HNFHC 4Q 2017 Analyst Meeting (Bloomberg: 2880 TT) Executive Vice President Mr. King-Huo Lu 2018/03/08
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 This document may not be directly or indirectly reproduced, redistributed or forwarded to any other person and my not be published in whole or in part for any purpose. 2
Agenda 4Q2017 Highlights....P.4 Operating Results HNFHC...P.7 Operating Results Subsidiaries P.10 Asset Quality.....P.20 2018 Year Ahead Outlook...P.23 3
4Q2017 Highlights 4
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 127.97% 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
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 2017. Myanmar Representative Office was opened in July 2017. Awards & Achievement Top 5 percent of the rankings in the CGES by TWSE Corporate Governance Center (2015-2016). 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
Operating Results HNFHC 7
HNFHC: Net profit reached NT$12 billion in 4Q2017 (NT$mn or NT$ dollar) 3Q2017 4Q2017 QoQ 2016 2017 YoY Net profit 3,772 2,327-38.3% 14,087 12,092-14.2% Total assets 2,570,273 2,574,640 0.2% 2,545,942 2,574,640 1.1% Book value 162,373 164,306 1.2% 158,984 164,306 3.3% EPS 0.34 0.21-38.2% 1.34 1.09-18.7% Book value per share 14.70 14.87 1.2% 15.11 14.87-1.6% Capital stock 110,465 110,465 0.0% 105,205 110,465 5.0% ROA(%) 0.59 0.36-0.23 0.58 0.47-0.11 ROE(%) 9.40 5.70-3.70 9.03 7.48-1.55 CAR(%) 115.34 127.97 12.63 125.63 127.97 2.34 Double Leverage Ratio(%) 118.82 118.71-0.11 114.58 118.71 4.13 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 8
HNFHC: Net Profits of major subsidiaries (NT$mn) 3Q2017 Net Profit 4Q2017 Net Profit QoQ 2016 Net Profit 2017 Net Profit HNCB 3,538 2,161-39% 13,653 11,443-16% HNSC 272 190-30% 249 729 193% SCIC 235 155-34% 600 671 12% HNIT 2 6 200% 29 11-62% HNVC (14) 20 10 6-40% HNAMC 162 (23) -114% 50 157 214% Total 4,195 2,509-40% 14,591 13,017-11% YoY FY17 Profit contribution (NT$mn) Net Profits 2016 HNSC 6% SCIC 5% HNIT 0% HNVC 0% HNAMC 1% 14,087 13,653 12,092 11,443 729 671 600 2017 249 157 29 50 HNCB 88% 11 10 6 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
Operating Results - Subsidiaries 10
HNCB: Operating Results (NT$mn) Net Profit 13,241 13,653 11,443 EPS 1.93 1.90 1.47 2015 2016 2017 Returns ROE(after tax) ROA(after tax) 2015 2016 2017 Market Share Deposits Loans 9.01% 8.61% 6.77% 5.9% 6.0% 5.8% 5.9% 5.6% 5.7% 0.59% 0.57% 0.46% 2015 2016 2017 2015 2016 2017 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 11
HNCB: Core earnings increased 6.2% YoY Revenue composition of Hua Nan Bank (NT$mn) 2016 2017 0.6% 26,448 26,300 5.6% 13.5% 6,032 6,367 3,695 3,198 934 418 1.4% 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 2016 2017 12
HNCB: Fee and wealth management income (NT$mn) Sources of fee income YOY +5.6% WM FX Loans Credit card Others 6,032 6,367 Wealth management fee WM business continues to grow with increasing funds contribution 2% 4% 464 446 8% 462 374 6% 562 753 9% 1,146 990 19% 58% 3,504 3,698 7% 7% 12% 16% 58% 6% 6% 45% 59% 45% 33% Property trust YOY +85.2% Custodian and certificate YOY +12.0% Insurance commission YOY -18.9% Structured bonds and funds YOY +43.6% 2016 2017 2016 2017 13
