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First Financial Holding Co. Ltd. Interim / Quarterly Report 2016

Aug 31, 2016

52222_rns_2016-08-31_053ea10e-c288-4dd2-8893-5379d674ccc2.pdf

Interim / Quarterly Report

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First Financial Holding 1H 2016 Earnings Result

Aug. 31, 2016

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Disclaimer

This presentation is provided by First Financial Holding Co., Ltd. (“FFHC”). 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 FFHC. While we endeavor to provide accurate, complete and consistent information herein, FFHC 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. First Group and all 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.

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Contents

  • At a Glance

  • Financial Highlight

  • Operating Results

  • Appendix

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At a Glance

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1H 2016 – Maintain Growing Momentum

Bank subsidiary helped boost group 1H16 earnings. Thanks to Bank’s solid core earnings, group posted a 7.9% growth on bottom line in the first half of 2016, YoY, aided by benign NPL which stabilize asset quality.

  • Loan growth reached +4.6% YoY, led by SME/Large corp.

  • sectors; F/X lending turned positive growth, as well as overseas loans.

Better-than-expected loan demand rose from 1Q16 and went on in 2Q16. F/X lending turned positive due to resumed demand of export sector from IT industries and robust offshore lending.

  • Fee income from Wealth Management continued to pick

  • up in 2Q16, will sustain until the end of 2016.

Domestic low-interest rate spurred WM fee income to soar, 10.9% (YoY) fee income growth in 1H16 shall extend to 2[nd] half .

  • First Bank latest Tier-1 rank rose to #208, comparing #234 from prior year,

  • according to “ The Banker”, July-2016.

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1H 2016 Financial Highlight

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1H 2016 Key Figures

Key Figures ( in NT$ dollar, NT$ mn, mn shares or %)
Consolidated Net Income1
Comprehensive Income
Total Assets
EPS
Book per share
Capital Stock
ROAE
3
ROAA
3
Group CAR
Double Leverage4
1H16
8,7461
8,999
2,488,308
0.73
16.21
119,769
9.36%
0.70%
131.84%
106.42%
YoY %
7.9%
37.1%
4.3%
-6.4%
3.8%
21.5%
-10.9%
2.9%
-0.9%
-2.1%
1H15
8,1081
6,566
2,386,009
0.78
15.62
98,611
10.50%
0.68%
132.75%
108.47%
1H16 Net Income Breakdown1( in NT$ mn) Key Figures ( in NT$ dollar, NT$ mn, mn shares or %)
Consolidated Net Income1
Comprehensive Income
Total Assets
EPS
Book per share
Capital Stock
ROAE
3
ROAA
3
Group CAR
Double Leverage4
1H16
8,7461
8,999
2,488,308
0.73
16.21
119,769
9.36%
0.70%
131.84%
106.42%
YoY %
7.9%
37.1%
4.3%
-6.4%
3.8%
21.5%
-10.9%
2.9%
-0.9%
-2.1%
1H15
8,1081
6,566
2,386,009
0.78
15.62
98,611
10.50%
0.68%
132.75%
108.47%
Banking
NT$9,072; 103.7%
Securities
NT$(135); -1.5%
Investment Trust
NT$31; 0.4%
Others
NT$(163);-1.9%
Insurance
NT$(59); -0.7%

  1. Based on the classification of specific company’s business units, financial information by business segments should be listed individually.

  2. Comprehensive Income Statement is required by IFRS.

  3. Annualized figures.

  4. Double Leverage = Equity Investment / Shareholder Equity

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Net Income & Comprehensive Income

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1H16 Consolidated Net Income & Comprehensive Income (in NT$ mn)
Credit (921)
Insurance (146)
(1,067)
22,100 (10,707)
7.9% 37.1%
↑ ↑
(1,580)
8,746 8,999
253
Net Revenue Provision Operating Income Tax Net Income Other Items Comprehensive
Expense Income
1H15 Consolidated Net Income & Comprehensive Income (in NT$ mn)
Credit 246
Insurance 702
948
(10,632)
19,325
(1,533)
8,108 6,566
(1,542)
Net Revenue Provision Operating Income Tax Net Income Other Items Comprehensive
Expense Income
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Net Income Breakdown by Subsidiaries*

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1H16 FFHC Net Income Breakdown (in NT$ mn)
↑7.9%
9,072 ↑14.9% 8,746
FFHC (30)
Aviva (29)
(135) 31 (59)
First Bank First Securities FSITC First-Aviva FFHC
1H15 FFHC Net Income Breakdown (in NT$ mn)
8,108
7,896
FFHC (4)
Aviva (4)
129 78 (8)
First Bank First Securities FSITC First-Aviva FFHC
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  • Major 4 subsidiaries were listed.

