hnfhc 2q 2012 analyst meeting en final€¦ · requirement by fsc. in order to improve asset...

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2012/8/30

HNFHCHNFHC

2Q 2Q 202012 Analyst12 Analyst MeetingMeeting

Senior Vice President & Senior Vice President & General ManagerGeneral Manager

Mr. King Mr. King huohuo LuLu

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• 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• This document may not be directly or indirectly reproduced, redistributed or forwarded to any other person and my not be published in whole or in part for any purpose.

DisclaimerDisclaimer

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��Operating Results Operating Results –– HNFHCHNFHC……………………....P.7....P.7

��Operating Results Operating Results –– SubsidiariesSubsidiaries……..……...P.10...P.10

��Asset QualityAsset Quality…………………………………………………….......P.20.......P.20

��OutlookOutlook………………………………....……………………………….......P.24.......P.24

��1Q 2012 1Q 2012 HighlightsHighlights………………………………....…………...P.4...P.4

AgendaAgenda

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2Q 2012 Highlights2Q 2012 Highlights

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Performance

�Core earnings continued growth momentum

� Group’s core earnings HNCB NII grew 11%, YoY, from NT$9,297 million in 2Q2011 to NT$ 10,342 million in 2Q2012.

� HNCB fee income lowered by 9% from NT$2,362 million in 2Q2011 toNT$2,147 million in 2Q2012. The drop was mainly due to dropped in wealth management business and slow in syndicated loan market. That result caused the total fee income in lending decline by 22%, YoY .

� Improving asset quality

� The loan coverage ratio was 1.11% in 6M2012, beyond the 1% requirement by FSC. In order to improve asset quality, the Bank increased loan losses provision to NT$1,734 million in 6M012, a NT$1,167 million increased compared to 3M2011.

�Gradual improvement in NIM

� Benefit from the continued expansion of overseas branches and OBU, the spread has improved gradually from 1.30% in 6M2011 to 1.34% in 6M2012, and NIM increased from 0.98% in 6M2011 to 1.04% in 6M2012.

�Group’s cross selling efforts remains strong

� HNSC’s brokerage market share rose to 2.75% from 2.63% (12M2011).

� SCIC’s growth written premium rose 4%, YoY. The market share also improved to 5.63% from 5.39% (12M2011).

2Q2012 Highlights2Q2012 Highlights--1 1

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Asset Quality&

Capital Position

�Continue to improve asset quality�NPL ratio increased to 0.73% in 6M2012, 20bps more, YoY, due to

reclassification of ProMOS loans into NPL this April. Coverage ratio also lower from 153.48% to 143.55% during the same period of time.

�Capital position remains adequate�HNCB CAR stood at 13.12%, Tier 1 stood at 9.42% in 1Q2012. HNFHC CAR

stood at 138.45%.

Greater China

�HNCB�Shenzhen branch began offering RMB service on May 16th, 2012. It was the first

Taiwanese bank to receive approval from CBRC in offering RMB service for Taiwan-funded enterprises. In addition The Shenzhen Baoan sub-branch application also received approval from FSC.

�The second branch, Shanghai branch, is in preparation to establish after receiving approval from FSC.

�In the process of evaluating taking ownership stakes of second and third-tier city commercial banks in China .

�The domestic Hua Nan International Leasing Company celebrated its grand opening on Aug 15th, 2012. The reinvested leasing company in China is in active preparation.

�HNSC�Approved by FSC to establish Beijing representative office on Apr. 5th, 2012, and

applied to CSRS on Apr. 26, 2012. �Continuing to work with Peking University’s Founder Group on TDR underwriting,

asset management, research on stock, security and brokerage business cooperation.

2Q2012 Highlights2Q2012 Highlights--22

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Operating Results Operating Results –– HNFHCHNFHC

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(NT$mn or NT$ dollar) 1Q2012 2Q2012 QoQ 6M2011 6M2012 YoY

Net income 2,694 2,421 -10% 4,375 5,115 17%

Total assets 1,988,837 2,011,843 1% 1,913,770 2,011,843 5%

Book value 130,111 127,983 -2% 101,920 127,983 26%

EPS 0.33 0.26 -21% 0.66 0.59 -11%

Book Value per share 15.84 15.58 -2% 15.40 15.58 1%

Capital stock 82,143 82,143 0% 66,173 82,143 24%

ROA (%) 0.54 0.48 -0.06 0.46 0.51 0.05

ROE (%) 8.43 7.51 -0.92 8.65 8.07 -0.58

CAR (%) 140.21 138.45 -1.76 114.41 138.45 24.04

Double Leverage Ratio 105.94 108.47 2.53 107.23 108.47 1.24

Debt/Equity ratio 7.37 9.63 2.26 10.10 9.63 -0.47

HNFHCHNFHC--Net Income Grew 17% Net Income Grew 17% YoYYoY

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(NT$mn)1Q2012

Net Income

2Q2012

Net IncomeQoQ

6M2011

Net Income

6M2012

Net IncomeYoY

HNCB 2,442 2,488 2% 3,943 4,930 25%

HNSC 187 (63) -134% 241 124 -49%

SCIC 152 95 -38% 278 247 -11%

HNIT 12 6 -50% 34 18 -47%

HNVC (74) (17) 77% 12 (91) -858%

HNMC 3 4 33% 3 7 133%

HNAMC 71 28 -61% 57 99 74%

TOTAL 2,793 2,541 -9% 4,568 5,334 17%

Net income contribution (6M2011) Net income contribution (6M2012)

