Ts Financial Holding Co., Ltd. · TWSE:2887

Ts Financial — Taishin Financial Holding — Q1 2023 Earnings Presentation

36 slides from Ts Financial's earnings presentation, May 16, 2023

  1. Slide 1: Investor Presentation

    Investor Presentation May 16, 2023

  2. Slide 2: Disclaimer

    Disclaimer This presentation may include forward looking statements. All statements (other than statements of historical facts) that address activities, events, or developments that Taishin Financial Holding Co. Ltd. (“Taishin”) expects or anticipates will or may occur in the future are forward-look

  3. Slide 3: Executive Summary

    Executive Summary • In 1Q23 TFHC delivered a net income after tax of NT$5.1bn (vs. NT$2.1bn in 1Q22; YoY +136.2%). If excluding MTM adjustment of contingent consideration on the POT acquisition in 1Q23 FHC 1Q22, YoY growth is reduced to 68.1% Performance • Book value NT$13.63/share, EPS NT$0.38, ROE

  4. Slide 4: Agenda

    Agenda ◼ 1Q23 FHC Financial Performance ◼ 1Q23 Bank Earning Drivers ◼ 1Q23 Life Overview 3

  5. Slide 5: Financial Holding Company: Earnings Results

    Financial Holding Company: Earnings Results Net Income (NT$mn) Earnings per Share 1 (NT$) Adjusted YoY +68.1% 2 +136.2% 5,064 2 +171.4% 3,013 0.38 One-time : 2 NT$870mn 0.14 2,144 1Q22 1Q23 1Q22 1Q23 Book Value per Share 1 (NT$) Return on Equity 1 (%) Return on Assets (%) 13.89 13.63 11.48 0.72 4.33

  6. Slide 6: FHC's Net Income By Entities

    FHC’s Net Income By Entities NT$mn YoY +33% YoY +136% 676 5,064 430 20 1Q23 % 4,291 (351) Composition Bank 85% Securities 8% Life 0% Others 7% Bank 1Q23 Securitites Life Other Holdings & FHC 1Q23 Subsidiaries other 2 adjustments Note: 1. “Other subsidiaries” includes Taishin Asset Management, Ventur

  7. Slide 7: Key Capital Ratios

    Key Capital Ratios FHC CAR Bank BIS Tier 1% 135.6% 15.1% 15.1% 14.9% 14.8% 133.3% 14.6% 126.9% 123.4% 119.2% 12.5% 12.6% 12.2% 12.6% 12.5% Jun-21 Dec-21 Jun-22 Dec-22 Mar-23 Jun-21 Dec-21 Jun-22 Dec-22 Mar-23 Taishin Life RBC Taishin Securities CAR 410% 371% 320% 365% 317% 311% 330% 327% 309% 300% J

  8. Slide 8: FHC's Aggregate Profit

    FHC’s Aggregate Profit NT$mn Better Adjusted 1Q23 vs. 4Q22 Worse FHC, excl. Life 2 599 766 4,845 (546) 1 (3) (1,272) (7) (240) (59) 6,717 5,955 3 4Q22 Pretax NII Net Fee Trading, Investment & Expenses Provisions, Net Life Holdings 1Q23 Pretax Earnings Income Derivatives & Others Earning FX 1Q23 vs.

  9. Slide 9: FHC Revenue Mix (excl. life insurance)

    FHC Revenue Mix (excl. life insurance) FHC Revenue Mix Historical Trends 1Q23 Total Revenue: NT$13.6bn, YoY+20.7% NT$bn YoY Investment +4.8% & Others 1.0% Trading, YoY Derivatives & FX 6.3 -14.3% 26.1% 6.0 5.6 YoY Net +286.2% 4.2 4.2 Interest 3.6 3.5 YoY Income +3.9% 46.6% 1.6 Net Fee Income 0.9 26.

