HNFHC 4Q 2017 Analyst Meeting

Transcription

1 HNFHC 4Q 2017 Analyst Meeting (Bloomberg: 2880 TT) Executive Vice President Mr. King-Huo Lu 2018/03/08

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 This document may not be directly or indirectly reproduced, redistributed or forwarded to any other person and my not be published in whole or in part for any purpose. 2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 4Q2017 Highlights....P.4 Operating Results HNFHC...P.7 Operating Results Subsidiaries P.10 Asset Quality.....P Year Ahead Outlook...P.23 3

4 4Q2017 Highlights 4

5 FY2017 Financial Highlights HNFHC s EPS was NT$1.09 and net profits reached NT$12,092 million in 4Q17, declined 14% from 4Q16, due to HNCB s higher bad debt expense. HNSC and SCIC maintain good performance. Core revenue rose moderately HNCB s net interest income was NT$26,448 million, which increasd 0.6% from 4Q16; net fee income of 6,367 million which increased 5.6% from 4Q16. HNSC s net profit was NT$729 million in 4Q17, which increased 193% from 4Q16, contributed to 6% of HNFHC s profit. Overseas operation improvement 39% of HNCB pre-tax net profits were generated from overseas networks in FY17. HNCB s foreign currency(fc) loan volume increased 1.3% from 4Q16 and FC spread rose up to 2.09%. Strong capital level HNFHC CAR ratio was % in 4Q17. HNCB CAR ratio was14.25% and Tier 1 ratio was 11.23% in 4Q17 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 5

6 FY2017 Business Highlights Stronger core business HNCB s loan growth increased 4.0% YoY, and stronger SME loans grow 6.9% YoY. Net fee income growth reached 23.5% YoY for credit card business and 5.5% YoY for WM business. The number of credit cards issued by HNCB exceeded 1 million. Overseas expansion Manila Branch in the Philippines was opened in June Myanmar Representative Office was opened in July Awards & Achievement Top 5 percent of the rankings in the CGES by TWSE Corporate Governance Center ( ). Selected in FTSE4Good Emerging Index. Selected in FTSE4Good TIP Taiwan ESG Index. Won the Taiwan Financial Fintech Innovation Award. Won the 2017 Gartner Financial Services Eye on Innovation Award. Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 6

7 Operating Results HNFHC 7

8 HNFHC: Net profit reached NT$12 billion in 4Q2017 (NT$mn or NT$ dollar) 3Q2017 4Q2017 QoQ YoY Net profit 3,772 2, % 14,087 12, % Total assets 2,570,273 2,574, % 2,545,942 2,574, % Book value 162, , % 158, , % EPS % % Book value per share % % Capital stock 110, , % 105, , % ROA(%) ROE(%) CAR(%) Double Leverage Ratio(%) Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 8

9 HNFHC: Net Profits of major subsidiaries (NT$mn) 3Q2017 Net Profit 4Q2017 Net Profit QoQ 2016 Net Profit 2017 Net Profit HNCB 3,538 2,161-39% 13,653 11,443-16% HNSC % % SCIC % % HNIT % % HNVC (14) % HNAMC 162 (23) -114% % Total 4,195 2,509-40% 14,591 13,017-11% YoY FY17 Profit contribution (NT$mn) Net Profits 2016 HNSC 6% SCIC 5% HNIT 0% HNVC 0% HNAMC 1% 14,087 13,653 12,092 11, HNCB 88% HNCB HNSC SCIC HNIT HNVC HNAMC HNFHC HNCB HNSC SCIC HNIT HNVC HNAMC Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 9

10 Operating Results - Subsidiaries 10

11 HNCB: Operating Results (NT$mn) Net Profit 13,241 13,653 11,443 EPS Returns ROE(after tax) ROA(after tax) Market Share Deposits Loans 9.01% 8.61% 6.77% 5.9% 6.0% 5.8% 5.9% 5.6% 5.7% 0.59% 0.57% 0.46% Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 11