SubsidiariesSubsidiaries--Operating ResultsOperating Results

57 , 1% 3 , 0%

12 , 0%34 , 1%

278 , 6%

241 , 5%

3,943 , 87%

HNCB HNSC SCIC HNIT HNVC HNMC HNAMC

4,930 , 90%

18 , 0%(91), 2% 7 , 0%

99 , 2%

124 , 2%

247 , 4%

HNCB HNSC SCIC HNIT HNVC HNMC HNAMC

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Operating Results Operating Results -- SubsidiariesSubsidiaries

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Profitability

CAR & Tier I

Market Share

Returns

HNCBHNCB--Operating ResultsOperating Results

Unit: NT$100mn

59.5

83.85

49.3

2010 2011 6M2012

Net Income

6.06%6.00%

5.80%

5.93%

6.28%

6.14%

2010 2011 6M2012

Deposits Loans

9.10%

6.87%

9.04%

0.50%0.33% 0.44%

2010 2011 6M2012

ROE (after tax) ROA (after tax) 13.12%11.34%11.51%

9.42%7.49%7.54%

2010 2011 6M2012

CAR Tier I

Note：6M2012 Returns were annualized basis

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HNCBHNCB--Net Revenue Grew 9% Net Revenue Grew 9% YoYYoY

Unit: NT$mn Net RevenueNet Revenue

6M2011 6M2012 YoYYoY13,966 15,284 +9 %+9 %

9,297

2,362

1,217 882209 129

10,342

2,1471,479 1,187

NII Fee Income Gains on Financial

Assets and Liab.

Recovery Others

6M2011 6M2012

+11%

-9% +22% -38%+35%

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1.98%1.94%1.93% 1.92%1.97% 1.99%1.96%1.95%1.96%1.99%

1.99%1.99%1.88%

0.64%0.56%

0.63%0.62%0.63%0.63%0.63%0.63%0.63%0.63%0.61%0.59%0.59%

1.34%1.36%1.34%1.32%1.33%1.36%1.36%1.36%1.29%1.36%1.35%1.34%1.32%

Jun 2011 Jul Aug Sep Oct Nov Dec Jan 2

012 Feb Mar Apr May Jun

Lending Rate Deposit Rate Spread

1.00% 1.00% 1.02% 1.04% 0.99%1.04%

1.02% 1.04% 1.04% 1.03% 1.03%1.05% 1.04%

Jun 2011 Jul Aug Sep Oct Nov Dec Jan 2

012 Feb Mar Apr May Jun

NIM

NIM +4bp

HNCBHNCB--Gradual Improvement in Spread and NIMGradual Improvement in Spread and NIM

Spread +2bp

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NTD Deposits Breakdown Total Loans Breakdown

NTD Demand Deposit Ratio 60%

HNCBHNCB--Total Loans Rose 3% Total Loans Rose 3% YoYYoYUnit:NT$100mn

7,905 8,032 7,950

5,132 5,165 5,386

2Q2011 1Q2012 2Q2012

Demand Deposit Time Deposit

1,122

7,365 7,114 7,448

4,476 4,934 4,964

1,101879

1Q2011 4Q2011 1Q2012

Overseas & OBU Corporate Consumer

12,902 13,27113,037 13,197

40%39%39%

60%61%61%

5,132

7,905

5,165

8,032

5,386

7,950

LoanLoan--Deposit RatioDeposit Ratio2Q2011 3Q2011 4Q2011 1Q2012 2Q201282.96% 85.72% 81.43% 85.19% 82.85%82.85%

39%

52%

9%

YoY + 3 %

13,53413,336

37%

55%

8%

57%

36%

7%

4,638

7,308

956

4,964

7,448

5,125

6,885

1,122 1,261

15

1,032

2,335

3,508

11

4,481

643

1,213

2,766

3,302

27

4,015

623

956 1,261

6M2011 6M2012

Overseas % OBU

Other Consumer

Mortgage

Other Corp. Loan

SME

Large Corp.

Government

Total loans rose 3 % YoY

HNCBHNCB--Loan Drivers Come From SME, Mortgage and OverseasLoan Drivers Come From SME, Mortgage and Overseas

Unit:NT$100mn

Government

Large Corp.