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1H 2016 Operating Results

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FFHC & First Bank Profitability -After Tax

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FFHC Net Income & ROAE (in NT$ mn & %)
Cumulative Net Income Annualized ROAE
10.73% 10.52% 10.50%
9.53% 9.45% 9.32% 9.28% 9.36%
15,962
14,078
11,705 12,018
8,108 8,746
4,109 4,406
9M 14 2014 3M 15 6M 15 9M 15 2015 3M 16 6M 16
First Bank Net Income & ROAE (in NT$ mn & %)
Cumulative Net Income Annualized ROAE
10.60% 10.56% 10.32% 10.36%
9.40% 9.60% 9.56% 9.86%
16,100
13,381
12,013
10,936
9,072
7,896
4,100 4,808
9M 14 2014 3M 15 6M 15 9M 15 2015 3M 16 6M 16
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1.Minority interests included

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FB 1H 16 Pre-tax Profit

18,205
20,610
1H15
1H16
Cumulative Net Revenue
+13.2%
Item
1H15		 1H16 Change
NII
74.4%		 66.9% -7.5%
Net Fee
18.8%		 18.5% -0.3%
Gain on ST Invest.
0.1%		 -0.2% -0.3%
Gain on LT invest.
0.1%		 2.0% +1.9%
Gain on fin. Products
5.2%		 10.8% +5.6%
Others
1.4%		 2.0% +0.6%
z
Total Revenue
100.0%		 100.0%
Provision Expense (net)
+1.6%		 -4.3% +5.9%
Operating Expense
-49.8%		 -44.8% -5.0%
FB Revenue/Expense Comparison(in NT$ mn ) Income Before Tax
51.8%		 50.9% -0.9%

Preliminary data

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FB 1H16 Loan Book Mix

1H16 1H16 1H16 Loan Book1 (in NT$ bn or %)
1,428.4
1,494.2
1H15
1H16
Loan Book1
+4.6%		 Loan Book1 (in NT$ bn or %)
1,428.4
1,494.2
1H15
1H16
Loan Book1
+4.6%		 742.1
697.9
319.9
327.0
1H151H16
1H151H16
↑F/X 2.2%
Commercial Loan
(Gov./SOE included)
F/X Loan
Item
1H15
1H16
Change
Consumer
28.7%
28.5%
-0.2%
Mortgage
27.2%
26.8%
-0.4%
Other Consumer Loan
1.5%
1.7%
+0.2%
Corporate Banking
71.3%
71.5%
+0.2%
Commercial Loan
(Gov./SOE included) )
48.9%
49.6%
+1.5%
--- SME
40.2%
40.9%
+0.7%
F/X/ Loan
22.4%
21.9%
-0.5%
--- Overseas
11.4%
13.0%
+1.6%
Loan Book1
100.0%
100.0%
% of Loan Book1
↑6.3%
SME2
573.8
SME2
610.6
Overseas
162.6
SME↑6.4%
Overseas
194.1
Overseas
↑ 19.4%
SME2
610.6
Item
1H15
1H16
Change
Consumer
28.7%
28.5%
-0.2%
Mortgage
27.2%
26.8%
-0.4%
Other Consumer Loan
1.5%
1.7%
+0.2%
Corporate Banking
71.3%
71.5%
+0.2%
Commercial Loan
(Gov./SOE included) )
48.9%
49.6%
+1.5%
--- SME
40.2%
40.9%
+0.7%
F/X/ Loan
22.4%
21.9%
-0.5%
--- Overseas
11.4%
13.0%
+1.6%
Loan Book1
100.0%
100.0%
388.9
21.7
400.1
25.0
1H151H16
1H151H16
↑2.9%
1H16 Loan Book1 Breakdown(in NT$ bn )
Mortgage
Other Consumer
Loan
↑ 15.0%		 742.1
697.9
319.9
327.0
1H151H16
1H151H16
↑F/X 2.2%
Commercial Loan
(Gov./SOE included)
F/X Loan
↑6.3%
SME2
573.8
SME2
610.6
Overseas
162.6
SME↑6.4%
Overseas
194.1
Oversea
↑ 19.4%
SME2
610.6
1H151H16
1H151H16
Mortgage
Other Consumer
Loan

