Mega Financial Holding Co., Ltd. · TWSE:2886
Mega Financial — 2Q 2024 Earnings Presentation
30 slides from Mega Financial's earnings presentation, Aug 26, 2024
Slide 1: 2Q/2024 Analyst Meeting
2Q/2024 Analyst Meeting 2024/08/26 1
Slide 2: Disclaimer
DISCLAIMER • This document is provided by Mega Financial Holding Co., Ltd. (the "Company"). Except for the numbers and information included in the Company's financial statements, the information contained in this document has not been unaudited or reviewed by any accountant or independent expert. Th
Slide 3: Table of Contents
Ta b l e o f C o n t e n t s Overview and Strategic 1 Focus 2 Financial Performance 3 Operating Performance 4 Appendix 3
Slide 4: Mega FHC 1H/24 earning were up 9% YoY
Mega FHC 1H/24 earning were up 9% YoY Mega FHC & Subs. 1H/24 earning trend Mega FHC Jan.-July/24 earning trend Unit: NT$MN 1H/2023 1H/2024* 20,397 18,505 18,767 17,792 24,588 22,091 1,117 1,495 162 981 1,088 (1,740)85 119 93 46 46 155 Mega Mega BillsMega Sec. CKI Mega Mega Site Mega VC Mega Jan.-Jul
Slide 5: Mega core strategies
Mega 4 core strategies • Leading state-linked FHC 1 • Maintain leading position in corp. banking, syndication loan and FX. No. 1 Mega • Emphasize non-bank biz. 2 Focus • Develop consumer banking biz, tailored Mega’s strength Bank vs Non-bank; Corp. banking vs. Consumer banking • ESG, Sustainability,
Slide 6: Table of Contents
Ta b l e o f C o n t e n t s Overview and Strategic 1 Focus 2 Financial Performance 3 Operating Performance 4 Appendix 6
Slide 7: 1H/24 bank NII rose 3% YoY; Fee income bounced up 46% YoY
1H/24 bank NII rose 3% YoY; Fee income bounced up 46% YoY Mega FHC 1H/24 net revenue breakdown* 1H/2023 1H/2024* Unit: NT$MN P&C Others 18,209 18,640 16,288 3% 1% 15,118 Trading NII Gain 43% 7,688 35% 5,369 1,523 791 612 -1,896 Fee Net Interest Income Net Fee Income Trading Gain** P&C Other Income 1
Slide 8: 1H/24 ROE & ROA Reached a 5-Year High
1H/24 ROE & ROA Reached a 5-Year High Major earning matrixes 11.90% 10.46% 7.69% 7.86% ROE 5.84% ROA 0.79% 0.91% 0.66% 0.64% To prevent over-inflated capital base as 0.45% 2.37 well as to maintain sufficient capital for future growth, our dividend policy is: 1.84 1.89 Maintain high payout ratio 0.
Slide 9: Strong capital position
Strong capital position Mega FHC Mega Bank CAR/RBC Moody’s: A2 CAR Requirement : 100% Moody’s: A1 / S&P: A+ D-SIBs requires: CAR: 14.0% CET1: 10.5% Common equity tier 1 ratio 122.86% 15.32% 122.12% 14.14% 14.31% 14.50% Credit rating BIS 119.34% 120.05% Double leverage ratio 116.61% 117.20% 116.53% 1
Slide 10: Table of Contents
Ta b l e o f C o n t e n t s Overview and Strategic 1 Focus 2 Financial Performance 3 Operating Performance 4 Appendix 10
Slide 11: 2Q/24 total loan were up 8.3% YoY
2Q/24 total loan were up 8.3% YoY, as large corp., SME and mortgage loan grew higher Mega Bank quarterly loan balance* Mega Bank 2Q/24 loan breakdown by customers Unit: NT$BN Growth % 2,237 Total YoY: 8.3% 2,148 2,199 QoQ: 1.7% Total: 2,066 2,135 Other consumer 708 720 5% 702 689 YoY: 10.9% Large co
Slide 12: 2Q/24 manufacturing loans were up 4.4% YoY
