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First Financial Holding Co. Ltd. Interim / Quarterly Report 2018

Nov 29, 2018

52222_rns_2018-11-29_f00be06d-37be-4b7f-8046-d4a37866be04.pdf

Interim / Quarterly Report

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First Financial Holding 3Q 2018 Earnings Result

Nov. 29, 2018

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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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3Q 2018 Snapshot

  • Non-interest income helped boost Bank’s net revenue by +8.4% YoY: Similar to 2[nd] quarter that non-interest income (treasury and fee) continued to drove bank’s revenue up by +8.4% YoY.

  • Higher than expected loan growth (+6.0% YoY) came from 1). F/X 2). mortgage lending:

Despite U.S kept hiking rates, F/X loan grew by +12.0%, YoY; mortgage lending also rose by +7.7% YoY.

  • Ample liquidity drove bank’s deposit grew by +9.3% YoY, a mixed bag on macro and local :

Bank recorded enormous deposit growth in 2018, given US/TWD rate widened gap, China’s and US’s tax reform and strong TWSE indexes attracted capital inflow.

2019 outlook:

Huge deposit growth brings WM business opportunities and helps to stabilize real-estate market in 2019, while GDP maintains moderate path. Looming economy sent uncertainty toward loan demand. High volatility on capital mkt may narrow gains on investments.

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3Q18 Financial Highlight

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3Q18 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 CAR4
Double Leverage5
3Q17
14,8321
14,347
2,585,733
1.21
15.70
122,164
10.29%
0.77%
126.35%
107.36%
3Q18
14,3041
15,945
2,882,678
1.16
16.49
123,386
9.49%
0.69%
126.80%
105.90%
YoY %
-3.6%
11.1%
11.5%
-4.1%
5.0%
1.0%
-7.8%
-10.4%
0.5%
-1.4%
3Q18 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 CAR4
Double Leverage5
3Q17
14,8321
14,347
2,585,733
1.21
15.70
122,164
10.29%
0.77%
126.35%
107.36%
3Q18
14,3041
15,945
2,882,678
1.16
16.49
123,386
9.49%
0.69%
126.80%
105.90%
YoY %
-3.6%
11.1%
11.5%
-4.1%
5.0%
1.0%
-7.8%
-10.4%
0.5%
-1.4%
Banking
NT$14,106; 98.6%
Securities
NT$214;1.5%
Investment Trust
NT$83; 0.6 %
Others
NT$(123); -0.9
Insurance
NT$(91); -0.6%
AMC
NT$115; 0.8%

  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. Preliminary data for 3Q18.

  4. Double Leverage = Equity Investment / Shareholder Equity

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Net Income & Comprehensive Income

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3Q18 Consolidated Net Income & Comprehensive Income (in NT$ mn)
↑ 23.9%
46,554 (4,178)
(8,778)
(16,973) ↑ 11.1%
↓3.6%
(2,321)
14,304 15,945
Net Revenue Credit Charge Insurance Operating Income Tax Net Income Comprehensive
Reserves Expense Income
3Q17 Consolidated Net Income & Comprehensive Income (in NT$ mn)
37,569
(1,182) (2,793)
(16,198)
(2,564)
14,832 14,347
Net Revenue Credit Charge Insurance Operating Income Tax Net Income Comprehensive
Reserves Expense Income
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Net Income Breakdown by Subsidiaries*

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3Q18 FFHC Net Income Breakdown (in NT$ mn)
↓ 3.6%
↓ 3.2%
14,304
14,106
214 83 (91) 115
First Bank First Securities FSITC First Life AMC FFHC
3Q17 FFHC Net Income Breakdown (in NT$ mn)
14,565 14,832
219 45 (82) 114
First Bank First Securities FSITC First-Aviva AMC FFHC
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  • Major 5 subsidiaries were listed.

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3Q18 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
9.36% 9.47% 9.10% 8.92% 10.14% 10.29% 8.04% 9.16% 9.66% 9.49%
17,284
13,407 14,832 15,432 14,304
8,746 9,608 9,580
4,309 4,592
6M 16 9M 16 2016 3M 17 6M 17 9M 17 2017 3M18 6M18 9M18
First Bank Net Income & ROAE (in NT$ mn & %)
Cumulative Net Income Annualized ROAE
9.86% 9.83% 9.46% 9.00% 10.00% 10.15% 7.91% 9.16% 9.34% 9.39%
17,699
13,685 14,565 15,142 14,106
9,072 9,442 9,203
4,320 4,562
6M 16 9M 16 2016 3M 17 6M 17 9M 17 2017 3M18 6M18 9M18
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1.Minority interests included

