Worldreginfo - 5921Ff3d-0686-4Bc3-A27d-1Fb49b397a68 CTBC Financial Holding Co., Ltd

WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 CTBC Financial Holding Co., Ltd. Moody's Investors Service Hong Kong Limited Address: 27 & 29F., No. 168, Jingmao 2nd Rd., Address: 24/F, One Paciﬁc Place, 88 Queensway, Admiralty, Nangang Dist., Taipei City 115, Taiwan (R.O.C.) Hong Kong Tel: +886-2-3327-7777 Tel: +852-3758-1300 Website: http://www.ctbcholding.com Website: http://www.moodys.com

Spokesman CTBC Bank Co., Ltd. Name: Daniel Wu Address: No. 166, 168, 170, 186, 188 Jingmao 2nd Rd., Nangang Position: President Dist., Taipei City 115, Taiwan (R.O.C.) Tel: +886-2-3327-7777 Tel: +886-2-3327-7777 Email address: [email protected] Website: http://www.ctbcbank.com

Acting Spokesman Taiwan Life Insurance Co., Ltd. Name: Ya-Ling Chiu Address: 8F., No. 188, Jingmao 2nd Rd., Nangang Dist., Position: Executive Vice President Taipei City 115, Taiwan (R.O.C.) Tel: +886-2-3327-7777 Tel: +886-2-8170-9888 Email address: [email protected] Website: http://www.taiwanlife.com

Acting Spokesman CTBC Securities Co., Ltd. Name: Roger Kao Address: 3F., No. 168, Jingmao 2nd Rd., Nangang Dist., Position: Senior Executive Vice President Taipei City 115, Taiwan (R.O.C.) Tel: +886-2-3327-7777 Tel: +886-2-6639-2000 Email address: [email protected] Website: http://www.ctbcsec.com

Stock Transfer Agency CTBC Venture Capital Co., Ltd. Agency: Corporate Trust Operation and Service Address: 21F., No. 168, Jingmao 2nd Rd., Nangang Dist., Department, CTBC Bank Co., Ltd. Taipei City 115, Taiwan (R.O.C.) Address: 5F., No. 83, Sec. 1, Chongqing S. Rd., Tel: +886-2-3327-7777 Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.) Website: http://www.ctbcholding.com/investment.html Tel: +886-2-6636-5566 Website: http://www.ctbcbank.com CTBC Asset Management Co., Ltd. Address: 19F., No. 168, Jingmao 2nd Rd., Nangang Dist., The Notarization CPA of Last Few Years Taipei City 115, Taiwan (R.O.C.) Name: Jeff Chen, Leoufong Yang Tel: +886-2-3327-7777 Business Office: KPMG Certified Public Accountants Website: http://www.ctbcholding.com/manage.html Address: 68F., No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) CTBC Investments Co., Ltd. Tel: +886-2-8101-6666 Address: 12F., No. 188, Jingmao 2nd Rd., Nangang Dist., Website: http://www.kpmg.com.tw Taipei City 115, Taiwan (R.O.C.) Tel: +866-2-2652-6688 Credit Rating Institutions Website: http://www.ctbcinvestments.com Taiwan Ratings Corp. Address: 49F., No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., CTBC Security Co., Ltd. Taipei City 110, Taiwan (R.O.C.) Address: 5F., No. 188, Jingmao 2nd Rd., Nangang Dist., Tel: +886-2-8722-5800 Taipei City 115, Taiwan (R.O.C.) Website: http://www.taiwanratings.com.tw Tel: +886-2-2653-0355 Website: http://www.ctbcholding.com/safe.html Standard & Poor's Ratings Services Address: Unit 1, 69F., International Commerce Taiwan Lottery Corporation Centre, 1 Austin Road West, Kowloon, Hong Kong Address: 15F., No. 188, Jingmao 2nd Rd., Nangang Dist., Tel: +852-2533-3500 Taipei City 115, Taiwan (R.O.C.) Website: http://www.standardandpoors.com Tel: +886-2-8170-5228 Website: http://www.taiwanlottery.com.tw Fitch Australia Pty Ltd, Taiwan Branch Address: Suite 1306, 13F., No. 205, Tun Hwa N. Rd., Taipei City 105, Taiwan (R.O.C.) Tel: +886-2-8175-7600 Website: http://fitchratings.com.tw/zh/ WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 CONTENTS

I. Letter to Shareholders 2

II. Company Proﬁle 6

III. Corporate Governance Report 14 1. Organization 14

2. Directors and Supervisors and Management Team 16

3. Implementation of Corporate Governance 24

4. Others 28

5. CPA information 44

IV. Capital Overview 47 1. Capital and Shares 47

2. Bonds, Preferred Shares, Global Depository Receipts, Employee Stock Option and New Restricted Employee Shares 53

3. Implementation of the Capital Utilization Plans 60

V. Operational Highlights 61 1. Business Activities 61

2. Human Resources 66

3. Social Responsibility 68

VI. Financial Information 74 1. The Audit Committee's Report 74

2. Independent Auditors' Report 75

3. Consolidated Balance Sheets 78

4. Consolidated Statements of Comprehensive Income 80

5. Consolidated Statements of Changes in Stockholders' Equity 82

6. Consolidated Statements of Cash Flow 84

VII. Review and Analysis of Financial Conditions, Financial Performance and Risk

Management 87

VIII. Special Disclosure 90

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3 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 2 group resources group CTBC Holding completed its acquisition of Taiwan Life on January 1, 2016. Through the comprehensive the comprehensive Through 2016. January on Life 1, Taiwan of acquisition its completed CTBC Holding linked will be Xiamen, city of in the branch, This 2016. in July in China branch third its launched Bank CTCB Dear shareholders the impacting material events other and numerous of the United States, of president the election Brexit, in performance outstanding sustain to able was and persevered Holding CTBC challenges, these Despite (1) Continue to integrate life insurance resources and facilitate rapid growth by utilizing CTBC utilizing CTBC by growth rapid and facilitate insurance resources life to integrate Continue (1) of CTCB Holding assisted with the growth of its existing channels, and use integration of CTBC's resources Life Taiwan and developed numerous products to provide customers with a one-stop service platform to fill their financial In needs. the CTCB future, Holding will continue to reinforce its existing cross-selling organizational through and maximize the synergies of CTBC group scale, assets, Life's Taiwan of boost the growth opportunities with CTBC subsidiaries. financial institution becoming a regional toward policies and strive Support government (2) to build a full-range cross- branches as overseas well as Kong Hong and Taiwan in to 258 of CTBC's branches border financial platform that offers a comprehensive array of financial products and services, including trade financing and international insurance and finance. In addition to preparing to establish joint-venture consumer opportunities in seeking potential investment CTBC Holding is also intensely finance companies in China, Asian such Southeast countries, as as share strategic well investments, as investments, M&A that target specific CTBC Holding signed a memorandum example, For and complementary services. networks, customer bases, its on seats 35.6% equity in LHFG and Thailand to acquire (LHFG) in with LH Financial Group of understanding the Financial Supervisory by Commission. has been approved This investment equity investment. through board government's Taiwan CTBC financial regional Holding serviceswill develop in with accordance In the the future, in private investing Star Bank has also expanded its business scope by Tokyo The Southbound Policy. New 1. Business Plans and Results 1. I. Letter to Shareholders Letter to I. international international financial market have elevated the risk of uncertainty in the substantially market, increasing the economic global stagnating addition, In businesses. their manage to companies financial global for difficulty holding financial recovering, is country'sthe Although economy export trade. Taiwan's slowed has growth industry the banking the subdued by is being dampened example, For challenges. many companies still face market's the stock by is the securities sector being affected whereas rate, interest and low housing market volume. diminishing trading subsidiary of performance exceptional the to largely Thanks prominent Holding's CTBC and Bank CTBC 2016. billion, NT$27.9 totaling profit after-tax generated CTBC Holding Life, Taiwan acquiring after performance CTBC Holding will be Going forward, budgets. and expenditure of its income management indicating favorable operations its business to expand continuing by Policy Southbound New looking to support the government's global provide to network global dense building a markets, Asian the China and in presence its extend to and financial our services. group Internally, has always adopted cross-selling as its business orientation in order to CTBC Holding will continue to uphold its brand maximize spirit the by financial benefits holding offered groups. and Professional, "Caring, of values brand and Build," and "Protect to mission corporate family," are "We of as we strive to Trustworthy" and strengthen fulfill corporate create corporate governance, social responsibility, Champion, "Taiwan a become to aim We whole. a as society and shareholders, employees, customers, for value Asia Leader-a leading brand with the best governance and the financial institution most trusted by customers and shareholders.

Letter to Shareholders equity funds. As of the end of 2016, the Bank had invested in 12 private equity funds, including ones covering funds in leasing, manufacturing, retail sales, and IT. The investment amount totaled 4.58 billion yen, with a strong investment return of 20.7%. (3) Reinforce corporate governance and enhance brand value In response to the severe penalties frequently imposed on large international financial institutions by local authorities, foreign companies have successively increased the stringency of their corporate governance and regulatory compliance, particularly regarding money-laundering prevention, which is now included as the main target for improvement. CTBC Holding has been among these businesses in responding quickly to the need for organizational reform. The extraordinary general meeting of the shareholders in December 2016 approved changes to the board's structure that require more than half of all seats to be given to independent directors. This change enhances board independence, ensures balance of power, and encourages board decisions to be made transparent, thereby positively influencing the company's future governance and performance. We are the first financial institution in Taiwan to have more than half of its board composed of independent directors, which is not only in keeping with international trends but also highlights the value we place on corporate governance in seeking to establish CTBC Holding as a credible financial institution.

2. 2016 Business Plans, Strategies, and Results CTBC Holding has many subsidiaries that specialize in a broad variety of services, from banking, securities, life insurance, venture capital, and asset management to investment trusts, security services, and lottery draws. In addition, 99.7% of revenues and profits are recognized using the equity method and are mostly contributed by the banking subsidiary, with the remaining 0.3% coming from other income. In 2016, CTBC Holding recorded a consolidated after-tax profit of NT$27.9 billion and a consolidated after-tax profit of 9.98% on return to ordinary shareholders—the most among all financial holding companies. Moreover, CTBC Holding achieved 167 major local and international awards in 2016—20 more than the previous year. Of these awards, 147 were for outstanding performance in corporate governance, brand image, corporate social responsibility, personal banking, wealth management, institutional banking, digital payment, and innovation. For the first time, we were named among the Best Taiwan Global Brands and, for the 15th time, recognized as the Best Bank in Taiwan by FinanceAsia. This scale of categories and number of achievements are unmatched in Taiwan's banking industry and are the best testament to CTBC Holding's outstanding performance. Additionally, we were included as a component of the Dow Jones Sustainability Index for the first time last year—an acknowledgment of our sustainable international-standard corporate management and an indication of the global acclaim earned by our economic, environmental, and social performance. This recognition did not breed complacency, and we have continued striving in terms of finance, risk management, information, human resources, and branding strategies to explore new means of improving performance and maximizing group synergies to yield an economy of scale providing a broad variety of services. Internally, we are also seeking to further tighten our policies governing regulatory compliance and to comprehensively raise employees' awareness of legal compliance.

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5 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 2016.12.09 2017.04.17 2016.09.26 2016.09.21 2016.09.21 Effective Date Effective Stable Stable Stable Negative Negative Outlook and the one that best understands customers' F1 A-2 twA-1+ F1+(twn) Short-term 4 Baa1 Credit Rating Credit A BBB twAA- AA+(twn) Long-term Fitch Fitch Moody's Taiwan Ratings Taiwan Rating Agency Rating Standard & Poor's Standard needs. overseas. and growth Taiwan in profitability the best service to be customers' first choice.and providing on customer servicecentered and performance. technologies. new integrating various for business activity. 2) Implement post-M&A management that actively integrates the group's business activities and system. business activities the group's integrates that actively Implement post-M&A management 2) synergy. group greater subsidiaries to deliver Enhance collaboration between 3) both on focusing business with the banking businesses, profitable and expansion Deepen business 4) selling approach, consultative a adopting base, customer the developing by business insurance the Improve 5) model broker digital a develop and business securities the of development international the Reinforce 6) company. management trust business into a private bank-grade investment investment Transform 7) capacity maintain innovation and model operating new a develop to platform digital banking open Build an 8) corporate social responsibility. and practice financial holding resources Provide 1) corporate governance. as a means of stronger transparency information Ensure 2) ensuring asset quality and operational stability. long-term value by Create 3) compliance management mechanisms. Implement risk management and strengthen 4) Recruit transnational talent to extend global presence. 5) related increase and market international the in efficiency operating improve to locations overseas Expand 6) a smoother user experience. to provide digital banking infrastructure Develop 7) 1) Target the international market and expand our presence in Asia. in and expand our presence market the international Target 1) and manage brand value. corporate governance Reinforce 2) the group. synergies for and create resources Integrate group 3) value. customer and co-create Listen to customer needs 4) risk management. and implement Enhance risk control 5) asset quality. of income and control sources Increase 6) servicesUpgrade digital banking and become the industry leader. 7) and efficient financial institution— Become the most trusted 1) CTBC Holding will continue relying on its sustainable practices as it works to strengthen its financial financial its strengthen to it works as practices its sustainable on relying continue will CTBC Holding Type of Rating Type National International rating 3. 2017 Business Overview 3. Date and Result of the Latest Credit Rating Latest Credit Result of the Date and (3) Key operational policies operational Key (3) structure and establish the most appropriate capital allocation. Realizing these goals will enable us to build build to us enable will goals these Realizing allocation. capital appropriate most the and establish structure is a Below of CTBC Holding. development the future for and a solid foundation long-term customer relations summary 2017: of our plans for 2017 business plans (1) (2) Expected accomplishments

Company Profile 4. Impacts from the Competitive Environment, Regulatory Environment, and Overall Business Environment Taiwan's banking industry has been plagued by excessive competition and a low-interest environment that is largely due to the global economic slowdown and global uncertainty. Furthermore, the international community is increasingly aware of the importance of anti-money laundering mechanisms and oversight. The influence of local authorities and international law regarding this issue has resulted in the gradual increase of operating costs. Despite such intense environmental challenges, we are continuing to strengthen our home base, expand regionally, and extend into other businesses by combining systems and resources across subsidiaries and maintaining our leadership position by offering diversified, innovative, and enriched products and services. We are also committed to fintech development. This is demonstrated through efforts such as establishing a designated digital banking office as well as a CTBC Block Chain Laboratory, which incorporates the world's biggest block chain alliance, R3, to actively develop relevant services and technology. We expect these efforts to earn us market-leading status in Taiwan's fintech industry. Going forward, CTBC Holding will continue expanding its global presence in response to the government's New Southbound Policy, and replicating past successes to capture development opportunities. As CTBC Holding perfects its overseas platform, we anticipate effectively capturing growth opportunities in the Asia-Pacific region, with the hope of helping subsidiary CTBC Bank gain stature as a regional bank and assisting Taiwan Life Insurance and CTBC Securities in expanding their operational scales.

5. Future Corporate Development Strategy Reflecting on the changes seen last year, particularly the fluctuations in the global financial environment, further emergence of digital trends, and amendments to legal regulations, CTBC Holding will harness the continued concerted efforts of its professional staff to focus on international and cross-strait affairs and developments, actively participate in digital banking development at the international level, and commit to complying with relevant laws and regulations as a means of global expansion. CTBC's future development strategies are as follows: 1) Boost brand image to yield a corporate advantage. 2) Broaden the concept of compliance to reinforce corporate governance. 3) Manage capital effectively to improve utilization efficiency. 4) Seek spontaneous growth through M&A. 5) Establish the core focus of digital banking and integrate group developments. 6) Concentrate on improving our life insurance business to create a powerful profit engine. 7) Support government policy to develop business in South and Southeast Asia. For the past 50 years, CTBC Holding has continued to explore growth, monitor market trends, and seek new business opportunities in an effort to build an international financial brand that employees, shareholders, customers, and the global Chinese population can feel proud of. In the future, we will continue to target increasing value for shareholders as an expression of gratitude for their support. Chairman

Wen-Long Yen

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7 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 6 - Global Sustainability Indexes Award Enterprise - Green - Responsible Business Leadership: Wen Long Yen Long Wen - Responsible Business Leadership: - Social Empowerment - Component of the Emerging Market - Asia's Best CEO -Daniel Wu Asia's Best CEO -Daniel - Asia's Best CFO - Rachael Kao - - Best CSR Taiwan Company, Relations by - Best Investor In order to provide customers with global and convenient financial services, CTBC Bank, a subsidiarya of Bank, CTBC services, financial convenient and global with customers provide to order In and 108 Taiwan CTBC Bank has a total of 150 branches within Holding's banking arm, CTBC date, To mission corporate family", are to uphold its brand spirit of "We CTBC Holding will continue Looking ahead, CTBC Financial Holding Co., Ltd. ("CTBC Holding") was established on May 17, 2002 and headquartered headquartered 2002 and 17, May on established was ("CTBC Holding") Ltd. Co., Holding CTBC Financial Morgan Stanley Capital International (MSCI) Index Capital Morgan Stanley Institution (BSI) British Standards Enterprise Asia Index (DJSI) Sustainability Jones Dow Corporate Asia Governance

● ● ● ● ● in Taipei of Taiwan, with over 26,000 employees worldwide. CTBC Holding has eight subsidiaries, including including has eight subsidiaries, CTBC Holding worldwide. 26,000 employees with over Taiwan, of Taipei in Ltd., Co., Capital Venture CTBC Ltd., CTBC Securities Co., Ltd., Co., Insurance Life Taiwan Ltd., CTBC Bank Co., Lottery Taiwan and Ltd., Co., CTBC Security Ltd., Co., CTBC Investments Ltd., Co., Management Asset CTBC Corporation. CTBC Star acquired Holding, Tokyo Limited Bank, the This in represents 2014. the first merger of a Japanese 100% acquired Holding CTBC business, insurance the in scale its expand To bank. foreign-owned a by bank trust investment and securities, insurance, life banking, integrating 2015, in Ltd. Co., Insurance Life Taiwan of services synergies within CTBC Holding. to maximize Malaysia, Vietnam, Thailand, India, Philippines, the Indonesia, Japan, Canada, US, in the located outlets overseas CTBC Australia. and is Myanmar, Hong China, Singapore, a Kong, financial institution with the most extensive Taiwan. in international network to strengthen strive we as Trustworthy" and Professional, its brand values of "Caring, and and Build, of "Protect customers employees, for values and create social responsibility, corporate fulfill corporate governance, with a leading brand Asia Leader"- Champion, aim to become "Taiwan We a whole. and society as shareholders, shareholders. customers and trusted financial institution by and the most the best governance, Awards International (1) CTBC Financial Holding Co., Ltd. Holding Co., CTBC Financial (1) II. Company Profile Company II. 2002 17, May establishment: Date of 1. history:Company 2.

Company Proﬁle ● CDP - Climate Change Assessment Leadership A-

Domestic awards ● CTBC Holding was named Exemplar in "Annual CSR Survey" during the 2016 Twelfth Global Vision CSR Award organized by Global Views Magazine. ● CTBC Holding was awarded "Taiwan Top 50 CSR Report-Financial and Insurance Group" during the 2016 Taiwan Corporate Sustainability Awards organized by Taiwan Institute for Sustainable Energy.

(2) CTBC Bank Co., Ltd. Established in 1966, CTBC Bank Co., Ltd. has been through three major stages of development. It started out as China Securities Investment Corporation and was later changed into China Investment and Trust Corporation. In 1992, it was converted to a commercial bank with business scopes covering deposits, loans, guarantees, foreign exchange services, offshore banking unit (OBU), trust business, credit cards, securities, bonds, derivatives, e-banking, and the national lottery agent business. Since May 17, 2002, it has become one subsidiary of CTBC Financial Holding Co., Ltd. To maximize operational scope, CTBC Bank merged with Grand Commercial Bank in December 2003, acquired the Fengshan Credit Cooperative in July 2004 and successfully bid to purchase Enterprise Bank of Hualien in May 2007. To make the group more effective, CTBC Bank formally merged with the Chinatrust Bills Finance Corporation on April 26, 2008. The transfer of 100% of The Tokyo Star Bank Ltd. shares was completed in June 2014 and CTBC Bank officially became the bank's sole shareholder. In October 2015, CTBC Bank, in a first for the banking industry, received approval from the competent authorities to operate within the insurance sector. On November 30, 2015, CTBC Bank merged with CTBC Insurance Brokers, with CTBC Bank, the surviving company, to continue providing services to CTBC Insurance Brokers' clients. Based on our business principles of "Integrity" and "Caring", CTBC Bank is proud to have offered many innovative services, including the first bank in Taiwan to issue credit cards, the first to set up a customer service center, and the first to install ATMs in convenience stores, and etc. With the commitment to achieving excellence and innovation, we continue to lead in the financial industry. As of the end of 2016, consolidated asset size reached NT$3.52 trillion, ranking the largest among privately-owned bank in Taiwan, and one of top 50 banks in Asia. To date, CTBC Bank has a total of 150 branches in Taiwan and 108 overseas outlets located in the US, Canada, Japan, Indonesia, the Philippines, India, Thailand, Vietnam, Malaysia, Hong Kong, Singapore, China, Myanmar, and Australia. CTBC has the most extensive international network among Taiwanese financial institutions. Looking ahead, CTBC Bank will continue to uphold its brand spirit of "We are family", corporate mission of "Protect and Build, and its brand values of "Caring, Professional, and Trustworthy" as we strive to strengthen corporate governance, fulfill corporate social responsibility, and to create values for customers, employees, shareholders, and society as a whole. We aim to become "Taiwan Champion, Asia Leader"- a leading brand with the best governance and the most trusted financial institution by customers and shareholders.

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9 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 8 Best Digital Wallet Initiative Wallet Best Digital Program Analytics Best Data Tung Chao Chin Taiwan-Chairman, Best CEO in Taiwan Best Managed Bank in Year of the Mortgage and Home Loans Product Award Risk Management in Credit Achievement The Asia/Pacific Leader in Risk Management Asia/Pacific Leader in Customer Experience Excellence in Social Media – Customer Relations and Brand Engagement ATM in ServiceInnovation Delivery – The Platinum Awards Best Domestic Bank, Taiwan Best Domestic Bank, Awards The Platinum Taiwan Best Domestic Private Bank, Awards The Platinum Taiwan Best Bank in Taiwan Best Private Bank in Best Private Banking Services overall in Taiwan in Best Private Banking Services overall Taiwan servicesBest Net-worth-specific in Taiwan Asset Management in Best Taiwan in Banking Capabilities Best Investment Taiwan in Banking Capabilities Best Commercial Taiwan in Best SRI/Social Impact Investing Taiwan Best Equity Finance in Best Leveraged Finance, Asia-Pacific Finance, Best Leveraged Banks 2016 World 1000 Top 164 of No. Taiwan Best Private Bank in Best Bank in Taiwan Best Bank in Taiwan Finance Bank in Trade Best Taiwan Bank in Best Investment Taiwan Bank in Best Sub-Custodian Taiwan Digital Banks in Best Corporate/Institutional The Banker Global Finance International (CEPI) Payment & Electronic Cards The Asian Banker IDC Financial Insights International Retail Banker FinanceAsia Euromoney & PWM Banker The

● ● ● ● ● ● ● ● ● International Awards International

Corporate Governance Report Best Retail Bank in Taiwan Best Transaction Bank in Taiwan Best Cash Management Bank in Taiwan Best Trade Finance Bank in Taiwan Best FX Bank in Taiwan The Sub-Custodian Bank of the Year, Taiwan Credit Card Product of the Year, Taiwan ● The Asset Best LBO in Asia Best Social-Media Banking Experience Best ATM Experience Data Analytics Project of the Year Best Trade Finance Bank in Taiwan Best Risk Management Bank in Taiwan Best Domestic Custodian Bank in Taiwan Best Wealth Manager, Taiwan Derivatives House of the Year, Taiwan Best Loan House in Taiwan ● AsiaRisk House of the Year ● IFR Asia Taiwan Loan House ● Timetric Best Tech Implementation – Back Ofﬁce ● Asiamoney Best Domestic Private Bank in Taiwan ● Global Trade Review Best Trade Finance Bank in Taiwan ● Asian Banking & Finance Taiwan Domestic Foreign Exchange Bank of the Year ● Brand Finance No. 83 of Top 500 Banking Brands ● World Branding Forum Brand of the Year– Banking category

Domestic Awards ● Gold Winner in Banking Industry, Wealth Management Bank, and Credit Card issuing Bank of the Trusted Brand survey.

