Slide 1: Investor/Analyst Briefing 2Q / 2016
Investor/Analyst Briefing 2Q / 2016 (V.1)
Slide 2: Disclaimer
DISCLAIMER THE FINANCIAL INFORMATION IN THIS PRESENTATION AS OF AND FOR THE SIX MONTHS ENDED JUN 30, 2016 ARE UN-AUDITED NUMBERS UNLESS SPECIFIED OTHERWISE. MEGA FHC WILL FILE ITS AUDITED FINANCIAL STATEMENTS THROUGH TAIWAN STOCK EXCHANGE MARKET OBSERVATION POST SYSTEM ON AUG 31, 2016. These materia
Slide 3: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 3
Slide 4: SME loan was up 2.4% QoQ
SME loan was up 2.4% QoQ Mega Bank quarterly loan balance* Mega Bank 2Q/16 loan breakdown by customer Unit: NT$bn Growth Trend 1,750 1,795 1,781 1,743 YoY: -2.1% 1,738 Total QoQ: 0.3% Other consumer 5% 726 757 735 708 704 YoY: -4.2% Mortgage Large corp. QoQ: -0.6% 17% Large Gov.-linked corp. 2% 40%
Slide 5: Growth from retail & wholesales and financial industries helped offset decline from others
Growth from retail & wholesales and financial industries helped offset decline from others Mega Bank loan balance trend by industry* Mega Bank 2Q/16 loan breakdown by industry* 2Q/16 1Q/16 2Q/15 Growth Trend Unit: NT$BN 427 YoY: -10.5% Manufacturing 433 QoQ: -1.4% 477 Transport & 162 YoY: -2.4% Tele
Slide 6: Overseas branches loan growth outperformed consistently
Overseas branches loan growth outperformed consistently Mega Bank 2Q/16 loan breakdown by regions * Unit: NT$bn Growth Trend 276 Overseas 35% off-shore 255 284 285 291 YoY: 14.1% branches loan QoQ: 2.1% Overseas branches 341 362 342 OBU 17% 323 324 Growth Trend YoY: -5.0% QoQ: 0.3% OBU (offshore ban
Slide 7: FCY loan was up; NTD loan was down
FCY loan was up; NTD loan was down Mega Bank 2Q/16 loan breakdown by currency: NTD vs. foreign currency loan * Unit: NT$bn 678 725 707 FCY Loan** Growth Trend 673 678 YoY: 0.0% FCY Loan QoQ: 0.7% 39.0% NTD Loan NTD Loan 1,064 1,078 1,082 1,071 1,061 61.0% Growth Trend YoY: -0.3% 2Q/15 3Q/15 4Q/15 1Q
Slide 8: Stable deposit growth
Stable deposit growth Mega Bank’s deposit balance * Mega Bank’s RMB deposit** Interbank Retail/Corp. Unit:NT$bn Growth Trend Unit:NT$bn 2,216 2,218 YoY: 3.4% 22 26 28 2,199 31 Total: 2,146 2,148 QoQ: 0.8% 16 127 126 120 16 11 113 112 97 93 506 486 502 492 458 FX time deposit 4Q/14 1Q/15 2Q/15 3Q/15
Slide 9: LDR slid down a bit
LDR slid down a bit Mega Bank’s total LDR* Mega Bank’s USD LDR* Total LDR USD LDR 89.81% 96.11% 91.76% 89.01% 85.61% 84.50% 85.81% 82.06% 84.12% 70.72% 68.63% 83.52% 81.50% 80.32% 78.96% 78.53% 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 * LDR calc
Slide 10: Onshore/offshore spread divergence continued
Onshore/offshore spread divergence continued Mega Bank total loan interest spread* Mega Bank overseas loan interest spread* Spread Yield cost Spread Yield cost 2.41% 2.59% 2.62% 2.30% 2.31% 2.33% 2.07% 1.81% 1.94% 1.55% 1.71% 1.58% 2.13% 2.13% 2.15% 2.16% 2.21% 2.19% 0.75% 0.73% 0.63% 0.60% 0.65% 0.
Slide 11: Net interest income recovered
Net interest income recovered Mega Bank quarterly NII* Mega Bank quarterly interest earning assets** Unit: NT$ million Unit: NT$ billion 3,190 9,128 9,038 9,053 2,997 2,971 2,957 8,913 2,903 2,872 2,882 8,862 8,794 2,826 8,776 8,728 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 3Q/14 4Q/14 1Q/15 2
Slide 12: NIM was up on the back of FCY NIM improvement
NIM was up on the back of FCY NIM improvement Mega Bank quarterly Total NIM* Mega Bank quarterly FCY NIM* Mega Bank quarterly NTD NIM* 1.34% 1.17% 1.32% 1.30% 1.30% 1.15% 1.14% 1.13% 1.24% 1.11% 1.26% 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 1.24% 1.22% 1.21% Mega Bank monthly USD
Slide 13: RMB NIM bounced back up
RMB NIM bounced back up Mega Bank 1-2Q/16 RMB interest earning assets* Mega Bank 1-2Q/16 RMB interest bearing liabilities* Total: Others Inter-banks NT$101,363mn Inter-banks Total: 1% deposit NT$105,702mn 11% Trade assets Demand finance 28% deposit 41% 12% Loan Time 9% Fin. Assets deposit 22% 76% Me
Slide 14: Bancassurance fee remained solid; while overall WM fee stayed strong
Bacassurance fee remained solid; while overall WM fee stayed strong Mega Bank wealth management gross fee breakdown* Unit: NT$MN 750 732 714 97 Management fee** 629 655 110 105 Total: 617 614 554 102 138 106 118 213 109 88 Mutual fund fee 127 125 109 161 214 160 270 436 416 306 301 247 Bancassurance
Slide 15: Group fee remained stable, helped by WM fee.