  1. Loan Book does not include NALs

  2. SME as defined by the “Act for Development of Small & Medium Enterprises; both NTD & Foreign currency loan included

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FB Loan Breakdown

-QoQ Comparison

FB Loan Growth(in NT$ bn) FB Loan Growth(in NT$ bn) QoQ%
+0.9%
+4.1%
+2.6%
-14.8%
+5.8%
319.9
336.5
323.4
309.1
327.0
124.1
135.0
132.8
154.3
131.5
573.8
580.4
608.2
595.1
610.6
21.7
22.7
24.7
24.0
25.0
388.9
390.6
397.5
396.7
400.1
2Q15
3Q15
4Q15
1Q16
2Q16
SME
Mortgage
Commercial
Loan
1428.4
1465.1
1486.5
1479.2
1494.2
F/X loan
Total loan
Consumer
Loan
Others		 QoQ%
+0.9%
+4.1%
+2.6%
-14.8%
+5.8%
2Q15
3Q15
4Q15
1Q16
2Q16

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FB 1H16 LDR, SPREAD &NIM

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Total Loan & LDR (in NT$ bn or % ) Total Loan [1] LDR [2]
84.49%
83.48% 83.03%
80.21%
78.55% 77.94% 76.88% 77.30% 78.56%
1,470.9 1,491.8 1,507.1 1,456.2 1,431.1 1,468.0 1,489.5 1,482.6 1,497.3
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
△
Loan-Deposit Spread / NIM ( in % ) Spread [3] NIM [3]
1.60% 1.62% 1.61% 1.63% 1.64% 1.64%
1.55% 1.55% 1.55%
1.28% 1.28% 1.28% 1.29% 1.28% 1.27%
1.25% 1.26% 1.26%
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
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  1. Total Loan = loan + import/export negotiation + NALs

  2. LDR = Total loan / Total deposit, starting from 2012, total deposit does not include structured deposit.

  3. Annual cumulative Average Spread and NIM

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FB 1H16 Deposit Mix

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FB Deposit Structure (in NT$ bn ) FB NTD Deposit CASA Rate (in %)
NTD Deposit F/X deposit
NTD CASA rate
1H16 Total
Deposit
492.6
438.6 $1905.0 bn △
64.94% 65.03% 65.17%
64.17% 63.82%
+4.7%
1381.9 1,412.4
1H14 2H14 1H15 2H15 1H16
1H15 1H16
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FB 1H16 Mortgage Book

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Mortgage Yield & LTV Ratio (in %)
Mortgage Yield
2.16% 2.17% 2.16%
2.08%
2.01%
1.94%
1Q15 2Q15 3Q15 2015 1Q16 2Q16
Loan-to-value ratio of new mortgage Avg. loan-to-value ratio
↑4.3%
65.08% 64.94% 64.81% 64.69% 64.56% 64.57%
46.33% 46.12% 45.92% 45.94% SME 45.61% [2] 45.60%
↑17.2%
317.0
1Q15 2Q15 3Q15 2015 1Q16 2Q16
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FB 1H16 Fee Income Breakdown

FB 1H16 FB 1H16 FB 1H16 FB 1H16 FB 1H16 FB 1H16 FB 1H16
1H16 Cumulative Net Fee Income (in NT$ mn or %) Item
1H15
1H16
Change
WM1
55.7%
53.5%
-2.2%
F/X
12.9%
11.9%
-1.0%
Other2
11.4%
11.7%
+0.3%
Loan-related
13.8%
17.9%
+4.1%
Credit Card
6.2%
5.0%
-1.2%
Cumulative Net Fee
100.0%
100.0%
% of Cumulative Net Fee
3,432
3,805
1H15
1H16
Net Fee Income
+10.9%
Item
1H15
1H16
Change
WM1
55.7%		 53.5% -2.2%
F/X
12.9%		 11.9% -1.0%
Other2
11.4%		 11.7% +0.3%
Loan-related
13.8%		 17.9% +4.1%
Credit Card
6.2%		 5.0% -1.2%
Cumulative Net Fee
100.0%
100.0%
1H16 Cumulative Net Fee Breakdown ( in NT$ mn )
1H151H16
1H151H16
1H151H16
1H151H16
1H151H16
WM Fee1
Loan-related
F/X
Credit Card
Other2

  1. WM Fee = Custodian Fee + Trust-related Fee + Bancassurance Fee

  2. Other represents network service fee, including overseas branches

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FB Fee Income Breakdown

-QoQ Comparison

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Fee Income (in NT$ mn)
1,922 1,898 1,907
1,842 1,806
QoQ% +0.5%
Fee
Income
196 261 229 217
Others 213
106 112 85 106
98
Credit Card 229 222
229 238
220
F/X
Related 258 280 323 392 290
Loan 96 94
Related 95 98 93
Custodian
452 QoQ +10.7%
Wealth 492 529 651
Bacassurance MGT. 588 Banca.
505
Mutual Fund 408 361 282 327
2Q15 3Q15 4Q15 1Q16 2Q16
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  • Wealth Management Fee = Fund sales + Bancassurance + Custodian

*Other represents network service fee, including overseas branches

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FB 1H16 Cost-to-Income Ratio