SME

Other Consumer

Mortgage

Overseas & OBU

+3%

+32%

+6%

-16%

13,271

17 %

8%

26 %

34 %

5 %

10 %

9 %

21 %

26 %

31 %

5 %

8 %

12,902

+12%

-15%

16

229

119230

664

1,120

114179

628

990

236

Wealth

Management

F/X Loans Cards Others

6M2011 6M2012

HNCBHNCB-- Net Fee Income Decline by 9% Net Fee Income Decline by 9% YoYYoY

Unit: NT$mn

-5%

-22%

-12%

Net Fee Income1Q2011 1Q2012 YoY

2,362 2,147 - 9 %

-4%+3%

17

490 449

2,222 2,303

4,832 5,047

6M2011 6M2012

Other general admin expensesDepreciation and amortizationPersonnel

7,544 7,796

15,23513,967

6M2011 6M2012

Net Revenue Operating Expenses

Operating Expenses

YoY + 3 %

Cost-Income Ratio

YoY –2.99 %

HNCBHNCB-- Cost Income Ratio Decline by 2.99% Cost Income Ratio Decline by 2.99%

Unit: NT$mn

7,544 7,799 54.02% 51.03%

490 449

4,832

2,222

5,047

2,303

13,966

7,544

15,284

7,799

18

7.71

0.751.24

2010 2011 6M2012

Net Income

Profitability

CAR

Market Share

Returns

HNSCHNSC--Operating ResultsOperating Results

Unit: NT$100mn

2.75%2.63%2.68%

3.58%3.60%3.25%

2010 2011 6M2012

Brokerage Margin Lending

0.66%

6.68%

2.22%

3.08%

1.25%0.32%

2010 2011 6M2012

ROE (after tax) ROA (after tax)527%

537%

377%

2010 2011 6M2012

CAR

Note： 6M2012 Returns were annualized basis

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55 60.53

34.88

2010 2011 6M2012

Written Premium

Growth Written Premium

Net Combined RatioReturns

Market Share

SCICSCIC--Operating ResultsOperating Results

Unit: NT$100mn

5.23% 5.39%5.63%

2010 2011 6M2012

Written Premium Market Share

13.68%

16.54%18.20%

2.66%3.34% 3.86%

2010 2011 6M2012

ROE (after tax) ROA (after tax)

55.73%56.74%48.67%

32.47%35.23%34.94%

2010 2011 6M2012

Net Claim Ratio Net Expense Ratio

86.11%

56.74%

35.23%

51.69%

34.42%

91.97% 88.20%

55.73%

32.47%

Note： 6M2012 Returns were annualized basis

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Asset Quality

21

69 64 62 60

97

0

50

100

2Q11 3Q11 4Q11 1Q12 2Q12

NPL Ratio & Coverage Ratio

NPL

HNCBHNCB--Continue to Improve Asset QualityContinue to Improve Asset Quality

Unit: NT$mn

+NT$ 2.8 billion YoY

Unit: NT$100mn

6M2011 6M20126M2012 YoY

Provision 1,7161,716 1,734 1 %

Write-Off 1,6241,624 833 - 49 %

Recovery 882882 1,187 35 %

Reserve 10,60810,608 13,984 32 %0.48%0.53% 0.47% 0.44%

0.73%221.35%

143.55%

211.12%172.15%

153.48%

0.00%

0.25%

0.50%

0.75%

1.00%

2Q11 3Q11 4Q11 1Q12 2Q12

0%

50%

100%

150%

200%

250%

22

2

3 3

4 4

0

1

2

3

4

5

2Q11 3Q11 4Q11 1Q12 2Q12

29 27 27 28 19

0.77%0.87% 0.79% 0.80%0.54%

0.00%

0.50%

1.00%

1.50%

2.00%

2Q11 3Q11 4Q11 1Q12 2Q12

0

20

40

60

80

SME NPL ratio & NPL

Large Corp. NPL ratio & NPL

-0. 33% YoY

Large Corp. New NPL formation

SME New NPL formation

HNCBHNCB-- SME NPL Kept in A Low PositionSME NPL Kept in A Low Position

Unit: NT$100mn

+NT$200 million YoYUnit: NT$100mn

21 19 18

63

19

0.69%0.74% 0.76% 0.71%

2.69%

0.00%

1.00%

2.00%

3.00%

2Q11 3Q11 4Q11 1Q12 2Q12

0

20

40

60

80

30 0 0

48

0

10

20

30

40

50

60

2Q11 3Q11 4Q11 1Q12 2Q12

+NT$ 4.5 billion YoY+1.95% YoY

23

3

2 2 2

1

0

1

2

3

4

2Q11 3Q11 4Q11 1Q12 2Q12

12 11 9 8 7

0.15%0.19%0.22%

0.30%0.26%

0.00%

0.25%

0.50%

0.75%

2Q11 3Q11 4Q11 1Q12 2Q12

0

10

20

30

40

Mortgage NPL ratio & NPL Mortgage New NPL formation

-0. 15% YoY

HNCBHNCB--Mortgage NPL Remains LowMortgage NPL Remains LowUnit: NT$100mn

-NT$200 million YoY

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Outlook

25

OutlookOutlook

A FirstA First--ClassClass

Regional Regional Financial Financial Holding Holding CompanyCompany 4. Boost cross-sell capabilities

