Fubon Financial Holding Co Ltd

Introduction of Fubon Financial Holding

(2881.tw)

Year 2011

(2881.tw)

History and track record

Highlight of Fubon Financial

Earning drivers

2

Earning drivers

Capitalization


Top performer across Taiwan financial subsectors

� Top 1 ranked in EPS, ROE and top 2 ranked in assets among major financial holding companies in Taiwan

� Leading position across banking, securities, life and insurance business

� First mover in China: investment in Xiamen Bank with management

� Experienced team with strong commitment to deliver growth

� Growth through successful acquisition with disciplined track recordConsistent growth

� Well-capitalized position in face of new capital regime

� Commitment to stable cash dividend on back of diversified source of profitability

� First mover in China: investment in Xiamen Bank with management involvement

� Capture opportunities in insurance, securities, and asset management

� Dedicated investor relations team to serve investment community

� Best practice of corporate governance in board and management team

Aspiration in Greater China

Solid capitalization & stable dividend

Commitment to transparency

3


Earning drivers


4

Earning drivers

Capitalization

� Fubon Group is established along with the trend of liberalization in Taiwan financial industry� The first listed financial holding company in Taiwan in 2001� Taiwan’s second largest financial holding company in total assets and market capitalization

50 years of commitment in Taiwan financial market

1961

Fubon Financial2001

100%1988

100% 100% 100% 100%

Fubon Asset 1992 1992 1993

Fubon Insurance Fubon Securities Fubon BankFubon Asset Management 富邦人壽富邦人壽富邦人壽富邦人壽Fubon Life

Taipei Bank

Fubon Bank (HK)

2002

2003

100%

100%

Antai Life

2009100%

Xiamen Bank

200819.9%

5

2002 2004 2008 2009

• US$600mm (0.71x P/B)

• Acquired 100% ING Life Insurance (Taiwan)

• US$2.4bn (1.7x P/B)

• Acquired 100% of TaipeiBankin 2002 through a share swap

• US$415mm (1.15x P/B)

• Acquired 75% of International Bank of Asia in 2004

• US$33mm (1.2x P/B)

• Acquired 19.99% of Xiamen City Commercial Bank in 2008

Expansion through M&As

6

Insurance (Taiwan)(“Antai Life”) in 2009

• Became the 2nd largest life insurer in Taiwan

in 2002 through a share swap

• First ever merger in Taiwan between private and government owned institutions

• Added strong distribution network of 74 branches in Greater Taipei

Bank of Asia in 2004

• First and only Taiwan FHC to operate a Hong Kong-based bank

• Privatization in June 2011

City Commercial Bank in 2008

• First and only Taiwan FHC to own a stake in a Chinese bank

Leading position across financial services business

Top 5 Private Banks by LoanTop 5 Private Banks by Loan Top 5 Life Insurers by First Year PremiumTop 5 Life Insurers by First Year Premium

4.8%4.6% 4.4%

3.5%3.0%

Chinatrust Fubon Cathay SinoPac E.Sun

Market Share28.40%

20.80%

8.70% 7.70%

3.80%

Cathay Fubon China Life Shin Kong Mercuries

Market Share

7Source: Financial Supervisory Commission, Taiwan Insurance Institute, As of June 2011

Top 5 Securities Firm by Trading Value Top 5 Securities Firm by Trading Value Top 5 P&C Insurers by Direct Written Premium Top 5 P&C Insurers by Direct Written Premium


10.83%

7.71%

6.04%4.90%

4.05%

Yuanta KGI Fubon SinoPac Polaris

Market Share

7%9%

10%12%

22%

Tokio Marine NEWA

MSIGShin KongCathayFubon

Market Share


Net income & Assets breakdown by subsidiaries

Total assets=NT$3,495.4billions(30 June, 2011)

Net income as of June, 2011 =NT$17,418m

TPFB1,467

P&C70

2%

Securities56

2%

NT$bn

TPFB5,818 P&C

Securities1,493 9%

Fubon HK547 3%

Others122 1%

NT$m

8

1,467 47%

Life1,527 49%

5,818 33%

Life7,531 43%

P&C1,907 11%

0.64%

0.78%

0.58%

0.85%

0.58%0.61%

Fubon Average

Consistent growth and profitability

ROAAROAA

Consumer finance crisis

Financial crisis / Global downturn

Assets comparison with listed FHCs (NT$bn)

4,780

3,492

2,474

2,336

2,096

2,035

Cathay

Fubon

Taishin

Mega

Shin Kong

First0.48%

0.58%

0.18%

-0.01%

-0.23%

20102009200820072006

9

Source: TEJ, as of 2011/03/31 *China Development & Water land FHCs are not included.