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FB 3Q18 Pre-tax Profit

3Q17
3Q18
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
Cumulative Net Revenue
3Q18 Cumulative Net Revenue(in NT$ mn or %)
% of FB Net Revenue(in %)
↓32.8%
z
Item
3Q17
3Q18
Change
NII
66.7%
61.2%
-5.5%
Net Fee
17.3%
16.3%
-1.0%
Gain on ST Invest.
0.9%
0.7%
-0.2%
Gain on LT invest.
2.3%
2.1%
-0.2%
Gain on fin. Products
11.9%
18.4%
+6.5%
Others
0.9%
1.3%
+0.4%
Total Revenue
100.0%
100.0%
Provision Expense (net)
-3.9%
-11.8%
+7.9%
Operating Expense
-43.6%
-41.9%
-1.7%
Income Before Tax
52.5%
46.3%
-6.2%
Net Interest Income
Net Fee Income
Gains on
investment
Operating Expense
FB Revenue/Expense Comparison(in NT$ mn )
↓0.5%
↑ 2.1%
↑ 53.2%
+8.4%
21,566
5,596
4,864
14,081
21,469
5,712
7,453
6,236
14,674
3,519
2,245
2,093
Provision Exp.1
Recovery
32,334
35,063
3Q17
3Q18		 3Q17
3Q18
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
Cumulative Net Revenue
3Q18 Cumulative Net Revenue(in NT$ mn or %)
% of FB Net Revenue(in %)
↓32.8%
z
Item
3Q17
3Q18
Change
NII
66.7%
61.2%
-5.5%
Net Fee
17.3%
16.3%
-1.0%
Gain on ST Invest.
0.9%
0.7%
-0.2%
Gain on LT invest.
2.3%
2.1%
-0.2%
Gain on fin. Products
11.9%
18.4%
+6.5%
Others
0.9%
1.3%
+0.4%
Total Revenue
100.0%
100.0%
Provision Expense (net)
-3.9%
-11.8%
+7.9%
Operating Expense
-43.6%
-41.9%
-1.7%
Income Before Tax
52.5%
46.3%
-6.2%
Net Interest Income
Net Fee Income
Gains on
investment
Operating Expense
FB Revenue/Expense Comparison(in NT$ mn )
↓0.5%
↑ 2.1%
↑ 53.2%
+8.4%
21,566
5,596
4,864
14,081
21,469
5,712
7,453
6,236
14,674
3,519
2,245
2,093
Provision Exp.1
Recovery
32,334
35,063
3Q17
3Q18		 3Q17
3Q18
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
Cumulative Net Revenue
3Q18 Cumulative Net Revenue(in NT$ mn or %)
% of FB Net Revenue(in %)
↓32.8%
z
Item
3Q17
3Q18
Change
NII
66.7%
61.2%
-5.5%
Net Fee
17.3%
16.3%
-1.0%
Gain on ST Invest.
0.9%
0.7%
-0.2%
Gain on LT invest.
2.3%
2.1%
-0.2%
Gain on fin. Products
11.9%
18.4%
+6.5%
Others
0.9%
1.3%
+0.4%
Total Revenue
100.0%
100.0%
Provision Expense (net)
-3.9%
-11.8%
+7.9%
Operating Expense
-43.6%
-41.9%
-1.7%
Income Before Tax
52.5%
46.3%
-6.2%
Net Interest Income
Net Fee Income
Gains on
investment
Operating Expense
FB Revenue/Expense Comparison(in NT$ mn )
↓0.5%
↑ 2.1%
↑ 53.2%
+8.4%
21,566
5,596
4,864
14,081
21,469
5,712
7,453
6,236
14,674
3,519
2,245
2,093
Provision Exp.1
Recovery
32,334
35,063
3Q17
3Q18		 3Q17
3Q18
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
Cumulative Net Revenue
3Q18 Cumulative Net Revenue(in NT$ mn or %)
% of FB Net Revenue(in %)
↓32.8%
z
Item
3Q17
3Q18
Change
NII
66.7%
61.2%
-5.5%
Net Fee
17.3%
16.3%
-1.0%
Gain on ST Invest.
0.9%
0.7%
-0.2%
Gain on LT invest.
2.3%
2.1%
-0.2%
Gain on fin. Products
11.9%
18.4%
+6.5%
Others
0.9%
1.3%
+0.4%
Total Revenue
100.0%
100.0%
Provision Expense (net)
-3.9%
-11.8%
+7.9%
Operating Expense
-43.6%
-41.9%
-1.7%
Income Before Tax
52.5%
46.3%
-6.2%
Net Interest Income
Net Fee Income
Gains on
investment
Operating Expense
FB Revenue/Expense Comparison(in NT$ mn )
↓0.5%
↑ 2.1%
↑ 53.2%
+8.4%
21,566
5,596
4,864
14,081
21,469
5,712
7,453
6,236
14,674
3,519
2,245
2,093
Provision Exp.1
Recovery
32,334
35,063
3Q17
3Q18		 3Q17
3Q18
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
Cumulative Net Revenue
3Q18 Cumulative Net Revenue(in NT$ mn or %)
% of FB Net Revenue(in %)
↓32.8%
z
Item
3Q17
3Q18
Change
NII
66.7%
61.2%
-5.5%
Net Fee
17.3%
16.3%
-1.0%
Gain on ST Invest.
0.9%
0.7%
-0.2%
Gain on LT invest.
2.3%
2.1%
-0.2%
Gain on fin. Products
11.9%
18.4%
+6.5%
Others
0.9%
1.3%
+0.4%
Total Revenue
100.0%
100.0%
Provision Expense (net)
-3.9%
-11.8%
+7.9%
Operating Expense
-43.6%
-41.9%
-1.7%
Income Before Tax
52.5%
46.3%
-6.2%
Net Interest Income
Net Fee Income
Gains on
investment
Operating Expense
FB Revenue/Expense Comparison(in NT$ mn )
↓0.5%
↑ 2.1%
↑ 53.2%
+8.4%
21,566
5,596
4,864
14,081
21,469
5,712
7,453
6,236
14,674
3,519
2,245
2,093
Provision Exp.1
Recovery
32,334
35,063
3Q17
3Q18		 3Q17
3Q18
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
Cumulative Net Revenue
3Q18 Cumulative Net Revenue(in NT$ mn or %)
% of FB Net Revenue(in %)
↓32.8%
z
Item
3Q17
3Q18
Change
NII
66.7%
61.2%
-5.5%
Net Fee
17.3%
16.3%
-1.0%
Gain on ST Invest.
0.9%
0.7%
-0.2%
Gain on LT invest.
2.3%
2.1%
-0.2%
Gain on fin. Products
11.9%
18.4%
+6.5%
Others
0.9%
1.3%
+0.4%
Total Revenue
100.0%
100.0%
Provision Expense (net)
-3.9%
-11.8%
+7.9%
Operating Expense
-43.6%
-41.9%
-1.7%
Income Before Tax
52.5%
46.3%
-6.2%
Net Interest Income
Net Fee Income
Gains on
investment
Operating Expense
FB Revenue/Expense Comparison(in NT$ mn )
↓0.5%
↑ 2.1%
↑ 53.2%
+8.4%
21,566
5,596
4,864
14,081
21,469
5,712
7,453
6,236
14,674
3,519
2,245
2,093
Provision Exp.1
Recovery
32,334
35,063
3Q17
3Q18
Cumulative Net Revenue
+8.4%
32,334
35,063
3Q17
3Q18
Item
3Q17		 3Q18 Change
NII
66.7%		 61.2% -5.5%
Net Fee
17.3%		 16.3% -1.0%
Gain on ST Invest.
0.9%		 0.7% -0.2%
Gain on LT invest.
2.3%		 2.1% -0.2%
Gain on fin. Products
11.9%		 18.4% +6.5%
Others
0.9%		 1.3% +0.4%
z
Total Revenue
100.0%		 100.0%
Provision Expense (net)
-3.9%		 -11.8% +7.9%
Operating Expense
-43.6%		 -41.9% -1.7%
FB Revenue/Expense Comparison(in NT$ mn ) Income Before Tax
52.5%		 46.3% -6.2%
  1. Gross Provision expense.

