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

Mega Financial — Q1 2015 Earnings Presentation

28 slides from Mega Financial's earnings presentation, 2015

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

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

  2. Slide 2: Disclaimer

    DISCLAIMER THE FINANCIAL INFORMATION IN THIS PRESENTATION AS OF AND FOR THE THREE MONTHS ENDED MAR 31, 2015 ARE UN-AUDITED NUMBERS UNLESS SPECIFIED OTHERWISE. MEGA FHC WILL FILE ITS AUDITED FINANCIAL STATEMENTS THROUGH TAIWAN STOCK EXCHANGE MARKET OBSERVATION POST SYSTEM ON MAY 31, 2015. These mater

  3. Slide 3: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 3

  4. Slide 4: Total loan was up 3.3% YoY but flat QoQ

    Total loan was up 3.3% YoY but flat QoQ Mega Bank quarterly loan balance* Mega Bank 1Q/15 loan breakdown by customer Unit: NT$bn Growth Trend YoY: 3.3% 1,679 1,672 1,711 1,737 1,734 Total QoQ: -0.2% Other consumer 6% 736 737 732 Large corp. YoY: -0.4% Mortgage 735 718 QoQ: -0.7% 17% Large Gov.-linke

  5. Slide 5: Transport/Telco, Financial, Hotel/Restaurant loan growth helped offsetting the declines from others

    Transport/Telco, Financial, Hotel/Restaurant loan growth helped offsetting the declines from others Mega Bank loan balance trend by industry* Mega Bank 1Q/15 loan breakdown by industry* 1Q/15 4Q/14 1Q/14 Growth Trend Unit: NT$BN 476 YoY: -4.0% Manufacturing 502 QoQ: -5.2% 496 Transport & 165 YoY: 6.

  6. Slide 6: OBU loan was up 3.6% QoQ

    OBU loan was up 3.6% QoQ Mega Bank 1Q/15 loan breakdown by regions * Unit: NT$bn Growth Trend Overseas 34% off-shore 248 245 YoY: 4.3% 235 236 240 branches loan QoQ: -1.2% Overseas branches OBU 14% 344 343 338 350 Growth Trend 334 YoY: 1.7% QoQ: 3.6% OBU (offshore banking unit) 20% Domestic Domestic

  7. Slide 7: NTD loan growth helped offsetting declines from FCY loan

    NTD loan growth helped offsetting declines from FCY loan Mega Bank 1Q/15 loan breakdown by currency: NTD vs. foreign currency loan * Unit: NT$bn FCY Loan** Growth Trend 660 654 681 696 688 YoY: 4.2% FCY Loan QoQ: -1.1% 39.5% NTD Loan NTD Loan 1,030 1,041 1,055 60.5% 1,013 1,018 Growth Trend YoY: 4.1

  8. Slide 8: Deposit was up 1.9% QoQ and 6.3% YoY

    Deposit was up 1.9% QoQ and 6.3% YoY Mega Bank’s deposit balance * Mega Bank’s RMB deposit** Interbank Retail/Corp. Unit:NT$bn Growth Trend Unit:NT$bn YoY: 6.3% 27 28 27 2,061 QoQ: 1.9% 31 16 2,023 22 126 Total: 1,938 1,908 116 117 113 112 1,883 10 100 447 65 459 FX time 422 395 394 deposit 3Q/13 4Q

  9. Slide 9: LDR was down as USD LDR came down further

    LDR was down as USD LDR came down further Mega Bank’s total LDR* Mega Bank’s USD LDR* 96.11% 95% 95% 91.76% 89.53% 89.81% 89.54% 89.01% 88.00% 86.85% 86.60% 87.18% 85.41% 85.81% 85.81% 85.94% 85.26% 84.12% 85% 85% 75% 75% 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