2,035

1,876

1,855

1,239

1,106

654

341

246

213

First

Chinatrust

Hua Nan

SinoPac

E.Sun

Yuanta

China Development

Jih Sun

Waterland

EPS comparison with listed FHCs (NT$)

Top ranked profitability among financial holdings in Taiwan

RoE comparison with listed FHCs (%)RoE comparison with listed FHCs (%)

18.6

17.9

11.9

10.2

10.1

9.8

Fubon

Waterland

Chinatrust

Taishin

E.Sun

Yuanta

1.20

0.62

0.47

0.42

0.40

0.37

Fubon

Waterland

Chinatrust

Mega

Taishin

E.Sun

10

Source: TEJ, as of 2011/03/31; annualized basis Source: TEJ, as of 2011/03/31;un-annualized

9.2

8.0

7.4

6.8

5.8

3.7

3.5

1.8

Mega

Hua Nan

First

SinoPac

Shin Kong

Jih Sun

Cathay

China Development

0.35

0.31

0.31

0.21

0.19

0.15

0.10

0.05

Yuanta

Hua Nan

First

SinoPac

Cathay

Shin Kong

Jih Sun

China Development

Integrated FHC model with extensive product offering, distribution network and customer base

Unique Business Group Model Promotes Efficiency


Powerful Multi-channel Distribution Enables Cross-selling


Corp & Inv. Banking

Investment Management

Consumer Finance

InsuranceFinancial Markets

Wealth Management

Bank Life P&C Securities

282 agency offices

~1,155 agents

75 agency offices

60 securities service centers

e-Platform: Fubon.com, Fubon e01 online brokerage, 518fb online P&C policy application/payment system

1,325 ATMs

645 Wealth Management

advisors

147 branches1

1,131 brokers40 bancassurance

partners

~15,000 sales agents

3.40

0.901.38

3.40

3.501.1

11.50

Deposits Brokerage Credit cards Life P&C Overlap Fubon FHC

Extensive Customer Base of 11.5 million, cover 50% of Taiwan populationExtensive Customer Base of 11.5 million, cover 50% of Taiwan population

Antai Life customers

Note: 1 Includes 125 branches of Taipei Fubon Bank and 22 branches of Fubon Bank (Hong Kong)

NT$m

11


Earning drivers


12

Earning drivers

Capitalization

Experienced management team and focus on corporate governance

Daniel TsaiChairman and CEO, Fubon Financial

• 30 years of industry experience

• Graduate School of Law, Georgetown University

Richard TsaiVice Chairman, Fubon Financial


• Graduate School of Finance, New York University

Oliver ChengPresident, Fubon Life


• Joined Fubon in 1973

• BA of Law, National Taiwan University

Life Insurance

Victor KungPresident, Fubon Financial



• MBA Finance, Stern School, New York

Financial Holding Company

Jerry HarnPresident, Taipei Fubon Bank



• MBA, Ohio State University

Corp. & Inv. Bank

Consumer Finance

Thomas LiangPresident, Fubon Bank HK



• Master, Case Western Reserve University

• Seasoned senior management team with an average of more than 20 years of experience in the financial services industry

• Best practice corporate governance standards with one third (4 out of 12) of board of directors being independent directors

Taiwan UniversitySchool, New York University

Tsan-Ming ShihChairman, Fubon Insurance



• Dept of Law, Soochow University

P&C InsuranceWealth Management

Benny ChenSenior Executive Vice President,

Fubon Financial



• MBA, Southern Illinois University

13

Taipei Fubon Bank

Fubon Insurance (P&C)

Earning drivers

14

Fubon Life

Fubon Securities

Greater China

Asset growth outperformed industry

Corporate loan growth (5-year CAGR) Total loan growth (5 year CAGR)

9.79%

4.77%

8.27%

4.28%

15

Deposit growth (5 year CAGR)Mortgage growth (5 year CAGR)

8.37%

4.43%

Fubon Industry average

Fubon Industry averageFubon Industry average

6.42%5.49%


Source: TEJ, as of 2011/05/31

Growth along with asset quality improvement

Corporate loan NPL and coverage (%) Mortgage NPL ratio (%)

1.0%

201.2%

200%

240%

1.1%

1.3%

NPL ratio (LHS) Coverage ratio (RHS)

0.48%

0.40%

0.60%

16

0.42%63.6%

40%

80%

120%

160%

0.3%

0.5%

0.7%

0.9%

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

0.10%

0.00%

0.20%

0.40%

Jun-09' Dec-09' Jun-10' Dec-10' Jun-11'

