Mega Financial Holding Co., Ltd. · TWSE:2886
Mega Financial — Q3 2007 Earnings Presentation
25 slides from Mega Financial's earnings presentation, 2007
Slide 1: 3Q / 2007 Investor Presentation
3Q / 2007 (v.1) Investor Presentation Mega Holdings
Slide 2: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 2 Mega Holdings 2
Slide 3: Strong SME loan growth
Strong SME loan growth Mega Bank loan balance trend * YTD growth: 5.2% Unit: NT$bn Total: 1,158 Total: 1,181 Total: 1,190 Total: 1,131 Large corp. 523 518 529 548 SME YTD growth: Other corp. 14.7% 287 258 282 296 Gov.-linked 17 22 42 44 92 92 75 50 Mortgage 201 204 208 210 40 40 40 42 Other consumer
Slide 4: Loan mix changes to improve yield
Loan mix changes to improve yield Mega Bank loan mix trend * Unit: NT$bn Total: 1,131 Total: 1,158 Total: 1,181 Total: 1,190 Large corp. 46.2% 44.7% 44.8% 46.1% SME Other corp. 22.8% 24.4% 24.3% 24.9% Gov.-linked 1.5% 1.9% 3.6% 3.7% 8.1% 7.9% 6.4% 4.2% Mortgage 17.8% 17.6% 17.6% 17.6% 3.5% 3.5% 3.4%
Slide 5: Strong off-shore loan growth
Strong off-shore loan growth Mega domestic & off-shore loan balance* Mega domestic & off-shore loan mix Unit: NT$bn Domestic OBU Overseas branches Domestic OBU Overseas branches YTD growth : 25.1% 25.3% are off-shore loan 11.9% 12.8% 13.7% 13.9% 133 145 160 164 9.4% 10.4% 11.1% 11.4% 105 118 129 134
Slide 6: Strong foreign currency deposit growth
Strong foreign currency deposit growth Mega Bank deposit balance and mix Unit: NT$bn YTD growth: 11.2% Total: 1,241 Total: 1,195 Total: 1,136 328 26% 27% 26% 323 Foreign currency time deposit 293 NTD time deposit 34% 34% 388 409 440 35% 156 Foreign currency demand deposit 12% 12% 13% 138 146 317 317
Slide 7: Much improved NIM and interest spread
Much improved NIM and interest spread Mega Bank net interest margin * Mega Bank loan interest spread 1.61% 1.58% 1.26% 1.26% 1.35% 1.44% 1.44% 1.41% 4Q/06 1Q/07 2Q/07 3Q/07 4Q/06 1Q/07 2Q/07 3Q/07 7 * Net interest income / average interest earning assets Mega Holdings 7
Slide 8: OBU and overseas bank branches earning growth continues
OBU and overseas bank branches earning growth continues 48.2% 46.4% 34.9% 36.8% Offshore earning contribution (%) * 29.7% Unit: NT$MN 4,483 1 4,716 3,441 2,584 3,558 2 OBU pretax earning** 2,232 3,089 2,773 2,699 Overseas branches pretax earning*** 1,811 2003 2004 2005 2006 1-3Q/07 1. 2007 OBU earni
Slide 9: Strong Wealth Mgmt AUM growth
Strong Wealth Mgmt AUM growth Wealth management AUM trend Unit: NT$MN Bancassurance Structured Notes Total: Overseas fund 150,840 Domestic fund Total: Total: 137,549 126,003 34,117 Total: 32,114 107,537 27,792 Total: 16,125 86,773 16,057 15,773 Total: 16,141 11,567 16,619 66,025 14,537 55,014 63,344
Slide 10: WM fee reached record high in 1-3Q/07
WM fee reached record high in 1-3Q/07 Wealth management net fee income trend* 1-3Q/07 Mega Bank fee income breakdown*** Management Fee** Unit: NT$MN Mutual Fund Fee Bancassurance Fee Others Structured Notes Fee Credit card fee 1% Total: 1,394 6% Wealth Mgmt fee 27% Total: 1,196 160 Treasury fee 13%
Slide 11: Continue to build up WM channels and FC team
Continue to build up WM channels and FC team 6 Wealth Mgmt VIP centers WM channel strategy Future target Leveraging HK branch corp. banking areas: started to Sanchong Taipei & Singapore develop WM overseas Sydney operation in branches Vancouver channels Sept / 2006 branches Hsinchu Numbers of WM fin
Slide 12: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 12 Mega Holdings 12
Slide 13: 1~3Q/2007 earning breakdown by subsidiaries
1~3Q/2007 earning breakdown by subsidiaries 1~3Q/07 earning contribution by sub. Unit: NT$MN 359 1,397 ( 131 ) ( 89 ) 2,360 13,610 9,714 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 emp