24% of subsidiary's business is contributed fromcross-sell

1. Expand overseas operation25% of HNCB revenue were from overseas networks

2. Raise non-bank subsidiaries revenue contribution10% of revenue contributed by non-bank subsidiaries

VISIONVISION STRATEGY and Achievement in 6M2012 STRATEGY and Achievement in 6M2012

3. Initiate dual-brand strategy47% of HNCB interest income contributed by consumer banking business

5. Strengthen capital level HNFHC CAR：：：：138.45% ;HNCB CAR：：：：13.12%, HNCB Tier 1：：：：9.42%

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Greater China RegionThe strategy is to select 3 focus area from 5 major regions（（（（Bohai Rim/Yangtze River Delta/Haixi/Pearl River Delta and Chengdu-Chongqing) to reflect the on going changes in the cross strait relationships and capture more opportunities.

�HNCB� Branch

Shenzhen branch has began offering RMB services for Taiwan-funded enterprises on May 16th 2012, the first Taiwan-funded bank to run RMB services in China. The Bank will continue to strengthen its advantage in order to seize the RMB business opportunities.The second branch, Shanghai branch, is in the application process to CBRC and the aim for the branch is to target customers located in the Yangtze River Delta region.

� Sub-branchBank has received FSC approval to establish sub-branch in the Shenzhen Baoandistrict to expand our services. The sub-branch can immediately operate RMB business as Shenzhen branch once its established.

OutlookOutlook--Expand Overseas OperationExpand Overseas Operation

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The strategy is to select 3 focus area from 5 major regions（（（（Bohai Rim/Yangtze River Delta/Haixi/Pearl River Delta and Chengdu-Chongqing) to reflect the on going changes in the cross strait relationships and capture more opportunities.

�HNCB (cont.)� Leasing Company

� Taking Ownership StakesIn the process of evaluating undertaking the ownership stakes in 2nd- and 3rd-tier city commercial banks.

The Hua Nan International Leasing Company was established on Aug 15th, 2012. In order to capture the Greater China capital leasing market opportunities, the leasing company in China is in the application process

Greater China Region


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Greater China Region

��HNSC & SCIC & HNITHNSC & SCIC & HNIT� HNSC received the approval from FSC to establish a second representative

office in Beijing on Apr. 5, 2012 and has applied to CSRC on Apr. 26, 2012 to act as the Group’s networking function role in the future.

� To work with local partners to establish a trust fund company to explore wealth management business opportunities.

� SCIC will continue to work with existing strategic alliances partner, AnchengProperty & Casualty Insurance in business cooperation.

� HNIT is in preparation to apply the QFII quota in order to invest in China's capital markets.


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Q & AQ & A

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AppendixAppendix

31

HNFHC Condensed Consolidated Income Statements

Expressed In Millions of New Taiwan Dollars, Except Earnings Per Share

2010 2011 Change 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 Change 6M2011 6M2012 Change

(%) (%) (%)27,435 32,387 18.05% 7,342 7,836 8,461 8,748 8,563 8,600 0.43% 15,178 17,163 13.08%(9,913) (12,136) 22.43% (2,639) (2,877) (3,203) (3,417) (3,295) (3,260) -1.06% (5,516) (6,555) 18.84%

17,522 20,251 15.57% 4,703 4,959 5,258 5,331 5,268 5,340 1.37% 9,662 10,608 9.79%7,176 6,570 -8.44% 1,574 1,681 1,753 1,562 1,483 1,433 -3.37% 3,255 2,916 -10.41%1,859 1,931 3.85% 556 536 489 350 536 634 18.28% 1,092 1,170 7.14%

(2,137) 1,779 -183.25% 328 (845) 2,541 (245) (751) 865 -215.18% (517) 114 -122.05%1,023 240 -76.59% 91 85 79 (15) 114 35 -69.30% 176 149 -15.34%

0 0 - 0 0 0 0 0 0 - 0 0 -(2) (3) 50.00% 4 (1) (1) (5) (1) 0 -100.00% 3 (1) -133.33%67 67 - 56 4 5 2 2 25 1150.00% 60 27 -55.00%

3,795 (1,041) -127.43% 120 1,110 (3,042) 771 1,546 (527) -134.09% 1,230 1,019 -17.15%(68) (33) -51.47% (20) (5) 1 (9) (79) (7) -91.52% (25) (86) 242.80%