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11 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 2016/09/21 2016/12/09 2016/09/21 2016/09/26 2016/09/26 Effective Date Effective - - Others CR:A1/P1 Standalone: a Standalone: Standalone: a Standalone: Support rating: 3 Support rating: Support rating: 3 Support rating: Stable Stable Stable Negative Negative Outlook F1 10 A-1 twA-1+ Prime-1 F1+(twn) Short-term Credit Rating Credit A A A2 twAA+ AA+(twn) Long-term Fitch Fitch Poor's Moody's Standard & Standard Taiwan Ratings Taiwan Rating Agency Rating To reinforce the reinforce breadth and diversity of financial To servicesCTBC Holding for plans customers, its entry into Administration, Ministry of Education. Administration, Affairs. Economic Best Banking Service Award, Excellence in Best Banking Product Award, and Excellence in Best FinTech Bank and Excellence in Best FinTech Award, Excellence in Best Banking Product Award, Best Banking Service the by Award Financial Taiwan under the 2016 Award Financial Brand and FHC CSR in the Consumer Award, Magazine. Wealth Banking Brand in the 2016 "30 Young Brand Survey." Young 2016 "30 Banking Brand in the magazine. Today Bank in the Business Industry. Information Experience - Gold Award; Best Organizational Innovation - Gold Award; Best Integrated Media Marketing Best Integrated Media Marketing Award; - Gold Best Organizational Innovation Award; Experience - Gold held by Award Commerce Future in the 2016 Award, Best Business Model - Bronze and Award; - Silver Business Next. Popular Bank, and the Most Promising Bank, in Wealth Magazine's 2016 survey on wealth management service. management wealth on 2016 survey Magazine's Wealth in Bank, Promising Most the and Bank, Popular Rating Type Rating Received the2016 Sports Sponsorship Gold Award and the Long-Term Sponsorship Award from the Sports from Award Sponsorship and the Long-Term Award the2016 Sports Sponsorship Gold Received Ministry of Bureau, the Industrial Development Brands in 2016 by 20 International Top Taiwan's as Rated Award. Business People 9th Ideal Brands for Today's Brand in Business First Place in the Best Banking Won Achieved the Best Digital Banking Gold Award, Excellence in the Best Banking Image Award, Excellence in the Award, Image Excellence in the Best Banking Award, the Best Digital Banking Gold Achieved Ranked first as the Most Popular Credit Card Brand, Most Ideal Credit Card Brand, and the Most Ideal and the Most Brand, Card Most Ideal Credit Brand, Card Credit first as the Most Popular Ranked Management Wealth in the 2016 Award, the Best Service and Award Management Bank Wealth the Best Won Brand Service for the Institute Sector by Innovative Technologically as the Best Bank Brand in the 2016 Rated Won the Best Customer Communication - Grand Jury Award, Gold Award, and Silver Award; Best Banking Award; and Silver Award, Gold Award, - Grand Jury Communication the Best Customer Won Rated as the Best Wealth Management Bank, Best Banking Service, Best Financial Consultant Team, the Most Team, Consultant Best Financial Best Banking Service, Bank, Management Wealth Best Rated as the International rating National the insurance business, as shown in its 100% acquisition of the subsidiary of MetLife, Inc. in Taiwan in November in November Taiwan in Inc. subsidiarythe of acquisition in its 100% shown as MetLife, of business, insurance the marking the point of entry of CTBC into the to CTBC Life, was renamed MetLife In January 2012, 2011. insurance business sector. (3) Taiwan Life Insurance Co., Ltd. Insurance Co., Life Taiwan (3) Date and result of the latest credit rating of the latest credit Date and result ● ● ● ● ● ● ● ● ●

Corporate Governance Report CTBC Life acquired Manulife Taiwan on January 1, 2014, making it stronger in terms of human resources, distribution coverage, and service scope, with a team of close to 1,000 dedicated employees. To expand its scale in the insurance business, CTBC Holding received approval from the board of directors on May 12, 2015 to engage in stock exchange with Taiwan Life Insurance Co., Ltd., which was completed on October 15, 2015. Subsequently, Taiwan Life Insurance Co., Ltd. officially became a subsidiary of CTBC Holding, acquiring 100% of its shares. At the beginning of 2016, CTBC Holding completed merging Taiwan Life with CTBC Life to effectively integrate resources, expand its life insurance business, and create consolidated synergies between CTBC and Taiwan Life. Taiwan Life, the first life insurance company in Taiwan, was established in 1947 and privatized in 1998. Realizing the practice of local cultivation, Taiwan Life started off with offering a comprehensive range of insurance services and paid continual attention to market changes to develop flexible, creative commodity strategies that help improve company performance and provide a comprehensive protective network that ensures the health, wealth, and safety of the insured. Moreover, valuable commodities are promoted to maintain the company's long-term stable profitability so that both the insured and the company can achieve stable and tangible sources of protection. In future, Taiwan Life will uphold CTBC Holding's service belief in treating its customers as if they are family and the brand value—We are Family, and work hand-in-hand with CTBC members to afford more thoughtful financial services and innovative products for every customer. In addition, we will pursue our mission to "protect and build" customer, employee, shareholder, and community values, create a better future, and become the first brand that offers insurance services in a Chinese society.

Date and result of the latest credit rating

Credit Rating Rating Type Rating Agency Outlook Effective Date Financial Capability International rating A Fitch Negative 2016.9.21 National AA+(twn)

(4) CTBC Securities Co., Ltd. CTBC Securities Co., Ltd. was formerly known as Pou Chen Securities, which was founded in 1989. It was originally the largest professional brokerage in Kaohsiung with an initial paid-in capital investment of NTD 200 million. In 2000, its name was changed to Chinatrust Securities Corporation and its capital had increased to NTD 3.5 billion. In 2002, it joined CTBC Holding. In 2003 it was renamed Chinatrust Securities Co., Ltd. (CTBC Securities) and had increased capital to NTD 5 billion. In 2009, to increase its operational capital, BIS ratio, and EPS, CTBC Securities issued private equity, increasing its capital to NTD 5.36 billion. In response to the government policy that is aimed at encouraging enterprises to participate in the Asian Cup competition, CTBC Securities expanded its scope of business cooperation local and abroad, increasing its capital to NTD 6 billion in 2015. CTBC Securities assists with corporate ﬁnancing in the capital market and strives to improve its securities and futures, all for the purpose of providing customers with a more diversiﬁed spectrum of trading services.

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13 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 2016.9.21 Effective Date Effective Negative Outlook F1 F1+(twn) Short-term 12 Credit Rating Credit A AA+(twn) Long-term Fitch Rating Agency Rating Rating Type Rating Founded Founded in Capital is Venture March Ltd. Co., CTBC 2003, CTBC Holding's first venture capital company. taking of the purpose for mainly 2003, in May founded AMC) was (CTBC Ltd. Co., Management Asset CTBC non- of in the handling investment its increase to continued has AMC CTBC establishment, Since its towards focus investment its shifting will be AMC CTBC environment, competitive increasingly the of light In In the future under CTBC Holding, CTBC Securities will provide online ordering, app orders, telephone telephone orders, app ordering, online will provide Securities CTBC Holding, CTBC under future the In In addition to the head office, CTBC Securities also has branches in local areas such as Zhongxiao, Kaohsiung, Kaohsiung, as Zhongxiao, such CTBC Securities branches in also has local areas to the head office, In addition International rating National (5) CTBC Venture Capital Co., Ltd. Co., Capital Venture CTBC (5) creativity, culture, healthcare, biotech, communication, in businesses such as information, mainly VC invests CTBC CTBC Holding's vast pool of Leveraging industries of sound potentials. and conventional energy, alternative financial resources and services, CTBC Capital's top-notch management professionals are well positioned to and become the most valued partner to entrepreneurs. help enterprises develop Ltd. Co., Asset Management CTBC (6) advantage of the large quantities of non-performing assets arising domestic Taiwan's A from financial reform. opportunities to seek potential business was assembled and to help companies improve team of professionals industry. the leasing investment financial institutions and for AMC manages debt trading for CTBC their finances. court auctions and complied and chattels from estates the real assessed and also actively liabilities, performing with financial holding policies to assist with the handling and activation of the CTBC group's CTBC idle assets. for advances of in the provision engage actively policy, renewal urban to support intends AMC the government's and assist urban with renewal projects, providing owners and construction developers of old buildings with the projects. urban renewal for funds required April 2012 specifically in and for which in company it Hong Kong has an created investment the leasing business, Date and result of the latest credit rating of the latest credit Date and result Sanchung, Yongkang, Wenxin, Hsinchu, Taoyuan, Songjiang, Chiayi, Shuanghe, and Chiayi, Songjiang, Zhongli to Taoyuan, serve Hsinchu, customers Wenxin, in Yongkang, Sanchung, Securities assembled CTBC futures. and Market Stock TSEC/GTSM/Emerging on securities listed of trading the variety. product and exposure global (OSU) to develop securities unit its offshore in diversity greater smartphones afford to Android and with the iPhone compatible ordering and orders, of development rapid With the services trading electronic demands. one-stop shopping customers' to meet and of accepting more are local investors in education, improvements and income, of per capita growth technology, High-quality a variety planning product of and financial financial and products demand has increased accordingly. services have become important factors for and investors, a diversity of cross-border financial services was provided after obtaining licenses from international financial and companies, this has spurred CTBC Securities to expand operations.

Corporate Governance Report to invest into China. In mainland China, there are few barriers to establishing a financial leasing company and the business scope is broad. After establishment, a company can directly begin dealing with RMB and immediately begin increasing their presence. Future integration with ﬁnancial holdings companies will enhance the effectiveness of asset disposal, maximize the synergy to enhance investment proﬁts and expand the scope of asset management business.

(7) CTBC Investments Co., Ltd. In order to expand product variety, CTBC Holding obtained a 98.6% stake in Trustwell Securities Investment Trust Co. in November 2012. In January 2013 its name was ofﬁcially changed to CTBC Investments Co., Ltd. (CTBC Investments), and in June, the same year, obtained the remaining 1.4%, becoming the sole shareholder, holding a 100% stake. CTBC Investments principal responsibilities include securities investment trust, discretionary investment services, offshore fund agent services, and engaging in other government-sanctioned business.

(8) CTBC Security Co., Ltd. Founded in 1995, CTBC Security Co., Ltd. became a subsidiary of CTBC Holding in December 2005. CTBC Security is principally engaged in helping corporate entities protect their property and personnel. Chosen through a meticulous screening process, its highly-trained workforce of over 358 employees stands out as one of the ﬁnest in the industry. CTBC Security's business scope includes planning and design for ﬁre safety and disaster prevention, security systems consulting, security courier services, stationed guards and personnel protection. Financial institutions constitute the majority of its clientele. CTBC Security is committed to a security-based, service-oriented business philosophy to ensure customer satisfaction with its security services.

(9) Taiwan Lottery Corporation Taiwan Lottery Corporation was ofﬁcially registered in July 10, 2006 as a CTBC Holding subsidiary entrusted with the distribution, sales, marketing, operations and management of the lottery and with handling the prize money. CTBC Bank has now obtained the distribution rights for the fourth public welfare lottery, the duration of which will be from January 1, 2014, to December 31, 2023. CTBC sought the right to run Taiwan's Public Welfare Lottery largely because it believes in and supports the values the Lottery upholds, such as enhancing employment opportunities for disadvantaged groups and caring for these individuals. Moreover, it serves to create a larger public welfare surplus, which improves the society as a whole and supports core values. For CTBC Bank, operating the lottery is a way of giving back to the community. In addition to the annual surplus of NTD 25 billion, which is raised for government public welfare, an additional NTD 2.7 billion is allocated to various social welfare programs. Since our involvement in the sales of public welfare lotteries, we have given more back to society than any other company in the world. By taking action in issuing public welfare lotteries, CTBC Holding will be able to uphold its philosophy of giving back to the community and implementing corporate social responsibility.

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15 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo As of 04/28/2017 General Department Department DepartmentⅠ DepartmentⅡ Department Administration Business Management Office of General Auditor Office of General Digital Banking Innovation Digital Banking Innovation Digital Banking Innovation Digital Banking Management Strategic Planning Department Investor Relations Department Investor Chief Administration Officer Officer Accounting Financial Department Management F i n a n c i a l O f fi c e r General Auditor Office of President Office of Chairman Digital Banking Division

Corporate Planning Division Chief Legal & Compliance Ofﬁcer Department Legal & Compliance 14

Chief Risk Ofﬁcer Meeting ’ Department Risk Management

President President CEO, Securities Business Chairman Board of Directors Board Stockholders CEO, Insurance Business

CEO, Banking Business

CEO, Investment Business

CEO, China Business

CEO, Japan Business Committee Audit Committee Risk Management

Executive Committee Executive CEO,Cross-border Financial Business Nomination Committee Remuneration Committee Remuneration Credit Approval Approval Credit Committee Chief Legal & Compliance Officer is concurrently serving as Compliance Officer) (PS：Chief Legal & Compliance Officer is concurrently III. Corporate Governance Report Governance Corporate III. 1. Organization 1.

Corporate Governance Report Organization of Group

As of 04/28/2017

100% CTBC Financial Holding Co., Ltd. CTBC Bank Corp. (Canada)

99% PT CTBC Bank Indonesia

100% 99.6% CTBC Bank Co., Ltd. CTBC Bank (Philippines) Corp.

100% 100% CTBC Capital Corp. CTBC Bank Corp. 100% (USA) Taiwan Lottery Corporation

100% 100% 100% The Tokyo Star Bank, Limited TSB Servicer, Ltd. CTBC Security Co., Ltd.

100% Tokyo Star Business Finance, Ltd. 100% CTBC Investments Co., Ltd.

100% CTBC Asset Management 100% 100% CTBC Leasing CTBC International Co., Limited Co., Ltd. Co., Ltd.

CTBC Venture 100% 100% CTBC Capital International 100% Capital Investment CTBC Venture Capital Co., Ltd. Co., Limited Management (Shanghai) Co., Ltd.

100% 100% CTBC(Mauritius) Holding CTBC Asia Limited 99.9179% Co., Ltd. CTBC Securities Co., Ltd. 100% CTBC Securities Investment Service Co., Ltd.

100% TLG Insurance Company., Limited 100% Taiwan Life Insurance Co., Ltd. 100% TLG Capital Co., Ltd.

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17 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Education As of 04/28/2017 Master in Materials of University Science, York, New Rochester, USA Department of Soochow Economics, University Signiﬁcant Experience Chairman, CTBC Bank Chairman, Ltd. Co., CTBC Bank Chairman, (USA) Corp. The Tokyo Director, Ltd. Star Bank, CTBC Life Director, Ltd. Insurance Co., CTBC Chairman, Co., Capital Venture Ltd. CTBC Chairman, Asset Management Corporation Director, CTBC Bank CTBC Director, Ltd. Co., Kainan Chairman, University % 0.00% 0.47% Legal Ages Spouse and 276,787 Shares Owned by Owned by Shares the Shareholders, the Shareholders, Number 91,254,109 of Shares Children under the Children % 0.44% 0.23% Shares 16 Presently Owned Presently Number 44,572,626 86,316,551 of Shares % 0.23% 0.44% Owned Shares Owned Shares upon Assignment Number of Shares 44,572,626 86,316,551 3 3 Term Ofﬁce (Note) Date of Assignment Dec.8, 2016 Dec.8, Dec.8, 2016 Dec.8, Name Chao- Tung, Chin, Representative of Chung Yuan Co., Investment Ltd. Wen-Long, Yen, Yen, Wen-Long, Representative of Wei Fu Co., Investment Ltd. Title Director Chairman (1) Directors and SupervisorsDirectors (1) 2. Directors and Supervisors and Management Team and SupervisorsDirectors Management and 2.

Corporate Governance Report Shares Owned by the Shareholders, Owned Shares Presently Owned Office Spouse and Date of upon Assignment Shares Significant Title Name Term Children under the Education Assignment Experience (Note) Legal Ages Number Number Number % % % of Shares of Shares of Shares Director Thomas Dec.8, 2016 3 65,344,869 0.34% 65,344,869 0.34% 990,411 0.01% Director, CTBC Bank Department of Public K. S. Chen, Co., Ltd. Finance and Taxation, Representative Chairman, CTBC National Chengchi of Yi Chuan Investments Trust Co., University Investment Co., Ltd. Ltd. Chairman, CTBC Asset Management Corporation Director, Taipei Financial Center Corporation Chairman, Overseas Investment & Development Corp. Chairman, CTBC Bank Corp. (USA) Chief Secretary, CTBC Financial Holding Co., Ltd. Independent Chung-Yu Wang Dec.8, 2016 3 ------Independent Director, Honorary Ph. D., Director CTBC Bank Co., Ltd. Chung Yuan Christian Chairman, China Steel University Corporation Independent Director, Chunghwa Telecom Co., Ltd. Legislator, Taiwan Independent Peter Tuen-Ho, Dec.8, 2016 3 ------Lawyer, Senior Ph. D., in Law, Director Yang consultants, Guoju law The University of office California, Berkeley Supervisor, Shiquan Campus Science & Technology Co., Ltd. Director, Jinwen University of Science & Technology President, Fu Jen Catholic University

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19 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Education Ph. D., Accounting D., Ph. College Department, of Management, National Taiwan University Ph. D., Dept. of Dept. D., Ph. Statistics in University of Wisconsin-Madison, USA. Signiﬁcant Experience Independent Director, Independent Director, Ltd. CTBC Bank Co., Department Professor, of Wealth and Taxation National Management, of Kaohsiung University Applied Sciences Independent Director, Bank of Kaohsiung Graduate Director, Institute of Finance, and Economics, Business Decisions, National Kaohsiung University of Applied Sciences Independent Director, Independent Director, Insurance Life Taiwan Ltd. Co., Independent Director, TLG Non- Life Ltd. Insurance Co., of Dept. Professor, Risk Management and National Insurance, Chengchi University Commissioner, Financial Supervisory Taiwan, Commission, R.O.C. - % 0.00% - Legal Ages Spouse and 133,844 Shares Owned by by Owned Shares the Shareholders, the Shareholders, Number of Shares Children under the Children - % 0.00% - Shares 18 133,844 Presently Owned Presently Number of Shares - % 0.00% - 133,844 Owned Shares Owned Shares upon Assignment Number of Shares 3 3 Term Ofﬁce (Note) Date of Assignment Dec.8, 2016 Dec.8, Dec.8, 2016 Dec.8, Name Wen-Chih Lee Wen-Chih Shih-Chieh, Shih-Chieh, Chang Title Independent Director Independent Director Note: The 6th Board of Director period from Dec. 8, 2016 to Dec. 7, 2019 7, 2016 to Dec. 8, Dec. period from of Director The 6th Board Note:

Corporate Governance Report (2) Signiﬁcant Shareholders of Legal Entities As of 04/28/2017 Name of legal entity Main legal person 1. Wei Fu Investment Co., Ltd. Wen-Long Yen(37.61%) Chen Li-Chin Yen(29.25%) Chih-Kuang Yen (8.96%) Chih-Yu Yen(8.96%) Wei Kuo Construction Co., Ltd. (8.66%) Wen-Tse Yen(3.58%) Tai-Hsuan Hsia (1.49%) United Investment Management Co., Ltd. (1.19%) Shieh-Er Chang (0.30%). 2.Yi Chuan Investment Co., Ltd. Yi Kao Investment Co., Ltd.(100％) 3 Chung Yuan Investment Co., Ltd. Yi Chuan Investment Co., Ltd.(100％) Note: A main legal person refers to any shareholder whose equity is over 10% or who is one of the top ten shareholders.