9,057
9,241
1H15
1H16
Operating Expense
Cumulative Operating Expense (in NT$ mn )
+2.0%		 Cost-to-Income Ratio Analysis( in NT$ mn) Cost-to-Income Ratio Analysis( in NT$ mn) Cost-to-Income Ratio Analysis( in NT$ mn)
1H16
Item
1H15
1H16
Net Revenue
18,205
20,610
Operating Expense
(9,057)		 (9,241)
Provision(Net)
279		 (870)
Income Tax
(1,531)		 (1,427)
Net Income
7,896
9,072

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Quarterly Operating Expense & Cumulated Cost-to-Income Ratio ( in NT$ mn or % )
Net Revenue Operating Expense Cumulated Cost-to-Income Ratio
49.75%
48.77% 48.99%
47.27% 47.86%
44.20% 44.84%
10,147 9,923 10,574 10,036
9,276 9,202 9,003
4,916 4,404 4,653 4,769 4,926 4,674 4,567
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
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FB 1H16 Asset Quality

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NPL Amount, Reserve, Coverage (in NT$ mn or % )
Coverage Ratio LLR ratio (loan loss reserve/total loan, excluding gov.loan)
767.32% 775.31% 751.03%
710.06%
680.71% 692.31%
635.75%
1.37% 1.39% 1.36% 1.40% 1.40% 1.36%
1.30%
NPL Ratio NPL NPL Reserve
0.20% 0.20%
0.19% 0.19% 0.19%
0.18% 0.18%
20,089 19,699 19,337 20,124 20,738 19,932 19,451
2,951 2,774 2,520 2,596 2,761 2,879 3,060
2014 3M15 6M15 9M15 2015 3M16 6M16
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FB NPL Migration by Sectors

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1
Individual & Mortgage NPL Ratios (in %) Large Corp. & SME NPL Ratios (in %)
Individual
Large Corp.
Mortagge
0.23% SME
0.21%
0.20% 0.19% 0.22%
0.18%
0.20% 0.31% 0.32% 0.27% 0.30% 0.30%
0.17% 0.17% 0.15%
0.06% 0.06%
0.00% 0.00% 0.00%
2Q15 3Q15 4Q15 1Q16 2Q16
2Q15 3Q15 4Q15 1Q16 2Q16
Domestic NPL Ratio (in %) Overseas NPL Ratio (in %)
Domestic Overseas
0.22% 0.23% 0.24%
0.20%
0.19%
0.17% 0.09% 0.11% 0.09% 0.10%
2Q15 3Q15 4Q15 1Q16 2Q16
2Q15 3Q15 4Q15 1Q16 2Q16
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  1. Individual: mortgage and non-mortgage loan included

  2. bad-debt recovery not included.

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CAR & Core Capital

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FFHC Group CAR(in %)
Re-cap.
153.43%
CAR
132.75% 131.84%
125.55% 125.34%
119.40% 123.04% 121.24%
statutory CAR 100%
FB CAR & Core Capital(in %)
Re-cap. CAR
13.67% 13.46%
12.27%
11.51% 11.50%
11.03% 10.90% 10.88%
Tier 1
10.93% 10.86%
9.45%
8.41% 8.34% 8.31% 8.64% 9.02%
2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16
2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16
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  • •Leverage ceiling for holding companies in Taiwan: Double Leverage < 125% ; Debt Ratio < 30%

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Shareholder Return

2011
2012
2013
2014
2015
Cash dividend
0.40
0.45
0.50
0.70
0.95
Stock dividend
0.60
0.65
0.70
0.65
0.45
Total dividend
1.00
1.10
1.20
1.35
1.40
CASH Payout
ratio
39.6%
38.1%
42.4%
49.0%
61.3%
1.00
1.10
1.20
1.35
1.40
1.01
1.43
1.18
1.18
1.55
2011
2012
2013
2014
2015
FFHC Earnings Per Share ( in NT$ dollar )
EPS
Dividend
FFHC Dividend History( in NT$ dollar )
1
2011
2012
2013
2014
2015
Cash dividend
0.40
0.45
0.50
0.70
0.95
Stock dividend
0.60
0.65
0.70
0.65
0.45
Total dividend
1.00
1.10
1.20
1.35
1.40
CASH Payout
ratio
39.6%
38.1%
42.4%
49.0%
61.3%
  1. EPS is adjusted retroactively for stock dividends. ,

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Appendix

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FFHC Consolidated Statement of Comprehensive Income

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FFHC Non-consolidated Income Statement

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FFHC Balance Sheet

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FFHC Key Ratios

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FB Income Statement

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FB Key Ratios

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FB Loan Quality

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First Sec. Operating Report

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FSITC Operating Report

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– First Aviva Operating Report

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Q&A

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