HNCB: SME loans continue increasing Loan composition Average loans by type YOY +4.0% 1,516 1,577 (NT$bn) Corporate loans Customer loans FC loans 1,516 1,577 270 18% 273 17% 576 38% 582 37% 18% 5% 33% 2,699 828 4,938 2,733 875 4,939 17% 6% 31% Overseas & OBU* YOY +1.3% Other customer YOY +5.7% Mortgage YOY +0.0% SME & others YOY +6.9% 44% 670 722 46% 27% 14% 3% 4,110 4,394 2,068 2,128 521 696 28% 13% 5% Large Corp. YOY +2.9% Government YOY +33.6% 2016 2017 2016 2017 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
HNCB: Deposit mix and LDR Deposit composition YOY +3.2% Loan-to-deposit ratio(ldr) 75.92% 76.49% (NT$bn) NTD demand deposit NTD time deposit FC deposit 1,997 2,061 441 22% 487 24% 543 27% 539 26% 2016 2017 NTD Demand deposit ratio 65.12% 65.74% 51% 1,013 1,035 50% 2016 2017 2016 2017 15
HNCB: Spreads and NIM NTD spread FC spread 1.83% 1.85% 1.88% 1.96% 2.06% 2.02% 1.95% 2.09% FC spread YoY+13bps 1.68% 1.42% 1.40% 1.39% 1.39% 1.37% 1.32% 1.32% 1.32% 1.33% NTD spread YoY-4bp 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1.46% 1.47% 1.47% 1.47% 1.47% 1.43% 1.42% 1.42% 1.43% 1.08% 1.06% 1.04% 1.03% 1.03% 0.99% 0.99% 1.00% 1.01% Overall spread YoY-4bp Overall spread NIM 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 16
HNCB: Cost to income ratio Operating expense YOY +1.7% (NT$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 18,493 873 917 11,311 11,094 36,961 36,431 2016 2017 2016 2017 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 17
HNSC: Operating results (NT$mn) Net profit 729 EPS 0.90 350 249 0.43 0.31 2015 2016 2017 Returns 2015 2016 2017 Market share ROE(after tax) ROA(after tax) Brokerage Lending balance 2.97% 2.16% 1.24% 0.81% 6.34% 1.95% 3.45% 3.58% 2.62% 2.73% 4.25% 3.09% 2015 2016 2017 2015 2016 2017 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 18
SCIC: Operating results (NT$mn) Business metrics Written premium revenue Market share Written premium market share 7,846 8,379 8,606 5.80% 5.77% 5.52% 2015 2016 2017 Returns ROE(after tax) ROA(after tax) 15.17% 13.99% 14.48% 2015 2016 2017 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% 2015 2016 2017 2015 2016 2017 Note: 4Q17 figures were preliminary based on IFRS. The others were audited based on IFRS. 19
Asset Quality 20
HNCB: Asset quality Net provision NPL (NT$mn) 2016 2017 YoY Provision 5,878 7,863 +33.8 % Write-off 3,576 5,999 +67.8 % (NT$mn) 4,341 5,731 5,675 YoY+1,102mn 5,221 5,443 Recovery 2,687 2,963 +10.3% Reserve 18,735 19,313 +3.1% NPL ratio 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Coverage ratio 431.55% 315.49% 324.09% 354.55% 354.81% 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
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 1,798 0.93% 0.91% 0.83% 0.70% 500 0.04% - 4Q16 1Q17 2Q17 3Q17 4Q17 2.0% 1.5% 1.0% 0.5% 0.0% 2,500 2,000 1,500 1,000 500 - SME NPL ratio NPL NPL ratio 2,255 1,631 1,783 1,565 1,829 0.50% 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 2,000 2.0% 1,500 1,000 1,097 1,364 1,291 1,438 1,196 1.5% 1.0% 0.38% 0.32% 0.37% 0.40% 0.48% 500 0.22% 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
2018 Year Ahead outlook 23
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
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
Q & A 26
Appendix 27