(3) Major shareholders of the major shareholders that are juridical persons As of 04/28/2017 Name of juridical persons Major shareholders of the juridical persons Chen Li-Chin Yen(67.57%) Wei Fu Investment Co.,Ltd. (22.86%) Wei Kuo Construction Co., Ltd. Wen-Long Yen(9.43%) Wen-Tse Yen(0.14%) Wei Fu Investment Co.,Ltd. (75.02%) Wei Kuo Construction Co., Ltd. (23.67%) Chiau-Chih Chen(0.99%) Wen-Tse Yen(0.14%) United Investment Management Co., Ltd. Wen-Long Yen(0.08%) Wen-Si Yen(0.07%) Chen Li-Chin Yen(0.01%) Chih-Kuang Yen (0.01%) Chih-Yu Yen(0.01%) Yi Kao Investment Co., Ltd. Bo Yu Investment Co., Ltd. (100％) Yi Chuan Investment Co., Ltd. Yi Kao Investment Co., Ltd. (100％)

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21 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 0 0 0 0 0 0 0 Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director As of 04/28/2017 V V V V 10 9 V V V V V V V 8 V V V V V V V 7 V V V V V V V 6 V V V V V V V 5 V V V V V V V 4 V V V V V V V Independence Criteria(Note) 3 V V V V V V V 2 V V V V 1 V V V V V V V 20 V V V V V V V Have Work Work Have Experience in the of Areas Commerce, Law, or Finance, Accounting, or Otherwise Necessary the for Business of the Company V A Judge, Public Public A Judge, Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National and Examination Awarded been a Certificate in a Profession Necessary the for of the Business Company V V V An Instructor or Higher in a Position Department of Commerce, Finance, Law, Accounting, or Other Academic Department to Related the Business Needs of the in Company or a Public Private Junior College, or College University Meet One of the Following Professional Professional Following One of the Meet with at Together Qualification Requirements, Experience Work Years Least Five Criteria person is an independent director of the Company, its parent company, or any subsidiary in which the Company holds, directly or directly subsidiary holds, any or in which the Company company, its parent of the Company, person is an independent director shares. than 50% of the voting more indirectly, of the of outstanding shares of the total number amount of 1% or more in an aggregate the person under others' names, by or ranking in the top 10 in holdings. Company subparagraphs. three persons in the preceding in holdings. ranking in the top five or that holds shares of the Company outstanding shares the Company. with a financial or business relationship accounting services or to any to the Company or consultation financial, legal, commercial, provides or institution that, company, or a spouse thereof. affiliate of the Company, elected or during the term of office. 1. of its affiliates. or any of the Company Not an employee the in cases where 2. however, The same does not apply, of its affiliates. or supervisor or any Not a director of the Company 3. or held minor children, the person's spouse, together with those held by who holds shares, Not a natural-person shareholder 4. of the of any of kinship, within the fifth degree or lineal relative of kinship, within the second degree relative Not a spouse, of of the total number 5. holds 5% or more that directly shareholder of a corporate or employee supervisor, Not a director, or institution that has of a specified company of the share, holding 5% or more or shareholder 6. officer, supervisor, Not a director, partnership, or officer of a sole proprietorship, supervisor, director, 7. partner, or an owner, individual who, Not a professional 8. of the Company. other director of kinship to any within the second degree or a relative a marital relationship, Not having 9. Law. Article 30 of the Company conditions defined in Not been a person of any Law. Article the Company 27 of as defined in juridical person or its representative 10. Not a governmental, Name Wen-Long, Yen Wen-Long, Chao-Chin Tung Thomas K. S. Chen S. Thomas K. Chung-Yu Wang Chung-Yu Wen-Chih Lee Wen-Chih Peter Tuen-Ho, Yang Tuen-Ho, Peter Shih-Chieh, Chang Shih-Chieh, Note: Please tick the corresponding boxes if directors or supervisors have been any of the following during the two years prior to being years during the two of the following been any or supervisors if directors have boxes Please tick the corresponding Note: (4) Professional qualifications and independence analysis of directors and supervisors directors of analysis and independence qualifications Professional (4)

Corporate Governance Report (5) Management Team As of 04/28/2017 Concurrently Serving Name Positon Eduction Experience Position Daniel I.K. Wu President & CEO, MBA, University Director of CTBC Financial Holding Co., Ltd. Spokesperson of CTBC Bank Co., Insurance Business of Rochester, CEO, Investment Business of CTBC Financial Holding Co., Ltd. Ltd. USA Senior Executive Vice President of CTBC Bank Co., Ltd. Director of CTBC Asia Limited Director of CTBC Capital Corp. Director of GCB Finance (HK) Limited Chairman of CTBC Securities Co., Ltd. Director of CTBC Asset Management Co., Ltd. Director of CTBC Venture Capital Co., Ltd James Chen CEO, Banking Business MBA,The City Director of CTBC Bank Co., Ltd. President of CTBC Bank Co., Ltd. University of Senior Executive Vice President of CTBC Bank Co., Ltd. Director of Grand Bills Finance New York, USA Chairman of CTBC Asset Management Co., Ltd. Corporation Director of CTBC Venture Capital Co., Ltd. Director of GCB Finance (HK) Limited Director of CT Opportunity Investment Company Director of CTBC (Mauritius) Holding Co., Ltd. Chairman of CTBC Bank (Indonesia) Director of CTBC Bank Corp. (USA) Roger Kao Chief Administration MS in Broadcast General Secretary of CTBC Financial Holding Co., Ltd. Senior Executive Vice President of Officer Journalism, Director of CTBC Bank Co., Ltd. CTBC Bank Co., Ltd. Boston Executive Vice President of CTBC Bank Co., Ltd. Acting Spokesperson of CTBC University, USA Chairman of CTBC Insurance Brokers Co., Ltd. Bank Co., Ltd. Director of CTBC Security Co., Ltd Director of Taiwan Lottery Corporation Director of CTBC Asset Management Co., Ltd. Jack T.K. Cheng Chief Risk Officer Bachelor Deputy Chief Risk Officer of CTBC Financial Holding Co., Ltd. Director of CTBC Bank(USA) of Business Executive Vice President of CTBC Bank Co., Ltd. Director of CTBC Capital Corp. Administration, Director of CTBC Venture Capital Co., Ltd. National Taiwan Director of CTBC Asset Management Co., Ltd. University Director of CTBC Securities Co., Ltd. Director of Chung Shin-1 Asset Management Co. Ltd. Director of Tuo Yu Asset Management Servicing Co. Ltd. Director of CT Opportunity Investment Company James Y.G. CEO, Japan Business Master of President of Chang Hwa Bank Senior Executive Vice President of Chen Political CTBC Bank Co., Ltd. Economy, Nankai Director of The Tokyo Star Bank, University Limited Winston Hsia CEO, Investment MBA, The Executive Vice President of CTBC Bank Co., Ltd. Director of TransWorld Production Business Wharton School, CEO of ShopNet Co., Ltd. Co. University of President of CTBC Asset Management Co., Ltd. Director of CNEX Studio Pennsylvania, President of CTBC Venture Capital Co., Ltd. Corporation USA Director of GCB Finance (HK) Limited Director of Mandarin Vision Inc. Director of ABICO Asia Capital Corporation.

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Position

Concurrently Serving Concurrently Supervisor of Taiwan Lottery Taiwan Supervisor of Corporation Asset Supervisor of CTBC Ltd. Management Co., Supervisor of CTBC Leasing Co., Ltd. Director of CTBC Leasing Co., of CTBC Leasing Co., Director Ltd. of CTBC International Director Limited Co., of CTBC Acting Spokesperson Ltd. Bank Co., Director of CTBC Venture Capital Capital Venture of CTBC Director Ltd. Co., of CTBC Vice President Executive Ltd. Bank Co., None None of Vice President Senior Executive Ltd. CTBC Bank Co., Director of AZ-Star Co., Ltd. Co., AZ-Star of Director

Experience 22

Supervisor of CTBC Leasing Co., Ltd. Supervisor of CTBC Leasing Co., Management Investment Capital Venture Supervisor of CTBC Ltd. (Shanghai) Co., Taiwan of Citibank Vice President Assistant AMRO ABN of Vice President Vice President ( Legal) of Taiwan Fixed Network CO., Ltd. Ltd. CO., Network Fixed Taiwan ( Legal) of Vice President Taipei Group), Telecom (Taiwan Ltd., TECO Electric & Machinery Co., General Counsel of Taipei Offices,Taipei Law Commercial Taiwan Partner of Office of Shi-Lin District Prosecutors Prosecutor Ltd. of CTBC Bank Co., Vice President Senior Ltd. of CTBC Bank Co., Acting Spokesperson Ltd. Co., Capital Venture Supervisor of CTBC Ltd. Asset Management Co., Supervisor of CTBC Ltd. Asset Management Servicing Co. Yu Tuo Supervisor of Limited of GCB Finance (HK) Director Senior Executive Vice President of Chang Lei Costar of Chang Vice President Senior Executive Inc. Electronics Corp. Technology of Lite-On Vice President Executive Manager of Kinpo Group Ltd. (Taiwan), Co. Card AIG Credit of Vice President Taipei Chartered Bank, of Standard Vice President Taiwan Manager of Citibank Taipei Assistant Manager of Societe Generale, Taiwan Assistant Manager of Citibank Inc. Legal) of Hannspree, Vice President( Senior Vice President of RZB Austria Beijing Branch of RZB President Vice Senior Ltd Japan Securities Co., of Bank Boston President Hong Income Ltd., Fixed of Peregrine President Vice Senior Kong Hong Kong of Lehman Brothers President Vice Senior Inc. Management, Venture of China President (HK) Limited Asia Capital Copartner of Crimson Partner of Lotus International Law Offices,Taipei Offices,Taipei Partner Law of Lotus International Executive Vice President of CTBC Bank Co., Ltd. Co., of CTBC Bank Vice President Executive Senior Vice President of CTBC Bank Co., Ltd. of CTBC Bank Co., Vice President Senior Executive Vice President of CTBC Bank Co., Ltd. of CTBC Bank Co., Vice President Executive Ltd. Financial Officer of CTBC Financial Holding Co., Executive Vice President of CTBC Bank Co., Ltd. of CTBC Bank Co., Vice President Executive Eduction Master of Law, Master of Law, Georgetown USA University, Bachelor of Keio Economics, Japan University, MBA, Minnesota- MBA, Cities Twin USA University, MBA, George MBA, Washington USA University, The MBA, City of N.Y. University Baruch College, USA MBA, National National MBA, Chengchi University

Positon Compliance Officer & Head of Legal & Compliance Department Acting CEO, Cross- Acting CEO, Financial border Business Financial Officer & Head of Financial Management Department General Auditor Chief Legal & Compliance Officer Acting General Secretary Acting CEO,China Acting CEO,China Business Name Chung Mao Hsiao Yaling Chiu Yaling Albert Hu King Aaron Rachael Kao Cliff Chen

Corporate Governance Report Concurrently Serving Name Positon Eduction Experience Position Sting Yang Accounting Ofﬁcer Bachelor of Vice President of CTBC Financial Holding Co., Ltd. Senior Vice President of CTBC Accounting, Fu Vice President of CTBC Bank Co., Ltd. Bank Co., Ltd. Jen Catholic Supervisor of CTBC Investment University Co., Ltd . Supervisor of CTBC Venture Capital Co., Ltd. Supervisor of Taiwan Lottery Corporation Supervisor of CTBC Venture Capital Investment Management (Shanghai) Co., Ltd. Derek Lo Head of General MBA, Madonna Senior Vice President of CTBC Bank Co., Ltd. Executive Vice President of CTBC Administration University, USA Assistant Manager of Citibank Taiwan Bank Co., Ltd. Department Monica Chu Acting Head of MBA, National Vice President of CTBC Financial Holding Co., Ltd. None Corporate Planning Taipei University Manager of CTBC Bank Co., Ltd. Division & Head of Steategic Planning Department Wenchieh Wu Head of Business MBA, National Manager of CTBC Bank Co., Ltd. None Management Sun Yat-sen Department University Justine Shen Acting Head of Investor Master of Vice President of CTBC Bank Co., Ltd. None Relations Department Commerce, The University of New South Wales, AUS Sophie You Head of Risk MBA, National Manager of CTBC Bank Co., Ltd. None Management Taiwan Department University Sumei Hsun Acting Head of Digital MBA, Imperial Senior Vice President of CTBC Bank Co., Ltd. None Banking Divison College London, UK Erick Hsieh Head of Digital Certiﬁcate Senior Vice President of Citibank Taiwan Concurrently Serving Position Banking Innovation in Business Consultant of Oracle Corporation Department I Administration, Warwick Business School, The University of Warwick, UK Ellen Wu Acting Head of Digital MBA, National Vice President of CTBC Bank Co., Ltd. None Banking Innovation Taipei University Department II Benny Kuo Acting Head of Digital Master of Vice President of CTBC Bank Co., Ltd. None Banking Management Technology Department Management, The University of New South Wales, AUS

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25 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Companies for deviation from from deviation for for Financial Holding for Deviation and reasons and reasons Deviation Corporate Governance Corporate Governance Best-Practice Principles Best-Practice Principles (1) No deviations (2) No deviations (3) No deviations Summary 24 Operations (Note 1) a "contact IR" section under the Investor Service category the Investor a "contact IR" section under on the contact to disclose website Relations page of the company's Investor can call or email suggestions or problems details so shareholders shall designate a specific and the Company to the Company, have they suggestions and shareholders' managerial department to process problems. list obtained after the date on which share with the shareholder of on equity changes is suspended and with the information transfer by which is submitted to the Company insiders and major shareholders, report in the annual publishes this information The Company regulation. website. and on the company's with the Financial transactions with affiliated companies in accordance regulations. and related Act, the Banking Act, Holding Company (1) The Company values the opinions of its shareholders. It has setup values the opinions of its shareholders. The Company (1) in accordance seizes hold of lists of major shareholders The Company (2) related and non-credit transactions engages in credit The Company (3) No V V V Yes Evaluation item Evaluation established and implemented risk in affiliated management and firewalls companies? shareholders that have actual control actual control that have shareholders and a list of ultimate the Company over major shareholders? of those owners implemented a set of internal procedures implemented a set of internal procedures suggestions, shareholders' to process disputes and litigations? queries, Best-Practice Principles for Financial Holding Companies, and reasons for such deviation such deviation for and reasons Financial Holding Companies, for Best-Practice Principles (3) Has the financial holding company Has the financial holding company (3) (2) Does the company have a list of major have Does the company (2) equity within the financial holding company equity within the financial holding Has the financial holding company (1) 1. Shareholding structure and shareholders' and shareholders' structure Shareholding 1. (1) Corporate governance implementation status and deviations from Corporate Governance Governance Corporate from status and deviations implementation Corporate governance (1) 3. Governance of Corporate Implementation 3.

Corporate Governance Report Deviation and reasons Operations (Note 1) for deviation from Corporate Governance Evaluation item Best-Practice Principles Yes No Summary for Financial Holding Companies 2. Constitution and obligations of the Board of Directors (1) Apart from the Remuneration V (1) In addition to assembling the Remuneration Committee and Audit (1) No deviations Committee and Audit Committee, has Committee as required by law, the Company has also established a Risk the financial holding company assembled Management Committee and Nomination Committee. other functional committees at its own 1. Audit Committee: Composed of independent directors who assist discretion? the Board of Directors in executing his/her supervisory roles. Auditing matters include: (1) fair presentation of the financial report; (2) evaluation of hiring or dismissal of an attesting CPA, or the compensation given thereto and its independence and performance; (3) effective implementation of the internal control system; (4) adequacy of internal legal compliance procedure and plan; (5) management of existing or latent risks; and (6) examination of merger and acquisition. 2. Remuneration Committee: Committee members are appointed by the Board of Directors, and there should be no less than three members, with at least one being an independent director, and the independent director will act as the convener. The Committee assists the board in (1) formulating and regularly reviewing the director, senior executive and manager performance assessments and the remuneration policy, system, standards, and structures; and (2) regularly assessing and establishing the remuneration to directors, senior executive and managers. 3. Risk Management Committee: Committee members are appointed by the Board of Directors, and there should be no less than three members, with at least one being an independent director. The Committee was established for the purpose of helping the Board of Directors communicate, report, and offer suggestions to support the risk management practice of decision makers. Thus, the decisions made and leaders' supporting actions could exert a widespread influence on all employees and the organization. 4. Nomination Committee: Committee members should comprise at least three directors appointed by the Board of Directors, and more than half of the committee members should be independent directors. The Committee helps the board (1) define the background required of a director or supervisor (profession, technical skills, experience, and gender) and independence criteria for seeking, assessing, and nominating director and supervisor candidates for the Company and subsidiaries; (2) construct develop, and review an organizational structure for the board and committees of the Company and its subsidiaries; (3) devise and inspect director continuing education plans; (4) formulate corporate governance practice for the Company; and (5) establish matters that should be handled by the committees as instructed by the board.

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27 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Companies for deviation from from deviation for for Financial Holding for Deviation and reasons and reasons Deviation Corporate Governance Corporate Governance Best-Practice Principles Best-Practice Principles (2) No deviations No deviations No (1)No deviations (2)No deviations (3)No deviations Summary 26 Operations (Note 1) CPA, the CPA is requested to provide confirmation of independence. of independence. confirmation to provide is requested the CPA CPA, after the hiring of the CPA then approves of Directors The Board of the Company to be not a stakeholder is confirmed the CPA and professionalism CPA's the Audit Committee evaluates and the independence. with the stakeholders on a yearly basis using paper documents. basis using paper on a yearly with the stakeholders Service Relations page of the company's category on the Investor acting including spokesperson, contact details, to disclose website institutional investor audit committee convener, spokesperson, to handles issues of interest and to service, and shareholder relations, stakeholders. customers, investors, with employees, communication uninterrupted and suppliers. (2) The Company hires a CPA on a yearly basis; when hiring or re-hiring a when hiring or re-hiring basis; on a yearly a CPA hires The Company (2) The Company has appointed a dedicated "Corporate Governance Officer" Officer" a dedicated "Corporate Governance has appointed The Company matters. supervisesin the Chairman's Office and corporate governance has been appointed The Secretary Department of Directors of the Board to including handling matters relating matters, to handle administrative meeting minutes, producing and meetings shareholders and meetings board directors. by business execution for required and furnishing information corporate registration handle to A dedicated personnel is appointed and documents and seals, related safeguard and amendment registration, operations. disclosure monitor information confirm data accuracy has set up a designated unit to The Company (1) has set up a "contact IR" section under the Investor The Company (2) page to ensure has established a Stakeholders The Company (3) No V V V Yes Evaluation item Evaluation conduct regular assessments on the conduct regular statement independence of its financial auditors? (2) Does the financial holding company Does the financial holding company (2) TPEx listed company, then has it set up a TPEx listed company, full- (or part-) governance time corporate unit or member of personnel to be in affairs charge of corporate governance (including but not limited to furnishing execution business for required information handling and supervisors, directors by meetings and to board matters relating to meetings according shareholders and handling corporate registration laws, and producing amendment registration, shareholders and meetings board of minutes meetings)? its channel for established a communication (including but not limited to stakeholders and customers)? employees, shareholders, 3. If the financial holding company is a TWSE/ 3. is a If the financial holding company 4. Has the financial holdings company

Corporate Governance Report Deviation and reasons Operations (Note 1) for deviation from Corporate Governance Evaluation item Best-Practice Principles Yes No Summary for Financial Holding Companies 5. Disclosure of information (1) Has the financial holding company V (1) The Company has set up an official website to disclose financial, No deviations established a website that discloses business, corporate governance, and other information. financial, business, and corporate governance-related information? (2) Does the financial holding company have V (2) The Company's website is mainly in Chinese, but an English version (2) No deviations other information disclosure channels is also available for foreign investors. Related units are in charge of (e.g., maintaining an English-language website information collection and disclosure. The Company has website, appointing responsible people designated spokesperson and an acting spokesperson to implement the to handle information collection and spokesperson system. disclosure, creating a spokesperson In addition, power point presentations and audio recordings used system, webcasting investor conference in investor conference are disclosed on the Company's website on on the company website)? the Events Calendar page under the Events & Filings of the Investor Relations page. 6. Does the financial holdings company have V Please refer to 8. Others for details No deviations other crucial information that facilitates understanding the operation status of its corporate governance (including but not limited to situations regarding employee rights and interests, employee care, investor relations, the rights and interests of stakeholders, the continuing education of directors and supervisors, the implementation status of risk management policies and risk measuring standards, the implementation status of customer policies, the situation concerning the purchase of accountability insurance for directors and supervisors, and donations made to public interest groups)? 7. Please describe improvement situations, priority for improvement, and measures based on the most recent corporate governance evaluation results published by the Corporate Governance Center of Taiwan Stock Exchange. (Not applicable for companies that were not included in the assessment) The Company was rated in the top 5% in the 2016 Second Corporate Governance Evaluation. Immediately thereafter, the Company made the following improvements based on the evaluation results: 1. Amended the CTBC Financial Holding Co., Ltd. and its Subsidiaries' Board of Directors Evaluation Measures, requiring the board assessment to be conducted at least once every three years. 2. Setup a Nomination Committee. 3. Voluntarily defined a number of independent director seats that is higher than regulatory requirement, and the number of independent director seats exceeded half of the board seats. 4. Obtained ISO14001 Environmental Management System Certification and ISO14064-1 Greenhouse Gas Inventory Certification Note 1: A summary must be provided regardless of whether a "Yes" or "No" is selected for Operations.

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29 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo reasons Principles Principles for TWSE/ for Corporate Governance Governance TPEx Listed TPEx Best-Practice Companies and Companies No deviations No deviations No deviations No Deviations from from Deviations Summary Operations 28 The Company has devised a CTBC Financial Holding Corporate Governance Best Practice Governance a CTBC Financial Holding Corporate has devised The Company Observation System. and the Market Post website it on the company's Principles and disclosed Code Trading, Against Insider the Internal Regulation on Prevention has formulated The Company Conduct and Employee and Guideline for Ethical Management for Procedure of Ethical Conduct, and has their conduct, to regulate and employees managers, directors, of Conduct for Code website. on the company's announced these codes of Directors Board The adopts the candidate nomination system to elect directors. The Company non- 3 are and the remaining independent directors of whom 4 are of 7 directors is composed are the election of directors Candidates for The term of ofﬁce is 3 years. independent directors. and skills, The knowledge, of Directors. allocation of the Board selected based on the overall stipulated in the rules for their duties are executing members for of Board literacy required Articles of mandated in the Company's are of Directors duties of the Board The election. director Incorporation. No V V V Yes Evaluation item Evaluation Companies and reasons Companies and reasons and disclose its corporate principles governance with the in accordance Corporate Governance Best-Practice Principles TWSE/TPEx for Listed Companies? internal regulations in place internal regulations its people from to prevent trading securities based on to be public yet information on the market? establish Directors and consolidate the its policy for diversiﬁcation composition? 1. 1. establish Does the company 2. 2. have Does the Company 3. of Does the Board (1) Deviations from Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Listed TWSE/TPEx for Principles Best-Practice Governance Corporate from Deviations (1) 4. Others 4.

Corporate Governance Report Deviations from Operations Corporate Governance Best-Practice Evaluation item Principles for TWSE/ Yes No Summary TPEx Listed Companies and reasons 4. Does the Company V The Company has established CTBC Financial Holding Co., Ltd. and its Subsidiaries' Board No deviations have Board of Directors of Directors Evaluation Measures , and it conducts annual Board of Directors performance performance assessment assessment at the end of December. Assessments are performed on the overall operations of the guidelines and assessment Board of Directors, and each of its directors is required to conduct self-assessment. The items of methods in place and assessment for the Company's Board of Directors comprise the following ﬁve areas: perform the assessments 1. Involvement in the company's business activities. periodically on a yearly 2. Improving quality of the board's decisions. basis? 3. Composition and structure of the Board of Directors. 4. Election of directors and continuing education and training. 5. Internal control. The items of assessment for members of the board should encompass at least the following six areas: 1. Understanding of company goals and missions. 2. Understanding of director duties and functions. 3. Involvement in the company's business activities. 4. Internal relations management and communication. 5. Director expertise and continuing education. 6. Internal control. The assessment results are graded as follows: Excellent, very good, good, acceptable, and require improvement; the secretary division will report the assessment results to the Board of Directors, to that the Board can propose improvement advices. The 2016 assessment presented the rating of "Excellent" in accordance with the aforementioned regulations. 5. Does the company V The Company consigns the CTBC Bank to handle shareholder affairs. No deviations designate a professional shareholder service agency to deal with shareholder affairs?

