9M2015 Interim Results Fubon Financial Holdings Fubon Financial Holdings 2015.11.25
Disclaimer This meeting may contain forward-looking statements with respect to the financial condition, results of operations and business of the company. These forward-looking statements represent the company’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed. Certain statements, such as those that include the words “potential”, “estimated”, and similar expressions or variations on such expressions may be considered “forward-looking statements”. Financial numbers in this report may include preliminary unaudited numbers or management accounts. 2
Agenda � Performance highlights of Fubon Financial Holdings � Performance review by subsidiary • Taipei Fubon Bank • Fubon Life • Fubon Life • Fubon Insurance • Fubon Securities • Fubon Bank (China) 3
Fubon Financial Holdings: Operation highlights Net profits NT$58,143 million 9M15 with 8.5% yoy growth � Net interest revenue and net fee revenue maintains steady Taipei Fubon Bank � Asset quality remains benign � Recurring return continue to increase and well above breakeven point Fubon Life � Total premium growth led by renewal premium and strong FYP in 3Q15 � Total premium growth led by renewal premium and strong FYP in 3Q15 Fubon Insurance � Leading position in premium income with 22.5% market share, with outstanding underwriting performance Fubon Securities � Stable market share across business lines 4
Fubon Financial Holdings: Profitability Net profits NT$bn 60.2 58.1 53.6 38.5 29.1 9M14 9M14 9M15 9M15 2012 2012 2013 2013 2014 2014 Earning per share (EPS) NT$ 5.89 5.68 5.24 3.90 3.07 2012 2013 2014 9M14 9M15 Note: Fubon adopted fair value method for investment property evaluation since September 2014. 5 5
Fubon Financial Holdings: Net profits from major subsidiaries Net profits from major subsidiaries Profit contribution from major subsidiaries Fubon Bank NT$bn NT$bn Fubon (HK) Securities 2.3 0.8 9M14 9M15 4% 1% Fubon P&C Taipei Fubon 2.6 Bank 58.1 5% 15.1 53.6 25% 38.8 38.8 31.3 16.6 15.1 2.6 2.4 2.3 1.6 1.2 0.8 Fubon Life 38.8 65% Fubon Taipei Fubon Life Fubon Fubon Fubon Note: FHC Fubon P&C Securities Bank (HK) (1) Profit contribution are based on the summation of five major Bank subsidiaries; (2) Fubon Bank (China) contributed NT$1.2bn net profits to the Company on the basis of 80% shareholding. 6
Fubon Financial Holdings: Assets and net worth Total assets NT$bn 5,861 5,438 5,207 4,597 4,106 9M14 9M14 9M15 9M15 2012 2013 2014 Equity attributable to parent company NT$bn 408 371 356 342 306 9M14 9M15 2012 2013 2014 Note: Fubon adopted fair value method for investment property evaluation since September 2014. 7
Fubon Financial Holdings: ROA & ROE ROA 1.46% 1.21% 1.38% 0.88% 0.75% 9M14 9M14 9M15 9M15 2012 2012 2013 2013 2014 2014 ROE 16.07% 20.31% 20.04% 11.54% 10.71% 2012 2013 2014 9M14 9M15 Note: Fubon adopted fair value method for investment property evaluation since September 2014. 8
Agenda � Performance highlights of Fubon Financial Holdings � Performance review by subsidiary • Taipei Fubon Bank • Fubon Life • Fubon Life • Fubon Insurance • Fubon Securities • Fubon Bank (China) 9
Taipei Fubon Bank: Revenue � Steadily growth from net interest income and net fees Revenue composition of Taipei Fubon Bank NT$bn 44.1 Fubon Bank (China) Treasury & others 11.7% Net fee income 33.7 Net interest income 34.3 25.2% 32.2 32.2 29.2 29.2 28.1% 11.1% 12.7% 21.7% 27.0% 23.7% 19.4% 25.1% 28.3% 26.4% 24.0% 39.3% 46.8% 50.0% 41.5% 37.9% 9M14 9M15 2012 2013 2014 Note: Consolidated basis; Fubon Bank (China) accounted starting from Jan. 7 th , 2014 10
Taipei Fubon Bank: Fee and wealth management revenue Wealth management revenue (2) Sources of fee revenue (1) NT$mn NT$mn 8,512 8,249 7,048 7,062 4.8% 6.2% 6.3% 11.1% 5.3% 14.7% Others 9.7% DCI,SI,SN and 10.4% others others Syndication Syndication 32.1% 32.1% Mutual funds Mutual funds loan 35.2% Custodian and Credit card trust 5.9% 3.2% Insurance Wealth 79.2% commission 78.0% management 50.9% 47.0% 9M14 9M15 9M14 9M15 Note: (1) Fee income including Taipei Fubon Bank standalone and Taipei Fubon Bank Life Insurance Agency. (2) Other income related to wealth management revenue are inclusive in the second chart. 11