  10. Slide 10: FHC Net Fee Income (excl. life insurance)

    FHC Net Fee Income (excl. life insurance) NT$mn -14.3% 4,157 3,562 2,384 1,905 1,627 1,512 1,265 566 494 639 467 409 410 543 490 520 509 436 443 437 274 353 156 157 168 208 176 172 153 141 130 124 1Q22 Wealth Management 1Q23 1Q22 Credit Card 1Q23 1Q22 Corporate Banking 1Q23 1Q22 Consumer Banking 1Q2

  11. Slide 11: Agenda

    Agenda ◼ 1Q23 FHC Financial Performance ◼ 1Q23 Bank Earnings Drivers ◼ 1Q23 Life Overview 10

  12. Slide 12: Stable Loan Growth

    Stable Loan Growth 850 NT$bn 1Q23 Total Loan: NT$1,469bn, QoQ +2.3%, YoY +4.0% 750 652 653 639 650 628 620 550 450 380 387 391 357 372 350 262 268 245 250 255 250 150 92 94 95 97 98 68 69 71 72 74 50 1Q22 Corporate 1Q23 1Q22 1Q23 First Mortgages 1Q22 Home Equity +1Q23 1Q22 Unsecured 1Q23 1Q22 Others

  13. Slide 13: Loan Mix

    Loan Mix Loan Mix By Product By Currency 1 Others Consumer 5.0% Unsecured 6.6% FCY Loan 16.8% (YoY: -12.6%) Home Equity 18.2% Corporate 43.5% NTD Loan 83.2% First (YoY: +8.1%) Mortgage 26.6% Note: 1. “Others” includes auto loans, second mortgages, retail SME, and other consumer products. 2. The numb

  14. Slide 14: Credit Composition & Unsecured Lending

    Credit Composition & Unsecured Lending Corporate Credit Corporate Composition Credit Composition Consumer Unsecured Consumer Lending Unsecured Lending QoQ YoY Personal Lending +1.4% +6.8% 1 Credit Card -1.7% +2.4% Cash Card -10.5% -34.8% Others Total Unsecured +1.0% +6.2% Manufacturing 11.8% 33.3% T

  15. Slide 15: Deposit Mix

    Deposit Mix Deposit Mix (%) Loan-to-Deposit Ratio (%)1 NT$bn QoQ: +4.8% YoY: +15.3% 1,771 1,792 1,858 1,948 2,042 10.5% 11.7% 13.0% 11.9% 13.9% FC Demand 79.3% 78.4% 77.8% 42.6% NTD 43.1% 44.8% Demand 73.3% 48.4% 46.4% 71.6% FC 22.0% Time 16.7% 20.0% 14.8% 15.5% NTD 25.1% 26.6% 25.3% 24.8% Time 22.9

  16. Slide 16: NIM and Spread

    NIM and Spread NIM Quarterly Interest Spread NIM% 1Q23* Overall Lending Rate Adjusted NIM Overall Deposit Rate (including SWAP) 1.32% Overall Spread 1.30% 1.26% 1.19% 1.21% 1.14% 1.59% 1.50% 1.53% 1.46% 1.37% Average earning asset NT$bn 2.92% 2.69% 2.35% 2,255 1.97% 1.78% 1.56% 2,158 1.16% 2,122 0.7

  17. Slide 17: Wealth Management Fee Income

    Wealth Management Fee Income Wealth Management Fee Breakdown (NT$mn) Wealth Management Fee Breakdown (%) Bancassurance Bancassurance Mutual Funds Mutual Funds Structured Products & Securities Structured Products & Securities Trust, Custody, & Others Trust, Custody, & Others 2,384 1,512 1,627 1,265 1

  18. Slide 18: Credit Card Business

    Credit Card Business Number of Merchants Served Spending NT$bn +10.7% +1.5% +1.5% +5.2% 165,154 167,607 162,770 98.1 84.2 88.6 2021.12 2022.12 2023.03 1Q21 1Q22 1Q23 Note 1. Total spending excludes cash advance. Active Cards Gross Fee Income thousands NT$mn +4.8% +1.7% +27.3% 4,261 4,332 4,068 +4.1%

