited) (Premilinary) 34

35 HNSC Condensed Income Statements Expressed In Milions of New Taiwan Dollars, unless otherwise indicated Year (IFRSs) Quarter (IFRSs) Comparison (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change Operating Revenue (%) (%) (%) Commissions and Fees - Brokerage 1,315 1, % % % Commissions and Fees - Underwriting % % % Gains (Losses) on sales of securities (32) % Stock affairs agent fees % % % Interest Income (Net) % % % Dividend Income % % Gains (Loss) on valuation of securities (58) % 42 4 (19) (22) % % Gains (Loss) on warrants issued 68 (8) % (6) 7 (44) 35 2 (120) % 1 (118) % Commissions and Fees - Futures % % % Gains (Loss) on Derivative Instruments 2 (116) % (13) (21) (56) (26) (35) (65) 85.71% (34) (100) % Others % % % Operating Revenue 2,134 1, % % 984 1, % Operating Expenses (1,989) (2,031) 2.11% (536) (452) (535) (508) (540) (556) 2.96% (988) (1,096) 10.93% Others Non-operating Gains or Loss % % % Profit Before Tax % (46) % % Tax Expense (95) (34) % (19) (8) (11) 4 (7) (11) 57.14% (27) (18) % Net Income (Loss) % (42) % % Other Comprehensive Income (32) (463) % (25) (89) (97) (252) % (114) % Total Comprehensive Income for the year 319 (214) % (294) % % EPS % (0.05) % % Total Assets 28,309 33, % 27,567 28,888 32,205 33,072 36,964 39, % 28,886 39, % Total Liabilities 16,543 21, % 15,779 17,324 20,588 21,749 25,470 28, % 17,322 28, % Total Stockholder's Equity 11,766 11, % 11,788 11,564 11,617 11,323 11,494 11, % 11,564 11, % ROE (After Tax) 2.97% 2.16% -0.82% 1.63% 2.42% 3.32% 2.16% 5.15% 4.65% -9.87% 4.98% 4.65% -6.68% ROA (After Tax) 1.24% 0.81% -0.43% 0.69% 0.99% 1.28% 0.81% 1.68% 1.46% % 1.92% 1.46% % (Audited) (Audited) (Audited) (Review) (Audited) (Review) (Preliminary) (Audited) (Preliminary) 35

36 SCIC Condensed Income Statements Expressed In Milions of New Taiwan Dollars, unless otherwise indicated Year (IFRSs) Quater (IFRSs) Comparison (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Change 6M2016 6M2017 Change (%) (%) (%) Operating Revenue 6,351 6, % 1,595 1,646 1,708 1,679 1,689 1, % 3,241 3, % Operating Cost (4,296) (4,548) 5.87% (1,160) (1,091) (1,130) (1,167) (1,179) (1,175) -0.34% (2,251) (2,354) 4.58% Gross Profit Margin 2,055 2, % % 990 1, % Operating Expense (1,365) (1,421) 4.10% (344) (340) (370) (367) (365) (366) 0.27% (684) (731) 6.87% Operating Net Income (Loss) % % % Nonoperating Gains (Loss) % (1) % % Income (Loss) Before Income Tax from continuing operations % % % Income Tax Benefit (Expense) (88) (84) -4.55% (11) (34) (29) (11) (17) (17) 0.00% (45) (34) % Net Income (Loss) % % % Other Comprehensive Income (63) (65) 3.17% (236) % % Total Comprehensive Income For The Yea % (84) % % EPS % % % Total Assets 16,239 17, % 17,287 17,214 17,731 17,402 18,255 18, % 17,214 18, % Total Liabilities 12,081 12, % 12,955 12,931 13,220 12,975 13,670 13, % 12,931 13, % Total Stockholder's Equity 4,158 4, % 4,332 4,283 4,511 4,427 4,585 4, % 4,283 4, % ROE(After tax) 15.17% 13.98% -1.19% 7.82% 12.70% 13.78% 13.98% 12.52% 12.60% 0.67% 12.70% 12.60% -0.10% ROA(after tax) 3.87% 3.57% -0.30% 1.98% 3.20% 3.52% 3.57% 3.16% 3.16% -0.22% 3.20% 3.16% -0.05% (Audited) (Review) (Audited) (Review) (Preliminary) (Audited) (Preliminary) 36