28 29 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

31 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo deviation Deviation from from Deviation and reasons for for and reasons for TWSE/TPEx for listed companies listed companies Corporate Social Practice Principles Practice Principles Responsibility Best Responsibility (1)No deviations (2)No deviations Summary Operations 30 and a dedicated CSR Committee that convenes regular meetings to devise methods methods meetings to devise regular that convenes and a dedicated CSR Committee and tracking reporting for task unit is responsible Each CSR practices. improving for our inclusion by evident in 2016, favorably performed Company The outcomes. work Indices (DJSI) and the MSCI Global Sustainability Jones as a component of the Dow CSR Survey" in "Annual also named Exemplar was The Company Sustainability Indexes. and Magazine, Views Global organized by Award Vision CSR Global Twelfth during the 2016 Asia's including the Best CSR in the 2016 awards, of foreign of a number was the recipient Asia during Corporate Governance FinanceAsia and the Best CSR by Best Companies by Awards. Asian Excellence Recognition the 6th Responsibility Best Practice implemented the CTBC Financial Holding Corporate Social CSR within the this principle to promote has followed The Company Principles in 2012. in meetings of the information also announces CSR-related Company The organization. been held meetings have two In 2016, holds CSR training. CSR Committee and regularly matters: the following to communicate in CSR." enterprises" and "opportunities and breakthroughs issues of concern. (1) The Company has established the Corporate Social Responsibility Best Practice Principles has established the Corporate Social Responsibility The Company (1) and since 2007, compile CSR reports to the initiative has taken The Company (2) on of CSR trend including "the effect on CSR, their views External experts shared the year. CSR plans and policies for Devising and assessing communication to stakeholder and campaigns relating Organizing projects of each project. effectiveness up on the Evaluating and following discussion. assessments and international trend Participating in CSR award institutions. ﬁnancial domestic and foreign Sharing CSR practices adopted by No V V Yes Evaluation item Evaluation educational training on corporate social on a regular responsibility basis? establish corporate social policy or responsibility system and examine its implementation results? (2) Does the company provide provide Does the company (2) implementation Does the company (1) 1. Corporate governance Corporate governance 1. (2)Compliance and adoption of corporate social responsibility of corporate and adoption (2)Compliance

Corporate Governance Report Deviation from Operations Corporate Social Responsibility Best Practice Principles Evaluation item for TWSE/TPEx Yes No Summary listed companies and reasons for deviation (3) Does the company V (3) As of 2011, the Company has appointed designated staff to take charge of CSR-related (3) No deviations establish a dedicated or strategy planning and promotional action as a whole. Seven staff members are designated concurrent unit in charge and are currently working in a CSR unit under the General Administration Department of promoting CSR with of CTBC Holding to undertake CSR-related campaigns. The cross-departmental "CSR senior management Taskforce Committee," established at the beginning of 2012, was renamed the "CSR authorized by the board to Committee" in 2015 with the President of CTBC Holding as the chairman of the take charge of proposing committee, the Chief Secretary as the deputy chairman, and the presidents of CTBC CSR policies and reporting subsidiaries as the committee members. The General Administration Department of to the board? CTBC Holding served as the resource integration unit and integrated human resources, corporate governance, legal affairs, audit, general affairs, risk management, personal banking, institutional banking, and the group's eight subsidiaries. Independent director supervision was setup in 2016, and CSR Promotion Proposal was submitted to the board of directors to reinforce the managerial functions of the board. Issues and policies related to the CSR of CTBC Holding are collected by the "CSR Committee," which regularly identifies stakeholders that they may come into contact with over the course of business, and to discuss and allocate resources into a number of CSR aspects such as corporate governance, employee care, customer care, community involvement, and environmental sustainability. The Committee evaluates and determines the annual target of various CSR categories and regularly performs management and supervision tasks, which are then reported in regular meetings and are reviewed by the Chairman of the Committee before escalating to CTBC Holding's Executive Committee and to the board of directors. The final amendments and decisions are made by the board of directors before implementing them. Under the operation of the Company's CSR Committee, various CSR tasks are executed through a top-down approach in the organization to ensure effective and comprehensive execution. (4) Does the company V (4) The Company has formulated CTBC Employee Code of Conduct since 2006, which (4) No deviations establish a reasonable specifies the corporate ethics and obligations employees should comply with. The salary remuneration policy, Company has not only included the implementation outcomes of the Employee Code of and integrate the employee Conduct as one of the items of the Company's annual performance assessment, but also performance evaluation commemorated or penalized employees for special matters through employee incentives system with its CSR policy, and penalties guidelines and committee. In addition, the Company's remuneration and and establish an effective welfare policies specify that remuneration management shall follow three major principles: reward and disciplinary market competitiveness, pay for performance, and performance-oriented, to facilitate a system? reasonable salary and remuneration policy.

30 31 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

33 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo deviation Deviation from from Deviation and reasons for for and reasons for TWSE/TPEx for listed companies listed companies Corporate Social Practice Principles Practice Principles Responsibility Best Responsibility (1)No deviations (2)No deviations (3)No deviations deviations No (1) No deviations Summary Operations 32 The total carbon remissions volume was 32,349.85 ton-CO2/year in 2015 and was and was in 2015 ton-CO2/year 32,349.85 was volume remissions carbon total The the carbon 2016, As of the end of December in 2016. to 30,322.7 ton-CO2/year reduced efficiency was 3,079.69 ton-CO2/year. reduction 2016. 9, on November Award Medal acquired ISO50001 Energy Management System verification in December 2012. In June In June in December 2012. ISO50001 EnergyManagement System verification acquired and Energy Management into an Environment the committee was restructured 2015, both for Institution British Standards 2015 by which was certified in July Committee, Gas Management System and ISO14064-1 Greenhouse the ISO14001 Environmental and energy management meeting holds environment the Company Internally, Inventory. meetings to implement environmental manages review on a quarterly basis and regularly management. energy and policy Our environment with ISO50001 and ISO14001 international standards. is as follows: labels. saving programs. of sustainability. the goal to achieve circle. green building assessment indexes: biodiversity, amount of greening, on-site water amount of greening, biodiversity, building assessment indexes: green quality, indoor environment waste reduction, CO2 reduction, energy daily saving, retention, treatment. and refuse and wastewater use of water, the company shall adhere to international human right conventions and related laws and laws and related to international human right conventions shall adhere the company Rules in accordance Work has devised The Company labor rights. to protect regulations Establishing Act and established Regulations for of the Labor Standard with regulations Complaint and Punishment of Sexual Harassment Correction, of Prevention, Measures environment. working equity and a harassment-free employee to protect Workplace at with in accordance representatives elect labor and its subsidiaries regularly The Company equity employee discuss issues regarding labor meetings to periodic and convene law on the available are handbook and employee regulations The Company's and welfare. use. employee for website company's (2) The Company assembled an Energy Management Committee in September 2012 and The Company (2) and energy management system in accordance has installed environmental The Company 1. (3) with energy of products purchase and extensive and regulations Self-compliance with laws (1) and energy management. protection environmental hold training and promote Regularly (2) and energy management and implement environment resources Integrate related (3) review and conduct regular energy improvement to implement environmental Continue (4) energy a green enterprises to form Magnify corporate influence and link surrounding (5) energyand conservation. protection environmental promote to continues Company The 2.2. - Bronze Award Protection the 25th Enterprise Environmental received The Company (1) The Company's CTBC Financial Park has met the required standards in eight of Taiwan's Taiwan's in eight of standards CTBC Financial Park has met the required The Company's (1) (1) The Company's Corporate Social Responsibility Best Practice Principles mandate that The Company's (1) No V V V V Yes Evaluation item Evaluation monitor the impact of climate change on business conduct operations, gas inventory greenhouse strategies and formulate energyfor conservation greenhouse and carbon and gas reduction? developed an appropriate an appropriate developed environmental management system, its distinctive given characteristics? to achieving efficient use efficient use to achieving and using of resources, materials that renewable impact on the less produce environment? developed its policies and developed in accordance procedures and the with laws International Bill of Human Rights? (3) Does the company Does the company (3) (2) Has the company Has the company (2) environment committed Is the company (1) (1) Has the company Has the company (1) 2. 2. a sustainable Fostering 3. 3. Upholding public interests

Corporate Governance Report Deviation from Operations Corporate Social Responsibility Best Practice Principles Evaluation item for TWSE/TPEx Yes No Summary listed companies and reasons for deviation (2) Does the company have V (2) The Company has set up an Employee Hot Line so that employee feedback can be handled (2) No deviations means through which directly and quickly. All feedback documents and letters are handled in a confidential employees may raise manner in order to protect the human rights of the complainant. complaints? Are employee 1. By mail: Employee feedback can be posted in writing to the human resource division or complaints being handled directly posted to the highest executive of the human resource division. properly? 2. By delivery in person: Employees can provide their feedback to any one of the supervisors of the human resource division in person. 3. By e-mail: [email protected] 4. Employee hot line: (02) 3327-8804 5. Company website: An area for employee feedback is designated on the General Affairs website of the General Administration Department where employees can express their opinions freely. (3) Does the company provide V (3) The Company offers a comprehensive range of hardware and software facilities to (3) No deviations employees with a safe and provide employees with a comfortable, safe, and healthy working environment. These healthy work environment? facilities include implementation of smoke-free workplace policy, access control measures, Are employees trained quarterly occupational safety and health committee meetings to conduct reflection on regularly on safety and the safety and health of the workplace, regular labor safety training, fire prevention drills, health issues? regular environmental inspection (CO2 emissions and lighting), free health check-ups, free employee canteen, breastfeeding room, library, staff lounge, and gym. Such provision is aimed to allow employees work and live happily without worry. (4) Does the company have V (4) The Company holds employee conferences on a quarterly basis to inform employees (4) No deviations channels to communicate about material matters and business operations; executive managers also sends email with employees on a on an irregular basis to update employees on how the company handled an emergency regular basis, and inform situation during a business operation. them of operational changes that may be of a significant impact? (5) Does the Company V (5) Depending business needs and work requirements, the Company designates employees (5) No deviations offer its employees to participate in internal or external training programs or attend overseas seminars. effective occupational The training courses contain professional competency and skills training, management empowerment training skills training, practical operations, language, and experience sharing. Based on employee programs? development and organizational needs, job rotations are granted from time to time (6) Does the company V (6) To protect customer interest, the Company has set up various communication channels (6) No deviations establish any consumer such as 24-hour toll-free customer service hotline, e-mail, and Stakeholders page on the protection mechanisms company's website. In addition, subsidiary CTBC Bank has established customer care and complaint procedures management practices, including the Voice of Customer (VOC) mechanism and customer regarding R&D, purchasing, complaint improvement plan to ensure customer satisfaction and protect customer production, operation and interest. service?

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35 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo deviation Deviation from from Deviation and reasons for for and reasons for TWSE/TPEx for listed companies listed companies Corporate Social Practice Principles Practice Principles Responsibility Best Responsibility (7)No deviations (8)No deviations (9)No deviations deviations No Summary Operations 34 suppliers to sign a commitment to business Ethics, employee rights and assistance, rights and assistance, employee to business Ethics, suppliers to sign a commitment single transaction that any executing and other issues before protection environmental above. amounts to NTD 1 million or Social Responsibility Best Practice Principles. with the Financial Holding Company Act, the Banking Act, and related regulations, and regulations, and related Act, the Banking Act, with the Financial Holding Company system. implements a strict internal control (8) The Company has implemented a "Supplier CSR Advocacy Policy" since 2012 that required 2012 that required since Policy" Advocacy has implemented a "Supplier CSR The Company (8) and implemented this content in the Corporate announced, has revised, The Company (9) (7) The Company conducts marketing and labeling of products and services and labeling of products accordance in conducts marketing The Company (7) The Company has designated a CSR page where we describe our principles and policies policies and principles our describe we where page CSR a designated has Company The to adequately versions in electronic CSR reports provide we In addition, pertaining to CSR. The dimensions. environmental and social, efforts our disclose in economic, practices and of CTBC Holding and on the Market on the website available are and e-book CSR reports our to distributed are reports CSR Moreover, access. public Observationfor System Post are we Meanwhile, as our peers and advanced industries. well as Taiwan, bank branches across CSR-related and meetings where to attend various types of sustainability forums also invited among industry shared experts.experiences are No V V V V Yes Evaluation item Evaluation the company and its the company major suppliers include termination clauses which once come into force the suppliers breach the corporate social policy and responsibility cause significant impact and on the environment society? the records of suppliers' the records impact on the environment doing and society before business with the supplier? comply with applicable with applicable comply and regulations, laws, international guidelines in and labeling the marketing and services?of products html. sustainability performance, sustainable management, human capital development, environmental sustainability, and social investment. Through CSR reports, we we reports, CSR Through investment. and social sustainability, environmental development, human capital management, sustainable sustainability performance, them with the best care. and the public and provide shareholders, customers, including employees, to all our stakeholders, hope to fulfill our responsibilities (9) Do the contracts between Do the contracts between (9) (8) Has the company evaluated evaluated Has the company (8) (7) Does the Company Does the Company (7) (2) Please refer to the CSR page on the Company's website for information regarding our CSR implementation status http://www.ctbcholding.com/care_index. our CSR implementation regarding information for website to the CSR page on the Company's Please refer (2) (1) The Company published its first CSR report in 2007. This year marks the 10th year of the report. The content of the report covers CSR performance, CSR performance, covers The content of the report of the report. marks the 10th year This year in 2007. published its first CSR report The Company (1) disclosure Has the company Has the company disclosure and reliable relevant disclosed on its CSR information and at the Market website Observation System? Post No deviations. the principles and their implementation: between discrepancy please describe any Listed Companies", verified the materiality, inclusiveness, and responsiveness of this report based on the AA1000 guaranteed standards and GRI G4 guidelines. The disclosed contents contents disclosed The guidelines. G4 GRI and standards guaranteed AA1000 the on based report this of responsiveness and inclusiveness, materiality, the verified in the GRI G4 guidelines. options provided complied with the core 6. 6. practices: corporate social responsibility Other important to facilitate a better understanding of the company's information 4. 4. Enhancing information TWSE/TPEx for principles based on "Corporate Social Responsibility Best Practice Principles 5. has established the corporate social responsibility If the Company 7. If the corporate social responsibility reports have received assurance from external certification institutions, they should state so below: they external certification institutions, assurance from received 7. have reports If the corporate social responsibility which April 2016, in organization, a third-party verification Institution (BSI), the British Standards by has been verified CSR report recent most The Company's

Corporate Governance Report (3) Implementation of Business Integrity Management Deviation from Operations "Ethical Corporate Management Best Practice Principles Evaluation item for TWSE/TPEx Yes No Summary Listed Companies" and reasons for deviation 1. Establishment of integrity policies and solutions (1) Has the Company stated V (1) The Company has CTBC Financial Holding Ethical Corporate Management Best Practice (1) No deviations in its Memorandum or Principles, in which the Board of Directors and management levels are required to commit external correspondence to complying with the principles. about the policies and practices it has to maintain business integrity? Are the Board of Directors and the management committed in fulfilling this commitment? (2) Does the Company have V (2) The Company forbids dishonest conduct; the measures against such conduct are specified (2) No deviations any measures against in Employee Code of Conduct, Code of Ethical Conduct (for directors and managers), and dishonest conducts? Are guidelines to the operating procedure and practices of integrity management. Every half these measures supported year, the Company examines any violations of integrity management in the organization. by proper procedures, Personnel specializing in corporate governance, legal affairs, legal compliance, risk behavioral guidelines, management, audit, international country management office , and human resource hold disciplinary actions and meetings to discuss about violations of integrity management. The meeting outcomes are complaint systems? then presented to the Board of Directors and disclosed on the Company's website. (3) Has the Company V (3) The Company business operations have a strict internal control and risk management (3) No deviations taken steps to prevent mechanism. In addition to conducting business activities in accordance with regulations occurrences listed in of competent authorities, the Company has assembled legal compliance, audit, and risk Paragraph 2, Article 7 management units to ensure strict monitoring of business activities. The aforementioned of "Ethical Corporate prevention measures also stipulate anti-bribery regulations, conflicts of interest, and Management Best Practice provision or acceptance of improper benefits to ensure corporate ethical management. Principles for TWSE/TPEx Listed Companies" or business conduct that are prone to integrity risks?

34 35 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

37 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo deviation Deviation from from Deviation and reasons for for and reasons for TWSE/TPEx for Management Best Management Practice Principles Practice Principles "Ethical Corporate "Ethical Listed Companies" Listed Companies" (1) No deviations (2) No deviations (3) No deviations Summary Operations 36 business activities, and has formulated agreement management policies, which require which require management policies, agreement and has formulated business activities, the rights, ensure affairs unit in advance to legal by transacting parties to be reviewed other customers or suppliers, The contract signed with agents, and legitimacy. obligations, business-transacting parties management policy and include compliance with integrity in dishonest involved counterparties when effectuated termination clauses which is are conduct. the example, For of their business activity. with the nature management in accordance and of accounting systems, implementation the effective finance department ensures to attend integrity management department designates employees the human resource unit affiliated with instructs the corporate governance the Company Additionally, courses. and integrity management regulations charge in formulating take the Chairman's office to the implementation inspect units to six months with related meetings every convening The implementation status of integrity status of integrity management principles. Audit Committee submitted to the are management and integrity management reports of Directors. and Board Meetings (for of Directors Board for Procedure included in the Regulations Governing the and guidelines to employees) Code of Conduct (for and the Employee directors) These policies and regulations and practices of integrity management. operating procedure implemented. been effectively have director If any of conflicts of interest. recusal director Meetings specifies the policy for to any party with respect is an interested a director by or a juristic person represented of the company, the interests to prejudice is likely and when the relationship agenda item, not participate in questions but may or answer his/her opinions express may the director during discussion shall enter recusal and further, on that agenda item, discussion or voting voting to exercise proxy act as another director's not on that item and may and voting rights on that matter. or cause a conflict influence their job performance situations that may for awareness personal action or pecuniary any advantage that might conflict with avoid of interest, of the benefit or for personal gains for abuse of power and prevent interest, company others. (1) The Company avoids transacting with parties with record of dishonest conduct in its transacting with parties with record avoids The Company (1) the implementation of integrity units to promote has designated related The Company (2) which are conflict of interest, that prevent has policies and regulations The Company (3) of Directors Board for Procedure Article Regulations Governing 16 of the Company's to maintain employees requires the Company of Conduct, Code In the Employee No V V V Yes Evaluation item Evaluation any policy that prevents policy that prevents any and conflict of interest, channels that facilitate of conflicting the report interests? a unit that specializes (or in business is involved) integrity? Does this unit to the its progress report on a of Directors Board basis? regular evaluate the integrity of evaluate all counterparties it has business relationships any there Are with? integrity clauses in the it signs with agreements business partners? (3) Does the Company have have Does the Company (3) (2) Does the Company have have Does the Company (2) corporate management Does the Company (1) 2. 2. Implementation of ethical

Corporate Governance Report Deviation from Operations "Ethical Corporate Management Best Practice Principles Evaluation item for TWSE/TPEx Yes No Summary Listed Companies" and reasons for deviation (4) Has the Company V (4) The Company's accounting system is based on the Generally Accepted Accounting (4) No deviations implemented effective Principle, and the internal control system is developed in accordance with the accounting and internal Implementation Rules of Internal Audit and Internal Control System of Financial Holding control systems for the Companies and Banking Industries, for the purpose of promoting sound corporate purpose of maintaining management and ensuring effective operational efficiency, reliability, and regulatory business integrity? Are compliance of reporting. The audit unit also examines the design of its internal control these systems reviewed system and effectiveness of its implementation through an internal auditing system and by internal or external self-auditing system. auditors on a regular basis? (5) Does the Company V (5) The Company designates its corporate governance unit to produce educational materials (5) No deviations organize internal or on integrity management and regularly provides training to directors and employees. For external training on a newly elected directors or new employees, educational materials on integrity management regular basis to maintain are given to directors when they take office, and training programs for new employees business integrity? are also included in the integrity management training. Furthermore, the Company's legal compliance department compiles a summary of legal cases on a monthly basis and announces it on the company's internal information network for employees. Every six months, it announces cases involving violation of integrity management regulations on the Company's website to provide a reference for employees. 3. Operation of whistleblowing system (1) Does the Company V (1) The Company has set up a Whistleblowing System on its website to encourage employees (1)No deviations provide incentives and to take the initiative to report conducts violating legal regulations or the Company's Code means for employees of Ethical Conduct to the Board of Directors, managers, internal auditing supervisors, or to report malpractices? other suitable personnel, and to provide sufficient information that facilitates subsequent Does the Company assign handling by the Company. All filed reports are handled by designated personnel. dedicated personnel to investigate the reported malpractices? (2) Has the Company V (2) The Company has incorporated standard procedures and confidentiality measures for (2)No deviations implemented any handling dishonest conduct by company employees in the Ethical Corporate Management standard procedures or Best Practice Principles. The Company assigns designated personnel to investigate the confidentiality measures reported cases and maintains confidentiality over the handling process and related for handling reported information. The accused is granted the opportunity to provide clarifications during the malpractices? investigation. Whistleblowers and investigators are subjected to protection. If an employee is confirmed as involving in conducts that violate the principles of integrity management, he/she shall be penalized in accordance with related regulations. (3) Has the Company V (3) The Company has established opening reporting and complaint channels, and all cases are (3)No deviations provided proper handled in a confidential manner to protect the complainants from unfair retribution and whistleblower protection? treatment for having the courage to report improper conducts or provide constructive advice.

36 37 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

39 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo deviation Deviation from from Deviation and reasons for for and reasons for TWSE/TPEx for Management Best Management Practice Principles Practice Principles "Ethical Corporate "Ethical Listed Companies" Listed Companies" No deviations No Summary Operations 38 The Company has established websites in both Chinese and English to disclose integrity English to disclose integrity in both Chinese and websites has established The Company the of the nature on Depending information. and regulations management-related irregular an on content the website with updating tasked are units designated information, Principles Practice Corporate Management Best its Ethical also discloses The Company basis. Observation System and announces and Code of Ethical Conduct on the Market Post Stock Exchange Corporation Procedures Taiwan with the in accordance information related of Companies with Listed Securities. of Material Information and Disclosure Verification for No V Yes Management Best Practice Principles for TWSE/TPEx Listed Companies' and reasons for deviation." for TWSE/TPEx Listed Companies' and reasons Management Best Practice Principles for Evaluation item Evaluation disclosed its integrity disclosed principles and progress and onto its website MOPS? corporate management capabilities. In 2016, arrangements were made for all of its directors to attend the course, titled "How do Directors Perform Their Perform Directors do "How titled course, the attend to its directors of all for made were arrangements 2016, In capabilities. management corporate and governance corporate on knowledge professional directors' the improving which facilitates Risks" Legal While Lowering with Law Accordance in Duties integrity management. submits the investigation report to the Audit Committee and Board of Directors, with the hope of providing a reference that serves as a measure of caution servesthat measure a as reference a of providing hope with the of Directors, and Board Audit Committee the to report investigation the submits subsequent improvements. and a basis for company information over the past six months. This is aimed at preventing trading with "bad" suppliers or partners. Before engaging in business transactions, transactions, business in engaging Before partners. or suppliers "bad" with trading preventing at aimed is This months. six past the over information company unethical in involved partnersbusiness-transacting other or are they whether and customers, suppliers, agents, of legitimacy the considers Company the in unethical conducts. involved trading with those conducts to avoid serve as a reporting channel for whistleblowers. serve channel for as a reporting and operation: Holding Companies: disclosure Has the Company (1) 4. The Company regularly arranges for all of its directors to attend corporate governance and integrity management courses that improve their supervisory that improve and integrity management courses and to attend corporate governance all of its directors for arranges regularly 4. The Company 3. The Company also investigates the implementation status of CTBC Holding and its subsidiaries in terms of integrity management every six months and six months and the implementation status of CTBC Holding and its subsidiaries in terms of integrity management every also investigates The Company 3. 2. and bounced their check 2. the records detailing transacting whether partnershave The they requires Company to complete a Qualifications Examination Form, amendment of ethical management rules) and and stakeholders the Company channel for a communication provide to page on the Home page of its website, has set up a Stakeholders The Company 1. Unethical Conduct were formulated. Before the end of June and December every year, the audit, legal affairs, legal compliance, human resource, risk management, risk management, human resource, legal compliance, legal affairs, the audit, year, and December every of June the end Before formulated. Unethical Conduct were and international countrycases of violation of ethical conduct within their scope of duty to the corporate governance notified to submit management office are of Audit Committee and Board to the presented violation of ethical conduct are cases of Subsequently, discussion. compilation and case-by-base unit for Management Best Ethical Corporate of the Company's the content from All operations do not deviate website. and then disclosed on the Company's Directors Practice Principles. TWSE/TPEx Listed Companies", describe any discrepancy between the principles and their implementation: between discrepancy describe any TWSE/TPEx Listed Companies", 4. 4. Enhancing information 6. Other important information to facilitate a better understanding of the Company's implementation of ethical corporate management: (such as review and (such as review 6. management: implementation of ethical corporate Other important to facilitate a better understanding of the Company's information Reporting Guidelines for Ethical Corporate Management Best Practice Principles, to the Ethical Corporate Management Best Practice Principles and In addition 5. Corporate Management Best Practice Principles for with the "Ethical 5. has established Ethical Corporate Management Principles in accordance If the Company (4) Other significant information which the may improve understanding (4) of corporate governance at http://ir.ctbcholding.com/c/gov_practice.php#c2. Please visit CTBC Holding website Financial Principles for the Corporate Governance by as required be disclosed must Item that (5) at http://ir.ctbcholding.com/c/gov_practice.php#c2. Please visit CTBC Holding website Note 1: A summary must be provided regardless of whether a "Yes" or "No" is selected for Operations. or "No" is selected for of whether a "Yes" regardless A summary be provided must Note 1: ‘Ethical Corporate from "Deviation to complete the column, not required financial holding companies are Non-listed/OTC Note 2:

Corporate Governance Report Internal Control Statement

To: Financial Supervisory Commission,

On behalf of CTBC Financial Holding Co., Ltd., we hereby certify that for the ﬁscal year of 2016, the company has duly complied with the "Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries" in establishing its internal control system, implementing risk management mechanism, designating an independent audit department to conduct audits, and regularly reporting to the company's Board of Directors and the Audit Committee.

