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

Mega Financial — Q4 2015 Earnings Presentation

28 slides from Mega Financial's earnings presentation, 2016

  1. Slide 1: 4Q / 2015 Investor/Analyst Briefing

    4Q / 2015 (v.1) Investor/Analyst Briefing

  2. Slide 2: Disclaimer

    DISCLAIMER THE FINANCIAL INFORMATION IN THIS PRESENTATION AS OF AND FOR THE TWELVE MONTHS ENDED DEC 31, 2015 ARE UN-AUDITED NUMBERS UNLESS SPECIFIED OTHERWISE. MEGA FHC HAS FILED ITS AUDITED FINANCIAL STATEMENTS THROUGH TAIWAN STOCK EXCHANGE MARKET OBSERVATION POST SYSTEM ON MAR 31, 2016. These mate

  3. Slide 3: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 3

  4. Slide 4: SME loan growth was offset by decline in large corporate loan

    SME loan growth was offset by decline in large corporate loan Mega Bank quarterly loan balance* Mega Bank 4Q/15 loan breakdown by customer Unit: NT$bn Growth Trend 1,750 1,795 1,781 YoY: 2.5% 1,737 1,734 Total QoQ: -0.8% Other consumer 5% 726 757 735 YoY: -0.3% 737 732 Large corp. Mortgage QoQ: -2.9

  5. Slide 5: Growth from service and leisure industries offset by contraction in other industries

    Growth from service and leisure industries were offset by contraction in other industries Mega Bank loan balance trend by industry* Mega Bank 4Q/15 loan breakdown by industry* 4Q/15 3Q/15 4Q/14 Growth Trend Unit: NT$BN 456 YoY: -9.2% Manufacturing 465 QoQ: -1.9% 502 Transport & 170 YoY: 8.3% Telecom

  6. Slide 6: Overseas branches loan was up; OBU loan retracted

    Overseas branches loan was up; while OBU loan retracted to 1H/15 level Mega Bank 4Q/15 loan breakdown by regions * Unit: NT$bn Growth Trend 276 Overseas 35% off-shore 248 245 255 284 YoY: 14.5% branches loan QoQ: 2.9% Overseas branches 338 341 362 342 OBU 16% 350 Growth Trend YoY: 1.2% QoQ: -5.5% OB

  7. Slide 7: Foreign currency loan demand remained challenging

    Foreign currency loan demand remained challenging Mega Bank 4Q/15 loan breakdown by currency: NTD vs. foreign currency loan * Unit: NT$bn 696 725 707 FCY Loan** Growth Trend 688 678 YoY: 1.6% FCY Loan QoQ: -2.5% 39.5% NTD Loan NTD Loan 1,041 1,055 1,064 1,078 1,082 60.5% Growth Trend YoY: 3.9% 4Q/14

  8. Slide 8: Deposit growth accelerated

    Deposit growth accelerated Mega Bank’s deposit balance * Mega Bank’s RMB deposit** Interbank Retail/Corp. Unit:NT$bn Growth Trend Unit:NT$bn 2,216 YoY: 9.6% 28 22 26 28 27 31 2,146 2,148 QoQ: 3.2% 16 2,061 127 126 120 Total: 2,023 116 117 113 112 492 458 506 459 447 FX time deposit 2Q/14 3Q/14 4Q/14

  9. Slide 9: Loan contraction plus deposit growth pushed the LDR lower

    Loan contraction plus deposit growth pushed the LDR lower Mega Bank’s total LDR* Mega Bank’s USD LDR* 96.11% 95% 95% 91.76% 89.81% 89.01% 88.00% 87.18% 86.60% 85.81% 85.81% 85.61% 84.12% 84.50% 83.52% 85% 85% 82.06% 81.50% 80.32% 75% 75% 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/14 2Q/14 3Q