  10. Slide 10: Loan spread remained stable despite NIM pressure

    Loan spread remained stable despite NIM pressure Mega Bank total loan interest spread* Mega Bank overseas loan interest spread* Spread Yield cost 2.32% 2.35% 2.28% 2.30% Spread Yield cost 2.16% 2.25% 1.58% 1.61% 1.54% 1.55% 1.45% 1.53% 2.07% 2.11% 2.15% 2.13% 2.10% 2.13% 0.58% 0.80% 0.79% 0.74% 0.75

  11. Slide 11: Interest earning assets was up 6.4% QoQ

    Interest earning assets was up 6.4% QoQ Mega Bank quarterly NII* Mega Bank quarterly interest earning assets** Unit: NT$ million Unit: NT$ billion 3,190 2,997 2,826 2,644 2,695 2,456 2,532 2,411 8,832 9,038 8,913 8,794 8,103 8,359 7,301 7,607 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/13 3Q/

  12. Slide 12: …mainly due to low-yield USD inter-banks assets growth…

    …mainly due to low-yield USD inter-banks assets growth… Mega Bank RMB inter-banks assets* Mega Bank USD inter-banks assets* Unit: NT$ billion Unit: NT$ billion 751 501 510 133 367 336 116 111 106 98 256 83 229 227 59 67 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 3Q

  13. Slide 13: …as a result, USD NIM contracted; however, NTD NIM remained stable, RMB NIM jumped higher

    …as a result, USD NIM contracted; however, NTD NIM remained stable, RMB NIM jumped higher Mega Bank quarterly Total NIM* Mega Bank quarterly FCY NIM* Mega Bank quarterly NTD NIM* 1.45% 1.51% 1.41% 1.22% 1.09% 1.13% 1.13% 1.12% 1.12% 1.10% 1.32% 1.28% 1.27% 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 1Q/14 2Q/14 3

  14. Slide 14: RMB biz is still very profitable despite PBOC rate cuts and easing policy

    RMB biz is still very profitable despite PBOC rate cuts and easing policy Mega Bank 1Q/15 RMB interest earning assets* Mega Bank 1Q/15 RMB interest bearing liabilities* Others Inter-banks 1% deposit Total: NT$202bn Total: NT$141bn 12% Demand Trade finance deposit 37% 7% Inter-banks assets 48% Loan 3

  15. Slide 15: WM fee jumped 17% QoQ & 27% YoY, due to strong fund sales fee and bancassurance fee

    WM fee jumped 17% QoQ & 27% YoY, due to strong fund sales fee and bancassurance fee Mega Bank quarterly wealth management gross fee revenue breakdown by product * Unit: NT$MN 649 619 617 554 102 Management fee** 554 Total: 530 104 510 118 490 105 127 99 107 118 Mutual fund fee 100 214 161 159 159 16

  16. Slide 16: WM, Corp. loan and bills fee were up

    WM, Corp. loan and bills fee were up Mega Securities Mega Bills net Mega Bank net fee breakdown* net fee fee 1Q/14 1Q/15 Unit: NT$MN 790 825 547 455 439 392 349 282 232 102 200 117 66 83 Wealth Mgmt** FX Corp. loan Custodian Credit card Securities Bills Highlights Mega FHC 1Q/15 net fee breakdown Bi

  17. Slide 17: NPL was down; coverage was up

    NPL was down; coverage was up Mega Bank NPL balance & NPL ratio* Mega Bank loan loss reserved and coverage ratio 0.38% 1986.37% 0.33% Market 0.30% Avg. 1515.62% 0.28% 0.25% 0.26% 1333.85% 963.83% 794.40% 809.11% Mega 0.16% 0.15% Mega 0.12% 442.08% 516.38% 490.67% 0.09% 0.08% 319.18% 362.60% 433.61%