After prudent evaluation, we hereby certify that except items listed on attachments, the company complies with all related laws and regulations, and the internal controls are effectively in place. This statement will be included in the company's annual report and public prospectuses, and be disclosed to the public.

We understand that we are legally bound to the Article 20, 32, 171, and 174 of the Securities and Exchange Act. Sincerely yours,

Chairman

President

General Auditor

Chief Compliance Ofﬁcer

38 39 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

41 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Date Target Target Completion The Bank had filed an administrative appeal against the administrative (case fine. pending) Completed. As of 12/31/2016 Corrective Actions Corrective procedures to prohibit any recommendation recommendation any to prohibit procedures company to mislead customers on offshore agent as formation establishment as well of and to enhance verification referral, Moreover, customers' financial information. will the customer's risk tolerance capacity into high consideration prior to be taken limits. of trading approval and requested the code of conduct, revised staff to sign up the code. the relevant CTBC Bank had revised the KYC procedure the KYC procedure CTBC Bank had revised mechanism for and established control in public tender offers the aforesaid proceeding promulgated. regulation line with new (1) CTBC Bank had refined the relevant control control the relevant CTBC Bank had refined (1) CTBC Bank had conducted staff training, (2) 40 Issues for Improvement Issues for in preparing their financial reports. Besides, trading Besides, their financial reports. in preparing over verification without proper approved limits were customers' financial information. the establishment of offshore company and referring and referring company the establishment of offshore over the control Further, agent to customers. formation authenticity was not company of offshore verification implemented properly. (2) Some employees were found to assist customers found were Some employees (2) fine of NTD 6 million and FSC imposed an administrative In addition, letter against CTBC Bank. issued a reprimand contracts of to cease selling new CTBC Bank was requested products) (including structured exchange derivatives foreign institutional to counterparties professional except for and stop- corporate investors high net worth investors, until the completion of It will not be lifted loss transactions. FSC. by actions recognized rectification CTBC Bank to suspend public CTBC Bank and ordered 3 months. business for related tender offer scope examination on customer onboarding of Offshore of Offshore customer onboarding scope examination on CTBC Bank in 2016 and noted the Banking Unit (OBU) of ： major deficiencies following in recommending involved found were Certain(1) employees Bank's that CTBC FSC found public tender offer. company's was not offeror for customer (KYC) procedure your know to identify the control and it lacked implemented properly, public tender offers. of under proceeding offeror fine of NTD 3 million on FSC imposed an administrative 1. 1. SupervisoryFinancial conducted a limited- Commission (FSC) 2. certainCTBC Bank served as a mandated institution for CTBC Financial Holding Co., Ltd. Co., Holding CTBC Financial Statement Internal Control Actions for Issues and Corrective

Corporate Governance Report Target Issues for Improvement Corrective Actions Completion Date 3. CTBC Insurance Brokers Co., Ltd. was found to conduct CTBC Bank had revised operating procedures Completed. improper identification of beneficial owners of certain and reiterated related requirements. corporate accounts and verification on customer product suitability. As a result, FSC imposed an administrative fine of NTD 600 thousand and requested CTBC Bank to complete the rectification within 1 month. (This case occurred prior to the date of the merger of CTBC Insurance Brokers by CTBC Bank on November 30, 2015.) 4. It was found that irrelevant customers' information on trust CTBC Bank had enhanced the system function Completed. asset statements was mistakenly sent out by CTBC Bank. to ensure data accuracy. Hence, FSC issued a reprimand letter against CTBC Bank. 5. The CTBC Bank's treasury marketing business was found CTBC Bank had conducted staff training Completed. with unclear disclosure of adverse scenario to customers, and enhanced operating procedures on risk inadequate assessment on customers' risk tolerance capacity, disclosure and customer identity verification. improper implementation of customer identity verification, and misconduct involving staff's signing up transaction confirmations for a customer. As a consequence, a reprimand was imposed on CTBC Bank. 6. FSC issued a reprimand letter against CTBC Bank due CTBC Bank claims this nonperforming loan Completed. to improper implementation of credit investigation and through legal process in order to protect verification of transaction authenticity to corporate loans of Bank's interests. In addition, CTBC Bank had certain group company. strengthened controls over credit investigation and enhanced staff training.

40 41 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

43 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Date Target Target Completion Completed. Completed. Corrective Actions Corrective the modification by system. the modification by system. in the had been entered implemented. channel to sell this type of products. channel to sell this type bonds classified as the foreign In addition, been have market bonds with no active included in the list of stop-loss notice. the bonds with no active Furthermore, risk been included in market have market monitoring. had business management fee direct And, assets in ROI segment been deducted from calculation. (6) The processes had been amended to review to review had been amended The processes (6) parties certain of The information interested (7) related and reinforced had revised Life Taiwan procedures. (4) Sales documentation had been modified. (4) and had been revised procedures Relevant (5) (1) Taiwan Life had stopped Bancassurance had stopped Life Taiwan (1) such bonds. had re-classified Life Taiwan (2) revised. had been The calculation of ROI (3) 42 Issues for Improvement Issues for single premium insurance products exceeded the insurance products single premium charge received. additional and bonds assets classified as both available-for-sale were some Besides, at the same time. market with no active market no active bonds classified as bonds with foreign Moreover, notice. stop-loss of the list in included not were bonds with no risk monitoring did not cover market market. active rates of interest-sensitive interest in setting the declared in used was inconsistent with the ROI insurance products the Also, rates. of interest degree the deviation reviewing calculation of segment assets did not deduct direct ROI with related in accordance business management fee regulation. warnings with eye-catching the relevant did not reveal fonts. with not comply did review transaction rate reasonability regulation. related did not collection address or premium address residential with regulation. comply in the system. properly recorded FSC imposed an administrative fine of NTD 3 million and FSC imposed an administrative Life. Taiwan letter against issued a reprimand for Insurance Enterprises in Making Loans to and Other for Party or Same Interested with Same Person, Transactions estate in real Affiliated Enterprise" when investing Same FSC imposed an administrative As a result, superficies in 2015. fine of NTD 1.8 million. 2015 and noted the following major deficiencies： 2015 and noted the following interest-sensitive paid for The commission and reward (1) that some bonds on certainIt was found cut-off date (2) of segment assets used (ROI) on investment The return (3) The sales documentation of the non-participating(4) policy and the of security investments The stop-loss control (5) The inspection scope on modification of customers' (6) parties of certainThe information was not interested (7) 8. with "Regulations did not comply and CTBC Life Life 8. Taiwan 7. FSC conducted a full-scope examination on Taiwan Life in Life Taiwan 7. on FSC conducted a full-scope examination

Corporate Governance Report Target Issues for Improvement Corrective Actions Completion Date 9. FSC conducted a full-scope examination on CTBC Life in (1)∼(6) 2015 and noted the following major deficiencies： Completed. (1) It was found that the counterparty was not eligible for (1) The agreement had expired. Taiwan Life will (7) Taiwan certain financial derivative transaction. comply with regulation thereafter. Life will (2) The use of insurer's funds in special projects has neither (2) Relevant procedures had been revised and keep inspect been assessed nor reported properly to the Board of implemented. the unpaid Directors. payment of (3) The invested exchange trade note in foreign stock (3) The exchange trade note had been sold out customers' exchange was not a legally qualified investment subject. and relevant control procedures have been accounts amended. payable. (4) When conducting financial underwriting, CTBC Life (4) The insurance underwriters had been did not collect sufficient financial documents, establish required to comply with relevant financial inspection mechanism to those customers with significant underwriting procedures. The relevant changes of household income in short term, and reinforce inspection mechanism had been established the improvement plan reported to FSC. to report significant changes of household income in short term. (5) The sales pitch of telemarketing was not appropriate. (5) Taiwan Life had conducted staff training and reiterated regulation. (6) The customers' risk attribution and the relevant invested (6) Taiwan Life modified "invest-link product subjects did not comply with internal procedure. customers' questionnaire" and completed system control mechanism. (7) CTBC Life did not establish periodic inspection (7) Taiwan Life had established periodic mechanism prior to notification of customers' accounts inspection mechanism prior to notification payable. Besides, CTBC Life did not proactively notify the and enhanced internal communication customers of the unclaimed payment. processes. (8) The terms and conditions of the insurance policy did not (8) The policy had been modified with eye- reveal the relevant warnings with eye-catching fonts. catching fonts. (9) The mandatory information of investment-linked products (9) Taiwan Life had updated relevant documents was not disclosed in accordance with relevant regulation. and established a checklist to strengthen review processes on information disclosure. (10) The account management of interest-sensitive segment (10) Taiwan Life had enhanced the account assets did not comply with relevant regulation. management to comply with regulation onward. (11) The control management procedure of contract (11) Taiwan Life had established relevant conversion did not properly comply with regulation. control procedures. (12) The credit underwriting and approval process of (12) Taiwan Life had established "Loan Review medium-term loans were not conducted properly. Committee" to enhance the review processes.

42 43 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

45 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Date Target Target Completion Completed. Completed. CTBC Securities had filed an administrative appeal against the administrative reprimand. (case pending) Note Unit: NTD, in thousands NTD, Unit: Others refer to checklist for capital capital to checklist for Others refer of due to capitalization increase for reports $50, earnings retained and benefits $40, decrease capital project service fee $ report 170, $50 and increase cash capital for $ 47. document printing fee Audit period 2016.1.1~ 2016.12.31 517 Subtotal Corrective Actions Corrective 357 information in accordance with relevant relevant with accordance in information since 2016. regulation Others (13) Taiwan Life had disclosed related had disclosed related Life Taiwan (13) the premium TLG Insurance re-calculated the and enhanced level based on the insured processes. review Taiwan Life refined the standard format of format the standard refined Life Taiwan claim adjusters letter and requested rejection the Besides, requirements. related to follow mechanism of claims system had verification been amended and launched. on the procedures CTBC Securities had revised for process and approval case evaluation KYC, in public tender offers the aforesaid proceeding promulgated. regulation line with new 44 - Human Resources Non-audit fee 160 Business Business registration - Policy Policy design 2,393 Audit fee Issues for Improvement Issues for CPA name CPA Leoufong Yang Leoufong Jeff Chen Jeff report were not disclosed in accordance with the accordance not disclosed in were report regulatory requirement. related procedures for assessing the endorsement of motor the endorsement assessing for procedures related administrative an FSC imposed consequence, a As insurance. fine of NTD 600 thousand. Life Life did not quote the applied policy terms in rejection due to verification inappropriate mechanism Further, letters. not did Life Taiwan system, in information embedded with accordance in accurately payment insurance calculate FSC Therefore, imposed an policy administrative terms. fine letter against reprimand a issued and thousand 600 NTD of Life. Taiwan certain company's public tender offer. It was found that the that found was It offer. public tender certaincompany's customer and beneficial owner your know of procedures FSC not implemented properly. were procedures verification ordered CTBC Securities to suspend the financial planning 3 months. and consulting business for 1) firm FSC imposed an administrative fine of NTD 4.8 million, 4.8 million, fine of NTD FSC imposed an administrative and cease Life, Taiwan against letter issued a reprimand 2 for telemarketing policies via new selling from Life Taiwan months. (13) Some mandatory in the full-scope internal audit items (13) Name of 10. It was found that TLG Insurance did not comply with with Insurance did not comply TLG that found It was 10. 11. When conducting formality review of claim rejection, Taiwan Taiwan 11. of When claim conducting rejection, formality review 12. CTBC Securities served as a financial consultant for served Securities CTBC for consultant financial a as 12. accounting KPMG 5. CPA information CPA 5. to CPA: of Fees Information (1)

Corporate Governance Report 2) Replacement of accounting firm and the auditing fee for the replacement year decreases from the previous year which requires mandatory disclosure of the auditing fees of the two years and provision of reasons : Not applicable. 3) Audit fee decrease over 15% from the previous year which requires mandatory disclosure of the reduction amount, percentage, and reason : Not applicable.

(2) Changes of CPA: 1) Regarding previous CPA Date of change Approved by the Board of Directors on March 28, 2017 Reason and description of Internal organizational changes within the CPA firm itself change Involved person Describe the termination CPA Appointed person of an appointed person or Contracting parties CPA or refusal to accept Proactive termination of appointment N/A N/A appointment No longer accepts (continue) appointment N/A N/A Evaluation report opinions The auditor has expressed a unqualified opinion. The auditor is not modified in respect of the other than unqualified judicial cases in 2016. opinion in the past 2 years The auditor has expressed a modified unqualified opinion on offshore structured notes case in and reasons 2015. Accounting principle or practice Disclosure of financial report Ye s Dissenting opinion with the Audit scope or steps company Others None V Explanation: None Additional disclosures None

Date of change Approved by the Board of Directors on March 31, 2015 Reason and description of Internal organizational changes within the CPA firm itself change Involved person Describe the termination CPA Appointed person of an appointed person or Contracting parties CPA or refusal to accept Proactive termination of appointment N/A N/A appointment No longer accepts (continue) appointment N/A N/A Evaluation report opinions other than unqualified The auditor has expressed a modified unqualified opinion on offshore structured notes case in opinion in the past 2 years 2013 and 2014. and reasons Accounting principle or practice Disclosure of financial report Ye s Dissenting opinion with the Audit scope or steps company Others None V Explanation: None Additional disclosures None

44 45 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

47 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo KPMG KPMG Jeff Chen, Lin Wu Lin Chen, Jeff 2017 28, on March of Directors Board the by Approved None None Yang Leoufong Chen, Jeff 2015 31, on March of Directors the Board by Approved None None 46 Name of accounting firm Name of accounting firm Name of accounting Reports Documentation Guidelines: Not applicable due to internal organizational changes within the changes within the due to internal organizational Not applicable Reports Documentation Guidelines: firm itself. CPA 3) Response of previous CPA to Articles 10.6.1 and 10.6.2.3 of the Financial Holding Company Annual Annual Articles Company Holding the Financial 10.6.2.3 of 10.6.1 and to CPA previous of Response 3) 2) Regarding current CPA current Regarding 2) had worked for the certifying accounting firm or its affiliated enterprise in the past year: None. the certifying for accounting firm or its affiliated enterprise in the past year: had worked CPA name CPA Date of appointment to relating Items and results accounting methods for specific transactions or accounting principles, opinions in financial reports and consultation of potential CPA Written opinions of succeeding CPA those of previous from different name CPA Date of appointment specific for methods accounting to relating results and Items potential of consultation and principles, accounting transactions or opinions in financial reports Written opinions of succeeding CPA CPA those of previous from different (5) Information of the Chairman, President, financial or accounting Information President, of manager of the the company Chairman, who (5)

Corporate Governance Report IV. Capital Overview

1.Capital and Shares (1) Source of Capital A. Issued Shares As of 04/28/2017 Unit: thousand shares; NT$ thousands Authorized Capital Paid-in Capital Remark Par Month/ Value Amount Amount Year (NT$) Shares (NT$ Shares (NT$ Sources of Capital Other thousands) thousands) A capital decrease of NT$580,000 01/2016 10 23,000,000 230,000,000 18,054,781 180,547,806 thousands due to redeem in full CTBC Note 1 Holding's preferred shares A A capital increase of NT$14,422,090 10/2016 10 23,000,000 230,000,000 19,496,990 194,969,896 thousands due to capitalization of retained Note 2 earnings of Year 2015 Note 1: 2015.12.31- Approved under Letter No. Jin-Guan-Yin-Kung-10400289300. Note 2: 2016.9.12 - Approved by Financial Supervisory Commission R.O.C. (Taiwan).

B. Type of Stock As of 04/28/2017 Unit: thousand shares Authorized Capital Share Type Remarks Issued Shares Un-issued Shares Total Shares Common Shares 19,496,990(Note) 3,503,010 23,000,000 Listed Shares Note: Issued shares include treasury stock 27,168 thousand shares.

(2) Shareholders Composition of Common Stocks As of 04/28/2017 Foreign Other Institutional Status of Government Financial Treasury Institutional Investors Individuals Total Shareholders Agencies Institution Stock Investors and Foreigners Number of 7 107 922 1,671 444,528 1 447,236 Shareholders Shareholding 1,271 2,742,775,189 2,988,033,350 7,962,158,568 5,776,853,190 27,168,001 19,496,989,569 (shares) Percentage 0.00% 14.07% 15.33% 40.83% 29.63% 0.14% 100.00%

46 47 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

49 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo As of 04/28/2017 0.78% 0.98% 1.64% 3.75% 2.92% 2.01% 2.65% 3.63% 3.34% 3.03% 0.17% 0.72% 0.49% 0.43% 0.51% 0.47% 72.48% 100.00% Percentage 32,704,620 95,525,837 85,033,832 99,410,370 91,707,175 151,343,981 191,108,748 319,577,787 731,045,135 568,416,834 392,669,488 516,381,031 706,909,383 652,271,331 590,826,899 141,165,412 14,130,891,706 19,496,989,569 Shareholding (Shares) Shareholding 48 73 57 59 48 169 277 653 129 609 4,793 2,137 40,499 16,205 13,401 10,229 204,073 153,825 447,236 Number of Shareholders 999 20,000 30,000 50,000 10,000 800,000 100,000 200,000 400,000 600,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1 (Unit : Share) (Unit : 1,000 10,001 20,001 30,001 50,001 Class of Shareholding Class of Shareholding 800,001 600,001 100,001 200,001 400,001 1,000,001 1,200,001 1,400,001 1,600,001 1,800,001 2,000,001UP Total (3) Common Shares (The par value for each share is NT$10) each share value for (The par Shares Common (3)

Capital Overview (4) Major shareholders (The par value for each share is NT$10) As of 04/28/2017 Shareholding Holding Shares Percentage (shares) Yi Kao Investment Co., Ltd. 563,580,574 2.89%

Mega International Commercial Bank Co., Ltd. Acting as Custodian for the Investment 507,260,455 2.60% Account of Morgan Stanley Formosa Holdings (Cayman) Limited

Cathay Life Insurance Co., Ltd. 503,721,368 2.58%

China Life Insurance Co., Ltd. 432,327,303 2.22%

Government of Singapore 330,852,851 1.70%

Chuan Wei Investment Co., Ltd. 313,835,344 1.61%

CTBC Bank Trust Account for CTBC Financial Holding Employee Welfare Savings 303,888,357 1.56% Committee

Bank of Taiwan Co.,Ltd. 302,632,426 1.55%

Vanguard Emerging Markets Stock Index Fund, A Series Of Vanguard International Equity 302,069,635 1.55% Index Funds

Jeffrey L.S. Koo 278,012,199 1.43%

(5) Market Price, Net Worth, Earnings, and Dividends per share Year 01/01/2017- 2015 2016 Items 04/28/2017 Before Adjustment 24.80 19.70 19.25 Highest Market Price After Adjustment 21.24 18.24 -

Market Price per Share Before Adjustment 16.05 14.50 17.5 Lowest Market Price (Note 1) After Adjustment 14.86 13.43 -

Before Adjustment 20.44 17.05 18.46 Average Market Price After Adjustment 17.51 15.79 -

Before Distribution 15.39 14.49 41.92(Note6) Net Worth per Share After Distribution 13.50 Note 2 Not Applicable

Weighted-average Shares (thousand shares) 18,162,921 19,469,822 19,469,822(Note6)

Earnings per Share Before Adjustment 2.10 1.43 0.52(Note6) Earnings Per Share (Note 1) After Adjustment 1.95 Note2 Not applicable

48 49 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

51 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo ------04/28/2017 01/01/2017- - (Note2) (Note2) (Note2) (Note2) (Note2) (Note2) (Note2) 2016 - - 0.81 0.75 0.80 8.98 23.35 4.28% 2015 Year 50 ） After Adjustment After Before Adjustment Before Dividends from Retained Dividends from Earnings Dividends from Capital Surplus Capital Dividends from Stock Dividends Cash Dividends (Note 1) Cash Dividends (Note Price / Earnings Ratio (Note 3) Price / Earnings Ratio (Note Accumulated Undistributed Dividends Accumulated Price / Dividend Ratio (Note 4) Cash Dividend Yield Rate（Note 5 Cash Dividend The Company, aiming to a continued The growth and Company, increase profitability as well as to be in line with the The earnings fiscal of year-end the Company shall be applied to the following uses in payments order: However, plan. the business to according dividend stock and cash on distribution is based The earnings be to 2016 Year for proposal appropriation earnings the approved has Board The 04/28/2017, On NT$0.85 per share and cash of NT$2,920,473 thousand from capital surplus at NT$0.15 per share, share, per NT$0.15 at surplus capital from thousand NT$2,920,473 of cash and share per NT$0.85 per share. cash of NT$1 totally provisions of laws, adopts a residual dividend policy. dividend policy. adopts a residual of laws, provisions of adjustments taxes, per financial and accounting principle, making-up of legal deficit, special reserve, the of 100% to the 30% earnings, if it still has dividends, stock preferred and or reversal, law by reserve earnings retained beginning with the combined be shall applications, above-mentioned the after balance, meeting. a shareholders by subject to approval the shareholders for bonuses dividends and for mentioned The above the cash dividend shall not be less than 10% of the total distributable dividends. the amendment of and by acquisition, investments, needs of operations, for be adjusted, cash dividend may shall but be no proposed by less the if laws, than The Board any, of 1% adjustment, of the total dividends. less are that earnings the retain may Company The Meeting. Shareholders' a by approved and Directors of cash dividend. than NT$0.1 per share meeting as follows: at 2017 shareholders' approved at 2016 Year of earnings retained from NT$16,549,348 thousand of dividend cash that proposed is It A. Dividend policy and status of execution 1) Dividend policy: meeting. shareholders' at the most recent Dividend distributions proposed 2) Dividends per Share Items Return on Investment (6) Dividend Policy and Earnings Distribution Dividend Policy (6) Note 1: Calculation has been retroactively adjusted for the capital increase by earnings. earnings. by increase the capital adjusted for Calculation has been retroactively Note 1: hence non-disclosure. Meeting, General Shareholders' Annual the 2017 by been approved Haven't Note 2: per Share Adjustment) Adjustment) / Earnings (After Price (After Market Average Price / Earnings Ratio = Note 3: Adjustment) per Share (After Adjustment) / Cash Dividends Price (After Market Average Price / Dividend Ratio = Note 4: Adjustment) (After Price Market Average Adjustment) / (After Yield Rate = Cash Dividends per Share Cash Dividend Note 5: CPA. by been reviewed 2017 has not 31, The financial data as of March Note 6:

Capital Overview B. In the event of capital raising or reduction, repurchase of the company's shares, or transfer, conversion or cancellation thereof, ESOP conversion into common shares at the request of employees, or disposal of shares by shareholders, which affects the number of outstanding shares on Record Date, the Board shall be authorized to handle relevant matters.