2,034 3,032 49.07% 382 500 986 1,164 254 936 268.50% 882 1,190 34.92%1,182 1,242 5.08% 180 396 346 320 213 335 57.28% 576 548 -4.86%

14,929 13,783 -7.68% 3,271 3,461 3,157 3,895 3,317 3,729 12.43% 6,732 7,046 4.67%

32,451 34,034 4.88% 7,974 8,420 8,415 9,226 8,585 9,069 5.64% 16,394 17,654 7.69%(7,346) (4,784) -34.88% (905) (836) (839) (2,204) (592) (1,159) 95.78% (1,741) (1,751) 0.57%

(506) (86) -83.00% (94) (68) 1 75 (57) (214) 275.44% (162) (271) 67.28%

(17,828) (18,761) 5.23% (4,511) (4,729) (4,915) (4,606) (4,782) (4,803) 0.44% (9,240) (9,585) 3.73%(11,639) (12,056) 3.58% (2,918) (3,031) (3,180) (2,927) (3,079) (3,111) 1.04% (5,949) (6,190) 4.05%

(1,132) (1,101) -2.78% (281) (278) (275) (267) (270) (263) -2.59% (559) (533) -4.65%(5,057) (5,604) 10.82% (1,312) (1,420) (1,460) (1,412) (1,433) (1,429) -0.28% (2,732) (2,862) 4.76%

6,771 10,404 53.65% 2,464 2,787 2,662 2,491 3,154 2,893 -8.27% 5,251 6,047 15.16%(690) (1,860) 169.57% (428) (448) (553) (431) (460) (472) 2.61% (876) (932) 6.39%

6,081 8,544 40.49% 2,036 2,339 2,109 2,060 2,694 2,421 -10.12% 4,375 5,115 16.92%0 0 - 0 0 0 0 0 0 - 0 0 -

6,081 8,544 40.50% 2,036 2,339 2,109 2,060 2,694 2,421 -10.12% 4,375 5,115 16.92%

0.87 1.22 40.23% 0.31 0.35 0.26 0.30 0.33 0.26 -20.10% 0.66 0.59 -10.61%0 0

6,081 8,544 40.50% 2,036 2,339 2,109 2,060 2,694 2,421 -10.12% 4,375 5,115 16.92%0 0 - 0 0 0 0 0 0 - 0 0 -

PeriodQuarterYear

Interest IncomeInterest Expense

Interest Income, NetService fee and commission income, netIncome from insurance premiums, netGains(losses) on financial assets and liabilitiesRealized gains(losses) of available-for-saleRealized gains or losses on held-to-maturityIncome(loss) from investments accounted forIncome from investments in real estateForeign exchange gains, netImpairment lossBad debts and overdue accounts recoveredOther non-interest income

Net Income Excluding Interest Income

Net RevenuesBad-debt expensesProvisions for the insurance reserves

Operating ExpensesPersonnelDepreciation and amortizationOther general and administrative expenses

Consolidated income before income tax fromIncome Tax Expense

Consolidated income after income tax from

Parent companyMinority interest

Cumulative effects of changes in accounting

Consolidated net income

Basic earnings per share

Attributable to：

32

HNFHC Condensed Balance SheetsExpressed In Millions of New Taiwan Dollars, unless otherwise indicated


Balance Sheets (%) (%) (%)Investments accounted for using equity

method106,027 112,833 6.42% 107,908 108,974 109,232 112,833 137,527 138,514 0.72% 108,974 138,514 27.11%

Total assets 109,050 135,209 23.99% 110,851 112,217 111,005 135,209 139,701 140,305 0.43% 112,217 140,305 25.03%Total liabilities 8,716 9,695 11.23% 8,749 10,298 8,956 9,695 9,591 12,324 28.50% 10,298 12,324 19.67%Total Stockholders' equity 100,334 125,514 25.10% 102,102 101,919 102,049 125,514 130,110 127,981 -1.64% 101,919 127,981 25.57%

- - - - - - - - - -Consolidated Balance SheetsTotal assets 1,880,638 1,975,026 5.02% 1,854,846 1,913,770 1,953,179 1,975,026 1,988,327 2,011,843 1.18% 1,913,770 2,011,843 5.12%Total liabilities 1,780,302 1,849,510 3.89% 1,752,743 1,811,850 1,851,129 1,849,510 1,858,216 1,883,860 1.38% 1,811,850 1,883,860 3.97%Total Stockholders' equity Parent stockholders' equity 100,334 125,514 25.10% 102,102 101,919 102,049 125,514 130,110 127,981 -1.64% 101,919 127,981 25.57% Minority Interest 2 2 - 1 1 1 2 1 2 100.00% 1 2 100.00%Capital Stock 66,173 82,143 24.13% 66,173 66,173 70,143 82,143 82,143 82,143 - 66,173 82,143 24.13%CHECK - - - - - - - - - -