2Q/24 manufacturing loans were up 4.4% YoY; while retail & wholesales loans were up 16.6% YoY Mega Bank loan balance trend by industry* 2Q/24 loan breakdown by 2Q/24 1Q/24 2Q/23 industry* Unit: NT$BN Growth YoY: 4.4% Others 597 Manufacturing 602 QoQ: -0.8% 9% Manufacturing 572 27% 107 YoY: 1.9% Tran
Slide 13: 2Q/24 OBU loans grew 4.5% QoQ
2Q/24 OBU loans grew 4.5% QoQ; while domestic loans rose 1.9% QoQ / 12.0%YoY Mega Bank 2Q/24 loan breakdown by regions * Unit: NT$BN Growth 340 338 Overseas YoY: 1.5% 346 333 QoQ: -0.6% 333 176 184 OBU Growth 194 182 Overseas YoY: -8.9% 202 QoQ: 4.5% 15% OBU 8% Growth 1,631 1,681 1,713 1,530 1,592 D
Slide 14: 2Q/24 NTD loan grew 1.8% QoQ
2Q/24 NTD loan grew 1.8% QoQ Mega Bank 2Q/24 loan breakdown by currency: NTD vs. foreign currency loan * Unit: NT$BN 582 Growth 583 598 583 578 FCY loan** FCY Loan YoY: -0.2% 27% QoQ: 0.7% NTD 1,584 1,613 NTD loan Growth 1,462 1,495 1,534 Loan YoY: 10.3% 73% QoQ: 1.8% 2Q/23 3Q/23 4Q/23 1Q/24 2Q/24 M
Slide 15: 2Q/24 total deposit were up 3.2% QoQ
2Q/24 total deposit were up 3.2% QoQ Mega Bank deposit balance * Mega Bank 2Q/24 deposit breakdown Unit: NT$BN FCY demand Growth FCY time 13% YoY: 3.6% 26% 3,028 QoQ: 3.2% Total: 2,922 2,925 2,930 2,933 FX time deposit 745 738 774 798 778 NTD time NTD demand NTD time 29% 32% deposit 759 790 789 801
Slide 16: 2Q/24 Total LDR reached 72.46%
2Q/24 Total LDR reached 72.46% Mega Bank’s total LDR* Mega Bank’s USD LDR** 44.39% 74.61% Mega LDR Industry LDR*** 43.43% 74.79% 72.73% 72.46% 72.49% 71.82% 40.35% 40.35% 40.01% 71.16% 39.80% 70.58% 39.45% 39.27% 70.56% 70.56% 70.76% 70.04% 71.17% 69.63% 69.28% 70.02% 3Q/22 4Q/22 1Q/23 2Q/23 3Q/23 4
Slide 17: Cost and yield both extended higher in 2Q/24
Cost and yield both extended higher in 2Q/24; putting pressure on spread Mega Bank total loan interest spread Mega Bank overseas loan interest spread* Spread Yield Cost Spread Yield Cost 6.22% 6.30% 6.26% 6.20% 5.95% 5.21% 3.30% 3.38% 3.35% 3.30% 3.36% 3.08% 3.11% 3.08% 3.15% 2.95% 3.14% 2.65% 3.11%
Slide 18: NIM moved sideway as NTD and Other FCY AIEA increased
NIM moved sideway as NTD and Other FCY AIEA increased Mega Bank quarter NIM and average interest earning assets* Unit: NT$BN / % Overall NTD FCY NIM AIEA USD RMB Other FCY NIM AIEA * NIM = annualized net interest income / average interest earning assets (AIEA) of that quarter; internal numbers; Unit
Slide 19: WM quarterly run rate remained to be robust versus last year
WM quarterly run rate remained to be robust versus last year Mega Bank wealth management gross fee breakdown* 1,400 Unit: NT$MN 14 1,200 188 3 Other income**** 1,000 16 193 15 8 200 193 12 Custodian fee*** 800 210 205 181 123 222 183 119 Management fee** 139 169 600 111 96 114 362 104 71 Equity prod
Slide 20: 1H/24 bank fee were up 46% YoY
1H/24 bank fee were up 46% YoY, primarily due to a surge in WM and Credit fee Mega Bank net fee breakdown 1H/23 1H/24 Unit: NT$MN 2,272 1,900 1370 1208 500 531 493 511 Wealth Mgmt* FX Credit fee** Others Mega Bank net fee trend*** Mega Bank 1H/24 net fee breakdown Unit: NT$MN Others 10% 5,242 WM* 36