12 HNCB: Core earnings increased 6.2% YoY Revenue composition of Hua Nan Bank (NT$mn) % 26,448 26, % 13.5% 6,032 6,367 3,695 3, % 36,961 36,431 NII Treasury income Net fee income Others 36,961 36,431 4% 1% 9% 9% 16% 17% 71% 73% Net interest income Net fee income Treasury income Others Net revenue

13 HNCB: Fee and wealth management income (NT$mn) Sources of fee income YOY +5.6% WM FX Loans Credit card Others 6,032 6,367 Wealth management fee WM business continues to grow with increasing funds contribution 2% 4% % % % 1, % 58% 3,504 3,698 7% 7% 12% 16% 58% 6% 6% 45% 59% 45% 33% Property trust YOY +85.2% Custodian and certificate YOY +12.0% Insurance commission YOY -18.9% Structured bonds and funds YOY +43.6%

14 HNCB: SME loans continue increasing Loan composition Average loans by type YOY +4.0% 1,516 1,577 (NT$bn) Corporate loans Customer loans FC loans 1,516 1, % % % % 18% 5% 33% 2, ,938 2, ,939 17% 6% 31% Overseas & OBU* YOY +1.3% Other customer YOY +5.7% Mortgage YOY +0.0% SME & others YOY +6.9% 44% % 27% 14% 3% 4,110 4,394 2,068 2, % 13% 5% Large Corp. YOY +2.9% Government YOY +33.6% Note:Overseas & OBU loans was USD8.38bn in 4Q16. Overseas & OBU loans was USD9.21bn in 4Q17, which increased 9.9% YoY from 4Q16. 14

15 HNCB: Deposit mix and LDR Deposit composition YOY +3.2% Loan-to-deposit ratio(ldr) 75.92% 76.49% (NT$bn) NTD demand deposit NTD time deposit FC deposit 1,997 2, % % % % NTD Demand deposit ratio 65.12% 65.74% 51% 1,013 1,035 50%

16 HNCB: Spreads and NIM NTD spread FC spread 1.83% 1.85% 1.88% 1.96% 2.06% 2.02% 1.95% 2.09% FC spread YoY+13bps 1.68% 1.42% 1.40% 1.39% 1.39% 1.37% 1.32% 1.32% 1.32% 1.33% NTD spread YoY-4bp 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q % 1.47% 1.47% 1.47% 1.47% 1.43% 1.42% 1.42% 1.43% 1.08% 1.06% 1.04% 1.03% 1.03% 0.99% 0.99% 1.00% 1.01% Overall spread YoY-4bp Overall spread NIM 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 16

17 HNCB: Cost to income ratio Operating expense YOY +1.7% (NT$mn) Other general admin expenses Depreciation and amortization Employee Benefits 18,190 18,493 Cost-to-income ratio YOY +1.6 percentage point Net revenue Operating expense 49.2% 50.8% 6,006 6,482 18,190 18, ,311 11,094 36,961 36, Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 17

18 HNSC: Operating results (NT$mn) Net profit 729 EPS Returns Market share ROE(after tax) ROA(after tax) Brokerage Lending balance 2.97% 2.16% 1.24% 0.81% 6.34% 1.95% 3.45% 3.58% 2.62% 2.73% 4.25% 3.09% Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 18

19 SCIC: Operating results (NT$mn) Business metrics Written premium revenue Market share Written premium market share 7,846 8,379 8, % 5.77% 5.52% Returns ROE(after tax) ROA(after tax) 15.17% 13.99% 14.48% Net combined ratio Net claim ratio Net expense ratio 94.84% 96.07% 92.40% 35.47% 35.61% 36.35% 3.87% 3.57% 3.80% 59.37% 60.46% 56.05% Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 19

20 Asset Quality 20

21 HNCB: Asset quality Net provision NPL (NT$mn) YoY Provision 5,878 7, % Write-off 3,576 5, % (NT$mn) 4,341 5,731 5,675 YoY+1,102mn 5,221 5,443 Recovery 2,687 2, % Reserve 18,735 19, % NPL ratio 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Coverage ratio % % % % % 0.27% 0.36% 0.36% 0.32% 0.34% 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 21