  18. Slide 18: Asset quality remained strong

    Asset quality remained strong Mega Bank NPL ratio by customer * Mega Bank new NPL as % of total loan ** Large corp. NPL% 0.10% 0.14% 0.17% 0.07% 0.00% 0.01% 4Q/13 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 New NPL 0.43% 0.34% 0.34% SME NPL % 0.19% 0.18% 0.13% 0.32% 0.13% 0.14% 0.17% 0.12% 0.17% 2010 2011 2012 20

  19. Slide 19: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 19

  20. Slide 20: NII was up 5% YoY; trading gain was up 16% YoY

    NII was up 5% YoY; trading gain was up 16% YoY Mega Group consolidated net revenue * Mega Group 1Q/2015 net revenue breakdown Other Unit: NT$MN Revenue 1Q/14 1Q/15 16% Insurance 9,152 premium 8,707 8% Net interest ** Net trading income 48% gain 14% Net fee revenue 14% Highlights Includes TMT NPL rec

  21. Slide 21: Well-capitalized for Basel III requirements

    Well-capitalized for Basel III requirements** Mega FHC* Mega Bank CAR / RBC Regulatory Regulatory Moody’s: A3 Requirement : 100% Moody’s: A1 / S&P: A / Fitch: A- Requirement : 8.0% Tier I capital ratio 126.88% 132.33% 11.56% 11.86% 11.07% 11.76% 125.55% 126.28% Credit rating 9.27% 9.66% 9.33% 9.75%

  22. Slide 22: Record high ROE and expecting 5% div. yield

    Record high ROE and expecting 5% div. yield Key Profitability Ratios  To prevent over-inflated capital base 12.03% 12.42% as well as to maintain sufficient capital 10.33% 9.95% for future growth, our dividend policy 8.74% is: 7.62% ROE  Maintain high payout ratio 0.98%  At least 50% of dividend p

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

    1Q/2015 Mega FHC consolidated P&L statement* NT$MN, except per share data 1Q/2015* 1Q/2014 YoY 2014 Net interest income 9,152 8,707 5% 36,674 Net fee revenue 2,555 2,518 1% 11,121 Insurance premium 413 437 -5% 1,529 Gain from fin. assets at fair value thru P&L 888 1,024 -13% 3,826 Available for sale

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

    1Q/2015 Mega FHC consolidated balance sheet* NT$MN 1Q/2015* 1Q/2014 YoY 2014 YTD Assets: Cash and due from banks 770,750 536,095 44% 635,381 21% Bills and bonds under RP agreement 6,915 5,000 38% 11,874 -42% Fin. assets at fair value through P&L 174,363 171,632 2% 181,367 -4% AFS financial assets 29

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

    1Q/2015 Mega Bank P&L statement* NT$MN, except per share data 1Q/2015* 1Q/2014 YoY 2014 Net interest income 8,794 8,375 5% 35,292 Net fee revenue 2,049 1,993 3% 7,521 Gain from fin. assets at fair value thru P&L 154 312 -51% 1,370 Available for sales asset gain 360 183 97% 1,277 Equity method invest

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

    1Q/2015 Mega Bank balance sheet* NT$MN 1Q/2015* 1Q/2014 YoY 2014 YTD Assets: Cash and due from banks 762,005 530,304 44% 630,105 21% Bills and bonds under RP agreement 6,858 5,110 34% 5,850 17% Fin. assets at fair value through P&L 41,116 41,299 0% 43,697 -6% AFS financial assets 198,865 188,913 5%

  27. Slide 27: Agenda

    Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 27

  28. Slide 28: Mega Bank's Overseas Franchise

    14 bank branches and rep. offices in SE Asia Mega Bank’s Overseas Franchise Toronto London Amsterdam Richmond Toronto -Chinatown China: Vancouver •Suzhou branch Paris •Wujiang sub-branch Silicon Valley Chicago New York Tokyo •Ningbo branch Cambodia: Osaka Los Angeles Bahrain* 1 branch + 2 HK Taiwan

Mega Financial Holding — Q1 2015 Earnings Presentation on 6ix