Fubon Financial 2015 1H Interim Results and and 2014 Embedded Value of Fubon Life
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 • Overseas banking operation � 2014 Embedded Value of Fubon Life 3
Fubon Financial Holdings: Operation highlights Net profits NT$42,053 million 1H15 with 47.8% yoy growth. Asset allocation and lending in overseas market are earning drivers. � Strong fee from wealth management business Taipei Fubon Bank � Improving NIM and favorable loan mix in 2Q15 � Strong investment performance from recurring and capital gains � Regular-paid policy premium continues to grow Fubon Life � Market leader in agency size growth and cross-sale results Market leader in agency size growth and cross-sale results � Leading position in premium income with 22% market share Fubon Insurance � P&C (China) saw premium growth of 37% yoy in 1H15, the most rapid growth foreign P&C in China � Stable market share across business lines Fubon Securities � Fubon Securities to acquire 40% shareholdings in Huishan Futures in China 4
Fubon Financial Holdings: Profitability Net profits NT$bn 60.2 42.1 38.5 29.1 28.5 6M14 6M14 6M15 6M15 2012 2012 2013 2013 2014 2014 Earning per share (EPS) NT$ 5.89 4.11 3.90 2.78 3.07 2012 2013 2014 6M14 6M15 Note: Fubon adopted fair value method for investment property evaluation since September 2014. 2013 and 2014 data are on pro forma basis. 5 5
Fubon Financial Holdings: Net profits by major subsidiary Net profits by major subsidiaries Profit contribution from major subsidiaries Fubon Bank NT$bn NT$bn (HK) 1.6 Fubon 4% Securities 6M14 6M15 42.1 0.6 Taipei 1% Fubon P&C Fubon Bank 1.9 10.2 4% 24% 29.1 28.5 14.1 10.3 10.2 1.9 1.6 1.1 0.6 Fubon Life 29.1 Fubon FHC Taipei Fubon Life Fubon P&C Fubon 67% Fubon Bank Securities Note: (1) Profit contribution are based on the summation of five major subsidiaries; (2) Fubon Bank (China) contributed NT$680mn net profits to the Company on the basis of 80% shareholding. 6
Fubon Financial Holdings: Asset and net worth Total assets NT$bn 5,438 5,575 5,149 4,597 4,106 2012 2013 2014 6M14 6M15 Equity attributable to parent company NT$bn 408 387 384 342 306 2012 2013 2014 6M14 6M15 Note: Fubon adopted fair value method for investment property evaluation since September 2014. 2013 and 2014 data are on pro forma basis. 7
Fubon Financial Holdings: ROA & ROE ROA 1.53% 1.21% 1.17% 0.88% 0.75% 6M14 6M14 6M15 6M15 2012 2012 2013 2013 2014 2014 ROE 16.07% 21.25% 11.54% 15.62% 10.71% 2012 2013 2014 6M14 6M15 Note: Fubon adopted fair value method for investment property evaluation since September 2014. 2013 and 2014 data are on pro forma basis. 8
Fubon Financial Holdings: Cash dividend income from equity investment NT$mn 16,729 1H 2H 14,821 14,526 12,608 12,700 11,300 11,961 10,702 881 870 4,029 607 554 3,521 345 476 2,565 1,906 438 690 653 262 344 272 183 228 252 292 139 73 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 Sum Fubon Life Fubon Insurance Taipei Fubon Bank Fubon Securities *Note: 2H2015 Data is based on company estimate. 9
Agenda � Performance highlights of Fubon Financial Holdings � Performance review by subsidiary • Taipei Fubon Bank • Fubon Life • Fubon Life • Fubon Insurance • Fubon Securities • Overseas banking operation � 2014 Embedded Value of Fubon Life 10
Taipei Fubon Bank: Revenue � Strong fee growth from wealth management business � Net interest income increase due to NIM improvement and favorable loan mix Revenue composition of Taipei Fubon Bank NT$bn 44.1 Fubon Bank (China) Treasury & others 5.2 Net fee income 33.7 Net interest income 11.1 29.2 29.2 9.5 21.7 21.2 6.3 10.5 2.5 2.5 8.4 8.3 5.4 4.3 5.8 5.2 17.3 15.8 14.6 8.6 8.7 2012 2013 2014 1H14 1H15 Note: Consolidated basis; Fubon Bank (China) accounted starting from Jan. 7 th , 2014 11
