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

Mega Financial — Q1 2008 Earnings Presentation

22 slides from Mega Financial's earnings presentation, 2008

  1. Slide 1: 1Q / 2008 Investor Presentation

    1Q / 2008 (v.2) Investor Presentation

  2. Slide 2: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 2

  3. Slide 3: Stronger than expected corp. loan growth in 1Q/08

    Stronger than expected corp. loan growth in 1Q/08 Mega Bank loan breakdown by customer segment * Unit: NT$bn Growth rate: 10% YoY; 6% QoQ 1,277 1,190 1,206 YoY Growth Total:1,158 1,181 Other 15% consumer 4% 598 Large corp. Mortgage 529 548 546 17% 518 YoY Growth 12% Gov.-linked Large corp. 4% 46% 31

  4. Slide 4: Off-shore loan grew 27% YoY

    Off-shore loan grew 27% YoY Mega Bank 1Q/08 loan breakdown by region * Unit: NT$bn YoY Growth 27% Overseas 186 Overseas branches 160 164 177 branches 145 15% 147 118 129 134 144 OBU OBU 12% 869 878 878 875 930 Domestic Domestic 73% 1Q/07 2Q/07 3Q/07 4Q/07 1Q/08 * Mega Bank quarterly average balance,

  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 1Q/08 LDR & deposit breakdown Unit: %; NT$bn 102% Loan to 99% 99% 96% 94% deposit ratio 1,296 YoY Growth 1,289 1,241 14% Total: 1,136 1,195 NTD FX time 345 304 demand 23% 323 328 FX time deposit 293 26% 470 503 NTD time deposit 38

  6. Slide 6: NIM is under pressure due to lower USD assets yield

    NIM is under pressure due to lower USD assets yield & dramatic increases in large corp. loan, while spread is intact Mega Bank NIM & NII * Mega Bank loan interest spread* Unit: NT$MN 1.72% Spread Yield cost 1.63% 1.49% 1.29% 1.32% 4.00% 4.00% 3.76% 3.80% 3.78% 6,492 6,353 6,025 5,077 4,838 2.32% 2.3

  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$2.97bn CBO 13,004 provision 13,428 8,048 9,251 Domestic branches 1,834 1,294 4,483 4,716 4,61

  8. Slide 8: Robust bancassurance & structured note product sales

    Robust bancassurance & structured note product sales Mega wealth management AUM Mega wealth management sales Unit: NT$BN Unit: NT$BN Total: 160.9 Total: 159.8 Total: 34.0 Total: 32.3 36.0 37.5 Bancassurance 1.4 1.0 0.9 5.8 Total: 107.5 16.4 17.7 Structured Note 11.7 Total: 86.8 16.1 10.5 16.6 Overse

  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 Total: 456 Total: 1,984 % 73 50 233 Management fee** Total: 304 47 197 Total: 1,196 1137 Mutual fund fee Total: 992 234 163 Total: 675 195 50 135 365 631 Bancassurance fee 218

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

    Strong WM & corp. banking related fee income Mega Bank 1Q/2008 gross fee income breakdown Unit: NT$MN 1Q/07 1Q/08 Others Credit 7% WM card 5% 25% 456 430 447 347 368 Treasury 304 262 13% 237 116 104 96 121 Custodian 50% 32% 15 4 6% FX Wealth FX Corp. loan Custodian Treasury Credit card Others Corp.

  11. Slide 11: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 11

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

    1Q/2008 earning breakdown by subsidiaries 1Q/08 earning contribution by sub. Unit: NT$MN 37 123 ( 117 ) 569 729 ( 262 ) 379 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. Audited subsidiary earning deducts employee bonus a

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

    Increases in NII & fee offset the CBO provision impact 1Q/07 vs. 1Q/08 net revenue * 1Q/2008 net revenue breakdown Unit: NT$MN 1Q/07 1Q/08 Other 7,268 Income, Insurance 5,767 15.7% Down to due premium, CBO provision 7.1% 26% and ST equity **Net trading trading loss gain,-25.7% 1,924 2,135 2,200 1,43

  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 77.72% 76.46% 2.32% 2.32% 2.16% 1.84% 1.69% 70.88% 71.75% 67.12% Mega 1.49% Market Avg. 1.29% 1.07% 1.00% 1.12% 64.05% 64.46% 53.91% 54.50% 55.10% 17,039 15,159

  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: 1Q/08 Mega FHC consolidated P&L statement

    1Q/08 Mega FHC consolidated P&L statement NT$MN, except per share data 1Q/08* 1Q/07* YoY 2007* Net interest income 7,268 5,767 26% 26,296 Net fee income 2,135 1,924 11% 9,327 Insurance premium 647 580 12% 1,167 ST Trading gain -7,098 3,329 -313% 4,545 Available for sales asset gain 276 222 24% 2,508

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

    1Q/08 Mega FHC consolidated balance sheet NT$MN 1Q/08* 1Q/07* YoY 2007* YTD Assets: Cash and due from banks 283,535 138,978 104% 349,728 -19% Securities, net 600,059 650,084 -8% 590,241 2% A/R, net 136,237 120,263 13% 123,959 10% Loan, net 1,278,909 1,144,671 12% 1,210,580 6% Equity method LT invest

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

    Well established size and scale to win 1Q/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 May/2008 Unit: NT$MN Mega Group Underlying assets Provision realized Securities Type Total ~May/08 4Q/07 ~May/08 % of Subprime Others balance balance income income Total subprime exposure *** sheet statement st

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