Slide 21: 2Q/24 asset quality overview
2Q/24 asset quality overview Mega Bank NPL balance & NPL ratio Mega Bank loan loss reserved and coverage ratio 985.00% 677.91% 634.46% 696.05% 0.30% 0.31% 538.73% 522.49% 0.25% 0.23% 0.22% 0.17% Unit: NT$MN Unit: NT$MN 35,818 36,005 35,877 6,683 6,867 5,100 33,082 4,662 4,753 32,359 3,636 31,601 1Q/
Slide 22: 2Q/24 new NPL formation has seen a significant improvement
2Q/24 new NPL formation has seen a significant improvement Mega Bank NPL ratio by customer * Mega Bank new NPL as % of total loan * Large corp. NPL% 0.34% 0.38% 0.23% 0.29% 0.30% 0.15% 1Q/23 2Q/23 3Q/23 4Q/23 1Q/24 2Q/24 New NPL SME NPL % 0.21% 0.47% 0.45% 0.33% 0.11% 0.08% 0.23% 0.26% 0.24% 0.07% 0
Slide 23: Table of Contents
Ta b l e o f C o n t e n t s Overview and Strategic 1 Focus 2 Financial Performance 3 Operating Performance 4 Appendix 23
Slide 24: 1H/24 Mega FHC consolidated P&L statement
1H/24 Mega FHC consolidated P&L statement Unit: NT$MN; EPS: NT$ 1H/2024* 1H/2023 YoY Interest income 64,605,866,067 54,690,704,677 18% Less: interest expense 45,965,920,688 36,481,244,433 26% Net interest revenue 18,639,945,379 18,209,460,244 2% Net revenue other than interest 24,940,419,750 20,551,
Slide 25: 1H/24 Mega FHC consolidated balance sheet
1H/24 Mega FHC consolidated balance sheet Unit: NT$MN 1H/2024* 1H/2023 YoY Cash and cash equivalents, net 89,722,188,956 78,986,280,191 14% Due from central bank and interbank assets 611,503,799,058 499,887,786,443 22% Financial assets at fair value thru P&L 228,377,716,317 195,431,634,306 17% Finan
Slide 26: 1H/24 Mega Bank consolidated P&L statement
1H/24 Mega Bank consolidated P&L statement Unit: NT$MN; EPS: NT$ 1H/2024* 1H/2023 YoY Interest income 62,096,041,815 53,067,355,603 17% Less: interest expense 42,686,005,319 34,247,068,140 25% Net interest revenue 19,410,036,496 18,820,287,463 3% Net revenue other than interest 16,957,084,172 17,326
Slide 27: 1H/24 Mega Bank consolidated balance sheet
1H/24 Mega Bank consolidated balance sheet Unit: NT$MN 1H/2024* 1H/2023 YoY Cash and cash equivalents, net 81,881,184,082 74,022,302,323 11% Due from central bank and interbank assets 611,503,799,058 500,787,786,443 22% Financial assets at fair value thru P&L 51,128,849,476 55,722,884,936 -8% Financ
Slide 28: Mega FHC ESG recognition
Mega FHC ESG recognition May 2023 Taiwan Corporate Governance ranking top 20%. 2024 Feb 2023 CDP Climate Change Questionnaire A List , highest ranking among state-linked FHC/bank. Dec Selected as DJSI world and EM index company. 2023 Joined「Sustainable Finance Leader」program, invited by FSC
Slide 29: Mega Bank's Extensive Overseas Franchise
39 offices in 18 countries/areas; 22 offices in“New South Bond Area” M e g a B a n k ’s E x t e n s i v e O v e r s e a s F r a n c h i s e Toronto London Amsterdam Vancouver China: New York Paris •Suzhou branch Chicago •Wujiang sub-branch Tokyo Silicon Valley •Kunshan sub-branch •Ningbo branch Los
Slide 30: Thank you~ Q&A
. IK ey = ay Mega Holdings Thank you~
Mega Financial Holding — 2Q 2024 Earnings Presentation on 6ix