PeriodQuarterYear

33

HNFHC Condensed Income Statements

Expressed In Millions of New Taiwan Dollars, unless otherwise indicated


(%) (%) (%) 6,561 9,005 37.25% 2,149 2,419 2,237 2,200 2,792 2,542 -8.95% 4,568 5,334 16.77% 3 7 133.33% 1 3 1 2 28 2 -92.86% 4 30 650.00%

(301) (347) 15.28% (76) (79) (91) (101) (86) (84) -2.33% (155) (170) 9.68%(146) (156) 6.85% (38) (39) (38) (41) (40) (39) -2.50% (77) (79) 2.60%

6,117 8,509 39.10% 2,036 2,304 2,109 2,060 2,694 2,421 -10.13% 4,340 5,115 17.86%

6,081 8,544 40.50% 2,036 2,339 2,109 2,060 2,694 2,421 -10.13% 4,375 5,115 16.91%

0.87 1.21 39.08% 0.31 0.35 0.26 0.29 0.33 0.26 -21.21% 0.66 0.59 -10.61%

0.87 1.22 40.23% 0.31 0.35 0.26 0.30 0.33 0.26 -21.21% 0.66 0.59 -10.61%

PeriodQuarterYear

Operating IncomeIncome from investmentsOther revenueOperating Expenses

Basic earnings per

Other Expenses And

Income before income tax

Income after income tax

Basic earnings per

34

HNFHC Key Financial Ratios

UNIT：：：：%


ROA(after tax) 5.79 7.00 1.21 7.41 7.91 7.86 7.00 7.84 6.92 -0.92 7.91 7.43 -0.48ROE(After tax) 6.27 7.57 1.30 8.05 8.65 8.54 7.57 8.43 7.50 -0.93 8.65 8.07 -0.58

105.99 90.15 -15.84 105.99 107.23 107.35 90.15 105.94 108.47 2.53 107.23 108.47 1.24122.16 140.21 18.05 122.16 114.41 114.41 140.21 140.21 138.45 -1.76 114.41 138.45 24.04

Note1：Double Leverage Ratio=Long-term Investment/Stockholders' Equity

Note2：Revise semiannually.

PeriodQuarter

Double LeverageCapital Adequacy

Year

35

HNCB Condensed Income StatementsExpressed In Millions of New Taiwan Dollars, Except Earnings Per Share


(%) (%) (%)Interest Income 26,604 31,514 18.46% 7,105 7,609 8,249 8,551 8,369 8,430 0.73% 14,714 16,799 14.17%Interest Expense (9,724) (11,939) 22.78% (2,589) (2,828) (3,153) (3,369) (3,246) (3,211) -1.08% (5,417) (6,457) 19.20%Interest Income, Net 16,880 19,575 15.97% 4,516 4,781 5,096 5,182 5,123 5,219 1.87% 9,297 10,342 11.24%Service fee income, net 5,259 4,789 -8.94% 1,106 1,256 1,261 1,166 1,037 1,110 7.04% 2,362 2,147 -9.10%Gains(Losses) on financial assets and liabilities at fair value

through profit or loss490 (70) -114.29% 245 (30) (485) 200 356 18 -94.94% 215 374 73.95%

Realized gains(losses) of available-for-sale financial assets 888 341 -61.60% 88 66 142 46 98 26 -73.47% 154 124 -19.22%Realized gains(losses) of held-to-maturity financial assets 0 0 - 0 0 0 0 0 0 - 0 0 -Income from investments accounted for using equity 77 88 14.29% 21 22 24 21 29 45 55.17% 43 74 72.09%Financial assets carried at cost 394 219 -44.42% 0 144 74 1 0 154 - 144 154 -Foreign exchange gains, net 1,118 1,509 34.97% 312 349 418 430 325 428 31.69% 661 753 13.92%Impairment loss 16 1 -93.75% 0 0 0 1 0 0 - 0 0 -Bad debts and overdue accounts recovered 2,007 3,027 50.82% 382 500 982 1,164 252 935 271.03% 882 1,187 34.66%Other non-interest income 363 555 52.89% 78 131 114 232 56 73 30.36% 209 129 -38.28%

Net Income Excluding Interest Income 10,612 10,459 -1.44% 2,232 2,437 2,529 3,261 2,153 2,789 29.54% 4,669 4,942 5.85%

