Taiwan Business Bank Overviews. Nov / 2017

Transcription

1 Taiwan Business Bank Overviews Nov / 2017

2 Disclaimer This presentation is provided by Taiwan Business Bank Co., Ltd. ( TBB ).The information contained within is not reviewed or reviewed by any accountant or any independent third party. Users should read this material in conjunction with all other public financial and operational information filed to the competent authorities by TBB. While we endeavor to provide accurate, complete and consistent information herein, TBB 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 with respect to such securities or other financial instruments. TBB 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. 2

3 Agenda 1 Corporate History & Overviews Operation highlights Strategy Outlook Corporate Governance 3

4 Corporate history of Taiwan Business Bank The forerunners of the Taiwan Business Bank were two private savings organizations set up in Taipei and Tainan in 1915, following the traditional cooperatives practice. Following the revised Banking Law, the company was reorganized, on July 1, 1976, into the Medium Business Bank of Taiwan (later to be known as the Taiwan Business Bank, or TBB), the first SME specialized bank established by the government. To cope with the government's privatization policy, the TBB was privatized on Jan.22,1998. The Bank's domestic branch network covers the whole island with 125 branches. In addition, there are 8 overseas branches, including Los Angeles, Sydney, Brisbane, Hong Kong,Shanghai, Wuhan, New York and Tokyo. According to The Banker magazine, Taiwan Business Bank ranks #305 on Asset size in global banking list, #15 in domestic banking list on July

5 Stable share structure and dividend policy TBB s Shareholding Structure TBB s Dividend Policy Others, 45.2% Bank of Taiwan, 17.2% FINI, 21.0% Ministry of Finance, 2.2% Land Bank, 2.4% Mega Financial Holding 12.0% % 7.33% % 4.38% % 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% The ownership of Ministry of Finance & government-owned financial institutions account for 33.8%. Stock Dividend (NT) Payout Dividend Ratio(%) Yield Rate(%) Cash Dividend (NT) 1 U.S. dollar = Taiwan dollars ( ) 5

6 Focus on the TW corporate clients TBB s Overseas Units WuHan Yangon Representative Office Shanghai a branch and a leasing co. Tokyo Los Angeles HK Taiwan (125 branches) Cambodia Microfinance Institution. New York Brisbane Sydney 6

7 S&P Ratings upgraded to BBB+ Taiwan Ratings S&P Global Ratings Long-term Short-term 2017 twaa- twa twa+ twa-1 Long-term Short-term 2017 BBB+ A BBB A-2 Overview: S&P raised TBB long-term issuer credit rating to BBB+ on improved capitalization; Outlook stable. Outlook stable reflects the view that TBB will maintain adequate capitalization and asset as well as its domestic market share over the next 2 years. 7

8 Agenda 1 Corporate History & Overviews Operation highlights Strategy Outlook Corporate Governance 8

9 SME loan is the key growth driver TBB annual loan balance TBB Q3/17 loan breakdown by customer Unit: NT$bn Total:1,005 1,014 1,053 1,106 Large corp. 10% Consumer, 24% Consumer FCY* FCY, 11% Gov-linked SME, 38% Highlights Gov-linked, 17% SME Large corp. 76% corporate loan; 24% consumer loan SME loan was up 9.45%, resulted from TBB s core competency. Reducing gov-linked loans and expanding overseas loans to improve yield. 9 * OBU, overseas branches and DBU large corporate, SME loans in foreign currency.

10 Strong deposit franchise TBB annual deposit balance TBB Q3/17 deposit breakdown Unit: NT$bn Total:1, ,270 1,290 1, FCY deposit Time deposit FCY Deposit. 15% Time Deposit, 41% Demand Deposit, 44% 600 TBB demand deposit trend Demand deposit 55.08% 53.13% % 49.16% 10

11 LDR and Interest spread TBB s LDR trend TBB s interest spread and NIM 84.62% 83.96% 79.89% 81.60% 1.37% 1.35% 1.32% 1.29% 1.06% 1.04% 0.97% 0.97% NIM Interest Spread Due to Central Bank of Taiwan cut interest four times from 2015, TBB s interest spread and NIM declined. In order to increase the interest spread, TBB enhanced the business of overseas units. 11

12 Steady net revenue structure TBB s net revenue trend Unit: NT$MN 15,563 15,545 11,081 11,369 2,725 2,449 Net Net Revenue income Net Interest income Income Net Fee Income 2016Q3 2017Q3 TBB s Q3/2017 net revenue breakdown TBB s Q3/2017 net fee income breakdown Loan 21% FX 12% Others 10% Highlights Wealth Manageme nt 57% * Net interest income 74% Net Service Fee Income 15% Financial Instruments Net Income, 6% Other Income 5% Wealth Management made great profit contribution. Aim to increase the proportion of financial instrument net income by FX and bond investment. 12 * WM fee includes bancassurance fee and trust fee.

13 Operating Expense Ratio TBB s cost-to-income ratio trend TBB s expense ratio trend Unit: NT$ million 18,811 19,886 20,409 10,831 11,390 11,622 15,545 8, % 57.28% 56.95% 56.60% Net revenue Operating expense TBB s cost-to-income ratio declined, due to strong revenue growth and control of operating expense. 13

14 Income Trend TBB s income* trend TBB s Q3/2017 income breakdown Unit: NT$ million 7,000 6,000 5, %YoY %YoY 6,169 6,323 5,478 5, Q3 income was $4,770mn, up 10.94% YoY OBU+overseas 31% 4,000 3,000 2,000 1,000 0 Domestic 69% TBB s income was up 10.94% YoY in 2017Q3, driven by stable NII and decrease of provision expense. TBB s net income: NT$ 5,196 mn in 2016, NT$ 4,460 mn in 2017Q3. 14 * Income before tax.