Taipei Fubon Bank: Fee and wealth management revenue � Fee income growth 11.5% yoy along with wealth management and syndication business Wealth management revenue (2) Sources of fee revenue (1) NT$mn NT$mn 4,787 5,757 4,433 249 5,161 616 374 335 661 575 299 DCI,SI,SN and Others 533 533 others others 1,723 Syndication loan Mutual funds 1,604 Credit card 292 Custodian and 161 Wealth management 4,559 trust 3,994 Insurance 2,156 commission 2,007 1H14 1H15 1H14 1H15 Note: (1) Fee income including Taipei Fubon Bank standalone and Taipei Fubon Bank Life Insurance Agency. (2) Other income related to wealth management revenue are inclusive in the second chart. 12
Taipei Fubon Bank: Loan composition � Corporate and mortgage loans continue growing � Loan growth excluding government loans reached 7.5% Loans by type NT$bn 1,146.6 1,140.9 YoY +0.5% 6.8 7.1 43.1 Credit card revolving 46.2 YoY -4.1% 365.3 416.1 416.1 Other consumer loans Other consumer loans YoY -6.7% Mortgage loan YoY +13.9% 570.6 596.9 Corporate loan YoY +4.6% 151.8 Government loan 83.8 YoY -44.8% Jun-14 Jun-15 Note: Data are stand-alone basis in page 13-17 13
Taipei Fubon Bank: Corporate credit � Foreign currency loans represents 43% of corporate loans in 2Q15 � SME loan accounts for 31.7% of corporate loans in 2Q15 Corporate loan by currency SME loan and as % of corporate loan NT$bn NT$bn NTD FX FX loan as % of corporate loan SME SME as % of corporate loan 210 209 340.1 350.3 345.2 340.1 337.5 43.0% 203 203 41.4% 41.4% 41.5% 32.0% 31.7% 256.8 31.1% 241.1 243.5 198 227.6 220.3 29.0% 40.3% 30.1% 190 38.6% 2Q14 3Q14 4Q14 1Q15 2Q15 2Q14 3Q14 4Q14 1Q15 2Q15 Note: Ending balance Note: Average balance 14
Taipei Fubon Bank: Interest yield and margin NIM and loan-to-deposit spread NIM Loan-to-deposit spread 1.29% 1.28% 1.26% 1.24% 1.10% 1.10% 1.09% 1.07% 1Q15 2Q15 1H14 1H15 Loan yield and deposit yield Loan rate Deposit rate 2.07% 2.05% 2.05% 2.05% 0.81% 0.79% 0.77% 0.78% 1H14 1H15 1Q15 2Q15 Note: Loan rate calculation inclusive of credit card revolving 15
Taipei Fubon Bank: Deposit mix and LDR Deposit mix in NTD NTD loan-to-deposit ratio (LDR) NT$bn 1,008 1,065 45.5% 48.6% Time 90.7% 83.0% Demand 54.5% 51.4% Jun-14 Jun-14 Jun-15 Jun-15 Jun-14 Jun-14 Jun-15 Jun-15 Deposit mix in foreign currency Foreign currency LDR NT$bn 364 391 58.0% 62.9% Time 68.4% 65.5% Demand 42.0% 37.1% Jun-14 Jun-15 Jun-14 Jun-15 Note: Ending balance 16
Taipei Fubon Bank: Asset quality NPL ratio Coverage ratio 1320.4% 0.20% 1113.1% 1096.0% 0.17% 788.6% 0.11% 0.11% 589.5% 0.09% Jun-14 Jun-14 Sep-14 Sep-14 Dec-14 Dec-14 Mar-15 Mar-15 Jun-15 Jun-15 Jun-14 Jun-14 Sep-14 Sep-14 Dec-14 Dec-14 Mar-15 Mar-15 Jun-15 Jun-15 NPL ratio by business Provision NT$m 0.6% Corporate loan Mortgage loan 1,987 0.4% 42 0.15% 0.2% 0.02% 0.0% -880 Jun-12 Jun-13 Jun-14 Jun-15 1H14 2014 1H15 17
Agenda � Performance highlights of Fubon Financial Holdings � Performance review by subsidiary • Taipei Fubon Bank • Fubon Life • Fubon Life • Fubon Insurance • Fubon Securities • Overseas banking operation � 2014 Embedded Value of Fubon Life 18
Fubon Life: Total premium � 13% growth from renewal premium income NT$bn 420.7 425.0 420.1 171.0 207.2 234.0 234.0 Renewal premium Renewal premium 210.4 210.4 205.1 FYP 109.6 124.1 249.7 212.9 191.0 100.8 81.0 1H14 1H15 2012 2013 2014 19 19
Fubon Life: First year premium (FYP) � Product mix improvement from regular-paid policies 1. FYP from regular-paid policy grew 18% yoy 2. FYP from health, accidents and others grew 14% yoy � VNB reached NT$16.8bn in 1H15. Stable trend compared to 1H14 based on 2014 EV calculation assumptions FYP composition YoY NT$bn 1Q15 2Q15 1H15 % 1H14 % growth Traditional life: Regular-paid 10.7 14.0 24.7 30.5% 20.9 20.7% 18.0% Traditional life: Single-paid 20.8 21.2 42.1 51.9% 66.1 65.6% -36.3% Interest-sensitive annuity 1.5 3.3 4.8 5.9% 4.9 4.9% -2.6% Investment-linked 3.1 3.3 6.4 7.9% 6.1 6.1% 3.6% Health, accidents and others 1.4 1.8 3.1 3.9% 2.7 2.7% 14.3% Total 37.4 43.6 81.0 100.0% 100.8 100.0% -19.6% 20
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