Net Revenues 27,492 30,034 9.25% 6,748 7,218 7,625 8,443 7,276 8,008 10.06% 13,966 15,284 9.44%Bad-debt expenses (6,559) (4,761) -27.41% (892) (824) (837) (2,208) (577) (1,157) 100.52% (1,716) (1,734) 1.05%Provisions for the insurance reserve 0 0 - 0 0 0 0 0 0 - 0 0 -Operating Expenses (14,400) (15,252) 5.92% (3,682) (3,863) (4,029) (3,678) (3,867) (3,932) 1.68% (7,545) (7,799) 3.37%Personnel (9,404) (9,809) 4.31% (2,354) (2,479) (2,628) (2,348) (2,475) (2,572) 3.92% (4,833) (5,047) 4.43%Depreciation and amortization (1,008) (957) -5.06% (249) (241) (237) (230) (229) (220) -3.93% (490) (449) -8.37%Other general and administrative expenses (3,988) (4,486) 12.49% (1,079) (1,143) (1,164) (1,100) (1,163) (1,140) -1.98% (2,222) (2,303) 3.65%Income before income tax from continuing operations 6,533 10,022 53.41% 2,174 2,531 2,759 2,558 2,832 2,919 3.07% 4,705 5,751 22.23%

Income Tax Expense (583) (1,637) 180.79% (340) (422) (489) (386) (390) (431) 10.51% (762) (821) 7.69%

Income after income tax from continuing operations 5,950 8,385 40.92% 1,834 2,109 2,270 2,172 2,442 2,488 1.88% 3,943 4,930 25.04%

Cumulative effects of changes in accounting principles 0 0 - 0 0 0 0 0 0 - 0 0 -

Net income 5,950 8,385 40.92% 1,834 2,109 2,270 2,172 2,442 2,488 1.88% 3,943 4,930 25.04%

Basic earnings per share 1.25 1.76 40.80% 0.43 0.37 0.50 0.46 0.51 0.41 -20.40% 0.80 0.92 15.00%

Year Quarter Period

36

HNCB Condensed Balance Sheets



(%) (%) (%)

AssetsCash and cash equivalents, due from the Central Bank

and other banks123,780 141,835 14.59% 119,426 120,791 131,628 141,835 154,476 153,534 -0.61% 120,791 153,534 27.11%

Financial assets at fair value through profit or loss, 25,387 33,926 33.64% 31,771 31,606 35,014 33,926 30,855 42,767 38.61% 31,606 42,767 35.31%Available-for-sale financial assets, net 61,402 65,909 7.34% 60,217 68,884 68,083 65,909 66,687 60,854 -8.75% 68,884 60,854 -11.66%Held-to-maturity financial assets, net 304,207 288,324 -5.22% 260,352 271,820 248,163 288,324 258,762 301,844 16.65% 271,820 301,844 11.05%Investments accounted for using equity method 255 272 6.67% 276 227 251 272 301 264 -12.29% 227 264 16.30%Receivables, net 28,254 44,213 56.48% 26,871 46,777 45,993 44,213 37,468 35,624 -4.92% 46,777 35,624 -23.84%Loans, net 1,245,813 1,308,303 5.02% 1,270,826 1,286,464 1,334,197 1,308,303 1,346,402 1,323,593 -1.69% 1,286,464 1,323,593 2.89%Plant, property, and equipment 25,914 28,012 8.10% 25,773 25,746 25,716 28,012 29,439 29,356 -0.28% 25,746 29,356 14.02%Other assets 22,345 25,668 14.87% 17,311 19,482 22,869 25,668 25,751 26,155 1.57% 19,482 26,155 34.25%Total Assets 1,837,357 1,936,462 5.39% 1,812,823 1,871,797 1,911,914 1,936,462 1,950,141 1,973,991 1.22% 1,871,797 1,973,991 5.46%

Liabilities

Deposits and remittances 1,564,252 1,617,656 3.41% 1,535,088 1,557,748 1,563,469 1,617,656 1,590,484 1,609,051 1.17% 1,557,748 1,609,051 3.29%Other liabilities 183,095 223,223 21.92% 186,366 222,376 256,217 223,223 239,828 243,865 1.68% 222,376 243,865 9.66%Total Liabilities 1,747,347 1,840,879 5.35% 1,721,454 1,780,124 1,819,686 1,840,879 1,830,312 1,852,916 1.23% 1,780,124 1,852,916 4.09%Stockholders' Equity 90,010 95,583 6.19% 91,369 91,673 92,228 95,583 119,829 121,075 1.04% 91,673 121,075 32.07%Total Liabilities and Stockholders' Equity 1,837,357 1,936,462 5.39% 1,812,823 1,871,797 1,911,914 1,936,462 1,950,141 1,973,991 1.22% 1,871,797 1,973,991 5.46%

PeriodQuarterYear

37

HNSC Condensed Income Statements



(%) (%) (%)

Operating Revenue

Commissions and Fees - Brokerage 1,891 1,594 -15.71% 439 397 444 314 413 260 -37.05% 836 673 -19.50%