  19. Slide 19: Cost Income Ratio

    Cost Income Ratio NT$bn Revenue Operating Expense 11.5 10.0 10.3 9.8 9.4 6.0 6.1 6.2 5.7 5.7 1Q22 2Q22 3Q22 4Q22 1Q23 C/I Ratio 56.9% 61.0% 57.8% 61.9% 54.3% Note: The analysis is based on adjusted numbers excluding one-time items. 18

  20. Slide 20: NPL and Coverage

    NPL and Coverage NPL% Reservetotoloan% Reserve loan% NPL NT$mn Reserve NT$mn 0.60% 1.30% 1.31% 1.35% 1.34% 1.33% 0.13% 0.14% 0.13% 0.14% 0.11% 18,459 19,453 19,159 19,460 18,213 -0.40% 1,842 1,903 1,943 1,969 1,644 -1.40% -1.40% 1Q22 2Q22 3Q22 4Q22 1Q23 Coverage% 989.0% 970.2% 1001.1% 973.2% 1183.5%

  21. Slide 21: Agenda

    Agenda ◼ 1Q23 FHC Financial Performance ◼ 1Q23 Bank Drivers ◼ 1Q23 Life Overview 20

  22. Slide 22: Total Premium and First Year Premium

    Total Premium and First Year Premium Total Premium First-Year-Premium (FYP) NT$mn NT$mn QoQ : +32.5% QoQ : +126.9% YoY : -16.4% YoY : -41.6% 9,957 8,327 6,861 6,282 6,256 5,435 3,801 3,656 1,476 1,611 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Note: 1. YoY : 1Q22 vs. 1Q23 21

  23. Slide 23: FYP Breakdown

    FYP Breakdown FYP breakdown by product FYP breakdown by payment 1 method Inv.-linked 28.9% 39.2% 28.9% 39.2% Inv.-linked 2.7% 5.3% Traditional 20.8% Single paid Interest 41.5% 57.6% 64.6% Regular paid sensitive 50.3% 0.6% 1.2% Health & PA 19.3% 1Q22 1Q23 1Q22 1Q23 FYP breakdown by channel FYP breakd

  24. Slide 24: First Year Premium Equivalent (FYPE)

    First Year Premium Equivalent (FYPE) First Year Premium Equivalent FYPE breakdown by channel NT$mn 3.6% 6.1% Insurance QoQ : +183.2% 3.5% Brokers YoY : +35.6% Bank- external 79.7% 77.3% Bank-Taishin Life Advisor 16.7% 13.1% 1,531 1Q22 1Q23 FYPE breakdown by product 1,129 22.2% 6.9% Inv.-linked 5.9%

  25. Slide 25: Investment Portfolio

    Investment Portfolio Total Investment Assets1 Total investment yield & recurring yield (%) 2 NT$bn Investment Yield Recurring Yield 197.2 204.4 214.0 213.4 219.1 6% 5% 5% 5% 5% Others 5.93 4% 4% 3% 4% 3% 9% 9% 9% 8% 8% Policy Loan 2.89 2.83 2.35 2.46 2.20 37% 40% 43% 43% 45% Equities 7.1% 7.1% 7.1%

  26. Slide 26: Appendix

    APPENDIX 25

  27. Slide 27: Balance Sheet of Taishin Holding and its subsidiaries

    Balance Sheet of Taishin Holding and its subsidiaries as of March 31, 2023 Taishin Holding & Taishin Bank Others Taishin Holding NT$mn Securities Taishin Life Other (Consolidated) Subsidiaries (Consolidated) (Consolidated) Adjustments Assets Cash & due from banks 153,781 2,405 2,886 1,729 (4,585) 15

  28. Slide 28: P&L of Taishin Holding and its subsidiaries

    P&L of Taishin Holding and its subsidiaries for the period ended March 31, 2023 Taishin Taishin Bank Others Holding & Other Taishin Holding NT$mn Securities Taishin Life (Consolidated) Subsidiaries Adjustments (Consolidated) (Consolidated) Operating income Net interest income 6,139 34 1,326 252 (418