  10. Slide 10: Overseas loan spread improvement continued

    Overseas loan spread improvement continued Mega Bank total loan interest spread* Mega Bank overseas loan interest spread* Spread Yield cost Spread Yield cost 2.41% 2.35% 2.28% 2.30% 2.31% 2.33% 1.71% 1.81% 1.61% 1.54% 1.55% 1.58% 2.13% 2.10% 2.13% 2.13% 2.15% 2.16% 0.74% 0.75% 0.75% 0.73% 0.63% 0.60

  11. Slide 11: Spread widened, but loan contraction and lower LDR caused NII to dip

    Although spread widened, but loan contraction and lower LDR caused the NII to dip lower Mega Bank quarterly NII* Mega Bank quarterly interest earning assets** Unit: NT$ million Unit: NT$ billion 3,190 2,997 2,903 2,826 2,872 2,882 2,644 2,695 9,128 9,038 9,053 8,913 8,832 8,794 8,728 8,359 1Q/14 2Q/

  12. Slide 12: Inter-banks assets became less of swing factor

    Inter-banks assets became less of swing factor Mega Bank RMB inter-banks assets* Mega Bank USD inter-banks assets* Unit: NT$ billion Unit: NT$ billion 751 594 501 510 513 488 133 336 116 111 106 98 256 82 77 67 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15

  13. Slide 13: NIM improvement stalled

    NIM improvement stalled Mega Bank quarterly Total NIM* Mega Bank quarterly FCY NIM* Mega Bank quarterly NTD NIM* 1.22% 1.30% 1.34% 1.32% 1.17% 1.09% 1.15% 1.13% 1.13% 1.13% 1.26% 1.24% 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1.22% 1.18% 1.11% Mega Bank monthly USD NIM Mega Bank m

  14. Slide 14: RMB assets/liabilities growth remained difficult

    RMB assets/liabilities growth remained difficult Mega Bank 1-4Q/15 RMB interest earning assets* Mega Bank 1-4Q/15 RMB interest bearing liabilities* Others Inter-banks Inter-banks 2% Total: assets Total: deposit NT$195,386mn NT$150,862mn 18% 34% Trade finance Demand 47% deposit 7% Time Loan deposit 4

  15. Slide 15: Wealth management fee turned soft; bancassurance fee the bright spot

    Wealth management fee turned soft; while bacassurance fee was the only bright spot Mega Bank wealth management gross fee breakdown* Unit: NT$MN 750 629 97 655 617 614 553 554 102 138 Management fee** Total: 510 118 109 213 105 127 118 125 109 Mutual fund fee 161 214 159 160 163 270 306 301 247 Banca

  16. Slide 16: Group fee was up 6% YoY

    Group fee was up 6% YoY, driven by WM, corp. loan, custodian and bills fee growth Mega Securities Mega Bills net Mega Bank net fee breakdown net fee fee 1-4Q/14 1-4Q/15 Unit: NT$MN 3,506 3,265 2,477 2,340 1,947 1,754 1,544 1,269 888 967 457 342 307 334 Wealth Mgmt* FX Corp. loan Custodian Credit car

  17. Slide 17: Asset quality remained strong; reserve jumped higher

    Asset quality remained strong; reserve jumped higher Mega Bank NPL balance & NPL ratio* Mega Bank loan loss reserved and coverage ratio Market 1986.37% 0.30% Avg. 1723.01% 0.25% 0.26% 0.25% 0.25% 1365.30% 1515.62% 0.23% 1466.97% Mega 809.11% 0.15% Mega 555.43% 0.08% 0.08% 0.09% 0.08% 442.08% 516.38%

  18. Slide 18: No sign of asset quality deterioration

    No sign of asset quality deterioration Mega Bank NPL ratio by customer * Mega Bank new NPL as % of total loan ** Large corp. NPL% 0.17% 0.00% 0.01% 0.01% 0.00% 0.00% 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 New NPL 0.43% 0.34% 0.34% SME NPL % 0.19% 0.18% 0.12% 0.17% 0.12% 0.17% 0.16% 0.16% 0.14% 2010 201

