Mega Financial Holding Co., Ltd. · TWSE:2886

Mega Financial — Q2 2008 Earnings Presentation

22 slides from Mega Financial's earnings presentation, 2008

  1. Slide 1: Investor Presentation 2Q / 2008

    2Q / 2008 (v.1) Investor Presentation

  2. Slide 2: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 2

  3. Slide 3: 2Q/08 loan growth slows down by focusing on higher margin products

    2Q/08 loan growth slows down by focusing on higher margin products and less riskier customers Mega Bank 2Q/08 loan breakdown by customer segment * Unit: NT$bn 1,277 1,282 Total:1,181 1,190 1,206 Other consumer 4% 598 574 Large corp. Mortgage 529 548 546 17% Gov.-linked Large corp. 45% 4% 316 324 SME

  4. Slide 4: OBU customers are mainly TW corps with high quality parent companies

    OBU customers are mainly TW corps with high quality parent companies in Taiwan Mega Bank 2Q/08 loan breakdown by region * Unit: NT$bn YoY Growth 21% Overseas Overseas 186 192 branches 164 branches 160 177 15% 147 157 OBU 129 134 144 OBU 12% 878 878 875 930 930 Domestic Domestic 73% 2Q/07 3Q/07 4Q/07

  5. Slide 5: Continuous FX deposit growth to fulfill the FX funding need

    Continuous FX deposit growth to fulfill the FX funding need Mega Bank 2Q/08 LDR & deposit breakdown Unit: %; NT$bn 102% Loan to 99% 99% 96% 94% deposit ratio 1,289 1,295 1,263 NTD Total: 1,195 1,241 FX time demand 304 25% 345 313 24% 328 323 FX time deposit 440 470 503 495 NTD time deposit 409 FX de

  6. Slide 6: 2Q/08 NIM contraction stabilized

    2Q/08 NIM contraction stabilized Mega Bank NIM & NII * Mega Bank loan interest spread* Unit: NT$MN 1.63% 1.72% Spread Yield cost 1.49% 1.47% 1.32% 4.00% 4.00% 3.80% 3.78% 3.57% 6,492 6,353 6,025 6186 5,077 2.39% 2.39% 2.31% 2.14% 2.00% 1.61% 1.69% 1.64% 1.57% 1.41% 2Q/07 3Q/07 4Q/07 1Q/08 2Q/08 2Q/0

  7. Slide 7: OBU and overseas bank branches earning growth continues

    OBU and overseas bank branches earning growth continues Mega Bank pre-tax earning breakdown by region* Unit: %; NT$MN 48% 47% Offshore 37% earning 30% contribution* 1Q/08 domestic earning was down due to NT$3.2bn 13,004 CBO provision 13,428 8,048 9,251 Domestic branches 4,179 1,171 2,577 4,483 4,716

  8. Slide 8: Mutual funds sales is down, while demand for structured note increases

    Mutual funds sales is down, while demand for principal protection structured note increases Mega wealth management AUM Mega wealth management sales Unit: NT$BN Unit: NT$BN Total: 168.2 Total: 160.9 Total: 76.6 39.5 36.0 Bancassurance 4.6 Total: 69.9 3.5 3.0 16.4 22.1 15.0 Total: 107.5 Structured Not

  9. Slide 9: Boosting WM fee despite slow global equity market

    … boosting WM fee despite slow global equity market Mega wealth management net fee income breakdown by product * Unit: NT$MN 13% Total: 904 Total: 1,984 Total: 797 133 233 101 Management fee** 360 Total: 1,196 1137 Mutual fund fee 462 Total: 992 234 163 104 Total: 675 135 365 631 Bancassurance fee 2

  10. Slide 10: Strong WM & corp. banking related fee income

    Strong WM & corp. banking related fee income Mega Bank 1H/2008 gross fee income breakdown Unit: NT$MN 1H/07 1H/08 Others Credit 5% WM card 5% 903 857 899 25% 797 Treasury 697 597 13% 450 459 250 211 Custodian 207 203 195 13% 5% 17% 58 6% FX Corp. loan 25% Wealth Mgmt FX Corp. loan Custodian Treasury

  11. Slide 11: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 11

  12. Slide 12: 1H/2008 earning breakdown by subsidiaries

    1H/2008 earning breakdown by subsidiaries 1H/08 earning contribution by sub. Unit: NT$MN 232 (- 216 ) 50 - 999 734 4,904 4,705 ( ) 1 1 1 1 1, 2 3 Mega Bank Mega Mega Bills Chung Kuo Other Subs. FHC expense Mega FHC Securities Insurance & tax adjustment 1. Un-audited subsidiary earning deducts employ