  29. Slide 29: Taishin FHC – Financial Summary (Consolidated)

    Taishin FHC – Financial Summary (Consolidated) Income Statement Data 2020 2021 2022 change 1Q22 1Q23 change Interest income 33,902 32,637 46,392 42.1% 8,773 16,723 90.6% Interest expense (12,243) (8,277) (17,169) 107.4% (2,055) (9,390) 356.9% Net interest income 21,659 24,360 29,223 20.0% 6,718 7,33

  30. Slide 30: Taishin Bank – Financial Summary

    Taishin Bank – Financial Summary NT$mn, except for percentages Full-Year Comparison Quarterly Comparison Income Statement Data 2020 2021 2022 Change 1Q22 1Q23 6 6 Change Interest income 32,084 29,096 40,848 40.4% 7,476 15,203 103.4% Interest expense (11,195) (7,199) (15,895) 120.8% (1,769) (9,064) 4

  31. Slide 31: Taishin Bank – Deposit Mix

    Taishin Bank – Deposit Mix 1Q23 1Q23 NT$bn 1Q22 2Q22 3Q22 4Q22 1Q23 % vs 1Q22 vs 4Q22 Current Deposits 1,103.5 1,064.9 1,054.0 1,066.7 1,085.3 53.2% 1.7% -1.7% • Checking 8.2 8.0 9.3 11.5 8.4 0.4% -27.2% 1.6% • Demand 251.8 236.0 222.7 225.5 228.6 11.2% 1.4% -9.2% • Current Savings 597.4 587.4 601.3

  32. Slide 32: Taishin Bank – Loan Mix

    Taishin Bank – Loan Mix 1Q23 1Q23 NT$bn 1Q22 2Q22 3Q22 4Q22 1Q23 % vs 4Q22 vs 4Q22 Corporate Loans 651.5 627.9 652.9 619.7 639.3 43.5% 3.2% -1.9% Consumer Loans 761.7 784.6 800.5 816.9 830.1 56.5% 1.6% 9.0% • First Mortgage 357.4 371.7 380.2 386.5 390.9 26.6% 1.1% 9.4% • Home Equity 244.7 249.8 255.

  33. Slide 33: Taishin Bank – NPL Ratios by Loan Book

    Taishin Bank – NPL Ratios by Loan Book Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 Corporate Loan 1 NPL % 2 0.13% 0.15% 0.15% 0.17% 0.11% Consumer Loan1 NPL %2 0.13% 0.12% 0.12% 0.11% 0.11% - First Mortgage Loan NPL % 0.09% 0.07% 0.06% 0.05% 0.04% Consumer Default % 3 0.00% 0.00% 0.00% 0.00% 0.00% Unsecured

  34. Slide 34: Taishin Securities – Financial Summary

    Taishin Securities – Financial Summary NT$mn, except for percentages Full-Year Comparison Quarterly Comparison Income Statement Data 2020 1 2021 1 2022 change 1Q22 1Q23 change Net interest income 196 485 384 -20.9% 132 34 -74.3% Net fee income 1,528 2,774 2,185 -21.2% 501 487 -2.8% Brokerage Income

  35. Slide 35: Taishin Life – Financial Summary

    Taishin Life – Financial Summary 1 1 Note: 1. Taishin Life began operating as a wholly-owned subsidiary of TSFHC in 3Q21. Prudential Life Taiwan’s pre-merger financial results for the period up until 2021/6/30 are for reference only. Accumulated profits resulted in a net loss of $67mn from Jan. 2021

  36. Slide 36: Taishin Life – Premium Performance

    Taishin Life – Premium Performance NT$mn, except for percentages Full-Year Comparison Quarterly Comparison Total Premium Breakdown by Products 2020 2021 2022 change 1Q22 1Q23 change Investment-linked 1,087 848 6,080 617% 2,617 1,204 -54% Traditional 7,386 6,836 6,753 -1% 2,002 1,794 -10% Interest Se

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