15 Solid profitability TBB s Key Profitability Ratios* 0.40% ROA 0.43% 0.43% 0.46% 9.13% 9.46% ROE 9.13% 9.65% Unit: NT$ EPS ROA, ROE and EPS are pre-tax data ROA, ROE and EPS after tax data in 2016 were 0.35%, 7.50% and 0.87 NTdollar.

16 Improvement of asset quality TBB s NPL ratio TBB s provision coverage ratio 0.46% 0.48% 0.43% 0.37% % % % % Unit: NT$MN 4,618 TBB s NPL balance 4,905 NPL 4,520 4,113 14,000 13,500 13,000 12,500 12,000 11,500 11,000 Unit: NT$MN TBB s loan loss reserved 12,550 11,342 10,934 12,066 10,500 10,000 16

17 Well-capitalized for Basel III requirements TBB s capital adequacy ratio trend 12.41% 11.91% 11.24% 10.54% 9.59% 9.47% 8.84% 8.20% 7.88% 7.98% 7.91% 7.93% S&P rating overview: We expect TBB to maintain its improved capitalization at an adequate level following its hybrid capital issuance with managed risk-asset growth. BIS Tier1 Ratio CET1 17

18 Conclusion With solid brand recognition as the only SMEs specialized bank, TBB will focus on the SMEs niche market. Establish global finance network to enhance profitability. Based on the improved asset quality and net income growth, if everything keeps in positive trend, TBB might declare higher dividend in

19 Agenda 1 Corporate History & Overviews Operation highlights Strategy Outlook Corporate Governance 19

20 Strategy Outlook for 2018 Strengthen overseas business. Strengthen financial operations and increase the investment income. Adjust the structure of corporate loans and aim to increase the revenue from wealth management. Strengthen internal controls on risk management, and enhance the investment in information infrastructure. Raise capital for business expansion. 20

21 Agenda 1 Corporate History & Overviews Operation highlights Strategy Outlook Corporate Governance 21

22 Corporate Governance Increase Minority Shareholder Representation - Inclusion of 3 Independent Directors appointed in 2015 Chau-Chen Yang Huang, Yophy Cheng Chih-Yu Former Professor, Department of Finance, National Taiwan University. Finance Ph.D., University of Illinois at Urbana-Champaign. Professor, Dept. of Public Finance and Taxation Administration, National Taipei University of Business. Ph.D. in Economics, Indiana University, Bloomington, in USA. Professor, Institute for Labor Research, National Chengchi University. Ph.D., Department of Political Science,Univ. of Hawaii-Manoa. Improved Shareholder Rights Proxy Voting Shareholder Voting Adoption of electronic voting system to facilitate proxy voting for shareholders was instituted to align with international standards in terms of closer integration with shareholders on corporate governance topics. Establishment of Nomination System Candidates seeking election or re-election to serve as Directors are subject to a robust evaluation and nomination process whereby final approval are granted by stockholders at General Meetings. 22

23 Corporate Governance TBB seeks candidates from different backgrounds Law Economics Banking Financial Leadership Accounting and Labor rights and interests. Director Diversity policy Reflecting on gender equality, TBB includes 2 female directors. Functional committee comprises 3 independent directors Audit Committee Remuneration Committee Chief compliance officer is appointed by the Board and reports to the audit committee and the Board on a half-yearly basis Legal Compliance & Internal Audit Chief auditor is appointed by the Board and reports directly to the Board 23

24 Corporate Governance Information Disclosure Timely information is disclosed in both Chinese and English on Taiwan Stock Exchange and TBB official website. The Board recognises the importance of the Investor Relations function and has designated a qualified team of experts to communicate with shareholders and act as a conduit of information to the Board. Announcement of operational and financial performances based on half yearly results and routinely participate with analysts in group meetings and corporate day events to update investors about the general health of the company. Continuously improve various functions of the Board to achieve better levels of efficiency Each Board member is required to meet TBB s training and development goals by participating in Continuous Professional Development activities minimum 6 hours, per year pursuant to the provisions of "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies On January, TBB carries out an internal annual performance review of the Board of Directors and responsibilities undertaken in the last fiscal year. 24

25 Corporate Governance Number of Directors Independent Non-managing Director Independent Director Over Female Labor Right and Interest (20%,3) Law -Company or Compliance (20%,3) Nonmanaging Director Managing Director (Including an Independent Director) MOF (Including Bank of Taiwan And Land Bank of Taiwan) TBB Labor Union Others Male Accounting (7%, 1) Leadership (13%,2) PROFESSIONAL (%,PERSON) Financial (13%,2) Banking (13%,2) Economics (14%,2) 25

26 Rating A by MSCI ESG Research Credit: MSCI ESG Research 2016 Rating Comment: TBB has been upgraded to 'A' from 'BBB driven by the bank's strong performance related to privacy and data security. 26

27 ESG focus Environmental Social Governance Prepare to issue Green Bonds. Financing Environmental Impact : Received Excellent Green Purchasing Institution from EPA in the past 5 years ( ). Offer Green Energy Loans up to 54.5 billion NT dollars. Energy Efficiency: Power reduction of 5.05% by 2016(goal setting>1%). Set up a data security management level committee. Achieved British Standards Institute s certification for personal information protection. Training & Qualification of Workforce: Offer online learning with 765 courses. On average, employees in TBB spent 39 hours per year on diverse training. Support more than 200 charitable organizations. Charity organization Educational units. Arts group Zero case was found on corruption or against ethical management in Board & directors: Diversified board structure and solid accounting practices. Legal Compliance: 98.25% employees have taken the anti-corruption courses. Strong policies covering anti-money laundering and KYC effort. 27

28 28 Thank you