(7) Impact to 2017 business performance and EPS resulting from the proposal of stock dividend distribution made in the recent shareholders' meeting: There was no announced ﬁnancial forecast for the company in Year 2017, therefore no disclosure of such information is needed.

(8) Information relating to compensation of employees, directors, and supervisors: 1) The percentages or ranges with respect to employee, director, and supervisor compensation, as set forth in the company's articles of incorporation: 0.05% as employee compensation and no more than 0.7% as directors and supervisors compensation. 2) The basis for estimating the amount of employee, director, and supervisor compensation, for calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated ﬁgure, for the current period: Estimation of employee, director, and supervisor compensation in 2016 is recognized as current- period expenses based on the Company's pretax income before deduction of employees, directors, and supervisors compensation at the end of the accounting period multiplied by the percentage set by the Company's articles of incorporation. Differences between the actual amount as resolved by the Board of Directors and the original estimates will be accounted for as changes in accounting estimates and recognized as next year's proﬁt or loss. 3) Information on any approval by the board of directors of distribution of compensation: A. Cash compensation of employee is NT$13,926 thousand and cash compensation of directors is NT$194,959 thousand. B. It is proposed that there will be no employee compensation distributed in the form of stock and the percentage of employee stock compensation over stock dividend distributed from earnings is 0%. C. The discrepancy: a. Accrued expense for employee and director compensation are NT$14,039 thousand and NT$196,551 thousand, respectively. The discrepancy between the actual distribution amount and the accrued expenses for employee and directors compensation are NT$113 thousand and NT$1,592 thousand, respectively. b. Reason: The discrepancy is due to the following reasons: The monthly closing number of pretax income before deduction of employees, directors, and supervisors compensation used to estimate accrued expense is different from the final one provided to the auditor. c. Treatment: The difference would be treated as change in accounting estimates of year 2017.

50 51 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

53 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Explanation The difference is due The difference closing to the monthly of pretax number income used to estimate accrued expense is the audit from different one. (Note 1) Difference NT$237thousand - - - NT$ 3,315 thousand Year 2015 Year 52 Recognized expense Recognized NT$18,066 thousand - - - NT$252,919 thousand Meeting Shareholders' Shareholders' Distributed with the Annual Annual the General the resolution from from the resolution NT$17,829 thousand - - - NT$249,604 thousand indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, and, distributed), shares the of price, stock and monetary amount, shares, of number the of indication or director, employee, the recognized and distribution the actual between discrepancy any is if there it is treated: how and cause, discrepancy, the additionally supervisor compensation, 4) The actual distribution of employee, director, and supervisor compensation for year 2015 (with an an (with 2015 supervisor and year for compensation director, of employee, actual distribution The 4) compensation distributed in the of cash form compensation distributed in the of stock form (1) shares (2) amount (3) stock price and to Directors Supervisors B. Employee Employee B. Compensation C. 1.Distribution status： Employee A. Note 1: The difference would be treated as change in accounting estimates and recognized as proﬁt or loss of year 2016. or loss of year as proﬁt as change in accounting estimates and recognized be treated would The difference Note 1: None Stock: Treasury Buyback of (5)

Capital Overview 2. Bonds, Preferred Shares, Global Depository Receipts, Employee Stock Option and New Restricted Employee Shares (1) Corporate Bonds As of 04/28/2017 Unit: NT$ thousands CTBC Holding 2012-1 CTBC Holding 2015-1 Corporate Bond Type Subordinated Unsecured Senior Unsecured corporate bond Corporate Bond Issue date February 20, 2012 August 3, 2015 Denomination NT$10,000 NT$1,000 Issuing and transaction location Republic of China Republic of China (Note) Market (TPEX listed) Market (TPEX listed) Issue price Issue by denomination Issue by denomination Total price NT$12,000,000 NT$15,000,000 Tranche A:NT$9,600,000 Tranche A:NT$3,200,000 Tranche B:NT$2,400,000 Tranche B:NT$6,300,000 Tranche C:NT$5,500,000 Coupon rate The issue coupon rate of Tranche A is fixed rate The issue coupon rate of Tranche A is fixed at 1.66% per annum. rate at 1.15% per annum. The issue coupon rate of Tranche B is fixed rate The issue coupon rate of Tranche B is fixed at 1.80% per annum. rate at 1.35% per annum. The issue coupon rate of Tranche C is fixed rate at 1.65% per annum. Tenor Tranche A: 7 years Tranche A: 3 years Maturity: February 20, 2019 Maturity: August 3, 2018 Tranche B: 10 years Tranche B: 5 years Maturity: February 20, 2022 Maturity: August 3, 2020 Tranche B: 7 years Maturity: August 3, 2022 Subordinated/Senior Ranking Subordinated Senior Guarantee agency N/A N/A Consignee Mega International Commercial Bank Mega International Commercial Bank Underwriting institution N/A N/A Certified lawyer HSIENDAI LAW OFFICE： TRUE HONESTY INTERNATIONAL LAW Kuo Hui Chi OFFICES： Kuo Hui Chi CPA KPMG: KPMG: Chen Fu Wei、Yang Leou-Fong Chen Chun Kuang、Yang Leou-Fong Repayment method Repayment in lump sum upon maturity Repayment in lump sum upon maturity Outstanding principal NT$12,000,000 NT$15,000,000 Terms of redemption or None None advance repayment

52 53 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

55 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Corporate Bond Senior Unsecured CTBC Holding 2015-1 CTBC Holding No Rating agency: Branch Taiwan Australia Pty Ltd, Fitch Rating date: 2016 September 21, rating: Credit AA＋(twn) (rating of issuer) None None None None Target investors are restricted to professional to professional restricted are investors Target Rules Exchange Taipei as deﬁned in investors Currency of Foreign Management Governing Bonds. Denominated International 54 corporate bond CTBC Holding 2012-1 CTBC Holding Subordinated Unsecured Subordinated Rating agency: Rating agency: Branch Taiwan Australia Pty Ltd, Fitch Rating date: 2016 September 21, rating: Credit A＋(twn)( rating of bond) None None None If the payment of interest or the repayment or the repayment of interest If the payment the bond causes the ﬁnancial of principal for adequacy capital group holding company's requirement, the minimum ratio to fall below or the repayment of interest the payment suspended. of principal shall be temporarily (interests of principal repayment the or Interest and on interest interests be accumulated, may to be of principal rollovers the repayment be paid only calculated at coupon rates) may ratio meets the when the aforementioned requirement. minimum Ye s None Issuance and conversion (exchange or subscription) method As of the printing date of this annual report, converted amount of (exchanged or subscribed) ordinary shares, GDRs or other securities Corporate Bond Type Name of credit rating agency, rating agency, Name of credit rating of corporate rating date, bonds Other rights attached Issuance and conversion, exchange or subscription condition issuing method, and impact on existing dilution, equity shareholders' agent Transfer Restrictive clause Restrictive Whether included as eligible capital

Capital Overview C.Convertible Bonds: None

D.Exchangeable Bonds: None

E.Shelf Registration for Issuing Bonds: None

F.Corporate Bonds with Warrants: None

G.Private placement corporate bonds in the last three years: None

(2) Preferred Shares: None

(3) Global Depository Receipts As of 04/28/2017 Issue date January 11, 2005 Item Issuance and listing Issuance: Europe, Asia and America Listing: Unlisted Total amount Based on the conversion price of ECB and the GDR unit converted

Unit issuing price Based on 20 times the conversion price of ECB

Units issued Based on the GDR unit converted

New common shares issued by the Company Source of securities represented

GDR represent a total of 10,231,300 common shares of the Amount of securities represented company.

54 55 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

57 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo January 11, 2005 January 11, have the right to give instructions to the Depositary for the the Depositary to instructions the give to right the for have exercise of any voting subject rights, to the provisions of the Agreement. Deposit the Agreement the Deposit by depositary facility created receipt such Holder's GDRs and either by represented common shares Holder's the on or, Holder such to shares common such transfer common such sold be to cause or sale the for arrange behalf, the sale, such any from proceeds any of receipt Upon shares. Depositary subject shall, to any restrictions imposed by ROC such any be converted to cause or convert regulations, and law to the such proceeds dollars and distribute any into U.S. proceeds fees, of any or payment after deduction entitled thereto Holders in connection charges incurred or governmental taxes expenses, with such sale. right of dividend the same have GDR holders extent practicable, if year, given any In shareholders. stock with common distribution depository will issue bank dividend, distribute stock company the dividend and to sell stock GDR holders or represent shares new according GDR holders to given will be sale the of proceeds the to original GDR units' apportionment. right with GDR holder has the same pre-emptive practicable, cash. for increases capital of event in the holder shares common them or represents the right to GDR holders, Depositary provides sale, such any from proceeds any of receipt Upon right. sell the to the subject Depositaryto any restrictions imposed shall, by ROC to the Holders. such proceeds distribute any and regulations, law 56 None JPMorgan Chase Bank Subject to the relevant laws and regulations of the and R.O.C. the major rights and obligations of Agreement, GDR holders as Deposit follows: Right 1. Voting still but right, their voting exercise directly cannot GDR holders 2. of Common Shares Withdrawals the from the Depositary request to withdraw holder may A 3. Securities Distributions on Deposited Subject to the provisions of the to Agreement, Deposit the 4. rights Pre-emptive extent the to Agreement, Deposit the of provisions the to Subject Issue date Trustee Depository bank Rights and obligations of GDR holders Item

Capital Overview Issue date January 11, 2005 Item Custodian bank JPMorgan Chase Bank, N.A., Taipei Branch There were 511,565 GDR units outstanding as of 04/28/2017, which Outstanding balance represented 10,231,300 ordinary shares of the company. Except as otherwise provided herein, generally issuing expenses are Treatment of expenses incurred at issuance and thereafter paid by the Company.

Based on the relevant laws and regulations of the R.O.C., the GDR Important conventions about depository and escrow holders have the rights and responsibilities that are stipulated in the agreement Deposit Agreement. Highest Note 2016 Lowest Note Average Note Market price per unit Highest Note Current year to Lowest Note 04/28/2017 Average Note Note 1: There is no reference market price for GDR due to unlisted on any stock exchange. Note 2: The board resolved to terminate of the GDRs program and Deposit Agreement on 11/29/2016. The Termination Date is set on 12/30/2016. In accordance with the Deposit Agreement, the Company shall send written notice to the Depositary and the Custodian for such termination intent. After the expiration of six months from the date so ﬁxed for termination, the Depositary and the Custodian will transfer all remaining outstanding GDRs to common shares, sell the shares and return the proceeds to the GDRs Holders. The termination process is expected to be completed before the end of June, 2017.

(4) Issuance of Employee Stock Option Plan: None.

(5) Issuance of New Restricted Employee Shares: None.

(6) Information of Other Financial Institutions Acquired or Transferred 1. Acquisition or transfer of ﬁnancial institutions in 2016 up to April 18, 2017: Taiwan Life and CTBC Life Insurance are wholly-owned subsidiaries of CTBC Holding. The merger and acquisition of Taiwan Life and CTBC Life was approved by the Board of Directors on October 15, 2015, as an effort to effectively integrate resources, expand life insurance business, and maximize group synergies that lead to an increased economy of scale. CTBC Life and Taiwan Life merged on January 1, 2016, making Taiwan Life a surviving company. The stock exchange ratio was 1.23 CTBC Life's ordinary shares in exchange for each ordinary share of Taiwan Life. The price adequacy opinion of this acquisition was produced by PwC Taiwan, which provided the following evaluation: The stock exchange ratio was evaluated by PwC Taiwan based on the premise that Taiwan Life is the wholly-owned subsidiary of CTBC Holding. Considering the nature of the tangible and consolidated targets of this transaction, PwC evaluates that calculating the stock exchange ratio of this merger and acquisition on the basis of embedded value is reasonable. PwC Taiwan conducted necessary review and evaluation analysis on the ﬁnancial statement , key assumptions of embedded value, calculation results, and relevant information. According to a summary

56 57 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

59 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 58 in Trustwell Securities Investment Trust Co at a purchase price of NT$466 million. In addition, CTBC In addition, million. NT$466 price of purchase at a Co Trust Securities Investment Trustwell in the purchase to 2013 27, March on Directors of Board the of approval the received also Holding at the same Trust Securities Investment Trustwell of interests minority from 1.4% share remaining which Taiwan, PwC by of this acquisition was produced The price adequacy opinion price per share. on the business and conducted necessary review Taiwan "PwC evaluation: the following provided CTBC 13, by Holding using July provided Trustwell financial of and information transaction background as the valuation adopted were analysis value and market Net asset date. record as the evaluation 2012, the basis as using the results Trustwell, by the fair value of the equity controlled method to analyze analysis, and evaluation review to the According price. of the purchase the reasonability evaluating for PwC. by analyzed the equity as fair value of of in the range the acquisition fell price of the purchase price cash at a Trustwell in acquisition of 98.6% stake CTBC Holding's that PwC considers Therefore, NT$466 million is reasonable." value of approximately 2013 to sign a share purchase contract with the Star major Bank Tokyo shareholders on to of Star Bank was approved purchase Tokyo acquisition of The Star Bank at JPY 52 billion. Tokyo in 98.16% stake CTBC Bank In addition meeting. extraordinary CTBC Holding's 2013 at shareholder December 20, remaining the to purchase 2013, on December 26, of Directors of the Board the approval received of total a for share, per price same the at Bank Star Tokyo of interests minority from share 1.84% Bank Star Tokyo of the shares of 100% acquired CTBC Bank Total, In 970 million. JPY approximately adequacy price The billion). NT$15.89 (about billion 52.97 JPY approximately of price purchase a at evaluation: the following which provided Taiwan, PwC by opinion of this acquisition was produced assumptions, method, on the evaluation Taiwan PwC conducted by and analysis "Necessary review share price and the purchase evaluating for adopted factors key other and the valuation, of conclusion Moreover, data. evaluation relevant using by Bank Star Tokyo of acquisition potential the of value to According various and influence evaluated latent analyzed. the risks transaction that price may were the estimated considers Taiwan PwC results, evaluation and review a summary of the aforementioned Star Bank is reasonable." Tokyo acquiring price for transaction price of JPY52 billion as the purchase 2014. January on acquisition completed and 1, Taiwan Manulife of liabilities and assets, matters, the excluding million); (NT$720 Manulife of value overall the on based was price transaction The a Insurance Life CTBC pay to required Manulife million, NT$840 of value the to asset reserved the evaluation between net value in the designated changes the In addition, million. NT$120 of value (1) CTBC Holding was approved by the Board of Directors on August 30, 2012 to acquire 98.6% stake 98.6% stake 2012 to acquire 30, August on of Directors (1) Board the by was approved CTBC Holding 31, October on Directors of Board the by (2) subsidiaryHolding CTBC approved was Bank CTBC operation the handled Insurance Life CTBC 2013, 31, July on Directors of Board the (3) by Approved of the aforementioned review and evaluation results, exchanging 1.23 ordinary shares of Taiwan Life for for Life Taiwan of ordinary 1.23 exchanging shares results, evaluation and review aforementioned the of Article 45 of the to and conforms M&A is reasonable current in the of CTBC Life each ordinary share Non- of Management the ArticleGoverning Regulations the of 4 and Act Company Holding Financial of prohibition PartiesRelated their and Firms Insurance regarding between Transactions Credit-Related than other comparable counterparties. favorable more that are terms offering 2. Merger or acquisition of financial institutions in the last five years: five of financial institutions in the last Merger or acquisition 2.

Capital Overview record date and the settlement date were used the basis for price adjustment. The price adequacy opinion of this acquisition was produced by PwC Taiwan, which provided the following evaluation: "Necessary review and evaluation analysis were conducted by PwC Taiwan on the data source, evaluation method, assumptions, conclusion of the valuation, and other key considerations adopted for determining the purchase price and the embedded value referenced for the potential transaction by using relevant evaluation data. Moreover, valuation method used in the insurance sector in practice was employed to evaluate the purchase price of the potential transaction. PwC considers that having the seller pay NT$122 million based on the evaluation record date and the conclusion drawn for the aforementioned review, and considering the adjusted net value as a reference for estimating the purchase price of the potential transaction are reasonable." (4) CTBC Holding was permitted by the Board of Directors in May 12, 2015 to acquire 100% of the shares of Taiwan Life Insurance Co., Ltd. through share conversion, exchanging 1 ordinary share of Taiwan Life with 1.44 ordinary shares of CTBC Holding (hereafter referred to as the "share exchange ratio"). Because CTBC Holding obtained the approval of the Board of Directors on July 21, 2015, to organize cash dividend and capital increase using earnings, the share exchange ratio was adjusted to 1.6129 using the formula listed in the share conversion contract between both parties. The share conversion was completed on October 15, 2015. The price adequacy opinion of this share conversion was produced by Ernst & Young Taiwan, which provided the following evaluation: "The reasonable range of stock exchange ratio based on the evaluation record date (December 31, 2014) as evaluated by Ernst & Young Taiwan is approximately 1.10–1.56 of CTBC Holding's ordinary shares in exchange for each ordinary share of Taiwan Life. For this transaction, Ernst & Young Taiwan considers that CTBC Holding's use of 1.44 of its ordinary shares in exchange for every ordinary share of Taiwan Life falls within the range as evaluated above. Therefore, this stock exchange ratio is reasonable. CTBC Holding passed the resolution of the Stockholders' meeting on June 29, 2015 to issue ordinary shares at a cash dividend of NT$0.81 per share and at a stock dividend of NT$0.81 per share, distributing a total of NT$1.62 per share. The Board of Directors of CTBC Holding passed a resolution on July 21, 2015, stipulating August 14, 2015 as the record date for capital increase and cash dividend distribution. Following the consideration for the distribution of stock dividend, the reasonable range of stock exchange ratio is approximately 1.23-1.75 of CTBC Holding's ordinary shares in exchange for each ordinary share of Taiwan Life. According to the share conversion contract, CTBC Holding's use of 1.6129 of its ordinary shares in exchange for every ordinary share of Taiwan Life falls within the range as evaluated above. Therefore, this stock exchange ratio is reasonable." 3. Fundamental information of any ﬁnancial institutions that the board of directors had resolved to merge or acquire through new share issuance in 2016 up to April 18, 2017: To expand its business, the Board of Directors approved on March 29, 2016 to sign a memorandum of understanding with LH Financial Group Public Company Limited (LHFG) to acquire 7.545 billion shares privately issued by LHFG at a transaction price of THB 16.6 billion. Following this transaction, CTBC Bank will hold 35.6% of LHFG's shares. The contract for this transaction was signed on June 8, 2016 after CTBC Bank's board meeting. The Board subsequently approved the signing of the ﬁrst supplementary agreement

58 59 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

61 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 60 LH Financial Group Public Company Limited(Note1) Company Public LH Financial Group Head Office: 1 Q.House Lumpini Building, Head Office: South Sathon Road, 5th Floor, Sathon, Thungmahamek, 10120 Bangkok Asavabhokhin Anant Chairman: THB 13,639 million Deposits and loans Deposits and loans THB 212,147 million THB 192,832 million THB 20,316 million Note 2 Note 2 THB 4,366 million(Note 3) THB 2,696 million 0.1977 Total assets Total liabilities Total equity shareholders' Total Operating income Operating margin Operating income (loss) and loss profit Current Earnings per share Name of financial institution with LHFG on December 23, 2016 to extend the contract date of the transaction to September 30, 2017, 2017, 30, to September of the transaction the contract date 2016 to extend with LHFG on December 23, authorities relevant from approval if terminated be to is contract the that stating provision the include and prior to the specified date is This not acquisition obtained. has been approved by the FSC, and will take once completed Settlement will be Thailand. in authorities competent the from approval following effect both parties the competent authorities of obtained. is from approval issue or private placement of securities have not been completed: None. not been completed: issue or private placement of securities have None. yielded the planned benefits: fully yet Address of financial institution Address Legal Representative Paid-in capital Primary scope of business Products Key Financial information the most recent for year (1) For the period as of the quarter preceding the date of printing of the annual report, public public report, annual the of printing of date the quarter the of as period the preceding For (1) not but have years three in most recent completed were that and placements such issues To (2) Note 1: Financial information for the most recent year was the financial statement for December 31, 2016. December 31, was the financial statement for year the most recent for Financial information Note 1: the banking industry. for with local regulations in accordance not differentiated, Operating income and operating margins are Note 2: loss including bad debt expenses. and profit pre-tax in terms of Operating income (loss) was expressed Note 3: Utilization Plans: Implementation of the Capital 3. Basic Information of Other Financial Institutions Acquired or Transferred or Acquired Institutions of Other Financial Basic Information

Capital Overview V. Operational Highlights

1. Business Activities

(1) CTBC Financial Holding Co., Ltd. 1) Business Activities CTBC Holding is a financial holding company; it is entitled to invest in banking, bills financing, credit card, trust, insurance, securities, futures, venture investment, securities investment trust, foreign ﬁnancial institution, and other ﬁnance-related activities approved by the authority. 2) Primary Subsidiaries CTBC Bank, Taiwan Life, CTBC Securities, CTBC Venture Capital, CTBC AMC, CTBC Investments, CTBC Security, and Taiwan Lottery. 3) Revenue Breakdown Unit: NTD million

Revenue Source Amount %

Investment Income Under Equity Method 28,958 99.72 Other Revenue 81 0.28 Total 29,039 100.00

(2) CTBC Bank Co., Ltd. 1) Business Activities A. Institutional Banking a. Commercial Banking: Providing customers with comprehensive, specialized, and cross-border financial services, including loans, trade financing, cash management, corporate trust, proxy services and offshore private banking services such as investment and financial planning. b. Capital Markets: Providing tailored solutions to meet clients' financial requirements. These services include syndication lending, structured finance, and financial advisory services, etc. Offering wide-ranged foreign exchange and derivative products to fulfill clients' hedging or financing needs, and specializing in structured product design and proprietary trading as well. B. Retail Banking a. Wealth Management: Providing target customer groups with financial planning, asset allocation planning and advisory services, as well as acquisition of a variety of financial products. b. Consumer Banking: Providing deposit and withdrawal services, including deposits in NTD and foreign currency and secured lending (including home mortgages, refinancing, installment loans, policy-based loans, and financial planning mortgages)

60 61 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

63 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Unit: NTD million Unit: % 3.74 36.60 42.80 16.86 100.00 62 3,290 32,178 37,630 14,821 87,919 Amount debit cards. services.transaction platform loans, cash management, trade financing, and international trade services; providing tailored tailored providing services; trade international and financing, trade management, cash loans, hedging These services include syndication lending, solutions to meet clients' financial requirements. finance. and structured transaction, of purchasing and planning financial including servicesbanking offering and customers, target to funds and insurance financial products. (a) Credit card: Providing issuing and acquiring services for credit cards, stored value cards, and and value cards, stored acquiring services issuing and cards, credit for Providing (a) card: Credit cross-border and payment, fee third-party, e-wallet, Developing method: payment New (b) Revenue Source Revenue a. servicesa. and payment-related card Credit Lending b. Unsecured loans). loans and revolving term unsecured personal loans (including Extending various unsecured a. institutional service Japan Providing customers and specialized, with cross-border financial comprehensive, including services, service retail b. Japan exchange, currency foreign domestic and and loans, and time deposits, current personal Providing C. C. services payment and card Credit D. business Japan Taiwan Life provides life insurance products. Its products are primarily marketed through banking banking through marketed primarily are products Its products. insurance life provides Life Taiwan to required are Insurance applications means. and direct insurance broker, sales personnel, insurance, underwritten to insurers. are they before procedures approval undergo 1) Business Activities 2) Revenue Breakdown Breakdown Revenue 2) Institutional Banking Retail Banking (Note 2) business Japan Other businesses Total Note 1: Bank consolidated basis. Note 1: services. and payment card Including credit Note 2: Ltd. Insurance Co., Life Taiwan (3)

Operational Highlights 2) Revenue Breakdown Unit: NTD million Revenue Source Amount % Life insurance 234,237 92.80

Health insurance 11,841 4.69

Accident insurance 1,471 0.58

Annuity insurance 4,872 1.93

Total 252,421 100.00

(4) CTBC Securities Co., Ltd. 1) Business Activities A. Underwriting The services mainly involve IPO and M&A counseling for TSEC, GTSM, and Emerging Stock Market listed companies and prospects. The company assists them in raising capital, which in turn provides liquidity to the capital market and accelerates economic development. B. Financial consultation services The company assists local and foreign customers in executing mergers, acquisitions, and sourcing ﬁnanciers, and promotes its expertise as a cross-border ﬁnancial consultant. C. Securities brokerage This service mainly involves executing consigned trade orders of TSEC, GTSM and Emerging Stock Market listed securities, and offering of margin trading services, in addition to money lending in connection with securities business. D. Re-consignment services This service involves executing investors' trade orders for securities listed in U.S. and Hong Kong markets. E. Futures brokerage This service involves accepting investors' trade orders for futures and options. F. Proprietary trading Business activities include securities trading in stock exchange market and over-the-counter, development and underwriting of conditional bond trading services, exchange of convertible/ exchangeable corporate bonds, operation of futures and options in domestic and foreign futures exchange, and other proprietary-related business approved by competent authorities. G. Options issuance Issuance and hedging of call (put) options and callable bull/bear contracts and other authority- approved derivative transactions. H. E-Commerce Planning and designing of e-platform services and manage customer groups that prefer digital sales channel.