Taipei Fubon Bank

Earning drivers


17

Fubon Securities

Greater China

Fubon Life

General Insurance: Premium growth along with Taiwan economy

4.64

3.5

6.15

4.164.8

5.7

3.923.3

12

7.6

5.6

3.34 3.75

Taiwan GDP Growth Industry premium growth

Consumer credit crisis

Taiwan GDP growth vs P&C industry premium growth (%)

18

-2.17

0.06

-4.05-3.71

-1.3

-4.35

-5.94

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Fubon Insurance: Excellence in underwriting results

Fubon’s Net Combined Ratio Gross written premium (NT$ m)

86.61%

83.90% 84.88%

90.29%91.50%

23,939 23,130 22,412 23,096

13,085

2007 2008 2009 2010 1H 2011

19

Source: Taiwan Insurance Institute, company data

Net Profits (NT$ m)

2007 2008 2009 2010 2011 1H

2007 2008 2009 2010 1H 2011

2,012 2,045

1,371

2,676

1,907

2007 2008 2009 2010 1H 2011

Taipei Fubon Bank

Earning drivers


20

Fubon Securities

Greater China

Fubon Life

Life industry: under a competitive environment

Taiwan

NorwayNetherlands

ItalyU.S.

World

NamibiaPortugal

Switzerland Italy

BelgiumNetherlands

World U.S.

Insurance density: Premium per capita Insurance Penetration: Premium to GDP

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

U.K.

SwitzerlandDenmark

FinlandIreland

Luxembourg Japan

France

Hong KongSweden

Belgium

(US$) (%) 0 2 4 6 8 10 12 14 16

TaiwanSouth Africa

U.K.Hong Kong

JapanFinlandFrance

South KoreaIreland

DenmarkSwedenNamibia

21

Life insurance: Polarization in Taiwan life industry

FYP market share (%) FYP growth yoy (%) 2010 Net profits (NT mn)

26%

51%

22%

11%

Cathay

Fubon

Shin Kong

China Life

28%

27%

7%

6%

Cathay

Fubon

Shin Kong

China Life

-6,516

8,620

393

3,363

Cathay

Fubon

Shin Kong

China Life

22

-15%

40%

17%

40%

1%

Allianz

Taiwan Coop

BNP

Bank of Taiwan

Nan Shan

Farglory

5%

4%

4%

3%

3%

3%

Allianz

Taiwan Coop

BNP

Bank of Taiwan

Nan Shan

Farglory

168

-238

194

326

-8,414

1,521

Allianz

Taiwan Coop

BNP

Bank of Taiwan

Nan Shan

Farglory

Source: Taiwan Insurance Institute, As of Dec 2010

Recurring premium First year premium

Strong momentum in Fubon Life fueled by merger with ING Antai Life

Total Premium (NT$ bn)Market share of Fubon Life FYP

4,382

3,252

Before M&A After M&A

10.9%15.0%

22.2%26.7%3.9%

4.0%

2007 2008 2009 2010

195 216

1,195 1,280 817 1,281

2,057

3,102

2007 2008 2009 2010

23


19.0%

14.8%

1,012

1,497

3,252

Antai

Taipei Fubon Bank

Earning drivers


24

Fubon Securities

Greater China

Fubon Life

Fubon Securities: Diversified sources of earnings

Business SectorMarket Share

Ranking

Brokerage Spot Trading 6.04% 3

Margin Loan 6.34% 5

Underwriting IPO 11.40% 2

Revenue Breakdown, 2006-2011 1H Business ranking, 2011 1H

Sources: Taiwan Stock Exchange Corporation, Gre Tai Securities MarketAs of June 2011

Sources: TEJ, Audited financial statements


SPO 5.5% 4

* Market share of underwriting business is counted as volume

25

Taipei Fubon Bank

Earning drivers


26

Fubon Securities

Greater China

Fubon Life

Leading platform for expansion in the greater China region

• First and only Taiwanese FHC to own a Hong Kong bank

• First and only Taiwanese FHC to own a minority stake in a Chinese bank – Xiamen Bank

– Management control (entitled to nominate President and appoint CFO and Chief Risk Officer)

– Task forces established to develop businesses, operating systems, and infrastructure upgrade

– Distinctly ahead of peers in China with access to retail banking and RMB business

• Primary beneficiary of West Strait Economic Zone

– Pilot area for preferential treatment for Taiwanese investments superseding regulations applicable to foreign investors under WTO framework