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FB 3Q18 Loan Book Mix

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% of Loan Book [1]
3Q18 Loan Book [1] (in NT$ bn or %)
Item 3Q17 3Q18 Change
Consumer 27.7% 28.4% +0.7%
1,657.9 Mortgage 25.9% 26.3% +0.4%
Other Consumer Loan 1.8% 2.1% +0.3%
Corporate Banking 72.3% 71.6% -0.7%
1,564.1 Commercial Loan 49.9% 47.9% -2.0%
+6.0%
--- SME 41.9% 40.0% -1.9%
Gov./SOE Loan 0.00% 0.60% +0.6%
F/X/ Loan 22.4% 23.7% +1.3%
3Q17 3Q18
Loan Book [1] --- Overseas 13.2% 14.0% +0.8%
Loan Book [1] 100.0% 100.0%
3Q18 Loan Book [1] Breakdown (in NT$ bn ) 795.5 ↑ 2.0%
779.9
SME↑1.2%
↑ 7.7%
436.0 F/X ↑ 12.0%
392.3
SME [2] 350.2
SME [2]
663.3
655.4
405.0
Overseas Overseas
Overseas
29.0 34.1 0.4 10.0 206.4 232.2 ↑ 12.5%
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
Mortgage Other Consumer Gov./SOE Commercial Loan F/X Loan
Loan Loan
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  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%
+1.1%
+5.6%
-0.4%
+10.7%
+233.3%
+3.5%
↑1.7%
350.2
352.8
364.1
378.9
392.3
0.4
0.0
18.0
3.0
10
124.0
125.7
117.8
119.4
132.2
655.4
657.8
653.2
665.9
663.3
30.9
31.1
32.3
34.1
405.0
414.7
421.5
431.1
436
29.0
3Q17
4Q17
1Q18
2Q18
3Q18
SME
Mortgage
Commercial
Loan
1564.1
1582.0
1605.6
1630.6
1,657.9
F/X loan
Total loan
Consumer Loan
Large Corp.
Gov./SOE		 QoQ%
+1.1%
+5.6%
-0.4%
+10.7%
+233.3%
+3.5%
↑1.7%

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FB 3Q18 LDR, SPREAD &NIM

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Total Loan & LDR (in NT$ bn or % ) Total Loan [1] LDR
79.15% 79.04% 80.48% 79.92% 78.89% 79.28% 80.00%
76.62% 76.58%
NTD 79.1%
F/X 68.6%
1,517.3 1,550.8 1,552.3 1,557.1 1,568.0 1,589.8 1,612.1 1,637.2 1,663.5
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18
△
Loan-Deposit Spread / NIM ( in % ) Spread [2] NIM [2]
1.64% 1.65% 1.63% 1.63% 1.64% 1.65% 1.63% 1.63% 1.64%
1.26% 1.26% 1.26% 1.26% 1.26% 1.26%
1.22% 1.21%
1.20%
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18
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  1. Total Loan = loan + import/export negotiation + NALs