62 63 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

65 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Unit: NTD million Unit: Unit: NTD million NTD Unit: % % 3.55 3.83 9.92 17.79 15.48 11.12 19.28 19.03 40.01 40.77 19.22 100.00 100.00 576 501 360 624 616 115 124 321 481 490 231 64 1,202 3,237 Amount Amount Revenue Source Revenue Revenue Source Revenue 2) Breakdown Revenue Market. while 7 local investments were 8 cases and existing investments; were 2 cases whereas investments new hand on 78 cases has now the company with the existing portfolio, Combined investments. foreign were locally, invested been 70% or NT$2.256 billion of which have of $3.237 billion, capital with a total invested summarya is Below the of billion. NT$0.981 or 30% remaining the represent investments while foreign industry: classiﬁed by portfolio, company's

1) Business activities: Seek long-term holdings in companies yet to list on the TSEC or GreTai Securities Securities GreTai TSEC or the to list on long-term Seek holdings in companies yet Business activities: 1) 2) Revenue Breakdown 13 cases were Among which, a sum of NT$712 million. for made 15 investments the company In 2016, Information Technology-Software and Technology-Software Information Hardware Culture and Creativity industry and Creativity Culture Consumer industry Biotech Industry industry Traditional industry energy-saving Green machineryPrecision industry Other industry Total Brokerage Proprietary Underwriting Total (5) CTBC Venture Capital Co., Ltd. Co., Capital Venture CTBC (5)

Operational Highlights (6) CTBC Asset Management Co., Ltd. 1) Business Activities A. Acquisition of debts from financial institutions. B. Sale of debts owned by financial institutions. C. Management of debts owned by financial institutions. D. Evaluation of debts. E. Investment of real estates, chattels, and rights from court auctions. F. Provision of advances for urban renewal projects. G. Acceptance of consignment from CTBC affiliates to rent, sell, or manage and maintain real estates and implementation of urban renewal projects. H. Invest in financial leasing businesses in China. 2) Revenue Breakdown Unit: NTD million Revenue Source Amount % Gain on disposal of non-performing assets 14 2.67

Interest revenue 526 100.19

Other gains/losses (15) -2.86

Total 525 100.00

(7) CTBC Investments Co., Ltd. 1) Business Activities The company's main services include securities investment trust, discretionary investment, foreign agency services, and other business activities approved by the authority. By the end of December 2016, the company had $51.5 billion of assets under management. In future, the company will continue focusing on the design and offering of ﬁxed income products, and market them primarily through custodian banks and channels within the ﬁnancial holding group. 2) Revenue Breakdown Unit: NTD million Revenue Source Amount % Management fee income 228 99.01

Commission income 1 0.65

Other operating income 1 0.34

Total 230 100.00

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67 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 74.3% 25.7% Percentage Unit: NTD million Unit: Unit: NTD million NTD Unit: 35 2.8 9.2 41.2 37.8 % % 10,719 33.33 66.67 100.00 2015.12.31 100.00% 9 26 Employee Count Employee 78.4% 21.6% Percentage 46 37 2.9 9.2 37.8 11,060 2016.12.31 76 152 228 66 1,375 8 29 Amount Amount Employee Count Employee YEAR Graduate School or Higher and College University Revenue Source Revenue Revenue Source Revenue a. a. Banking security services residences. community and business premises, b. Security services buildings, at offi ce A. A. Stationed security issues. prevention and disaster B. safety, fire services consultative on anti-theft, Provides Taiwan Lottery is mainly involved in the issuance, sale, marketing, redemption and management of lotteryof management and redemption marketing, sale, issuance, the in Lottery involved mainly is Taiwan CTBC Bank. for 1) Business Activities: 2) Revenue Breakdown (R&D). and Development Research 1) Business Activities 2) Revenue Breakdown Average Age (Years Old) Age (Years Average (Years) of Employment Tenure Average Education Ltd CTBC Bank Co., Number of Employees Old) Age (Years Average (Years) of Employment Tenure Average CTBC Financial Holding Co., Ltd CTBC Financial Holding Co., Number of Employees Lottery service income Banking security services Total Stationed security at office buildings and communities 2.Human Resources (9) Taiwan Lottery Corporation Taiwan (9) (8) CTBC Security Co., Ltd. Security Co., CTBC (8)

Operational Highlights YEAR 2016.12.31 2015.12.31 Employee Count Percentage Employee Count Percentage Graduate School or Higher 2,431 22% 2,333 21.7% Education University and College 7,788 70.4% 7,445 69.5% Senior High School 783 7.1% 881 8.2% Below Senior High School 58 0.5% 60 0.6% CTBC Securities Co., Ltd Number of Employees 461 477 Average Age (Years Old) 39.2 38.9 Average Tenure of Employment (Years) 7.3 6.6 Employee Count Percentage Employee Count Percentage Graduate School or Higher 105 22.8% 106 22.2% Education University and College 316 68.5% 332 69.6% Senior High School 39 8.5% 37 7.8% Below Senior High School 1 0.2% 2 0.4% CTBC Security Co., Ltd. Number of Employees 360 345 Average Age (Years Old) 39.8 38.9 Average Tenure of Employment (Years) 6.7 6.5 Employee Count Percentage Employee Count Percentage Graduate School or Higher 2 0.6% 2 0.6% Education University and College 175 48.6% 165 47.8% Senior High School 181 50.2% 176 51% Below Senior High School 2 0.6% 2 0.6% Taiwan Lottery Corporation. Number of Employees 207 202 Average Age (Years Old) 38 37.9 Average Tenure of Employment (Years) 7 6.5 Employee Count Percentage Employee Count Percentage Graduate School or Higher 37 17.8% 35 17.3% Education University and College 162 78.3% 158 78.2% Senior High School 8 3.9% 9 4.5% TaiwanLife Insurance Co.,Ltd. Number of Employees 4,044 3,388 Average Age (Years Old) 42.9 43.1 Average Tenure of Employment (Years) 8.9 9.9 Employee Count Percentage Employee Count Percentage Graduate School or Higher 399 9.9% 269 8% Education University and College 2,487 61.5% 1,969 58.1% Senior High School 1,096 27.1% 1,082 31.9% Below Senior High School 62 1.5% 68 2%

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69 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 18% 2.4% 0.5% 35.3% 62.3% 33.3% 66.7% 79.4% 20.6% 14.7% 66.8% Percentage Percentage Percentage Percentage 3 4 85 58 34 2.3 0.7 2.5 38.5 39.5 39.1 1,209 2015.12.31 2 1 2 7 6 30 53 27 178 808 217 Employee Count Employee Employee Count Employee Employee Count Employee Employee Count Employee 1.1% 34.7% 64.2% 38.5% 61.5% 79.4% 20.6% Note1 Note1 Note1 Note1 Percentage Percentage Percentage Percentage 3 39 95 13 34 2.6 0.9 48.1 40.4 Note1 Note1 Note1 2016.12.31 68 1 5 8 7 33 61 27 Note1 Note1 Note1 Note1 Employee Count Employee Employee Count Employee Employee Count Employee Employee Count Employee YEAR Graduate School or Higher and College University Senior High School Graduate School or Higher and College University Graduate School or Higher and College University Graduate School or Higher and College University Senior High School Senior High School Below As an organization committed to sustainable business development, CTBC has long worked to promote to promote CTBC has long worked As an organization committed to sustainable business development, Average Age (Years Old) Age (Years Average (Years) of Employment Tenure Average Education Ltd. Insurance Co., CTBC Life Number of Employees Average Age (Years Old) Age (Years Average Average Tenure of Employment (Years) of Employment Tenure Average Education Ltd Co., Trust CTBC Securities Investment Number of Employees Old) Age (Years Average Average Age (Years Old) Age (Years Average (Years) of Employment Tenure Average Education Ltd. Asset Management Co., CTBC Number of Employees Average Tenure of Employment (Years) of Employment Tenure Average Education CTBC Venture Capital Co., Ltd. Co., Capital Venture CTBC Number of Employees 3.Social Responsibility Note 1: Taiwan Life formally became 100% shareholding subsidiary of CTBC Holding on October 15, 2015, and CTBC Life and Taiwan Life Taiwan and and CTBC Life 2015, subsidiary became 100% shareholding of CTBC Holding on October 15, formally Life Taiwan Note 1: a surviving Life company. Taiwan making 2016, merged on January 1, corporate social responsibility and strengthen its corporate governance, environmental protection endeavors, endeavors, protection environmental its corporate governance, and strengthen corporate social responsibility financial industry's first dedicated Taiwanese CTBC published the in 2007, ago, years Ten and social participation. ISO In we received 50001 another Energyindustry CSR Management In report. first, certification2016, in 2012. industryCTBC became GRI G4 the meeting and reporting integrated of the principles adopting by leaders and widely been efforts CSR long-term have Group's the years, the Over ReportingInternational Guidelines.

Operational Highlights warmly recognized by professional organizations in Taiwan and abroad. In 2016 alone, CTBC was selected to be included in the Morgan Stanley Capital International (MSCI) Global Sustainability Indexes and the Dow Jones Sustainability Indices (DJSI) Emerging Markets Index. Among all the Taiwanese companies included in the MSCI Global Indexes, CTBC was the only ﬁnancial institution in the top 10. Underscoring our top-ranked brand value, we were the only Taiwanese ﬁnancial institution to make the top 100 in the banking brand values report released by Brand Finance, a U.K.-based brand appraisal agency. In the 2016 Best Taiwan Global Brands survey conducted jointly by the Ministry of Economic Affairs' Industrial Development Bureau and Interbrand, CTBC had the most valuable brand in the financial industry in Taiwan. In addition, the Group was ranked in the top 5% of TWSE-listed companies in the Taiwan Stock Exchange's Corporate Governance Evaluation, and CTBC stock has been included in the TWSE Corporate Governance 100 Index as a constituent for two consecutive years. Such recognition represents the concrete result of CTBC's efforts in CSR, corporate governance, and sustainable development.

(1) Sustainable Governance To strengthen corporate governance and enhance business performance, CTBC in 2006 implemented a professional management system, under which the management team, led by the President, is responsible for the performance of the Group, while the Chairman and the Board of Directors oversee the performance of the management team. We also augmented our participation in investor conferences both in Taiwan and internationally to properly disclose operational and financial information. In 2008, the independent director system was introduced and three independent directors from business, legal, and academic communities were appointed to strengthen the expertise and independence of the Board. To reinforce the Board's management and supervisory functions, CTBC established the Audit Committee, the Remuneration Committee and the Risk Management Committee under the Board of Directors in 2009. The following year, the Corporate Governance Officer position was created directly under the Office of the Chairman to assist the Board of Directors in implementing sound corporate governance practices throughout CTBC Holding and its subsidiaries as well as facilitating coordination among these subsidiaries. To uphold the principle of separating management from oversight, the board directors of CTBC Holding and CTBC Bank do not assume any management positions. Through these efforts, we have successfully built a system of clear separation of responsibilities, with "managers in charge of operations, while the Board of Directors is responsible for supervising the management team." In response to our long-term strategic development and to elevate the effectiveness of our corporate governance, an election was held at the end of 2016 for CTBC's entire Board of Directors. Four independent directors were elected to the seven-member Board, demonstrating CTBC's adherence to the principle of separation between oversight and management and making CTBC the first financial institution in Taiwan—and one of the few publicly listed companies, along with businesses such as Taiwan Semiconductor Manufacturing Company—with a majority of independent board directors. The practice set a new standard for corporate governance among financial holding companies. With expertise in various areas, independent directors supervise the management team during major decision-making and support the company to achieve sustainable development. At the end of 2016, we took another significant step to reinforce our overall supervisory mechanism by establishing the Nominating Committee. This body is tasked with developing the standards and qualifications

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71 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 70 To take on more social responsibility, CTBC implemented CSR policies with concrete measures and formed formed and measures concrete CTBC implemented CSR policies with responsibility, social more on take To industry the leads CTBC business only in not development, business sustainable achieving of goal With the Light Up a Life was the ﬁrst charity initiative established by and the as company, such marked the start of can they support adequate opportunities, and given are areas living in remote that when children believe We of those living in that many discovered have we children, with disadvantaged of work our decades Through CTBC years, recent In abuse. drug is areas urban and remote both in children plagues that problem One required of directors and supervisors, evaluating the performance of the Board, and devising training plans for for plans training devising and the Board, of the performance evaluating supervisors, and directors of required directors. next six years the over and was set up in 2011 Taskforce The CSR tasks. to carry out related groups dedicated presidents The Holding. of CTBC the President by which is chaired into the CTBC CSR Committee, developed and attend to invited are directors independent and committee, the of members are subsidiaries CTBC of corporate for responsible groups working furtheris committee The several into separated supervisemeetings. the ensure to sustainability environmental and participation, social care, customer care, employee governance, environmental, of aspects in all CTBC empowers committee The policies. related of implementation thorough stakeholders. of to maximize the interests and endeavors and governance social, Social (2) Care The Taiwan. in and management but also charitable campaigns aiming to eradicate social problems innovation welfare social groundbreaking many launched it has as care in social model role a as recognized been has Group they to where directed of volunteering culture corporate and embedded resources with the Group's programs, needed. most are a by the decades was inspired over to social welfare Our devotion CTBC's commitment to public welfare. compelled felt Sr. Koo Jeffrey founder CTBC Holding in 1985, ago, years Thirty-two children. of love simple fundraising Life initiated the Light Up a and areas living in remote children of in the lives difference a make to disadvantaged with organizations working to social welfare given donations were All the collected campaign. families. and children the which is now Light Up a Life, true time after time by been proven This has the better. for their lives change the public to help disadvantaged for platform visible the most and Taiwan in longest-running charity campaign used been have that billion NT$1.7 exceeding donations raised has it decades, three past the Over children. the for and goodwill trust, underline the public's support, These results 360,000 people. to help approximately campaign. school after loiter outside children of 36% to up areas, these In grandparents. their by raised are areas remote and in which to live with a healthier environment these children provide To supervision. without parental pursue their we dreams, launched the Community The Project in initiative provides 2015. educational support and on outlying in mountainous areas mostly communities, services in remote and nutritional children for The project works islands. by marshalling central and local government resources and leveraging the efforts of MinistryThe of home. second warm and loving a with children provide to public general the and volunteers as a successful model. has praised the program Welfare Health and has observed the CTBC address increasingly inﬂuence this, severe of To such abuse on children's development. the establish to groups foreign professional and institutions, domestic academia, from resources integrated specializing group corporate-sponsored first Taiwan's As in 2015. Foundation Educational Anti-Drug CTBC

Operational Highlights in drug education, the Foundation has served as a crucial drug awareness platform for the government and the public, partnering with government agencies and NGOs worldwide including the justice and education ministries in Taiwan, the Drug Enforcement Administration Educational Foundation in the United States, and the China Narcotics Control Foundation in mainland China. It also holds drug education exhibitions that utilize 3-D interactive technology and documentaries to raise children's awareness of the hazards of drugs. In addition to helping disadvantaged children, CTBC also helps parents start their own businesses to escape poverty. Inspired by the microfinancing concept of Nobel Peace Prize winner Dr. Muhammad Yunus's Grameen Bank, we introduced the first such initiative in Taiwan in 2011 with the CTBC Poverty Alleviation Program (CPAP). Combining our expertise in entrepreneurship counseling, lending, social work, and business planning, CPAP provides microfinancing to help disadvantaged families meet their basic needs and escape poverty. CTBC subsequently introduced the PAP Merchants brand to promote products created through CPAP microloans. Over the past six years, CPAP has provided support for 1,200 would-be entrepreneurs, of whom 166 have so far succeeded in starting up their own businesses. For its work giving disadvantaged children and their families the courage to pursue their dreams, the program won the Excellence Award under the 11th Charity Support Category at the 2015 Corporate Social Responsibility Award Ceremony held by Global Views Monthly, as well as the Taiwan Corporate Sustainability Social Inclusion Award. Also in recent years, we discovered that many children in remote locations have both a passion and a talent for baseball but that this potential often goes unharnessed due to a lack of stable funding and resources. In 2014, CTBC initiated the Rural Youth League Program, which has so far provided funding for 25 youth league baseball teams. CTBC is endeavoring to improve Taiwan's overall competitiveness in baseball—widely considered the national pastime of Taiwan—by supporting both this youth competition as well as the professional league through sponsorship and by organizing tournaments. We are also working to cultivate talented female golfers and sponsor golf tournaments to promote Taiwan to the world through the sport. CTBC firmly believes that education provides people with opportunities to change their lives. In 2015, we made a donation to a college on the brink of closure and transformed it into CTBC Financial Management College. The college is aimed at fostering the development of future financial specialists, offering grants and scholarships to disadvantaged students with outstanding academic performances. Over the past two years, CTBC Financial Management College has achieved 100% student enrollment and has been recognized by the Ministry of Education as an example of a new type of corporate support for education. We have long dedicated a great deal of effort in supporting the arts, such as with the founding of CTBC Foundation for Arts and Culture in 1996. Novel Hall, the performing arts center sponsored by CTBC for 18 years, provided artists with a venue for performing arts, becoming a model example of corporate and cultural arts integration in the process. CTBC also funds performing arts, world-class art exhibitions and performances, and artist exhibitions in the hope of enriching the lives of people through the arts. The CTBC Arts Festival was launched in 2015 with the mission of bringing cultural arts to cities across Taiwan. Our support for artistic and cultural events allows people to experience the arts in more diverse forms than they otherwise could. For instance, CTBC's sponsorship of the local premiere of Ang Lee's 2016 film Billy Lynn's Long Halftime Walk provided people in Taiwan with a unique opportunity to see landmark cinematic artistry. In addition to our efforts to improve society through external arms and means, we have also implemented the Good Deeds Leave program—the first of its kind among financial holding companies—to encourage a culture of volunteering within the Group. Currently, we has over 2,000 volunteers (roughly one in 10 employees), who

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73 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo a clear sign of CTBC's CTBC's of sign clear a 72 it is the spirit of the CTBC brand, in which we care for our our for care we which in brand, CTBC the of spirit the is it Climate change is a tremendous global challenge, and CTBC has taken concrete actions to realize its its realize actions to concrete and CTBC has taken global challenge, is a tremendous Climate change "We are family" is more than a slogan— a than more is family" are "We built have Future," we Green Policy, and "Green development In line with our commitment to sustainable supports that policy green the credit a established has CTBC Principles, Equatorial the of spirit the In increasing attention to and support of the industry. attention to and support of the industry. increasing financial were one institutions We of Taiwanese that the commitment signed first to on the to planet. the CDP (formerly Carbon Disclosure Project) in In 2012. the we same became year, the first financial institution in to Taiwan be granted ISO 50001 Energy Management certification. In CTBC 2015, received both ISO 14001 Environment Management System and ISO 14064-1 Greenhouse Gas Emissions Reporting certification, and in Also CDP—the financial from A- recognition best industry. Taiwan's result the Leadership in year the following Executive the from Award Protection Environmental Enterprise R.O.C. the with honored was CTBC 2016, in have helped more than 60,000 disadvantaged children. CTBC not only encourages its employees to extend their extend to its employees encourages not only CTBC children. disadvantaged 60,000 than more helped have as the basic needs as well meet its employees' To members. them as family for but it also cares to others, love to addition in schemes compensation incentivized and generous provides CTBC self-development, for need various training benefits, and programs, a promotion mechanism superior to those of We also industry peers. Beginning communication. labor-management channels for and transparent equality, gender value human rights, managerial of up 60% make women That training. employee new in covered were issues rights human in 2016, positions and 70% of those recognized annually as model demonstrates employees just how committed we are to nondiscriminatory advancement. career and country, our community across in turn spreads This care do our family. we and clients in the way employees ripples like as in we continue a to pond, expand our efforts in social the five categories of charitable endeavors: to resources company CTBC devotes cultural arts. and education, awareness, drug education, physical welfare, public participation of encouraging cycles with the goal to a better world. and contributing positive creating Environmental (3) Sustainability buildings to and green management, resource carbon reduction, of energyupon the foundations efficiency, with the ultimate consumption, and green sourcing, green action further services, expand our green to green energyand conservation protection the at are environmental of concepts The Earth. the protecting of goal meters of which boasts 29,752 square CTBC Financial Park, headquarters, of the design of the Group's core 28,099 park square area, meters of public and and green space, 264,463 square The meters of gross floor area. techniques is and the largest financial and energy-saving complex incorporates various environmental-protection The building's water facilities, building status. green diamond-level to receive Taiwan institution building in solar while technologies, water-recycling and reclamation rainwater utilize equipment sprinkler and fountains, are also working to shrink our We panels are installed to supply electricity for the financial park's public spaces. energy protection, in environmental meet strict standards that products purchasing by as such footprint, carbon Outstanding the received has Group the result, a As construction. green and conservation, water efficiency, Department of City Government's Taipei from a Private Enterprise award by Purchasing Contribution to Green years. eight consecutive for Protection Environmental energy In and making protection environmental industries. investment and we also financing consider decisions, the Over impact. social and potential environmental with the along issues carbon-related and emissions carbon 20%— by increased industry green the in clients our have customers years, three past

Operational Highlights Yuan's Environmental Protection Administration. In the 50 years since the founding of CTBC, the brand of the Group has been our most important intangible asset. In 2016, CTBC won 167 top domestic and foreign awards recognizing the Group's efforts in business performance, brand image, CSR, and sustainable performance. We also integrated sustainable development as well as environmental, social, and governance issues into our policies and development programs. We will continue to uphold our "We are family" brand spirit, "protect and build" corporate mission, and "caring, professional and trustworthy" brand features in order to promote corporate governance and fulfill our corporate social responsibility. The Group will strive to create value for its customers, employees, shareholders, suppliers, and society as it develops its brand as a "Taiwan Champion and Asia Leader." CTBC also aspires to be the most reliable ﬁnancial institution with the strongest governance for its customers and shareholders. Summary of CTBC's CSR awards and recognition in 2016 ● Selected as a constituent stock of the MSCI Global Sustainability Indexes ● Selected as a constituent stock of the DJSI Emerging Markets Index ● CDP Leadership A- rating ● Corporate Governance Asia: Best CSR ● The Asian Banker: Best Managed Bank in Taiwan ● FinanceAsia: Best Bank in Taiwan ● Global Finance: Best Bank in Taiwan ● Enterprise Asia: Social Empowerment Award ● Global Views Monthly: Corporate Social Responsibility Award ● World Branding Forum: Brand of the Year, banking category ● Ministry of Economic Affairs' Industrial Development Bureau and Interbrand 2016 Best ● Taiwan Global Brands: Fourth place and the only ﬁnancial holding company selected

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75 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo April 28, 2017 2017 April 28, Wen-Chih Lee Wen-Chih Taipei, Taiwan, R.O.C. R.O.C. Taiwan, Taipei, Audit Committee Convener CTBC Financial Holding Co., Ltd. CTBC Financial Holding Co., 74 In accordance with Article 14-4 of Security and Exchange Law and with Article 219 of the Company Act, the Act, ArticleCompany the of 219 with and ArticleLaw Exchange and Security of 14-4 with accordance In VI. Financial Information Financial VI. ReportAudit Committee's The 1. undersigned, have duly examined have and accepted as the undersigned, correct ﬁnancial reports for the year 2016 along with the of CTBC Financial Holding of Directors the Board by distribution plan submitted earnings and report business Ltd. Co.,

Financial Information 2. Independent Auditors' Report

To the Board of Directors of CTBC Financial Holding Co., Ltd.:

Opinion We have audited the consolidated financial statements of CTBC Financial Holding Co., Ltd. and it subsidaries, which comprise the consolidated balance sheet as of December 31, 2016 and 2015, and the consolidated statement of comprehensive income, consolidated statement of changes in stockholders' equity and consolidated statement of cash flows for the year ended December 31, 2016 and 2015, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of CTBC Financial Holding Co., Ltd. and its subsidaries as of December 31, 2016 and 2015, and its consolidated financial performance and its consolidated cash flows for the years then ended December 31, 2016 and 2015 in accordance with the Regulations Governing the Preparation of Financial Reports by Financial Holding Companies, the Regulations Governing the Preparation of Financial Reports by Public Banks, the Regulations Governing the Preparation of Financial Reports by Securities Firms, the Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants, the Regulations Governing the Preparation of Financial Reports by Insurance Companies, International Financial Reporting Standards (IFRS), International Accounting Standard (IAS), interpretations and pronouncements as accepted by Financial Supervisory Commission.