Beijing

Shanghai

Primary beneficiary of West Strait

Nanjing

Competitive Advantages

– Existing presence and relationship in Fujian

– Potential for market entry fast track across business segments

• Opportunity to replicate Fubon business model to the Greater China region

Hong Kong

• Banking: 22 branches

• Securities: 2 securities service centers

Xiamen


• P&C subsidiary open in Oct 2010

• Securities: Rep office since May 2009

Dongguan• Banking: Rep office since Dec 2009Shanghai• P&C: Rep office since Jan 2003• Securities: Rep office since Nov 2005

Hong Kong

Xiamen

Taiwan

of West Strait Economic Zone

Banking

P&C insurance

Life insurance

Securities

Beijing• P&C: Rep office since Feb 2001

• Life: Rep office since Jan 2003

• Asset management JV with Founder Securities, plan to open in July 2011

• Leasing JV with CITIC AMC

Fuzhou• Banking: 1 branch

Quanzhou• Banking: 1 branch

Chongqing• Banking: 1 branch

Dongguan

Asset Management

Leasing

27

Update of China investment plan

Beijing� Founder Fubon Asset Management set up in July2011

� Focus on products offering and performance

28

Xiamen

Chongqing

Nanjing

Hong Kong

� 35 bank branches cover Xiamen, Fuzhou, Quanzhou,and Chongging. Branch network expansion to Tianjin, Zhangzhou, Nanchang in 2011-2012� Capital injection of RMB$116m in Xiamen Bank in 2H11

� New branch expansion continues into Fuzhou,Quanzhou, Chongqing, and Dalian in 2011-2012� As of 1H11, direct written premium RMB18m, of

which 54% is from retail lines.

� Xiamen Bank branch set up in May 2011

� Life JV with Zijin Holdings submitted to CIRC

� Privatization of FBHKcompletion in June 2011

Bank

P&C


Earning drivers


29

Earning drivers

Capitalization

9.139.169.189.729.46

3.72.843.812.241.76

Tier1 Tier2

11.9611.22

0.230.32

0.53

0.79 260.60

198

112 75

0.000.100.200.300.400.500.600.700.800.90

0.00

50.00

100.00

150.00

200.00

250.00

300.00

NPL ratio Coverage ratio

Consistent strong capital position & asset quality

Unit: % Unit: %

Taipei Fubon Bank CAR NPL and coverage ratio

12.8312.00

12.99

2011 1HAverage2010200920080.00 0.00

2011 1H201020092008

0.60

0.38 0.38 0.38 0.37 0.37

0.23

First

SinoP

ac

Chinatrust

Shin K

ong

Cathay

Yuanta

Fubon

30Source: Company disclosure, Financial Supervisory Commission , as of 2011/06/30, FHC CAR number as of 2010/12/31

Industry average = 0.48 %148 145

129 123 123 119 118 117

Fubon

Cathay

Shin K

ong

E.S

un

Mega

Taishin

Chinatrust

SinoP

ac

Industry average = 138 %

Unit: %Unit: %

Fubon FHC CAR vs. selected peers NPL ratio vs. selected peers

Dec-10 Average of Domestic Banks

Solid capital position across subsidiaries� Capital position is well above statutory and internal requirement level

� Basel III implication is of limited impact based on current assessment

Year 2011 1HStatutory

requirementInternal

guideline

CAR of FHC 144.2% ≥ 100% ≥ 105%

Double leverage of FHC 109.8% ≤ 120% ≤ 120%

Debt to equity 17.3% ≤ 30% ≤ 30%Debt to equity 17.3% ≤ 30% ≤ 30%

TFB - Tier one 9.13% ≥ 6% ≥ 8%

TFB - CAR 12.83% ≥ 8% ≥ 9%

Fubon Securities 466.5% ≥ 150% ≥ 200%

Fubon Life 200%~300% ≥ 200% ≥ 225%

Fubon P&C >300% ≥ 200% ≥ 250%

Fubon Bank HK - CAR 16.9% ≥ 8% ≥ 12%

31Source: Company disclosure, unaudited financial statements, as of 2011/06/30

Commitment to cash dividend � Target a stable to growing cash dividend onward

Year Net profit (NT$ m) EPS (NT$) Cash Dividend (NT$) S tock Dividend

2002 9,415 1.3 1.2 -

2003 14,044 1.9 1.6 -

2004 15,008 2.0 1.7 -2004 15,008 2.0 1.7 -

2005 10,641 1.4 1.2 -

2006 8,400 1.1 1.0 -

2007 14,432 1.9 1.5 -

2008 10,875 1.4 - -

2009 19,938 2.5 2.0 0.5

2010 19,905 2.3 1.0 0.5

32

33

Thank youFor more information, please contact Investors Relations in Fubon Financial:

Amanda Wang [email protected] tel:+886 2 66366636 extension 57402Christine Chi [email protected] tel:+886 2 66366636 extension 57405Mandy Chao [email protected] tel:+886 2 66366636 extension 57406Company website: http://www.fubon.com

Introduction of Fubon Financial Holding

(2881.tw)

Year 2011

(2881.tw)



Earning drivers

2

Earning drivers

Capitalization


Top performer across Taiwan financial subsectors

� Top 1 ranked in EPS, ROE and top 2 ranked in assets among major financial holding companies in Taiwan

� Leading position across banking, securities, life and insurance business

� First mover in China: investment in Xiamen Bank with management

� Experienced team with strong commitment to deliver growth

� Growth through successful acquisition with disciplined track recordConsistent growth

� Well-capitalized position in face of new capital regime

� Commitment to stable cash dividend on back of diversified source of profitability

� First mover in China: investment in Xiamen Bank with management involvement

� Capture opportunities in insurance, securities, and asset management

� Dedicated investor relations team to serve investment community

� Best practice of corporate governance in board and management team

Aspiration in Greater China

Solid capitalization & stable dividend

Commitment to transparency

3


Earning drivers


4

Earning drivers

Capitalization

� Fubon Group is established along with the trend of liberalization in Taiwan financial industry� The first listed financial holding company in Taiwan in 2001� Taiwan’s second largest financial holding company in total assets and market capitalization

50 years of commitment in Taiwan financial market

1961

Fubon Financial2001

100%1988

100% 100% 100% 100%

Fubon Asset 1992 1992 1993

Fubon Insurance Fubon Securities Fubon BankFubon Asset Management 富邦人壽富邦人壽富邦人壽富邦人壽Fubon Life

Taipei Bank

Fubon Bank (HK)

2002

2003

100%

100%

Antai Life

2009100%

Xiamen Bank

200819.9%

5

2002 2004 2008 2009

• US$600mm (0.71x P/B)

• Acquired 100% ING Life Insurance (Taiwan)

• US$2.4bn (1.7x P/B)

• Acquired 100% of TaipeiBankin 2002 through a share swap

• US$415mm (1.15x P/B)

• Acquired 75% of International Bank of Asia in 2004

• US$33mm (1.2x P/B)

• Acquired 19.99% of Xiamen City Commercial Bank in 2008

Expansion through M&As

6

Insurance (Taiwan)(“Antai Life”) in 2009

• Became the 2nd largest life insurer in Taiwan

in 2002 through a share swap

• First ever merger in Taiwan between private and government owned institutions

• Added strong distribution network of 74 branches in Greater Taipei

Bank of Asia in 2004

• First and only Taiwan FHC to operate a Hong Kong-based bank

• Privatization in June 2011

City Commercial Bank in 2008

• First and only Taiwan FHC to own a stake in a Chinese bank

Leading position across financial services business

Top 5 Private Banks by LoanTop 5 Private Banks by Loan Top 5 Life Insurers by First Year PremiumTop 5 Life Insurers by First Year Premium

4.8%4.6% 4.4%

3.5%3.0%


Market Share28.40%

20.80%

8.70% 7.70%

3.80%


Market Share

7Source: Financial Supervisory Commission, Taiwan Insurance Institute, As of June 2011

Top 5 Securities Firm by Trading Value Top 5 Securities Firm by Trading Value Top 5 P&C Insurers by Direct Written Premium Top 5 P&C Insurers by Direct Written Premium


10.83%

7.71%

6.04%4.90%

4.05%

Yuanta KGI Fubon SinoPac Polaris

Market Share

7%9%

10%12%

22%

Tokio Marine NEWA

MSIGShin KongCathayFubon

Market Share


Net income & Assets breakdown by subsidiaries

Total assets=NT$3,495.4billions(30 June, 2011)

Net income as of June, 2011 =NT$17,418m

TPFB1,467

P&C70

2%

Securities56

2%

NT$bn

TPFB5,818 P&C

Securities1,493 9%

Fubon HK547 3%

Others122 1%

NT$m

8

1,467 47%

Life1,527 49%

5,818 33%

Life7,531 43%

P&C1,907 11%

0.64%

0.78%

0.58%

0.85%

0.58%0.61%

Fubon Average

Consistent growth and profitability

ROAAROAA

Consumer finance crisis

Financial crisis / Global downturn

Assets comparison with listed FHCs (NT$bn)

4,780

3,492

2,474

2,336

2,096

2,035

Cathay

Fubon

Taishin

Mega

Shin Kong

First0.48%

0.58%

0.18%

-0.01%

-0.23%

20102009200820072006

9

Source: TEJ, as of 2011/03/31 *China Development & Water land FHCs are not included.