  2. Annual cumulative Average Spread and NIM

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FB 3Q18 Loan Yields

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FB NTD Yields & Costs Overview ( in % ) Interest Spread (NTD)
Deposit Rate (NTD) Lending Rate (NTD)
1.49% 1.49%
1.47%
1.45%
1.44%
1.91% 1.91% 1.88% 1.87% 1.86%
0.42% 0.42% 0.41% 0.42% 0.42%
3Q17 4Q17 1Q18 2Q18 3Q18
FB FX Yields & Costs Overview ( in % ) Deposit Rate (FX) Lending Rate (FX)
2.50% Interest Spread (FX) 2.46%
2.43%
2.33% 2.35%
3.83%
3.66%
3.25% 3.51% 3.41%
1.23% 1.37%
0.92% 1.01% 1.06%
3Q17 4Q17 1Q18 2Q18 3Q18
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All rates are QUARTERLY* average rates.

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FB 3Q18 Deposit Mix

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FB Deposit Structure (in NT$ bn ) FB Deposit CASA Rate (in %)
NTD Deposit F/X deposit
NTD CASA rate
571.8
532.0 +7.5%
△
3Q18 Total 69.16% 69.61%
68.30%
Deposit 67.12%
66.21%
$2,171.8 bn
+9.3% YoY
+10.0% 1,600.0
1,454.9
2016 1H17 2017 1H18 3Q18
3Q17 3Q18
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Major Exposures Breakdown

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End of 3Q18 - % of Loan to Industries
4.53%
11.67%
4.33%
4.75%
10.66%
4.72%
Manufacturing; 25.53%
3Q18
4.01%
Petro.
9.97% Total Exposures Tech.
Machinery
$1,773.8 bn 5.57%
Metal
Other manufacturing
6.48% Individual(Mortgage included)
Real Estate
Wholesale/Retail
Transportation&Warehousing
33.31% Banking & Insurance
Others
----- End of picture text -----*

  1. Total exposures does not includes NALs and investment.

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FB 3Q18 Mortgage Book

3Q18 Mortgage by Location(in %)
Location
Loan%
NPL Ratio
TPE Metro
50%
0.28%
Taoyuan/Hsinchu
18%
0.17%
Taichung Area
11%
0.20%
Tainan Area
9%
0.17%
Kaohsiung Area
8%
0.08%
Eastern Area
4%
0.06%
Total
100.00%
0.22%
Location
Loan%
NPL Ratio
TPE Metro
50%
0.28%
Taoyuan/Hsinchu
18%
0.17%
Taichung Area
11%
0.20%
Tainan Area
9%
0.17%
Kaohsiung Area
8%
0.08%
Eastern Area
4%
0.06%
Total
100.00%
0.22%
↑4.3%
↑17.2%
SME2
317.0
SME2
305.0
Monthly New Mortgage Lending
Monthly New Mortgage Lending(in NT$mn)
7,235
6,965
8,879
10,322
9,205
5,977
9,357
8,473
10,071
8,274
7,664
8,000
7,595
9M17
10M17
11M17
12M17
1M18
2M18
3M18
4M18
5M18
6M18
7M18
8M18
9M18

19

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FB 3Q18 Fee Income Breakdown

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----- Start of picture text -----

3Q18 Cumulative Net Fee Income (in NT$ mn or %) % of Cumulative Net Fee
5,712 Item 3Q17 3Q18 Change
WM [1 ] 55.0% 58.0% +3.0%
Loan-related 17.1% 15.4% -1.7%
5,596 +2.1%
F/X 12.4% 11.8% -0.6%
Credit Card 5.6% 5.2% -0.4%
Other [2] 9.9% 9.6% -0.3%
3Q17 3Q18
Net Fee Income Cumulative Net Fee 100.0% 100.0%
3Q18 Cumulative Net Fee Breakdown ( in NT$ mn )
↑ 5.0%
3,341
3,183
↓ 23.7%
878
942
640 ↑3.0%643 283 539 567
292
3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18
WM Fee [1] Loan-related F/X Credit Card Other [2]
----- End of picture text -----

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

  2. Other represents network service fee, including overseas branches

20

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FB Fee Income Breakdown

-QoQ Comparison

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----- Start of picture text -----

Fee Income (in NT$ mn)
2,168 2,092
1,869 1,861 1,851 QoQ +13.0%
1,769
Quarterly
fee income
197
218
100
94
178 215 156 177
172 217
107 118 96
93
Others 214 355 223 217
209 321
Credit Card
95
F/X Related 302 284 252 305 96
94 94 94 97
Loan Related
681
695 QoQ +41.0%
Custodian 528 474 429 493
Wealth Bacassurance
MGT.
520
525 512
446 466 451
Mutual Fund
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18
----- End of picture text -----

  • Wealth Management Fee = Fund sales + Bancassurance + Custodian

*Other represents network service fee, including overseas branches

21

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FB 3Q18 Cost-to-Income Ratio