22 HNCB: NPL composition (NT$mn) 2,500 2,000 1,500 1,000 Large Corp. NPL ratio 107 NPL NPL ratio 2,374 2,256 2,051 1, % 0.91% 0.83% 0.70% % - 4Q16 1Q17 2Q17 3Q17 4Q17 2.0% 1.5% 1.0% 0.5% 0.0% 2,500 2,000 1,500 1, SME NPL ratio NPL NPL ratio 2,255 1,631 1,783 1,565 1, % 0.37% 0.39% 0.33% 0.38% 4Q16 1Q17 2Q17 3Q17 4Q17 2.0% 1.5% 1.0% 0.5% 0.0% Mortgage NPL ratio Credit cost ratio NPL NPL ratio 2, % 1,500 1,000 1,097 1,364 1,291 1,438 1, % 1.0% 0.38% 0.32% 0.37% 0.40% 0.48% % 0.28% 0.26% 0.29% 0.24% 0.5% - 4Q16 1Q17 2Q17 3Q17 4Q17 0.0% 4Q16 1Q17 2Q17 3Q17 4Q17 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 22

23 2018 Year Ahead outlook 23

24 2018 Key strategic focus Diversify Source of Income Enhance capital efficiency Innovation of FinTech and Digital Banking Strengthen governance risk and compliance framework Fulfilling corporate social responsibility 24

25 2018 Key strategic focus HNCB Create a robust earning performance by promoting the growth of treasury revenue and fee income, and maintaining steady net interest income steady growth. Adjust loan and deposit structure and enhance overall spread, LDR and capital utilization efficiency. Strengthen the local operation and management of overseas branches to expand the global financial services landscape. Create a digital financial environment and enhance the efficiency of all branches to explore opportunity of all generations. Continue to promote the concept of green finance by introducing the "Equator Principles" into the credit process so as to achieve the goal of sustainable development. HNSC Continue to recruit high quality employees and integrate networks to promote the business growth. Actively promote OSU business, expand wealth management business and products. Following the trend of Fintech, integrate multiple mobile platforms and raise the proportion of electronic transactions. SCIC Set up car insurance claims digitization system with mobile devices to provide faster and more convenient claims service. Set up mobile security system to make sure customers privacy protected. Optimize online insurance process. Enhance marketing effectiveness by importing bid data. 25

26 Q & A 26

27 Appendix 27

28 HNFHC Condensed Consolidated Income Statements Expressed In Millions of New Taiwan Dollars, Except Earnings Per Share Year (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) Interest Income 39,640 41, % 9,734 9,911 9,974 10,021 10,102 10,120 10,479 10, % Interest Expense (12,800) (14,431) 12.74% (3,220) (3,214) (3,147) (3,219) (3,431) (3,546) (3,667) (3,787) 3.27% Interest Income, Net 26,840 27, % 6,514 6,697 6,827 6,802 6,671 6,574 6,812 7, % Service fee and commission income, net 7,713 8, % 1,617 2,098 2,124 1,874 1,980 1,911 2,262 2, % Income from insurance premiums, net 2,537 2, % % Gains(losses) on financial assets and 1,594 (4,621) % (1,236) 1,270 (2,122) 3,682 (4,775) 1, (1,251) % liabilities at fair value through profit or Realized gains(losses) of available-for-sale 1,573 1, % % financial assets Share of the profit or loss of associates and joint ventures (6) (1) - (2) (1) 0 (3) (1) (1) Gains on investment properties % % Foreign exchange gains, net 227 6, % 1,607 (867) 2,286 (2,799) 4,378 (340) 580 1, % Impairment loss (11) (57) (11) 0 (1) (61) 5 Other non-interest income 1, % (21) % Net Income Excluding Interest Income 15,392 15, % 3,761 3,838 4,152 3,641 2,805 4,430 4,522 3, % Net Revenues 42,232 42, % 10,275 10,535 10,979 10,443 9,476 11,004 11,334 10, % Bad-debt expenses (3,446) (4,953) 43.73% (109) (248) (2,357) (732) (896) (769) (1,032) (2,256) % Provisions for the insurance reserve (226) (238) 5.31% (345) (110) (293) (265) % Operating Expenses (22,516) (23,048) 2.36% (5,503) (5,676) (5,584) (5,753) (5,474) (5,841) (6,033) (5,700) -5.52% Employee Benefits (14,004) (13,839) -1.18% (3,510) (3,623) (3,389) (3,482) (3,283) (3,643) (3,682) (3,231) % Depreciation and amortization (1,061) (1,112) 4.81% (264) (254) (268) (275) (278) (286) (292) (256) % Other general and administrative expenses (7,451) (8,097) 8.67% (1,729) (1,799) (1,927) (1,996) (1,913) (1,912) (2,059) (2,213) 7.48% Consolidated income before income tax from continuing operations 16,044 13, % 4,318 4,501 3,070 4,155 2,813 4,129 4,309 2, % Income Tax Expense (1,957) (1,874) -4.24% (629) (500) (245) (583) (517) (432) (537) (388) % Consolidated net income 14,087 12, % 3,689 4,001 2,825 3,572 2,296 3,697 3,772 2, % Basic earnings per share % % Other comprehensive income (1,932) (1,137) (1,727) (170) 1,202 (44) (393) Othe comprehensive income for the period, net of income tax 12,155 12, % 3,709 4,913 1,688 1,845 2,126 4,899 3,728 1, % Attributable to: Owner of the Company 14,087 12, % 3,689 4,001 2,825 3,572 2,296 3,697 3,772 2, % Non-controlling interests (Audited) (Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 28