Interest Income,Net 724 745 2.90% 209 199 177 160 138 133 -3.62% 408 271 -33.58%

Commissions and Fees - Underwriting 46 55 19.57% 18 16 6 15 8 3 -62.50% 34 11 -67.65%

Gain (Loss) on Sales and Valuation of Securities , Net 89 (540) -706.74% (114) (59) (392) 25 123 (113) -191.87% (173) 10 -105.78%

Others 199 247 24.12% 75 76 152 (56) 31 58 87.10% 151 89 -41.06%

Operating Revenue 2,949 2,101 -28.76% 627 629 387 458 713 341 -52.17% 1,256 1,054 -16.08%

Operating Expenses (2,078) (2,007) -3.42% (486) (504) (525) (492) (533) (420) -21.20% (990) (953) -3.74%

Others nonoperating gains or loss 61 89 45.90% 23 27 16 23 30 25 -16.67% 50 55 10.00%

Income (Loss) before Income Tax from continuing operations 932 183 -80.36% 164 152 (122) (11) 210 (54) -125.71% 316 156 -50.63%

Income Tax Expense (161) (108) -32.92% (48) (27) (28) (5) (23) (9) -60.87% (75) (32) -57.33%

Net Income (Loss) 771 75 -90.27% 116 125 (150) (16) 187 (63) -133.69% 241 124 -48.55%

EPS 0.95 0.09 -90.53% 0.14 0.16 (0.19) (0.02) 0.23 (0.08) -134.78% 0.30 0.15 -50.00%

Total assets 26,631 20,018 -24.83% 25,256 24,322 22,920 20,018 20,303 19,670 -3.12% 24,322 19,670 -19.13%

Total liabilities 15,041 8,871 -41.02% 13,348 12,911 11,809 8,871 8,946 8,487 -5.13% 12,911 8,487 -34.27%

Total Stockholder's equity 11,590 11,147 -3.82% 11,908 11,411 11,111 11,147 11,357 11,183 -1.53% 11,411 11,183 -2.00%

ROE(After tax) 6.68% 0.66% -6.02 3.95% 4.19% 1.07% 0.66% 6.65% 2.22% -4.43 4.19% 2.22% -1.97

ROA(after tax) 3.08% 0.32% -2.76 1.79% 1.89% 0.49% 0.32% 3.71% 1.25% -2.46 1.89% 1.25% -0.64

Year Quarterly Period

38

SCIC Condensed Income Statements



(%) (%) (%)

Operating Revenue 10,555 4,281 -59.44% 1,099 1,101 1,052 1,029 1,263 1,152 -8.79% 2,200 2,415 9.77%Operating Cost (9,324) (2,760) -70.40% (691) (689) (677) (703) (823) (789) -4.13% (1,380) (1,612) 16.81%Gross Profit Margin 1,231 1,521 23.56% 408 412 375 326 440 363 -17.50% 820 803 -2.07%Operating Expense (938) (1,011) 7.78% (243) (245) (264) (259) (263) (255) -3.04% (488) (518) 6.15%Operating Net Income (Loss) 293 510 74.06% 165 167 111 67 177 108 -38.98% 332 285 -14.16%Nonoperating Revenues and gains 54 10 -81.48% 1 1 1 7 3 8 166.67% 2 11 450.00%Nonoperating Expenses and losses (3) (1) -66.67% (1) 0 0 0 0 0 - (1) 0 -100.00%Income (Loss) before Income Tax from continuing operations 344 519 50.87% 165 168 112 74 180 116 -35.56% 333 296 -11.11%Income Tax Benefit (Expense) (40) (109) 172.50% (29) (26) (29) (25) (28) (21) -25.00% (55) (49) -10.91%Net Income (Loss) 304 410 34.87% 136 142 83 49 152 95 -37.50% 278 247 -11.15%EPS 1.52 2.05 34.87% 0.68 0.71 0.42 0.24 0.76 0.48 -36.84% 1.39 1.24 -10.79%

Total assets 11,866 12,454 4.96% 12,799 12,693 12,719 12,454 13,047 13,142 0.73% 12,693 13,142 3.54%Total liabilities 9,513 9,849 3.53% 10,318 10,336 10,339 9,849 10,240 10,317 0.75% 10,336 10,317 -0.18%Total Stockholder's equity 2,353 2,605 10.71% 2,481 2,357 2,380 2,605 2,807 2,825 0.64% 2,357 2,825 19.86%

ROE(After tax) 13.68% 16.54% 2.85 22.51% 23.61% 20.34% 16.54% 22.47% 18.20% -4.27 23.61% 18.20% -5.41ROA(after tax) 2.66% 3.34% 0.68 4.37% 4.49% 3.88% 3.34% 4.77% 3.86% -0.91 4.53% 3.86% -0.67

Year PeriodQuarterly

hnfhc 2q 2012 analyst meeting en final€¦ · requirement by fsc. in order to improve asset...

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