2,035

1,876

1,855

1,239

1,106

654

341

246

213

First

Chinatrust

Hua Nan

SinoPac

E.Sun

Yuanta

China Development

Jih Sun

Waterland

EPS comparison with listed FHCs (NT$)

Top ranked profitability among financial holdings in Taiwan

RoE comparison with listed FHCs (%)RoE comparison with listed FHCs (%)

18.6

17.9

11.9

10.2

10.1

9.8

Fubon

Waterland

Chinatrust

Taishin

E.Sun

Yuanta

1.20

0.62

0.47

0.42

0.40

0.37

Fubon

Waterland

Chinatrust

Mega

Taishin

E.Sun

10

Source: TEJ, as of 2011/03/31; annualized basis Source: TEJ, as of 2011/03/31;un-annualized

9.2

8.0

7.4

6.8

5.8

3.7

3.5

1.8

Mega

Hua Nan

First

SinoPac

Shin Kong

Jih Sun

Cathay

China Development

0.35

0.31

0.31

0.21

0.19

0.15

0.10

0.05

Yuanta

Hua Nan

First

SinoPac

Cathay

Shin Kong

Jih Sun

China Development

Integrated FHC model with extensive product offering, distribution network and customer base





Corp & Inv. Banking

Investment Management

Consumer Finance

InsuranceFinancial Markets

Wealth Management

Bank Life P&C Securities

282 agency offices

~1,155 agents

75 agency offices

60 securities service centers

e-Platform: Fubon.com, Fubon e01 online brokerage, 518fb online P&C policy application/payment system

1,325 ATMs

645 Wealth Management

advisors

147 branches1

1,131 brokers40 bancassurance

partners

~15,000 sales agents

3.40

0.901.38

3.40

3.501.1

11.50

Deposits Brokerage Credit cards Life P&C Overlap Fubon FHC

Extensive Customer Base of 11.5 million, cover 50% of Taiwan populationExtensive Customer Base of 11.5 million, cover 50% of Taiwan population

Antai Life customers

Note: 1 Includes 125 branches of Taipei Fubon Bank and 22 branches of Fubon Bank (Hong Kong)

NT$m

11


Earning drivers


12

Earning drivers

Capitalization

Experienced management team and focus on corporate governance

Daniel TsaiChairman and CEO, Fubon Financial


• Graduate School of Law, Georgetown University

Richard TsaiVice Chairman, Fubon Financial


• Graduate School of Finance, New York University

Oliver ChengPresident, Fubon Life



• BA of Law, National Taiwan University

Life Insurance

Victor KungPresident, Fubon Financial



• MBA Finance, Stern School, New York

Financial Holding Company

Jerry HarnPresident, Taipei Fubon Bank



• MBA, Ohio State University

Corp. & Inv. Bank

Consumer Finance

Thomas LiangPresident, Fubon Bank HK



• Master, Case Western Reserve University

• Seasoned senior management team with an average of more than 20 years of experience in the financial services industry

• Best practice corporate governance standards with one third (4 out of 12) of board of directors being independent directors

Taiwan UniversitySchool, New York University

Tsan-Ming ShihChairman, Fubon Insurance



• Dept of Law, Soochow University

P&C InsuranceWealth Management

Benny ChenSenior Executive Vice President,

Fubon Financial



• MBA, Southern Illinois University

13

Taipei Fubon Bank


Earning drivers

14

Fubon Life

Fubon Securities

Greater China

Asset growth outperformed industry

Corporate loan growth (5-year CAGR) Total loan growth (5 year CAGR)

9.79%

4.77%

8.27%

4.28%

15

Deposit growth (5 year CAGR)Mortgage growth (5 year CAGR)

8.37%

4.43%


Fubon Industry averageFubon Industry average

6.42%5.49%


Source: TEJ, as of 2011/05/31

Growth along with asset quality improvement

Corporate loan NPL and coverage (%) Mortgage NPL ratio (%)

1.0%

201.2%

200%

240%

1.1%

1.3%

NPL ratio (LHS) Coverage ratio (RHS)

0.48%

0.40%

0.60%

16

0.42%63.6%

40%

80%

120%

160%

0.3%

0.5%

0.7%

0.9%

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

0.10%

0.00%

0.20%

0.40%

Jun-09' Dec-09' Jun-10' Dec-10' Jun-11'