29 HNFHC Condensed Balance Sheets Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Year(IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change Balance Sheets (%) (%) Investments accounted for using equity method 182, , % 177, , , , , , , , % Total assets 184, , % 179, , , , , , , , % Total liabilities 25,072 32, % 22,669 29,085 24,636 25,072 25,139 32,730 32,419 32, % Total Stockholders' equity 158, , % 156, , , , , , , , % Consolidated Balance Sheets Total assets 2,545,942 2,574, % 2,393,863 2,498,742 2,529,500 2,545,942 2,543,720 2,537,094 2,570,273 2,574, % Total liabilities 2,386,958 2,410, % 2,237,084 2,343,291 2,372,361 2,386,958 2,382,610 2,378,449 2,407,900 2,410, % Total Stockholders' equity Parent stockholders' equity 158, , % 156, , , , , , , , % Minority Interest % % Capital Stock 105, , % 99,063 99, , , , , , , % (Audited) (Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 29

30 HNFHC Condensed Income Statements Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Year(IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change Operating Income (%) (%) Income from investments accounted for using equity method 14,592 12, % 3,850 4,084 2,970 3,688 2,448 3,864 3,919 2, % Other revenue % (3) 0 60 (2) (3) (1) 62 (4) % Operating Expenses (526) (490) -6.84% (110) (115) (159) (142) (99) (116) (156) (119) % Interest and Other Expenses And (188) (213) 13.30% (48) (47) (46) (47) (50) (50) (53) (60) 13.21% Losses Income before income tax 13,933 12, % 3,689 3,922 2,825 3,497 2,296 3,697 3,772 2, % Income after income tax 14,087 12, % 3,689 4,001 2,825 3,572 2,296 3,697 3,772 2, % Basic earnings per share(before tax) % % Basic earnings per share(after tax) % % (Audited)(Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 30

31 HNFHC Key Financial Ratios UNIT:% Year(IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change ROA(after tax) ROE(after tax) Double Leverage Ratio (Note1) Capital Adequacy Ratio (Consolidated basis) (Note2) (Audited) Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) Note1:Double Leverage Ratio=Long-term Investment/Stockholders' Equity Note2:Revise semiannually. 31