  19. Slide 19: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 19

  20. Slide 20: Core revenue growth remained solid

    Core revenue growth remained solid Mega Group consolidated net revenue * Mega Group 1-4Q/2015 net revenue breakdown Insurance Other premium Revenue Unit: NT$MN ** 1-4Q/14 1-4Q/15 3% 6% Net trading gain 10% 36,674 37,689 Net fee revenue 18% Net interest income 63% Highlights  NII was up 3% YoY due t

  21. Slide 21: CET1 capital ratio reached 11.23%; highest among major peers

    CET1 capital ratio reached 11.23%; highest among major peers Mega FHC* Mega Bank CAR / RBC** Regulatory Regulatory Moody’s: A3 Requirement : 100% Moody’s: A1 / S&P: A / Fitch: A- Requirement : 8.0% Common Equity Tier I capital ratio** 145.00% 13.16% 11.86% 11.07% 11.76% 132.33% 126.28% 126.88% Credi

  22. Slide 22: Consistent profitability and attractive dividend policy

    Consistent profitability and attractive dividend policy Key Profitability Ratios 12.03%  To prevent over-inflated capital base 10.33% 9.95% 10.56% as well as to maintain sufficient capital 8.74% for future growth, our dividend policy 7.62% ROE is: 0.95% 0.88%  Maintain high payout ratio 0.81% 0.77

  23. Slide 23: 1-4Q/2015 Mega FHC consolidated P&L statement

    1-4Q/2015 Mega FHC consolidated P&L statement* NT$MN, except per share data 1-4Q/2015*5 1-4Q/2014 YoY Brief Gap Analysis Net interest income 37,689 36,674 3% 1. Gain from fin. assets was down Net fee revenue 10,975 10,393 6% mainly due to MTM loss from TW Insurance premium 1,871 1,529 22% convertibl

  24. Slide 24: 1-4Q/2015 Mega FHC consolidated balance sheet

    1-4Q/2015 Mega FHC consolidated balance sheet* NT$MN 1-4Q/2015* 1-4Q/2014 YoY Assets: Cash and due from banks 652,169 634,546 3% Bills and bonds under RP agreement 7,079 11,874 -40% Fin. assets at fair value through P&L 182,037 181,367 0% AFS financial assets 346,461 280,703 23% HTM financial assets

  25. Slide 25: 1-4Q/2015 Mega Bank consolidated P&L statement

    1-4Q/2015 Mega Bank consolidated P&L statement* Brief Gap Analysis NT$MN, except per share data 1-4Q/2015*5 1-4Q/2014 YoY Net interest income 36,046 35,297 2% 1. Gain from fin. assets was down mainly due to MTM loss from TW Net fee revenue 8,600 8,254 4% convertible bond position. Gain from fin. ass

  26. Slide 26: 1-4Q/2015 Mega Bank balance sheet

    1-4Q/2015 Mega Bank balance sheet* NT$MN 1-4Q/2015* 1-4Q/2014 YoY Assets: Cash and due from banks 616,729 630,394 -2% Bills and bonds under RP agreement 9,236 5,850 58% Fin. assets at fair value through P&L 47,028 43,697 8% AFS financial assets 231,507 187,345 24% HTM financial assets 199,529 161,79

  27. Slide 27: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 27

  28. Slide 28: Mega Bank's Overseas Franchise

    39 offices in 20 countries; 15 offices in SE Asia Mega Bank’s Overseas Franchise Toronto London Amsterdam Richmond China: Vancouver •Suzhou branch Paris •Wujiang sub-branch New York Silicon Valley Chicago •Kunshan sub-branch Tokyo •Ningbo branch Osaka Los Angeles Bahrain* HK Colon Abu Dhabi* Yangon*

Mega Financial Holding — Q4 2015 Earnings Presentation on 6ix