14,081
14,674
3Q17
3Q18
Operating Expense
Cumulative Operating Expense (in NT$ mn )
4.2%		 Cost-to-Income Ratio Analysis( in NT$ mn) Cost-to-Income Ratio Analysis( in NT$ mn) Cost-to-Income Ratio Analysis( in NT$ mn)
3Q18
Item
3Q17
3Q18
Net Revenue
32,334
35,063
Operating Expense
(14,081)		 (14,674)
Provision(Net)
(1,274)		 (4,143)
Income Tax
(2,413)		 (2,140)
Net Income
14,565
14,106
Quarterly Operating Expense & Cumulated Cost-to-Income Ratio( in NT$ mn or % ) Quarterly Operating Expense & Cumulated Cost-to-Income Ratio( in NT$ mn or % ) Quarterly Operating Expense & Cumulated Cost-to-Income Ratio( in NT$ mn or % ) Quarterly Operating Expense & Cumulated Cost-to-Income Ratio( in NT$ mn or % ) Quarterly Operating Expense & Cumulated Cost-to-Income Ratio( in NT$ mn or % )
Operating Expense
Cumulated
Net Revenue
44.73%
43.55%
43.03%		 Cost-to-Income Ratio
42.09%
42.20%		 41.85%
10,861 11,447
10,580		 11,049
11,684		 12,330
4,796
4,739
4,385		 4,650 4,944 5,080
2Q17
3Q17
4Q17		 1Q18 2Q18 3Q18

22

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FB 3Q18 Asset Quality

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----- Start of picture text -----

NPL Amount, Reserve, Coverage (in NT$ mn or % )
Coverage Ratio LLR ratio (loan loss reserve/total loan, excluding gov.loan)
537.82%
498.44%
500.09%
358.56% 342.89%
297.73% 321.54%
1.38%
1.20% 1.20% 1.20% 1.21%
1.18% 1.19%
NPL Ratio NPL NPL Reserve
0.40%
0.38% 0.37%
0.35%
0.22% 0.24% 0.24%
21,922
18,205 18,561 18,762 19,030 19,626 20,030
6,114 6,392 6,104 5,841
3,385 3,724 3,752
3M17 6M17 9M17 2017 3M18 6M18 9M18
----- End of picture text -----

  • NTD 2,141 mn was recategorized from “allowance for loan losses” to “reserve for loan commitments” and other provision referring to IFRS9 since 2018.

23

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FB NPL Migration by Sectors

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----- Start of picture text -----

1
Individual & Mortgage NPL Ratios (in %) Large Corp. & SME NPL Ratios (in %)
Individual
Large Corp.
Mortagge
SME
0.39%
0.75% 0.60% 0.70%
0.33% 0.32% 0.57%
0.36%
0.35%
0.31% 0.29% 0.22% 0.56%
0.22% 0.48% 0.37%
0.36%
0.21% 0.00%
0.22%
3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18
Domestic NPL Ratio (in %) Overseas NPL Ratio (in %)
Domestic Overseas
0.46% 0.47% 0.45%
0.38%
0.28% 0.22%
0.05% 0.05% 0.07% 0.08%
3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18
----- End of picture text -----

  1. Individual: mortgage and non-mortgage loan included

  2. bad-debt recovery not included.

24

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FB New NPL Influx Breakdown
Breakdown of New NPL Influx (in NT$ mn）
Quarterly
NPL Influx
4Q17
1Q18
2Q18
3Q18
--- Domestic
3,159
2,660
1,444
742
--- Overseas
79
162
38
463
Total NPL Influx
3,238
2,822
1,482
1,205		 Quarterly Recovery Mix (in NT$ mn)
Quarterly
Recovery
4Q17
1Q18
2Q18
3Q18
--- Domestic
499
636
788
574
--- Overseas
25
33
13
12
--- Credit Card
13
12
12
12
Total Recovery
537
681
813
598
Quarterly
NPL Influx
4Q17
1Q18
2Q18
3Q18
--- Domestic
3,159
2,660
1,444
742
--- Overseas
79
162
38
463		 Quarterly
Recovery
4Q17
1Q18
2Q18
3Q18
--- Domestic
499
636
788
574
--- Overseas
25
33
13
12
--- Credit Card
13
12
12
12
Total NPL Influx
3,238
2,822
1,482
1,205		 Total Recovery
537
681
813
598
1,938
1,350
1,040
880
876
2,544
1,770
1,488
1,700
3,238
988
1,482
1,205
2,822
1,983
1,379
918
908
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
Quarterly New NPL Influx & Write-offs ( in NT$ mn)
Write-off
New NPL Influx

25

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FB 3Q18 Overseas Profits

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----- Start of picture text -----

3Q18 FB Accumulated Pre-Tax Profit Mix ( in NT$ mn 3Q18 FB Total Pre-Tax Profit Mix ( in NT$ mn or %)
or %)
Total Pre-Tax
21.06% 40.84% Profit
OBU $16,246 mn
Taiwan Domestic Market;
HK
56.17%
3Q18
North America
10.37% Overseas Asean
$7,120 mn Others
14.42%
13.31% Other Overseas ; Greater China (including OBU) ;
14.80% 29.03%
----- End of picture text -----

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----- Start of picture text -----

Quarterly Overseas & Total PTP (in NT$ mn or %)
Overseas Total Cumulative Overseas PTP to FB Total PTP
36.16% 35.88% 36.77% 48.36% 40.15% 43.83%
31.57%
5,984 5,965 5,720
5,030 5,106 5,420
630
1,818 2,134 2,292 2,272 1,612 2,614 2,894
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18
----- End of picture text -----