32 HNCB Condensed Income Statements Expressed In Millions of New Taiwan Dollars, Except Earnings Per Share Year(IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) Interest Income 38,863 43, % 9,538 9,716 9,787 9,822 9,924 9,924 10,276 13, % Interest Expense (12,563) (17,067) 35.85% (3,158) (3,155) (3,094) (3,156) (3,362) (3,473) (3,591) (6,641) 84.93% Interest Income, Net 26,300 26, % 6,380 6,561 6,693 6,666 6,562 6,451 6,685 6, % Service fee and commission income, net 6,032 6, % 1,281 1,675 1,626 1,450 1,588 1,474 2,236 1, % Gains(losses) on financial assets and liabilities at fair value through profit or loss 438 (32) % (15) 294 (447) % Realized gains(losses) of available-for-sale financial 1, % % assets Realized gains or losses on held-to-maturity financial assets Share of the profit or loss of associates and joint venture % (74) (203) % Financial assets carried at cost % % Debt investments without active market % % Foreign exchange gains, net 1,244 1, % % Impairment loss Gains on investment properties % % Other non-interest income % (29) % Net Income Excluding Interest Income 10,661 9, % 2,489 2,549 2,696 2,927 1,401 3,024 3,369 2, % Net Revenues 36,961 36, % 8,869 9,110 9,389 9,593 7,963 9,475 10,054 8, % Bad-debt expenses (3,194) (4,904) 53.54% (101) (244) (2,099) (750) (908) (765) (990) (2,241) % Provisions for the insurance reserve Operating Expenses (18,190) (18,493) 1.67% (4,501) (4,595) (4,449) (4,645) (4,428) (4,751) (5,024) (4,290) % Employee Benefits (11,311) (11,094) -1.92% (2,847) (2,935) (2,713) (2,816) (2,620) (2,944) (3,055) (2,475) % Depreciation and amortization (873) (917) 5.04% (217) (207) (220) (229) (230) (239) (247) (201) % Other general and administrative expenses (6,006) (6,482) 7.93% (1,437) (1,453) (1,516) (1,600) (1,578) (1,568) (1,722) (1,614) -6.27% Income before income tax from continuing operations 15,577 13, % 4,267 4,271 2,841 4,198 2,627 3,959 4,040 2, % Income Tax Expense (1,924) (1,591) % (579) (503) (218) (624) (461) (381) (502) (247) % Net income 13,653 11, % 3,688 3,768 2,623 3,574 2,166 3,578 3,538 2, % Basic earnings per share % % Other comprehensive income (1,398) % (38) 955 (1,085) (1,230) (210) 1,082 (39) (437) - Total comprehensive income for the period 12,255 11, % 3,650 4,723 1,538 2,344 1,956 4,660 3,499 1, % (Audited) (Premilinary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Premilinary) 32

33 HNCB Condensed Balance Sheets Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Assets Cash and cash equivalents, due from the Central Bank and other banks Year(IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) 220, , % 233, , , , , , , , % Financial assets at fair value through profit or loss, net 59,426 72, % 57,743 69,579 66,475 59,426 64,128 63,321 72,916 72, % Available-for-sale financial assets, net 106, , % 119, ,214 96, , , , , , % Held-to-maturity financial assets, net 400, , % 311, , , , , , , , % Investments accounted for using equity method 1,995 1, % 2,194 1,997 1,892 1,995 2,091 1,845 1,421 1, % Receivables, net 24,715 23, % 34,722 33,659 37,690 24,715 35,534 34,685 32,082 23, % Loans, net 1,578,384 1,582, % 1,483,826 1,511,119 1,522,784 1,578,384 1,573,801 1,569,853 1,590,099 1,582, % Plant, property, and equipment 28,351 30, % 28,489 28,229 28,269 28,351 28,359 28,351 28,994 30, % Other assets 69,320 29, % 70,095 98,549 85,133 69,320 63,441 50,027 49,019 29, % Total Assets 2,489,255 2,506, % 2,342,512 2,442,008 2,473,466 2,489,255 2,482,780 2,471,259 2,502,243 2,506, % Liabilities Deposits and remittances 2,066,261 2,113, % 1,937,812 2,028,847 2,033,965 2,066,261 2,065,898 2,081,174 2,062,965 2,113, % Other liabilities 259, , % 246, , , , , , , , % Total Liabilities 2,326,210 2,331, % 2,184,726 2,288,345 2,312,765 2,326,210 2,317,779 2,310,789 2,329,166 2,331, % Stockholders' Equity 163, , % 157, , , , , , , , % Total Liabilities and Stockholders' Equity 2,489,255 2,506, % 2,342,512 2,442,008 2,473,466 2,489,255 2,482,780 2,471,259 2,502,243 2,506, % (Audited) (Premilinary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Premilinary) 33