Group fee remained stable, helped by WM fee. Mega Securities Mega Bills net Mega Bank net fee breakdown net fee fee 1H/15 1H/16 Unit: NT$MN 1,975 1,829 1,144 963 870 835 614 523 464 512 215 254 158 156 Wealth Mgmt* FX Corp. loan Custodian Credit card Securities Bills Highlights Mega FHC 1H/16 net fe
Slide 16: Low NPL ratio; high coverage
Low NPL ratio; high coverage Mega Bank NPL balance & NPL ratio* Mega Bank loan loss reserved and coverage ratio 0.27% 1624.61% 0.26% 0.25% 0.25% 0.26% 1723.01% 0.23% 1515.62%1466.97% 1527.91% Market 1365.30% Avg. Mega Mega Market Avg. 0.08% 0.08% 0.09% 0.08% 0.09% 0.09% 490.67% 501.14% 509.13% 555.4
Slide 17: No sign of asset quality deterioration
No sign of asset quality deterioration Mega Bank NPL ratio by customer * Mega Bank new NPL as % of total loan ** Large corp. NPL% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 New NPL 0.43% 0.34% SME NPL % 0.19% 0.18% 0.12% 0.12% 0.17% 0.16% 0.16% 0.14% 0.15% 0.16% 2011 201
Slide 18: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 18
Slide 19: Group net revenue was up 7% YoY
Group net revenue was up 7% YoY Mega Group consolidated net revenue * Mega Group 1-2Q/2016 net revenue breakdown Insurance Other premium Revenue Unit: NT$MN 3% 1-2Q/15 1-2Q/16 4% ** Net trading gain 16% 18,395 18,729 Net fee revenue Net interest 17% income 60% Highlights Mega Group net revenue was
Slide 20: Strong CET1 ratio to ensure consistent dividend policy
Strong CET1 ratio to ensure consistent dividend policy 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** 13.16% 13.47% 145.00% 11.76% 132.33% 137.00% 11.07% 126.88% Credit rati
Slide 21: Strong dividend policy with 6~7% cash yield
Strong dividend policy with 6~7% cash yield Key Profitability Ratios 12.03% To prevent over-inflated capital base 10.33% 9.95% 10.56% 10.38% as well as to maintain sufficient capital 8.74% for future growth, our dividend policy ROE is: 0.95% 0.88% 0.90% Maintain high payout ratio 0.81% 0.77% ROA
Slide 22: 1-2Q/2016 Mega FHC consolidated P&L statement
1-2Q/2016 Mega FHC consolidated P&L statement* NT$MN, except per share data 1-2Q/2016*5 1-2Q/2015 YoY Brief Gap Analysis Net interest income*1 18,729 18,395 2% 1. NII was up due to improved NIM Net fee revenue 5,356 5,375 0% 2. Gain from fin. assets was up due Insurance premium 1,031 762 35% trading
Slide 23: 1-2Q/2016 Mega FHC consolidated balance sheet
1-2Q/2016 Mega FHC consolidated balance sheet* NT$MN 1-2Q/2016* 1-2Q/2015 YoY Assets: Cash and due from banks 628,227 478,613 31% Bills and bonds under RP agreement 9,372 5,157 82% Fin. assets at fair value through P&L 195,694 173,345 13% AFS financial assets 353,280 312,596 13% HTM financial assets
Slide 24: 1-2Q/2016 Mega Bank consolidated P&L statement
1-2Q/2016 Mega Bank consolidated P&L statement* NT$MN, except per share data 1-2Q/2016*4 1-2Q/2015 YoY Brief Gap Analysis Net interest income 17,702 17,645 0% 1. Gain from fin. assets was up due Net fee revenue 4,221 4,255 -1% trading gain from asset swap Gain from fin. assets at fair value thru P&L
Slide 25: 1-2Q/2016 Mega Bank balance sheet
1-2Q/2016 Mega Bank balance sheet* NT$MN 1-2Q/2016* 1-2Q/2015 YoY Assets: Cash and due from banks 620,853 469,604 32% Bills and bonds under RP agreement 9,971 7,811 28% Fin. assets at fair value through P&L 48,866 39,937 22% AFS financial assets 214,405 209,309 2% HTM financial assets 246,594 163,50
Slide 26: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 26
Slide 27: Mega Bank's interbank assets trend
Mega Bank’s interbank assets trend Mega Bank RMB inter-banks assets* Mega Bank USD inter-banks assets* Unit: NT$ billion Unit: NT$ billion751 594 501 510 513 496 509 488 133 111 98 82 77 67 30 28 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 Lower
Slide 28: 39 offices in 20 countries; 15 offices in SE Asia
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*