26

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CAR & Core Capital

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----- Start of picture text -----

FFHC Group CAR(in %)
Re-cap.
153.43%
139.14% CAR
132.75% 131.84% 131.31%
126.80%
121.35%
115.66%
statutory CAR 100%
FB CAR & Core Capital(in %)
Re-cap. CAR
13.67% 13.46% 13.27% 12.82% 13.42% 13.21% 13.69%
12.27%
Tier 1
10.93% 10.86% 10.95% 10.64% 11.25% 11.08% 11.67%
9.45%
1H15 2H15 1H16 2H16 1H17 2H17 1H18 3Q18
1H15 2H15 1H16 2H16 1H17 2H17 1H18 3Q18
----- End of picture text -----

  • Leverage ceiling for holding companies in Taiwan: Double Leverage < 125% ; Debt Ratio < 30% •Preliminary data for 3Q18.

27

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Appendix

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FFHC Consolidated Statement of Comprehensive Income FFHC Consolidated Statement of Comprehensive Income (in NT$ million or %)

Year-over-Year Comparison
Full Year Results		 Year-over-Year Comparison
Full Year Results		 Year-over-Year Comparison
Full Year Results
2015
2016
2017
3Q17		 3Q18 Change
Net interest income
Net service fee & commission
Net Insurance revenue
Gain on financial assets meas.
at fair value through P/L
Real estate investment gain
Gain on AFS financial assets		 28,452
28,801
29,993
22,410
8,502
8,723
8,341
6,217
121
1,351
5,130
3,210
1,152
2,569
5,550
4,036
146
163
93
58
541
951
1,052
892		 22,653
6,473
9,222
3,973
80
0
Gain on financial assets at fair value
through other compre. income 0 1,555
Income from equity invest.
Net gain on F/X
Assets impairment loss
Others
Net Revenue
Net Provision for credit losses
Recovered(provided) for insurance res.
Operating Expense
Income from continued op. before tax
Income tax expenses
Consolidatednetincome		 (588)
(75)
138
113
1,707
935
(170)
(118)
(10)
(39)
(46)
(53)
825
1,712
746
804
40,848
45,091
50,827
37,569
(518)
(2,244)
(6,772)
(1,182)
540
(871)
(4,560)
(2,793)
(21,893)
(21,779)
(21,347)
(16,198)
18,976
20,197
18,148
17,396
(3,014)
(2,913)
(2,716)
(2,564)
15,962
17,284
15,432
14,832
413
(2,354)
(1,038)
(485)
16,375
14,930
14,394
14,347
16,006
17,356
15,483
14,872
(44)
(72)
(51)
(40)
16,461
15,023
14,380
14,337
(86)
(93)
14
10
1.48
1.42
1.27
1.21		 94
1,973
(54)
585
46,554
(4,178)
(8,778)
(16,973)
16,625
(2,321)
14,304
Other Items
Comprehensive Income		 1,642
15,945
Net Income attributed to:
Parent
Minorityinterests		 14,304
0
Comprehensive Income attributed to:
Parent
Minorityinterests		 15,945
0
EPS1(NT$)
1.16

29

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FFHC Non-consolidated Income Statement

FFHC Standalone Income Statement Summary in NT$ million, NT$, or %

in NT$ million, NT$, or %
Full Year Results Year-over-Year Comparison
2015 2016 2017 3Q17 **3Q18 ** Change
Operating revenues
Income from long-term investment 16,431 17,857 15,693 14,997 14,521 -3.2%
Other income1 213 242 246 244 220 -9.8%
Total revenues 16,644 18,099 15,939 15,241 14,741 -3.3%
Loss from long-term investment (114) (304) (53) (42) (92) 119.0%
Operating expenses (373) (338) (334) (278) (274) -1.4%
Other expenses and losses (192) (145) (118) (97) (59) -39.2%
Income from continued op. before tax 15,965 17,312 15,434 14,824 14,315 -3.4%
Income from continued op. after tax 16,006 17,356 15,483 14,872 14,304 -3.8%
Income from discontinued op., net of tax 0 0 0 0 0 --
Net income 16,006 17,356 15,483 14,872 14,304 -3.8%
EPS2(NT$) 1.48 1.42 1.27 1.21 1.16 -4.1%

  1. Including income other than long-term investment

  2. EPS is adjusted retroactively for stock dividends

30

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FFHC Balance Sheet

FFHC Balance Sheet Summary ~~in NT$ million or million shares~~

Full Years Result Full Years Result Year-over-Year Comparison Year-over-Year Comparison Year-over-Year Comparison
2015 2016 2017 3Q17 **3Q18 ** Change
Non-consolidated Balance Sheet Data
Long-term investment 197,454 203,834 205,970 205,847 215,511 4.7%
Total non-consolidated assets 201,923 205,165 208,951 208,410 223,727 7.3%
Total liabilities 14,283 13,390 17,168 16,670 20,228 21.3%
Total shareholders' equity 187,640 191,775 191,783 191,740 203,499 6.1%
Conolidated Balance Sheet Data
Total consolidated assets 2,500,096 2,541,156 2,634,059 2,585,733 2,882,678 11.5%
Total liabilities 2,312,109 2,349,127 2,442,008 2,393,729 2,679,179 11.9%
Total shareholders' equity 187,987 192,029 192,051 192,004 203,499 6.0%
Parent's shareholders' equity 187,640 191,775 191,783 191,740 203,499 6.1%
Minority interests 347 254 268 264 0 -100.0%
Current shares outstanding** 114,611 119,769 122,164 122,164 123,386 1.0%