Taipei Fubon Bank

Earning drivers


17

Fubon Securities

Greater China

Fubon Life

General Insurance: Premium growth along with Taiwan economy

4.64

3.5

6.15

4.164.8

5.7

3.923.3

12

7.6

5.6

3.34 3.75

Taiwan GDP Growth Industry premium growth

Consumer credit crisis

Taiwan GDP growth vs P&C industry premium growth (%)

18

-2.17

0.06

-4.05-3.71

-1.3

-4.35

-5.94

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Fubon Insurance: Excellence in underwriting results

Fubon’s Net Combined Ratio Gross written premium (NT$ m)

86.61%

83.90% 84.88%

90.29%91.50%

23,939 23,130 22,412 23,096

13,085

2007 2008 2009 2010 1H 2011

19


Net Profits (NT$ m)

2007 2008 2009 2010 2011 1H

2007 2008 2009 2010 1H 2011

2,012 2,045

1,371

2,676

1,907

2007 2008 2009 2010 1H 2011

Taipei Fubon Bank

Earning drivers


20

Fubon Securities

Greater China

Fubon Life

Life industry: under a competitive environment

Taiwan

NorwayNetherlands

ItalyU.S.

World

NamibiaPortugal

Switzerland Italy

BelgiumNetherlands

World U.S.

Insurance density: Premium per capita Insurance Penetration: Premium to GDP

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

U.K.

SwitzerlandDenmark

FinlandIreland

Luxembourg Japan

France

Hong KongSweden

Belgium

(US$) (%) 0 2 4 6 8 10 12 14 16

TaiwanSouth Africa

U.K.Hong Kong

JapanFinlandFrance

South KoreaIreland

DenmarkSwedenNamibia

21

Life insurance: Polarization in Taiwan life industry

FYP market share (%) FYP growth yoy (%) 2010 Net profits (NT mn)

26%

51%

22%

11%

Cathay

Fubon

Shin Kong

China Life

28%

27%

7%

6%

Cathay

Fubon

Shin Kong

China Life

-6,516

8,620

393

3,363

Cathay

Fubon

Shin Kong

China Life

22

-15%

40%

17%

40%

1%

Allianz

Taiwan Coop

BNP

Bank of Taiwan

Nan Shan

Farglory

5%

4%

4%

3%

3%

3%

Allianz

Taiwan Coop

BNP

Bank of Taiwan

Nan Shan

Farglory

168

-238

194

326

-8,414

1,521

Allianz

Taiwan Coop

BNP

Bank of Taiwan

Nan Shan

Farglory

Source: Taiwan Insurance Institute, As of Dec 2010

Recurring premium First year premium

Strong momentum in Fubon Life fueled by merger with ING Antai Life

Total Premium (NT$ bn)Market share of Fubon Life FYP

4,382

3,252

Before M&A After M&A

10.9%15.0%

22.2%26.7%3.9%

4.0%

2007 2008 2009 2010

195 216

1,195 1,280 817 1,281

2,057

3,102

2007 2008 2009 2010

23


19.0%

14.8%

1,012

1,497

3,252

Antai

Taipei Fubon Bank

Earning drivers


24

Fubon Securities

Greater China

Fubon Life

Fubon Securities: Diversified sources of earnings

Business SectorMarket Share

Ranking

Brokerage Spot Trading 6.04% 3

Margin Loan 6.34% 5


Revenue Breakdown, 2006-2011 1H Business ranking, 2011 1H

Sources: Taiwan Stock Exchange Corporation, Gre Tai Securities MarketAs of June 2011

Sources: TEJ, Audited financial statements


SPO 5.5% 4

* Market share of underwriting business is counted as volume

25

Taipei Fubon Bank

Earning drivers


26

Fubon Securities

Greater China

Fubon Life

Leading platform for expansion in the greater China region

• First and only Taiwanese FHC to own a Hong Kong bank

• First and only Taiwanese FHC to own a minority stake in a Chinese bank – Xiamen Bank

– Management control (entitled to nominate President and appoint CFO and Chief Risk Officer)

– Task forces established to develop businesses, operating systems, and infrastructure upgrade

– Distinctly ahead of peers in China with access to retail banking and RMB business

• Primary beneficiary of West Strait Economic Zone

– Pilot area for preferential treatment for Taiwanese investments superseding regulations applicable to foreign investors under WTO framework

Beijing

Shanghai

Primary beneficiary of West Strait

Nanjing

Competitive Advantages

– Existing presence and relationship in Fujian

– Potential for market entry fast track across business segments

• Opportunity to replicate Fubon business model to the Greater China region

Hong Kong


• Securities: 2 securities service centers

Xiamen


• P&C subsidiary open in Oct 2010

• Securities: Rep office since May 2009

Dongguan• Banking: Rep office since Dec 2009Shanghai• P&C: Rep office since Jan 2003• Securities: Rep office since Nov 2005