  13. Slide 13: Increases in NII & fee offset the CBO provision impact

    Increases in NII & fee offset the CBO provision impact 1H/07 vs. 1H/08 net revenue * 1H/2008 net revenue breakdown Unit: NT$MN 1H/07 1H/08 Insurance Other premium, Income, (11.0%) 23% **Net trading 4.8% 14,393 gain, 7.6% 11,709 Net fee Down due to Down due to ST equity NT$3.2b CBO income, 11% 5,919

  14. Slide 14: Maintaining low NPL ratio while increasing coverage ratio

    Maintaining low NPL ratio while increasing coverage ratio NPL balance & NPL ratio* Loan loss reserved and coverage ratio* Market Avg. Mega 2.32% 2.16% 1.84% 77.72% 81.05% 1.69% 1.55% 76.46% 70.88% 71.75% Mega Market Avg. 1.29% 1.07% 1.00% 1.12% 1.15% 54.50% 55.10% 64.05% 64.46% 67.35% 15,159 14,700

  15. Slide 15: Conservative balance sheet position

    Conservative balance sheet position Mega FHC* Mega Bank** Total Tier I CAR ratio Moody’s: Baa1 Regulatory Moody’s: A1 / S&P: A Regulatory Requirement : 100% Requirement : 8.0% 108.42% 119.46% 110.57% 108.99% 10.90% 10.51% 10.34% 10.54% BASEL II 8.34% 8.60% 8.52% 9.80% implementation fully reflected

  16. Slide 16: Focus on providing consistent yields for investors

    Focus on providing consistent yields for investors Key Earning Metrics 13.57% 12.59% ™ Mid-term ROE target of 10~12% 12.10% ™ Mid-term ROA target of >1% 1.13% 8.66% ™ To increase our ROE and prevent 1.06% 1.04% over-inflated capital base, we have ROE 7.61% paid 100% cash dividend in the last 2.22 0.

  17. Slide 17: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 17

  18. Slide 18: 1H/08 Mega FHC consolidated P&L statement

    1H/08 Mega FHC consolidated P&L statement NT$MN, except per share data 1H/08* 1H/07* YoY 2007* Net interest income 14,393 11,709 23% 26,296 Net fee income 4,523 4,092 11% 9,327 Insurance premium 924 540 71% 1,167 ST Trading gain -7,761 5,170 -250% 4,545 Available for sales asset gain 572 1,206 -53%

  19. Slide 19: 1H/08 Mega FHC consolidated balance sheet

    1H/08 Mega FHC consolidated balance sheet NT$MN 1H/08* 1H/07* YoY 2007* YTD Assets: Cash and due from banks 136,986 228,534 -40% 349,728 -61% Fin. assets at fair value through P&L 181,743 196,565 -8% 210,393 -14% Bills and bonds under RP agreement 25,121 16,279 54% 4,766 427% AFS financial assets 22

  20. Slide 20: Well established size and scale to win

    Well established size and scale to win 1H/2008* Mega Financial Holding Co. (TAIEX.2886) NT$ Billion 100% 100% 100% 100% 96.31% 100% 100% 100% Chung Mega Mega Int’l Mega Life Mega Mega Mega Mega Kuo Investment Mega Insurance CTB FHC Bank Securities Bills Insurance AMC Venture Trust** Agency (P&C) Cap

  21. Slide 21: Mega Bank's Global Franchise

    Mega Bank’s Global Franchise Bridge the gap, reach the world Toronto London Amsterdam Richmond Toronto -Chinatown Vancouver Paris Silicon Valley Chicago New York Tokyo Suzhou** Osaka Los Angeles Bahrain* Macau** HK Taiwan (OBU) Abu Dhabi** Phnom Penh** Colon Mumbai** Bangkok Ha Noi** Chonburi Ho Chi

  22. Slide 22: Mega's US subprime exposure and provision realized

    Mega’s US subprime exposure and provision realized Mega US Subprime Exposure As of end of July/2008 Unit: NT$MN Mega Group Underlying assets Provision realized Securities Type Total ~ July /08 4Q/07 ~ July /08 % of Subprime Others balance balance income income Total subprime exposure *** sheet state

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