*figures may not match due to rounding

31

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FFHC Key Ratios

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FFHC Key Ratios

FFHC Key Ratios
Full Year Results
2015
2016
2017
3Q17
3Q18 Change
0.66%
0.69%
0.60%
0.77%
0.69%
-10.4%
9.32%
9.10%
8.04%
10.29%
9.49%
-7.8%
16.37
16.01
15.70
15.70
16.49
5.0%
114,611
119,769
122,164
122,164
123,386
1.0%
105.23%
106.29%
107.40%
107.36%
105.90%
-1.4%
153.43%
139.14%
131.31%
126.35%
126.80%
0.4%
7.07%
6.53%
8.24%
8.00%
9.04%
13.0%
Year-over-Year Comparison
3Q17 **3Q18 ** Change
After-tax ROAA (Annualized ratio)
After-tax ROAE (Annualized ratio)
Book Per Share
Capital Stock
Double leverage1
Group CAR2
Debt Ratio3		 0.77%
10.29%
15.70
122,164
107.36%
126.35%
8.00%		 0.69%
9.49%
16.49
123,386
105.90%
126.80%
9.04%		 -10.4%
-7.8%
5.0%
1.0%
-1.4%
0.4%
13.0%

  1. Double leverage ratio = Long-term investment / Equity 2. Preliminary data for 3Q18

  2. Non-consolidated basis.

32

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FB Income Statement

FB Comprehensive Income Statement Summary(Standalone) in NT$ million or %

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----- Start of picture text -----

Full Year Results Year-over-Year Comparison
2015 2016 2017 3Q17 3Q18 Change
Net interest income 27,496 27,797 28,843 21,566 21,469 -0.4%
Net fee income 7,790 8,035 7,457 5,596 5,712 2.1%
Net gain on ST invest. (49) 274 398 307 256 ------
Net gain on LT invest. 177 433 719 726 730 0.6%
Net gain on other fin. products 2,823 4,344 5,256 3,831 6,467 68.8%
Other net income 349 654 241 308 429 39.3%
Net revenue 38,586 41,537 42,914 32,334 35,063 8.4%
Operating expenses (18,997) (18,963) (18,466) (14,081) (14,674) 4.2%
Pre-provisiion pre-tax profit 19,589 22,574 24,448 18,253 20,389 11.7%
Provision expense (3,027) (4,396) (9,621) (3,519) (6,236) 77.2%
Adjustment: bad-debt recovery 2,554 2,346 2,782 2,245 2,093 -6.8%
Income before tax 19,115 20,524 17,609 16,979 16,246 -4.3%
Income tax (3,015) (2,825) (2,467) (2,414) (2,140) -11.4%
Net income 16,100 17,699 15,142 14,565 14,106 -3.2%
Other items 995 (2,100) (1,214) (619) 1,652 -366.9%
Comprehensive income 17,095 15,599 13,928 13,946 15,758 13.0%
EPS 1.93 1.99 1.70 1.64 1.58 (0.04)
----- End of picture text -----

33

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FB Key Ratios

FB Key Ratios FB Key Ratios FB Key Ratios
FB Key Ratios
~~Year-over-Year Comparison~~
~~Full Year Results~~

3Q18
Change
1.64%
0.00%
1.20%
-4.76%
41.85%
-3.90%
76.58%
-2.93%
0.35%
45.83%
1.19%
3.48%
1.21%
0.83%
342.89%
-31.43%
13.69%
6.21%
11.67%
7.96%
0.71%
-8.97%
9.39%
-7.40%
2015
2016
2017
3Q17
1.63%
1.65%
1.65%
1.64%
1.26%
1.26%
1.26%
1.26%
45.53%
45.65%
43.03%
43.55%
79.04%
79.04%
79.28%
78.89%
0.19%
0.20%
0.38%
0.24%
1.19%
1.16%
1.29%
1.15%
1.40%
1.22%
1.38%
1.20%
751.03%
625.14%
358.56%
500.09%		 3Q18
Loan to deposit spread
Net Interest Margin
Cost to income ratio3
Loan to deposit ratio1
NPL ratio
Gross Provision ratio
LLR ratio (excluding gov. loan)
Coverage ratio		 1.64%
1.20%
41.85%
76.58%
0.35%
1.19%
1.21%
342.89%
CAR
Tier-1		 13.67%
13.27%
13.42%
12.89%
10.93%
10.95%
11.25%
10.81%		 13.69%
11.67%
ROAA2
ROAE2
1. Loan to depoist ratio = total loan /
2. Annualized figures.		 0.69%
0.72%
0.60%
0.78%
9.56%
9.46%
7.91%
10.14%
total deposit		 0.71%
9.39%