HNFHC Condensed Consolidated Income Statements Expressed In Millions of New Taiwan Dollars, Except Earnings Per Share Year (IFRSs) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) Interest Income 39,640 41,539 4.79% 9,734 9,911 9,974 10,021 10,102 10,120 10,479 10,838 3.43% 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 27,108 1.00% 6,514 6,697 6,827 6,802 6,671 6,574 6,812 7,051 3.51% Service fee and commission income, net 7,713 8,257 7.05% 1,617 2,098 2,124 1,874 1,980 1,911 2,262 2,104-6.98% Income from insurance premiums, net 2,537 2,831 11.59% 868 734 570 365 929 871 612 419-31.54% Gains(losses) on financial assets and 1,594 (4,621) -389.90% (1,236) 1,270 (2,122) 3,682 (4,775) 1,246 159 (1,251) -886.79% liabilities at fair value through profit or Realized gains(losses) of available-for-sale 1,573 1,242-21.04% 210 202 893 268 85 409 651 97-85.10% financial assets Share of the profit or loss of associates and joint ventures (6) (1) - (2) (1) 0 (3) (1) (1) 1 0 - Gains on investment properties 407 406-0.25% 91 123 90 103 90 105 83 128 54.22% Foreign exchange gains, net 227 6,477 2753.30% 1,607 (867) 2,286 (2,799) 4,378 (340) 580 1,859 220.52% Impairment loss (11) (57) 0 0 0 (11) 0 (1) (61) 5 Other non-interest income 1,358 563-58.54% 606 279 311 162 119 230 235 (21) -108.94% Net Income Excluding Interest Income 15,392 15,097-1.92% 3,761 3,838 4,152 3,641 2,805 4,430 4,522 3,340-26.14% Net Revenues 42,232 42,205-0.06% 10,275 10,535 10,979 10,443 9,476 11,004 11,334 10,391-8.32% Bad-debt expenses (3,446) (4,953) 43.73% (109) (248) (2,357) (732) (896) (769) (1,032) (2,256) 118.60% Provisions for the insurance reserve (226) (238) 5.31% (345) (110) 32 197 (293) (265) 40 280 600.00% 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) -12.25% Depreciation and amortization (1,061) (1,112) 4.81% (264) (254) (268) (275) (278) (286) (292) (256) -12.33% 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 13,966-12.95% 4,318 4,501 3,070 4,155 2,813 4,129 4,309 2,715-36.99% Income Tax Expense (1,957) (1,874) -4.24% (629) (500) (245) (583) (517) (432) (537) (388) -27.75% Consolidated net income 14,087 12,092-14.16% 3,689 4,001 2,825 3,572 2,296 3,697 3,772 2,327-38.31% Basic earnings per share 1.34 1.09-18.66% 0.37 0.36 0.27 0.34 0.22 0.33 0.34 0.21-38.24% Other comprehensive income (1,932) 595 20 912 (1,137) (1,727) (170) 1,202 (44) (393) Othe comprehensive income for the period, net of income tax 12,155 12,687 4.38% 3,709 4,913 1,688 1,845 2,126 4,899 3,728 1,934-48.12% Attributable to: Owner of the Company 14,087 12,092-14.16% 3,689 4,001 2,825 3,572 2,296 3,697 3,772 2,327-38.31% Non-controlling interests 0 0-0 0 0 0 0 0 0 0 - (Audited) (Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 28
HNFHC Condensed Balance Sheets Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Year(IFRSs) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change Balance Sheets (%) (%) Investments accounted for using equity method 182,158 195,046 7.08% 177,239 172,857 180,190 182,158 184,437 179,943 192,926 195,046 1.10% Total assets 184,054 196,557 6.79% 179,446 184,534 181,773 184,054 186,247 191,374 194,790 196,557 0.91% Total liabilities 25,072 32,253 28.64% 22,669 29,085 24,636 25,072 25,139 32,730 32,419 32,253-0.51% Total Stockholders' equity 158,982 164,304 3.35% 156,777 155,449 157,137 158,982 161,108 158,643 162,371 164,304 1.19% Consolidated Balance Sheets Total assets 2,545,942 2,574,640 1.13% 2,393,863 2,498,742 2,529,500 2,545,942 2,543,720 2,537,094 2,570,273 2,574,640 0.17% Total liabilities 2,386,958 2,410,334 0.98% 2,237,084 2,343,291 2,372,361 2,386,958 2,382,610 2,378,449 2,407,900 2,410,334 0.10% Total Stockholders' equity Parent stockholders' equity 158,982 164,304 3.35% 156,777 155,449 157,137 158,982 161,108 158,643 162,371 164,304 1.19% Minority Interest 2 2 0.00% 2 2 2 2 2 2 2 2 0.00% Capital Stock 105,205 110,465 5.00% 99,063 99,063 105,205 105,205 105,205 105,205 110,465 110,465 0.00% (Audited) (Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 29