Taipei Fubon Bank: Loan composition � Corporate and mortgage loans continue growing � Loan growth excluding government loans reached 8.3% Loans by type 1163.7 NT$bn 1,131.9 YoY +2.8% 0.6% 0.6% 3.7% 3.9% Credit card revolving YoY +0.3% 36.8% 36.8% 33.2% 33.2% Other consumer loans YoY -2.4% Mortgage loan YoY +13.8% 49.9% 51.2% Corporate loan YoY +5.5% Government loan 12.4% 7.7% YoY -36.0% Sep-14 Sep-15 Note: Data are stand-alone basis in page 12-16 12
Taipei Fubon Bank: Corporate credit � Foreign currency loan represents 41.9% of corporate loan in 3Q15 � SME credit accounts for 32.4% of corporate credit in 3Q15 Corporate loan by currency SME credit and as % of corporate credit NT$bn NT$bn NTD Non-NTD Non-NTD loan as % of corporate loan SME SME as % of corporate credit 211 346.3 345.2 210 340.1 340.1 337.5 209 256.8 250.1 243.5 32.4% 241.1 32.0% 31.7% 227.6 203 30.1% 31.1% 43.0% 41.9% 41.5% 41.4% 198 40.3% 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 Note: Management account basis. SME credit and corporate credit include loan and trade finance 13
Taipei Fubon Bank: Interest yield and margin NIM and loan-to-deposit spread NIM Loan-to-deposit spread 1.31% 1.28% 1.27% 1.27% 1.24% 1.10% 1.10% 1.08% 1.07% 1.08% 1Q15 2Q15 3Q15 9M14 9M15 Loan yield and deposit yield Loan rate Deposit rate 2.06% 2.05% 2.05% 2.05% 2.05% 0.81% 0.77% 0.74% 0.79% 0.77% 1Q15 2Q15 3Q15 9M14 9M15 Note: Loan rate calculation inclusive of credit card revolving 14
Taipei Fubon Bank: Deposit mix and LDR Deposit mix in NTD NTD loan-to-deposit ratio (LDR) NT$bn 988 1,068 46.7% 47.7% Time 91.0% 85.0% Demand 53.3% 52.3% Sep-14 Sep-14 Sep-15 Sep-15 Sep-14 Sep-14 Sep-15 Sep-15 Deposit mix in foreign currency Foreign currency LDR NT$bn 376 440 57.8% Time 61.6% 63.5% 59.4% Demand 42.2% 38.4% Sep-14 Sep-15 Sep-14 Sep-15 15
Taipei Fubon Bank: Asset quality NPL ratio Coverage ratio 1113.1% 1096.0% 1033.5% 0.20% 0.17% 788.6% 589.5% 0.12% 0.11% 0.11% Sep-14 Sep-14 Dec-14 Dec-14 Mar-15 Mar-15 Jun-15 Jun-15 Sep-15 Sep-15 Sep-14 Sep-14 Dec-14 Dec-14 Mar-15 Mar-15 Jun-15 Jun-15 Sep-15 Sep-15 NPL ratio by business Net provision NT$m Corporate loan Mortgage loan 41 0.6% 0.4% 0.16% 0.2% -1,027 0.02% 9M14 9M15 0.0% Sep-12 Sep-13 Sep-14 Sep-15 Net recovery 16
Agenda � Performance highlights of Fubon Financial Holdings � Performance review by subsidiary • Taipei Fubon Bank • Fubon Life • Fubon Life • Fubon Insurance • Fubon Securities • Fubon Bank (China) 17
Fubon Life: Total premium � 4.3% growth in total premium income � Renewal premium accounted for 58.1% of total premium in 9M15 NT$bn 420.7 425.0 420.1 341.3 327.3 40.6% 49.3% 55.1% 55.1% Renewal premium Renewal premium 58.1% 51.0% FYP 59.4% 50.7% 44.9% 49.0% 41.9% 9M14 9M15 2012 2013 2014 18 18
Fubon Life: First year premium (FYP) � Strong FYP growth of 42.7% in 3Q15 qoq, which mainly from traditional life and health & accidents products FYP composition YoY NT$bn 1Q15 2Q15 3Q15 9M15 9M14 % % growth Traditional life: Regular-paid 10.7 14.0 13.0 37.7 26.3% 40.8 25.4% -7.6% Traditional life: Single-paid 20.8 21.2 32.8 74.9 52.3% 98.0 61.2% -23.6% Interest-sensitive annuity 1.5 3.3 7.0 11.8 8.2% 5.8 3.6% 103.2% Investment-linked 3.1 3.3 6.7 13.1 9.1% 11.6 7.2% 12.8% Health, accidents and others 1.4 1.8 2.6 5.7 4.0% 4.0 2.5% 42.7% Total 37.4 43.6 62.2 143.2 100.0% 160.2 100.0% -10.6% 19
Fubon Life: Value of new business (VNB) & First year premium equivalent (FYPE) � FYPE growth mainly came from traditional regular-paid policies and health, accidents and others policies � VNB grew 3% in 9M15 yoy based on 2014 EV calculation assumptions VNB FYPE NT$bn NT$bn 47.8 46.9 28.4 Traditional life: Regular-paid 27.6 Traditional life: Single-paid Single-paid Investment-linked 67.0% 66.5% Interest-sensitive annuity Health, accidents and others 15.6% 20.9% 2.9% 2.5% 2.6% 1.2% 12.0% 8.8% 9M14 9M15 9M14 9M15 VNB/ FYPE 29.3% 33.4% 17.2% 19.8% FYP /FYP 20
Fubon Life: Sales channel FYP by channel � Diversified channel strategy � Growth of the size in agency force Other outperformed peers. Bancassurance: through Taipei Fubon Bank � NT$3.2bn of P&C insurance premium sold Bancassurance: through external banks through agency channel, up 14% yoy Tied agents � 64,182 new credit cards promoted by agency channel 11.7% 10.9% Number of agency force 17.0% 24.2% 18,178 41.9% 16,297 36.8% 29.5% 28.1% 9M14 9M15 9M14 9M15 21
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