34

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FB Loan Quality

FB NPL Migration in NT$ million or %

FB NPL Migration
in NT$ million or %
2016
2017
Q1
Q2
Q3
3Q17
3Q18
Change
NPL- beginning
2,761
3,035
6,114
6,392
6,104
3,035
6,114
101.4%
Net new NPL influx
6,166
7,225
2,822
1,482
1,205
3,987
5,509
38.2%
Domestic
4,611
6,744
2,660
1,444
742
3,585
4,846
35.2%
Overseas
1,555
481
162
38
463
402
663
64.9%
Net write-offs
(5,892)
(4,146)
(2,544)
(1,770)
(1,468)
(3,270)
(5,782)
76.8%
NPL- ending balance
3,035
6,114
6,392
6,104
5,841
3,752
5,841
55.7%
Allowance for loan loss- beginning
20,738
18,973
19,781
19,030
19,626
18,973
19,781
4.3%
Provisions for loan loss
4,238
7,429
1,832
2,020
1,892
3,337
5,744
72.1%
Net write-offs
(5,892)
(4,146)
(2,544)
(1,770)
(1,468)
(3,270)
(5,782)
76.8%
Others
(111)
(334)
(39)
346
(20)
(278)
287
--
Allowance for loan loss- ending
18,973
21,922
19,030
19,626
20,030
18,762
20,030
6.8%
Recovery from bad debt
2,346
2,782
681
813
598
2,011
2,092
4.0%
Domestic
2,075
2,533
636
788
574
1,791
1998
11.6%
Overseas
214
197
33
13
12
180
58
-67.8%
Credit card
57
52
12
12
12
40
36
-10.0%
1. Non-consolidated basis
NTD 2,141 mn was recategorized from “allowance for loan losses” to “reserve for loan commitments” and other provision referring to IFRS9 since 2018
Year-over-Year Comparison
2018 Quarterly
Full Year Results*
  • NTD 2,141 mn was recategorized from “allowance for loan losses” to “reserve for loan commitments” and other provision referring to IFRS9 since 2018

35

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First Sec. Operating Report

First Sec. Operating Report First Sec. Operating Report First Sec. Operating Report
Fir
in		 st S
NT$		 ec Income Statement Summary
million or %
2014
Full Yr
3Q18
B
N
U
P
O
T
Tot
No
Inc
Inc		 roker
et int
nder
ricipl
ther
otal o
al op
n-ope
ome
ome t		 age commission
erest income
writing commission
e transaction gains, net
operating income
perating income
erating expenses
rating income
before tax
ax		 803
335
38
187
63
1,426
(1,367)
54
114
(40)		 Brokerage commission
753
645
849
605
Net interest income
315
292
306
222
Underwriting commission
53
23
38
33
Transaction gains through F/V, net
217
(12)
227
173
Other operating income
125
93
107
95
Total operating income
1463
1,041
1,527
1,128
Total operating expenses
(1,363)
(1,288)
(1,301)
(937)
Non-operating income
64
42
72
51
Income before tax
164
(205)
298
242
Income tax
10
(24)
(26)
(23)		 706
237
78
90
53
1,164
(960)
56
260
(46)
Cu
prin		 mmul
ciple		 ative effect of change in accounting
s		 0 Cummulative effect of change in
accounting principles		 0
0
0
0		 0
Net inco me 74 Net income 174
(229)
272
219		 214
Fir st S ec Key Ratios First Sec Key Ratios
RO
RO
Bro
Mar		 AE (
AA (A
kerag
gin lo		 Annualized)
nnualized)
e market share
an market share		 1.14%
0.40%
1.57%
2.41%		 ROAE (Annualized)
ROAA (Annualized)
Brokerage market share
Margin loan market share		 2.65%
-3.65%
4.41%
4.78%
0.92%
-1.30%
1.55%
1.68%
1.58%
1.45%
1.48%
1.56%
2.64%
2.99%
2.77%
2.96%		 4.48%
1.37%
1.43%
2.56%

36

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FSITC Operating Report

FSITC Income Statement Summary in NT$ million or %

3Q18 Change
492
6
498
(406)
10
102
(20)
83
0		 40.2%
20.0%
39.9%
30.5%
25.0%
92.5%
150.0%
84.4%
#DIV/0!
Net income
102
64
70
45		 83 84.4%
y
FSITC Key Ratios
AUM
97,016
94,461
101,095
99,101
AUM Ranking
8
8
8
7		 95,213 -3.9%
8
  1. Non-consolidated basis

37

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First Life Operating Report

First Life Financial Results Summary in NT$ million or %

in NT$ million or %
3Q17 3Q18
9,073
7,876
201
996
8,763
29
2,880
5,253
513
88
(416)
(93)
(323)
0		 15,182
14,783
237
162
14,798
35
8,602
5,328
699
134
(478)
(127)
(350)
0
Profit/Loss of Operation
(89)
(150)
(129)
(106)
Non-Operating Profit
0
0
0
0
Profit/Loss Before Tax
(89)
(150)
(129)
(106)
Income tax
(1)
3
26
24
Net Income after tax
(90)
(147)
(103)
(82)
Key Ratios
ROAE(Annualized ratio)
-11.26%
-23.91%
-19.39%
-20.83%
ROAA(Annualized ratio)
-0.28%
-0.45%
-0.30%
-0.33%
* FFHC claims 51% of First-Aviva operating results in 2015,2016, and 2017.		 (93)
0
(93)
3
(91)
-10.54%
-0.29%

38

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Q&A

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