HNFHC Condensed Income Statements Expressed In Millions of New Taiwan Dollars, unless otherwise indicated Year(IFRSs) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change Operating Income (%) (%) Income from investments accounted for using equity method 14,592 12,741-12.69% 3,850 4,084 2,970 3,688 2,448 3,864 3,919 2,510-35.95% Other revenue 55 54-1.82% (3) 0 60 (2) (3) (1) 62 (4) -106.45% Operating Expenses (526) (490) -6.84% (110) (115) (159) (142) (99) (116) (156) (119) -23.72% 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 12,092-13.21% 3,689 3,922 2,825 3,497 2,296 3,697 3,772 2,327-38.31% Income after income tax 14,087 12,092-14.16% 3,689 4,001 2,825 3,572 2,296 3,697 3,772 2,327-38.31% Basic earnings per share(before tax) 1.32 1.09-17.42% 0.37 0.35 0.27 0.33 0.22 0.33 0.34 0.21-38.24% Basic earnings per share(after tax) 1.34 1.09-18.66% 0.37 0.36 0.27 0.34 0.22 0.33 0.34 0.21-38.24% (Audited)(Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) 30
HNFHC Key Financial Ratios UNIT:% Year(IFRSs) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change ROA(after tax) 7.83 6.35-1.48 8.31 8.54 7.85 7.83 4.96 6.39 6.87 6.35-0.52 ROE(after tax) 9.03 7.48-1.55 9.52 9.97 9.04 9.03 5.74 7.55 8.10 7.48-0.62 Double Leverage Ratio (Note1) 114.58 118.71 4.13 113.05 111.20 114.67 114.58 114.48 113.43 118.82 118.71-0.11 Capital Adequacy Ratio (Consolidated basis) (Note2) 125.63 127.97 2.34 141.78 123.28 123.28 125.63 125.63 115.34 115.34 127.97 12.63 (Audited) Preliminary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Preliminary) Note1:Double Leverage Ratio=Long-term Investment/Stockholders' Equity Note2:Revise semiannually. 31
HNCB Condensed Income Statements Expressed In Millions of New Taiwan Dollars, Except Earnings Per Share Year(IFRSs) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) Interest Income 38,863 43,515 11.97% 9,538 9,716 9,787 9,822 9,924 9,924 10,276 13,391 30.31% 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 26,448 0.56% 6,380 6,561 6,693 6,666 6,562 6,451 6,685 6,750 0.97% Service fee and commission income, net 6,032 6,367 5.55% 1,281 1,675 1,626 1,450 1,588 1,474 2,236 1,069-52.19% Gains(losses) on financial assets and liabilities at fair value through profit or loss 438 (32) -107.31% 136 23 (15) 294 (447) 114 108 193 78.70% Realized gains(losses) of available-for-sale financial 1,253 959-23.46% 181 127 786 159 11 346 523 79-84.89% assets Realized gains or losses on held-to-maturity financial 0 0-0 0 0 0 0 0 0 0 - assets Share of the profit or loss of associates and joint venture 259 316 22.01% 76 141 (74) 116 138 96 (203) 285-240.39% Financial assets carried at cost 251 193-23.11% 0 141 110 0 0 123 70 0-100.00% Debt investments without active market 250 71-71.60% 0 19 94 137 0 14 50 7-86.00% Foreign exchange gains, net 1,244 1,691 35.93% 187 281 76 700 6 731 430 524 21.86% Impairment loss 0 0-0 0 0 0 0 0 0 0 - Gains on investment properties 343 358 4.37% 75 87 81 100 92 102 89 111 24.72% Other non-interest income 591 60-89.85% 553 55 12 (29) 13 24 66-79 -219.70% Net Income Excluding Interest Income 10,661 9,983-6.36% 2,489 2,549 2,696 2,927 1,401 3,024 3,369 2,189-35.03% Net Revenues 36,961 36,431-1.43% 8,869 9,110 9,389 9,593 7,963 9,475 10,054 8,939-11.09% Bad-debt expenses (3,194) (4,904) 53.54% (101) (244) (2,099) (750) (908) (765) (990) (2,241) 