Hong Kong

Xiamen

Taiwan

of West Strait Economic Zone

Banking

P&C insurance

Life insurance

Securities

Beijing• P&C: Rep office since Feb 2001

• Life: Rep office since Jan 2003

• Asset management JV with Founder Securities, plan to open in July 2011

• Leasing JV with CITIC AMC

Fuzhou• Banking: 1 branch

Quanzhou• Banking: 1 branch

Chongqing• Banking: 1 branch

Dongguan

Asset Management

Leasing

27

Update of China investment plan

Beijing� Founder Fubon Asset Management set up in July2011

� Focus on products offering and performance

28

Xiamen

Chongqing

Nanjing

Hong Kong

� 35 bank branches cover Xiamen, Fuzhou, Quanzhou,and Chongging. Branch network expansion to Tianjin, Zhangzhou, Nanchang in 2011-2012� Capital injection of RMB$116m in Xiamen Bank in 2H11

� New branch expansion continues into Fuzhou,Quanzhou, Chongqing, and Dalian in 2011-2012� As of 1H11, direct written premium RMB18m, of

which 54% is from retail lines.

� Xiamen Bank branch set up in May 2011

� Life JV with Zijin Holdings submitted to CIRC

� Privatization of FBHKcompletion in June 2011

Bank

P&C


Earning drivers


29

Earning drivers

Capitalization

9.139.169.189.729.46

3.72.843.812.241.76

Tier1 Tier2

11.9611.22

0.230.32

0.53

0.79 260.60

198

112 75

0.000.100.200.300.400.500.600.700.800.90

0.00

50.00

100.00

150.00

200.00

250.00

300.00

NPL ratio Coverage ratio

Consistent strong capital position & asset quality

Unit: % Unit: %

Taipei Fubon Bank CAR NPL and coverage ratio

12.8312.00

12.99

2011 1HAverage2010200920080.00 0.00

2011 1H201020092008

0.60

0.38 0.38 0.38 0.37 0.37

0.23

First

SinoP

ac

Chinatrust

Shin K

ong

Cathay

Yuanta

Fubon

30Source: Company disclosure, Financial Supervisory Commission , as of 2011/06/30, FHC CAR number as of 2010/12/31

Industry average = 0.48 %148 145

129 123 123 119 118 117

Fubon

Cathay

Shin K

ong

E.S

un

Mega

Taishin

Chinatrust

SinoP

ac

Industry average = 138 %

Unit: %Unit: %

Fubon FHC CAR vs. selected peers NPL ratio vs. selected peers

Dec-10 Average of Domestic Banks

Solid capital position across subsidiaries� Capital position is well above statutory and internal requirement level

� Basel III implication is of limited impact based on current assessment

Year 2011 1HStatutory

requirementInternal

guideline

CAR of FHC 144.2% ≥ 100% ≥ 105%

Double leverage of FHC 109.8% ≤ 120% ≤ 120%

Debt to equity 17.3% ≤ 30% ≤ 30%Debt to equity 17.3% ≤ 30% ≤ 30%

TFB - Tier one 9.13% ≥ 6% ≥ 8%

TFB - CAR 12.83% ≥ 8% ≥ 9%

Fubon Securities 466.5% ≥ 150% ≥ 200%

Fubon Life 200%~300% ≥ 200% ≥ 225%

Fubon P&C >300% ≥ 200% ≥ 250%

Fubon Bank HK - CAR 16.9% ≥ 8% ≥ 12%

31Source: Company disclosure, unaudited financial statements, as of 2011/06/30

Commitment to cash dividend � Target a stable to growing cash dividend onward

Year Net profit (NT$ m) EPS (NT$) Cash Dividend (NT$) S tock Dividend

2002 9,415 1.3 1.2 -

2003 14,044 1.9 1.6 -

2004 15,008 2.0 1.7 -2004 15,008 2.0 1.7 -

2005 10,641 1.4 1.2 -

2006 8,400 1.1 1.0 -

2007 14,432 1.9 1.5 -

2008 10,875 1.4 - -

2009 19,938 2.5 2.0 0.5

2010 19,905 2.3 1.0 0.5

32

33

Thank youFor more information, please contact Investors Relations in Fubon Financial:

Amanda Wang [email protected] tel:+886 2 66366636 extension 57402Christine Chi [email protected] tel:+886 2 66366636 extension 57405Mandy Chao [email protected] tel:+886 2 66366636 extension 57406Company website: http://www.fubon.com

Documents

Fubon Financial Holding Co Ltd