34 HNSC Consolidated Income Statements Expressed In Milions of New Taiwan Dollars, unless otherwise indicated Year (IFRSs) Quarter (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change Operating Revenue (%) (%) Commissions and Fees - Brokerage 1,394 2, % % Security lendinig income % % Commissions and Fees - Underwriting % % Commissions and Fees - WM business % % Gains (Losses) on sales of securities % (32) (31) % Stock affairs agent fees % % Interest Income (Net) % % Dividend Income % % Gains (Loss) on valuation of securities 3 (9) % 42 6 (28) (17) (86) 2 - Gains (Loss) on warrants issued (8) 90 - (6) 7 (44) 35 2 (120) % Commissions and Fees - Futures Gains (Loss) on Derivative Instruments (116) (163) - (13) (21) (56) (26) (35) (65) (30) (33) - Others % 6 (7) (6) 34 (6) % Operating Revenue 2,371 3, % % Operating Expenses (2,266) (2,705) 19.37% (536) (568) (594) (568) (600) (626) (735) (744) 1.22% Others Non-operating Gains or Loss % % Profit Before Tax % (45) % Tax Expense (39) (113) % (19) (11) (12) 3 (7) (14) (41) (51) 24.39% Net Income (Loss) % (42) % Other Comprehensive Income (463) % (26) (88) (98) (251) % Total Comprehensive Income for the year (214) % (293) % EPS % (0.05) % Total Assets 34,917 39, % 29,069 28,888 32,205 33,072 38,837 39,910 36,964 39, % Total Liabilities 23,593 28, % 17,280 17,324 20,588 21,749 27,343 28,242 25,470 28, % Total Stockholder's Equity 11,324 11, % 11,789 11,564 11,617 11,323 11,494 11,668 11,494 11, % ROE (After Tax) 2.16% 6.34% -0.82% 1.63% 2.42% 3.32% 2.16% 5.15% 4.64% 6.17% 6.34% 0.17% ROA (After Tax) 0.81% 1.95% -0.43% 0.67% 0.96% 1.24% 0.79% 1.59% 1.39% 1.75% 1.95% 0.20% (Audited) (Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 34

35 SCIC Condensed Income Statements Expressed In Milions of New Taiwan Dollars, unless otherwise indicated Year (IFRSs) Quater (IFRSs) Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) Operating Revenue 6,628 6, % 1,595 1,646 1,708 1,679 1,689 1,699 1,837 1, % Operating Cost (4,548) (4,702) 3.39% (1,160) (1,091) (1,130) (1,167) (1,179) (1,175) (1,213) (1,135) -6.43% Gross Profit Margin 2,080 2, % % Operating Expense (1,421) (1,503) 5.77% (344) (340) (370) (367) (365) (366) (357) (415) 16.25% Operating Net Income (Loss) % % Nonoperating Gains (Loss) % (1) 3 (4) % Income (Loss) Before Income Tax from continuing operations % % Income Tax Benefit (Expense) (84) (99) 17.86% (11) (34) (29) (11) (17) (17) (35) (30) % Net Income (Loss) % % Other Comprehensive Income (65) % (236) (28) (15) 46.43% Total Comprehensive Income For The Yea % (84) % EPS % % Total Assets 17,402 17, % 17,287 17,214 17,731 17,402 18,255 18,225 18,208 17, % Total Liabilities 12,975 13, % 12,955 12,931 13,220 12,975 13,670 13,732 13,715 13, % Total Stockholder's Equity 4,427 4, % 4,332 4,283 4,511 4,427 4,585 4,493 4,493 4, % ROE(After tax) 13.98% 14.48% 0.49% 7.82% 12.70% 13.78% 13.98% 12.52% 12.60% 15.43% 14.48% -0.95% ROA(after tax) 3.57% 3.80% 0.23% 1.98% 3.20% 3.52% 3.57% 3.16% 3.16% 3.86% 3.80% -0.06% (Audited) (Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 35