126.36% Provisions for the insurance reserve 0 0-0 0 0 0 0 0 0 0 - Operating Expenses (18,190) (18,493) 1.67% (4,501) (4,595) (4,449) (4,645) (4,428) (4,751) (5,024) (4,290) -14.61% Employee Benefits (11,311) (11,094) -1.92% (2,847) (2,935) (2,713) (2,816) (2,620) (2,944) (3,055) (2,475) -18.99% Depreciation and amortization (873) (917) 5.04% (217) (207) (220) (229) (230) (239) (247) (201) -18.62% 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 13,034-16.33% 4,267 4,271 2,841 4,198 2,627 3,959 4,040 2,408-40.40% Income Tax Expense (1,924) (1,591) -17.31% (579) (503) (218) (624) (461) (381) (502) (247) -50.80% Net income 13,653 11,443-16.19% 3,688 3,768 2,623 3,574 2,166 3,578 3,538 2,161-38.92% Basic earnings per share 1.90 1.47-22.63% 0.52 0.26 0.37 0.48 0.29 0.49 0.48 0.21-55.85% Other comprehensive income (1,398) 396-128.33% (38) 955 (1,085) (1,230) (210) 1,082 (39) (437) - Total comprehensive income for the period 12,255 11,839-3.39% 3,650 4,723 1,538 2,344 1,956 4,660 3,499 1,724-50.73% (Audited) (Premilinary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Premilinary) 32
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) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) 220,375 256,013 16.17% 233,679 223,625 235,192 220,375 223,223 245,787 210,066 256,013 21.87% Financial assets at fair value through profit or loss, net 59,426 72,503 22.01% 57,743 69,579 66,475 59,426 64,128 63,321 72,916 72,503-0.57% Available-for-sale financial assets, net 106,200 131,009 23.36% 119,859 106,214 96,887 106,200 110,514 117,642 127,876 131,009 2.45% Held-to-maturity financial assets, net 400,489 379,759-5.18% 311,905 369,037 399,144 400,489 381,689 359,748 389,770 379,759-2.57% Investments accounted for using equity method 1,995 1,428-28.42% 2,194 1,997 1,892 1,995 2,091 1,845 1,421 1,428 0.49% Receivables, net 24,715 23,067-6.67% 34,722 33,659 37,690 24,715 35,534 34,685 32,082 23,067-28.10% Loans, net 1,578,384 1,582,117 0.24% 1,483,826 1,511,119 1,522,784 1,578,384 1,573,801 1,569,853 1,590,099 1,582,117-0.50% Plant, property, and equipment 28,351 30,715 8.34% 28,489 28,229 28,269 28,351 28,359 28,351 28,994 30,715 5.94% Other assets 69,320 29,854-56.93% 70,095 98,549 85,133 69,320 63,441 50,027 49,019 29,854-39.10% Total Assets 2,489,255 2,506,465 0.69% 2,342,512 2,442,008 2,473,466 2,489,255 2,482,780 2,471,259 2,502,243 2,506,465 0.17% Liabilities Deposits and remittances 2,066,261 2,113,858 2.30% 1,937,812 2,028,847 2,033,965 2,066,261 2,065,898 2,081,174 2,062,965 2,113,858 2.47% Other liabilities 259,949 217,806-16.21% 246,914 259,498 278,800 259,949 251,881 229,615 266,201 217,806-18.18% Total Liabilities 2,326,210 2,331,664 0.23% 2,184,726 2,288,345 2,312,765 2,326,210 2,317,779 2,310,789 2,329,166 2,331,664 0.11% Stockholders' Equity 163,045 174,801 7.21% 157,786 153,663 160,701 163,045 165,001 160,470 173,077 174,801 1.00% Total Liabilities and Stockholders' Equity 2,489,255 2,506,465 0.69% 2,342,512 2,442,008 2,473,466 2,489,255 2,482,780 2,471,259 2,502,243 2,506,465 0.17% (Audited) (Premilinary) (Review) (Audited) (Review) (Audited) (Review) (Audited) (Review) (Premilinary) 33