Slide 14: Mega FHC consolidated net revenue breakdown
Mega FHC consolidated net revenue breakdown 1~3Q/06 & 1~3Q/07 net revenue * 1~3Q/07 net revenue breakdown 1~3Q/06 1~3Q/07 Unit: NT$MN Other 18,448 18,954 Income Insurance 6.6% premium 2.7% 2.1% Capital & asset gain 8,381 8,481 22.7% Net interest income 6,671 5,451 50.8% 3,253 Net fee 2,468 income 22
Slide 15: PPOP rebounded to normalized level
PPOP rebounded to normalized level Mega FHC consolidated pre-provision operating profit Unit: NT$MN 9197 8,310 7,216 7,079 6,650 6,188 6,296 5,354 3,564 Merger of two banks 3Q/05 4Q/05 1Q/06 2Q/06 3Q/06 4Q/06 1Q/07 2Q/07 3Q/07 15 Mega Holdings 15
Slide 16: Improved cost to income ratio
Improved cost to income ratio FHC consolidated cost to income numbers FHC consolidated provision expense Cost to income ratio Unit: % / NT$MN Unit: NT$MN Revenue Operating expense 62.44% 3,291 3,319 42.13% 42.51% 42.03% 35.99% 35.12% 2,523 14,176 2,318 12,469 12,982 2,117 12,220 9,488 10,951 1 5,924
Slide 17: Superior asset quality among peers
Superior asset quality among peers NPL balance & NPL ratio* Loan loss reserved and coverage ratio* Mkt Avg ** Mega Oct/07: 86.15% 2.40% 2.32% 2.32% 2.13% 97.72% 104.84% Oct/07: 1.07% 67.12% 77.72% 70.88% Mega 1.49% Mkt Avg ** 1.19% 0.88% 1.29% 1.07% 58.85% 53.91% 48.64% 54.50% 17,039 12,808 15,159 1
Slide 18: Conservative balance sheet position
Conservative balance sheet position Mega FHC* Mega Bank** BASEL II Moody’s: Baa1 Regulatory Moody’s: A1 / S&P: A Regulatory implementation Requirement : 100% Requirement : 8.0% fully reflected 108.42% 119.46% 110.57% 109.48% 10.90% 10.51% 10.34% 10.32% 8.34% 8.60% 8.52% 9.50% 2004 2005 2006 1H/2007
Slide 19: Focus on providing consistent yields for investors
Focus on providing consistent yields for investors Key Earning Metrics 13.57% To increase our ROE and prevent 12.59% 12.10% over-inflated capital base, we have 1.13% paid 100% cash dividend in the last 9.23% 1.04% 4 years. 1.06% 8.20% ROE Payout ratio of 70% ~100% 0.83% 2.22 Dividend policy is
Slide 20: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 20 Mega Holdings 20
Slide 21: 1~3Q/07 Mega FHC Audited P&L Statement
1~3Q/07 Mega FHC Audited P&L Statement NT$K, except per share data 1~3Q/07 1~3Q/06 YoY Net interest income 18,954,361 18,448,080 2.74% Net fee income 6,670,714 5,451,115 22.37% Insurance premium 766,006 1,204,712 -36.42% ST Trading gain 5,280,925 5,469,544 -3.45% Available for sales asset gain 2,163
Slide 22: Well established size and scale to win
Well established size and scale to win 1~3Q/2007* Mega Financial Holding Co. (TAIEX.2886) NT$ 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) C
Slide 23: Mega CDO/ CBO/ sub-prime exposure disclosure (1)
Mega CDO/ CBO/ sub-prime exposure disclosure (1) 23 Mega Holdings 23
Slide 24: Mega CDO/ CBO/ sub-prime exposure disclosure (2)
Mega CDO/ CBO/ sub-prime exposure disclosure (2) Key Facts & Analysis 1. Calyon 2005-1 CBO was underwritten by Mega Bank, with total issued size of NT$10,532M, which includes NT$8,636M Senior ABCP, NT$105M Mezzanine Certificate B, NT$105M Mezzanine Certificate C, and NT$1,685M Equity Tranche. Mega B
Slide 25: Mega CDO/ CBO/ sub-prime exposure disclosure (3)
Mega CDO/ CBO/ sub-prime exposure disclosure (3) Key Facts & Analysis (cont.) 4. Equity tranche of our CBO are classified as “No Active Market” securities, while Senior ABCP & Mezzanine Certificate are classified as “Available for Sales” securities using dividend discount model for valuation. No mar
Mega Financial Holding — Q3 2007 Earnings Presentation on 6ix