HNSC Consolidated Income Statements Expressed In Milions of New Taiwan Dollars, unless otherwise indicated Year (IFRSs) Quarter (IFRSs) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change Operating Revenue (%) (%) Commissions and Fees - Brokerage 1,394 2,045 46.70% 365 335 366 328 402 438 594 611 2.86% Security lendinig income 94 123 30.85% 16 21 27 30 22 29 41 31-24.39% Commissions and Fees - Underwriting 36 18-50.00% 9 2 16 9 4 6 3 5 66.67% Commissions and Fees - WM business 8 10 25.00% 3 1 2 2 2 2 3 3 0.00% Gains (Losses) on sales of securities 272 285 4.78% 21 125 158 (32) 85 151 80 (31) -138.75% Stock affairs agent fees 26 28 7.69% 6 7 7 6 6 8 8 6-25.00% Interest Income (Net) 479 645 34.66% 121 117 117 124 133 149 167 196 17.37% Dividend Income 156 173 10.90% 0 27 128 1 0 25 145 3-97.93% Gains (Loss) on valuation of securities 3 (9) -400.00% 42 6 (28) (17) 20 55 (86) 2 - Gains (Loss) on warrants issued (8) 90 - (6) 7 (44) 35 2 (120) 69 139 101.45% Commissions and Fees - Futures 0 0-0 0 0 0 0 0 0 0 - Gains (Loss) on Derivative Instruments (116) (163) - (13) (21) (56) (26) (35) (65) (30) (33) - Others 27 17-37.04% 6 (7) (6) 34 (6) 13 2 8 300.00% Operating Revenue 2,371 3,262 37.58% 570 620 687 494 635 691 996 940-5.62% Operating Expenses (2,266) (2,705) 19.37% (536) (568) (594) (568) (600) (626) (735) (744) 1.22% Others Non-operating Gains or Loss 183 285 55.74% 33 52 69 29 119 69 52 45-13.46% Profit Before Tax 288 842 192.36% 67 104 162 (45) 154 134 313 241-23.00% Tax Expense (39) (113) 189.74% (19) (11) (12) 3 (7) (14) (41) (51) 24.39% Net Income (Loss) 249 729 192.77% 48 93 150 (42) 147 120 272 190-30.15% Other Comprehensive Income (463) 179 138.66% (26) (88) (98) (251) 23 87 17 52 205.88% Total Comprehensive Income for the year (214) 908 524.30% 22 5 52 (293) 170 207 289 242-16.26% EPS 0.31 0.90 190.32% 0.06 0.11 0.19 (0.05) 0.18 0.15 0.18 0.72 300.00% Total Assets 34,917 39,910 14.30% 29,069 28,888 32,205 33,072 38,837 39,910 36,964 39,910 7.97% Total Liabilities 23,593 28,242 19.70% 17,280 17,324 20,588 21,749 27,343 28,242 25,470 28,242 10.88% Total Stockholder's Equity 11,324 11,668 3.04% 11,789 11,564 11,617 11,323 11,494 11,668 11,494 11,668 1.51% 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
SCIC Condensed Income Statements Expressed In Milions of New Taiwan Dollars, unless otherwise indicated Year (IFRSs) Quater (IFRSs) 2016 2017 Change 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Change (%) (%) Operating Revenue 6,628 6,964 5.07% 1,595 1,646 1,708 1,679 1,689 1,699 1,837 1,739-5.33% 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 2,262 8.75% 435 555 578 512 510 524 624 604-3.21% Operating Expense (1,421) (1,503) 5.77% (344) (340) (370) (367) (365) (366) (357) (415) 16.25% Operating Net Income (Loss) 659 759 15.17% 91 215 208 145 145 158 267 189-29.21% Nonoperating Gains (Loss) 25 11-56.00% 3 4 1 18 13 (1) 3 (4) -233.33% Income (Loss) Before Income Tax from continuing operations 684 770 12.57% 94 219 209 163 158 157 270 185-31.48% Income Tax Benefit (Expense) (84) (99) 17.86% (11) (34) (29) (11) (17) (17) (35) (30) -14.29% Net Income (Loss) 600 671 11.83% 83 185 180 152 141 140 235 155-34.04% Other Comprehensive Income (65) 10 115.38% 91 32 48 (236) 16 37 (28) (15) 46.43% Total Comprehensive Income For The Yea 535 681 27.29% 174 217 228 (84) 157 177 207 140-32.37% EPS 3.00 3.35 11.67% 0.42 0.92 0.90 0.76 0.70 0.70 1.18 0.77-34.75% Total Assets 17,402 17,907 2.90% 17,287 17,214 17,731 17,402 18,255 18,225 18,208 17,907-1.65% Total Liabilities 12,975 13,067 0.71% 12,955 12,931 13,220 12,975 13,670 13,732 13,715 13,067-4.72% Total Stockholder's Equity 4,427 4,840 9.33% 4,332 4,283 4,511 4,427 4,585 4,493 4,493 4,840 7.72% 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