Basis for Opinion We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements of Financial Institutions by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of CTBC Financial Holding Co., Ltd. in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China ("the Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Emphasis of Matter The judicial cases as stated in Note 9(e) are still under investigation by the judiciary, and the results remain uncertain. Our opinion is not modiﬁed in respect of this matter.

Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2016. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 1. Assessment of the fair value of financial instruments Please refer to Note 4 (f) for the related accounting policies of the assessment of the fair value of financial instruments, Note 5 (c) for the accounting assumptions and estimation uncertainty, and Note 6 (au) for the other details. How the matter was addressed in our audit: Parts of the financial instruments owned by CTBC Financial Holding Co., Ltd. and its subsidiaries as of December 31, 2016 were valued via evaluation model due to the lack of public transaction prices, and parts of the referred input values could not be obtained from the public market. Thus, it demands significant professional judgments from the management by using different valuation techniques and assumptions for input values. Therefore, the assessment of fair value of financial instruments is one of the key audit matters. Our principal audit procedures included: testing the management's control procedures over measurement and disclosure of financial instruments, including evaluating how the management chooses the appropriate evaluation method and the prime parameter hypothesis, and confirming that the presentation and disclosure of financial instruments are in accordance with the International Financial Reporting Standards (IFRSs). For financial assets with active market prices, we used sampling test to assess the appropriateness of public quoted prices. As to financial assets using evaluation model to measure their fair value, we used sampling test to confirm the appropriateness of the evaluation method and the prime input values used by the management. 2. Impairment of loans and receivables Please refer to Note 4 (f) for the related accounting policies of impairment of loans and receivables, Note 5 (a) for the accounting assumptions and estimation uncertainty, and Note 6 (g), (h) and (au) for the other details. How the matter was addressed in our audit: The management assessed the impairment of loans and receivables by determining whether there is any observable evidence indicating impairment, and dividing them into collective assessment and individual assessment to measure them by using different impairment methods. For collective assessment, the impairment is calculated by establishing an impairment model and using the past loss experience on assets with similar credit risk characteristic to form basic estimation. For individual assessment, the measurement is based on expected future recoverable cash flows. The aforementioned measurement methods involved significant professional judgments and estimation by the management; therefore, the impairment of loans and receivables is one of the key audit matters.

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77 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 76 assesses and measures the impairment amount of loans and receivables. For collective assessment, we assessed the impairment model model impairment the assessed we assessment, collective For receivables. and loans of amount impairment the measures and assesses of the calculation of the impairment parameters (including probability the appropriateness management and reviewed the adopted by the of appropriateness the assess to test sampling used we assessment, individual For sampling. via rate) recovery and rate default of loans and for assessed whether the allowance we Meanwhile, value amounts and the of collateral. recoverable estimation of future the requirements. meets receivables details. the other and Note 6 (p) for estimation uncertainty, one is impairment goodwill the evaluating Therefore, judgments. professional significant management's the require which flows, cash future audit matters. of the key assessing test; how the management identifies the CGU and the basis and assumptions actual and of forecast past of the results comparing future the calculations; of the accuracy rate and discount cash rate, flows growth of the appropriateness which estimation, include cash flows. future of the method of predicting to assess the appropriateness operating performance liability. of insurance the other details of the provision (ad) for and Note 6 (z) and estimation uncertainty, is premiums unearned of Provision policy. insurance of issuance the upon rate reserve a by calculated is the provision say, to is that claim are reserve claim of assumptions main The risk. undue its and characteristic product's each to according actuaries calculated by cash future the discounted estimating liabilities, of insurance the adequacy evaluate To rates. expected claims and factors development aforementioned The expenses. related and income insurance payments, insurance future the consideration into take should flows evaluation involved the professional judgments of the management which will affect the recognition amount of audit matters. key of insurance liabilities is one of the the provision insurance evaluating liabilities. Therefore, with the in accordance are parameters applied inspecting whether the calculation and and specialists, actuarial our by liabilities performed Also, Actuarial Institute of the Republic of China. the by and code of conduct announced interpretations administrative ordinances, related specification conformirtyin be product should and data assumptions empirical the with actuarial of reasonableness the on assessment the result actuarial the of reasonableness the on estimation the as well as liability, insurance of evaluation of model the build to order in on our understanding of industry the management should be based adopted by and market. the management how on procedures control the methodology understanding related and included: procedures audit Our principal impairment 3. Assessment of goodwill and assumptions accounting the for (b) 5 Note impairment, goodwill of policies accounting related the for (o) 4 Note to refer Please in our audit: the matter was addressed How the estimating unit (CGU) and cashgenerating each of the value in use evaluating by impairment the goodwill assessed The management impairment the goodwill performs the management how of procedures the understanding included: procedures audit Our principal of insurance liability 4. Provision and assumptions accounting the for (e) 5 Note liability, insurance of policies accounting related the for 4 (s) Note to refer Please in our audit: the matter was address How The estimation of insurance liability is The subject assumption to of future uncertainties. life insurance reserve adopts a fixed cost basis, insurance of audit the adopting liabilities, insurance in movements of analysis the reviewing included: procedures audit principal Our the Consolidated Financial Statements for with Governance Those Charged and Responsibilities of Management the with accordance in statements financial consolidated the of presentation fair and the preparation for responsible is Management Preparation the Governing Regulations the ReportsFinancial of Companies, Financial Holding by Preparation the Regulations Governing the Regulations of Financial Reports Securities Firms, by the Preparation Governing the Regulations of Financial Reports Public Banks, by Financial of Preparation the Governing the Regulations Merchants, Commission Financial Reportsof Futures by Preparation the Governing interpretations (IAS), Standard Accounting International Reporting(IFRS), Financial International Standards Reports Companies, Insurance by is determines Supervisory management as Financial by accepted as control internal such for and pronouncements and Commission necessary to enable the of preparation whether consolidated due financial to statements fraud that material from free or are misstatement, error. and its Ltd. assessing CTBC Financial Holding Co., for management is responsible the consolidated financial statements, In preparing concern going the using and concern going to related matters applicable, as disclosing, concern, going a as continue to ability subsidiaries' cease to or subsidiaries its and Ltd. Co., Holding Financial CTBC liquidate to intends either management unless accounting of basis but to do so. alternative or has no realistic operations, its and Ltd. Co., Holding Financial CTBC overseeing for responsible are committee) audit (including with governance charged Those process. subsidiaries' financial reporting Audit of the Consolidated Financial Statements the Auditor's Responsibilities for Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free high level is a assurance Reasonable from material opinion. includes our that report auditor's an issue to and error, or fraud to whether due misstatement, of in the Republic accepted generally standards auditing with the in accordance conducted audit an that guarantee a is not but assurance, of material if, considered and are fraud or error can arise from Misstatements detect a material misstatement when it exists. China will always they individually could or be reasonably in expected the to aggregate, influence the economic decisions of users on taken the basis of these consolidated financial statements.

Financial Information As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: 1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of CTBC Financial Holding Co., Ltd. and it subsidiaries' internal control. 3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 4. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on CTBC Financial Holding Co., Ltd. and its subsidiaries' ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause CTBC Financial Holding Co., Ltd. and it subsidaries to cease to continue as a going concern. 5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within CTBC Financial Holding Co., Ltd. and it subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, performance of the group audit and developing a group audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partners on the audit resulting in this independent auditors' report are Chen, Chun-Kuang and Yang, Leou-Fong.

KPMG

Taipei, Taiwan (Republic of China) March 28, 2017

Notes to Readers The accompanying consolidated financial statements are intended only to present the financial position, financial performance and its cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China. The auditors' report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language auditors' report and financial statements, the Chinese version shall prevail.

76 77 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

79 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo % 100 2 9 3 14 - - 4 - 46 - 5 - 13 1 1 1 - 1 Amount December 31, 2015 December 31, 156,618,285 114,274,285 402,006,003 658,449,447 107,526 12,429,243 167,982,197 2,225,770 2,080,161,690 3,613,292 224,773,310 16,320,924 573,190,852 23,977,131 64,494,739 23,284,911 11,033,621 61,283,528 4,596,226,754

% 4 100 3 5 17 - 1 3 - 44 - 5 - 15 1 1 - - 1 (Expressed In Thousands of New Taiwan Dollars) Taiwan Thousands of New In (Expressed Amount December 31, 2016 December 31, $ 4,839,251,254

195,315,251 $ 128,881,516 265,151,265 808,810,459 416,342 25,510,984 130,315,259 2,377,851 2,112,661,940 3,322,732 216,315,007 17,885,709 739,955,696 47,009,937 60,463,447 23,383,294 10,347,900 51,126,665 78 and (t)) ASSETS TOTAL ASSETS TOTAL Due from Central Bank and call loans to banks(Note 6(b) and 8) and call loans to banks(Note 6(b) and Central Bank Due from 6(c), or loss(Note 4, profit at fair value through Financial assets measured 8 and 9(a)) 6(d) and (t), financial assets-net(Note 4, Available-for-sale financial assets-hedging-net(Note 4 and 6(e)) Derivative 4 and 6(f)) agreements(Note under resell Securities purchased 7 and 8) 6(g) and (i), Receivables-net(Note 4, 4) income tax assets(Note Current and 7) (i), 6(h) and Loans-net(Note 4, Reinsurance assets-net(Note 4 and 6(j)) (t) and 8) 6(k), 4, Held-to-maturity financial assets-net(Note under equity method-net(Note 4 and 6(l)) Investments and 8) (m) and (ad), 6(i) , Other financial assets-net(Note 4, 4 and 6(n)) property-net(Note Investment 6(o)) and equipment-net(Note 4 and Permises 6(p) and 12(o)) Intangible assets-net(Note 4, tax assets(Note 4 and 6(ae)) income Deferred 6(q) and 8) Other assets-net(Note 4, Cash and cash equivalents(Note 4 and 6(a)) Cash and cash equivalents(Note

December 31, 2016 and 2015 December 31, (English Translation of Consolidated Financial Statements and Report of Consolidated Financial Issued in Chinese) Originally Translation (English AND SUBSIDIARIES LTD. HOLDING CO., CTBC FINANCIAL BALANCE SHEETS CONSOLIDATED 3.

11500 12000 12100 12300 12500 13000 13200 13500 13700 14500 15000 15500 18000 18500 19000 19300 19500 11000

Financial Information (Expressed In Thousands of New Taiwan Dollars) December 31, 2016 December 31, 2015 LIABILITIES AND EQUITY Amount % Amount % Liabilities: 21000 Deposits from Central Bank and banks(Note 6(r)) $ 63,498,683 1 45,634,274 1 21500 Due to Central Bank and banks(Note 6(s)) 15,752,488 - 27,925,966 1 22000 Financial liabilities measured at fair value through profit or loss(Note 4 97,582,396 2 133,194,426 3 and 6(c)) 22300 Derivative financial liabilities-hedging-net(Note 4 and 6(e)) 303,599 - 441,428 - 22500 Securities sold under repurchase agreements(Note 4, 6(t) and7) 49,491,084 1 58,259,113 1 22600 Commercial papers payable-net(Note 6(u) and 7) 28,248,099 1 11,693,753 - 23000 Payables(Note 6(v) and 7) 78,876,776 2 69,748,378 2 23200 Current income tax liabilities(Note 4) 2,435,981 - 3,635,535 - 23500 Deposits and remittances(Note 6(w) and 7) 2,748,419,254 57 2,699,802,159 60 24000 Bonds payable(Note 6(c), (e) and (y)) 99,355,898 2 109,220,573 2 24500 Preferred stock liabilities(Note 4 and 6(x)) - - 2,030,000 - 24600 Provisions(Note 4, 6(z), (ac) and (ad)) 1,152,859,490 24 940,212,902 20 25500 Other financial liabilities(Note 4, 6(aa) and (an)) 199,621,926 4 204,158,705 4 29300 Deferred income tax liabilities(Note 4 and 6(ae)) 1,506,995 - 2,196,953 - 29500 Other liabilities(Note 6(ab)) 19,103,166 - 10,478,343 - Total liabilities 4,557,055,835 94 4,318,632,508 94 Stockholders’ equity - parent company: 31100 Capital stock: 31101 Common stock(Note 6(ag)) 194,969,896 4 180,547,806 4 31500 Capital surplus(Note 6(ag)) 36,637,717 1 36,654,760 1 32000 Retained earnings: 32001 Legal reserve 17,674,655 - 14,180,457 - 32003 Special reserve 21,886,995 - 19,692,303 - 32005 Undistributed earnings(Note 6(ah)) 28,249,266 1 34,941,972 1 32500 Other equity interest(Note 6(ag)) (16,728,988 ) - (7,927,403 ) - 32600 Treasury stock(Note 4 and 6(ag)) (582,754 ) - (582,754 ) - 38000 Non-controlling interest 88,632 - 87,105 - Total equity 282,195,419 6 277,594,246 6 TOTAL LIABILITIES AND EQUITY $ 4,839,251,254 100 4,596,226,754 100

78 79 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

81 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo Change % Change (21) - 48 292 87 4 8 7 (12) 27 10 (17) 13 41 (34) 79 116 561 78 (754) (870) (77) 216 (100) 99 167 % 17 (1 ) 102 (1 ) (55 ) (11 ) (26 ) (3 ) (10 ) 37 (14 ) 20 (1 ) 27 12 52 3 - 3 - 1 - - 5 (1 ) 1 2015 Amount 80,541,643 35,402,042 215,571,927 (2,700,000 ) (1,504,991 ) (117,725,465 ) (22,859,226 ) (55,291,150 ) (5,648,279 ) 21,389,532 (29,293,524 ) 41,050,321 (3,138,400 ) 59,152,111 25,551,640 112,736,151 5,720,557 56,469 5,503,314 409 1,079,439 (902,178 ) 74,167 10,229,800 (3,071,131 ) 2,141,179 % (Expressed In Thousands of New Taiwan Dollars) Taiwan Thousands of New In (Expressed 32 9 (1 ) 100 (2 ) (69 ) (7 ) (18 ) (2 ) (6 ) (10 ) 11 (1 ) 26 5 64 4 - 3 - (3 ) - - - - 2 2016 Amount $ 102,274,095 27,932,874 319,671,361 (2,700,000 ) (5,896,362 ) (220,215,855 ) (23,817,840 ) (59,606,969 ) (6,019,301 ) (18,806,920 ) (32,243,135 ) 33,952,175 (3,545,994 ) 83,467,175 16,981,749 202,011,333 12,357,934 373,081 9,773,534 (2,675 ) (8,306,620 ) (204,584 ) 234,639 - (31,378 ) 5,717,173 80

Net revenue 6(i)) benefits expenses(Note 6(aq)) Employee operating expenses Total Net interest income (Note 6(ak)) Net interest Depreciation and amortization 6(ar)) expense(Note Depreciation Other general and administrative expenses(Note 6(at)) Other general and administrative or loss(Note 6(an)) under equity method (Note 6(l)) Provisions for bad debt expenses and guarantee reserve(Note bad debt expenses and guarantee reserve(Note for Provisions Gains on financial assets measured at fair value through profit profit at fair value through Gains on financial assets measured Interest income(Note 6(ak)) income(Note Interest Net changes in insurance liability reserve(Note 6(ap)) Net changes in insurance liability reserve(Note Operating expenses: Operations Continuing from Tax Net Income Before Net income Less:Interest expenses(Note 6(ak)) expenses(Note Less:Interest Income tax expenses (Note 6(ae)) Non-interest income Non-interest Service and commission income (Note 6(al)) fee Net insurance income(Note 6 (am)) Gains on investment properties Gains on investment Realized gains on available-for-sale financial assets(Note 6(ag)) Realized gains on available-for-sale Realized (losses) gains on held-to-maturity financial assets Realized (losses) gains on held-to-maturity Foreign exchange (losses) gains Foreign Impairment loss on assets (Note 6(m)) Proportionate share of gains from associates or joint ventures associates or joint ventures of gains from share Proportionate Gains on disposal of property-assets-held for sale for Gains on disposal of property-assets-held Losses on retirement of assets Losses on retirement Other net non-interest income Other net non-interest Public-welfare lottery payment Public-welfare

41000 For The Years Ended December 31, 2016 and 2015 31, Ended December Years The For (English Translation of Consolidated Financial Statements and Report of Consolidated Financial Issued in Chinese) Originally Translation (English AND SUBSIDIARIES LTD. HOLDING CO., CTBC FINANCIAL INCOME OF COMPREHENSIVE STATEMENTS CONSOLIDATED 4. 58100 58300 58501

51000 58503 61003 58599 49800 49810 49820 49825 49830 49840 49870 49880 49890 49963 49965 49900 58099

Financial Information 2016 2015 Amount % Amount % Change % 69500 Other comprehensive income: 69560 Items that will not be reclassified subsequently to profit or loss 69561 Remeasurement gains (losses) related to defined benefit plans 110,417 - (636,502 ) - 117 69565 Changes in designated as financial liabilities measured at fair value (1,931,883 ) (1 ) 1,150,729 1 (268 ) through profit or loss attributable to credit risk 69563 Proportionate share of other comprehensive losses from (6,470 ) - (2,119 ) - (205 ) associates or joint ventures under the equity method- items that will not be reclassified subsequently to profit or loss 69569 Income tax related to items that will not be reclassified to profit (12,252 ) - 106,941 - (111 ) or loss Subtotal (1,840,188 ) (1 ) 619,049 1 (397 ) 69570 Items that are or may be reclassified subsequently to profit or loss 69571 Exchange differences of overseas subsidiaries’ financial reports (2,942,073 ) (1 ) 1,942,611 1 (251 ) translation 69572 Unrealised valuation losses on available-for-sale financial assets (4,647,311 ) (1 ) (6,427,914 ) (3 ) 28 69575 Proportionate share of other comprehensive (losses) income from (38,448 ) - 112,130 - (134 ) associates or joint ventures under the equity method-items that are or may be reclassified subsequently to profit or loss 69579 Income tax related to items that are or may be reclassified to 755,840 - 1,022,080 - (26 ) profit or loss Subtotal (6,871,992 ) (2 ) (3,351,093 ) (2 ) (105 ) 69500 Other comprehensive losses (net amount after tax) (8,712,180 ) (3 ) (2,732,044 ) (1 ) (219 ) Total comprehensive income $ 19,220,694 6 32,669,998 16 (41 ) Net income attributable to: Parent company $ 27,928,977 9 35,397,576 17 (21 ) Non-controlling interest 3,897 - 4,466 - (13 ) $ 27,932,874 9 35,402,042 17 Comprehensive income attributable to: Parent company $ 19,219,055 6 32,669,531 16 (41 ) Non-controlling interest 1,639 - 467 - 251 $ 19,220,694 6 32,669,998 16 Earnings per share (unit: NT Dollars)(Note 6(AJ)) $ 1.43 1.95

80 81 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 Total equity Total 3,803 28,422,199 ) (582,754 ) (17,043 ) (112 229,439,398 35,402,042 (2,732,044 ) 32,669,998 - - (12,358,398 ) - - 277,594,246 27,932,874 ) (8,712,180 19,220,694 - - (14,602,366 ) - 282,195,419 (112 ) interests Non-controlling Non-controlling - - - - 86,638 4,466 467 (3,999 ) - - - - - 87,105 3,897 1,639 (2,258 ) - - - - 88,632

(Expressed In Thousands of New Taiwan Dollars) Taiwan Thousands of New In (Expressed company equity-parent Stockholders' 3,803 28,422,199 (582,754 ) - (17,043 ) 229,352,760 229,352,760 35,397,576 32,669,531 (2,728,045 ) - - - (12,358,398) - 277,507,141 27,928,977 19,219,055 (8,709,922 ) - - - (14,602,366 ) 282,106,787 stock Treasury Treasury - - (582,754 ) ------(582,754 ) ------(582,754 ) 83 Others ------(1,641 ) 1,641 1,641 ------

or loss ﬁnancial liabilities measured credit risk credit Changes in Changes at fair value designated as proﬁt through attributable to attributable - - - - - 464,012 - 1,150,729 1,150,729 - - - - - 1,614,741 - (1,931,883 ) (1,931,883 ) - - - - (317,142 )

Stockholder's Equity - Parent company - Parent Stockholder's Equity assets Other equity interest losses on Unrealized sale ﬁnancial available-for------(2,731,322 ) (5,196,773 ) (5,196,773 ) ------(7,928,095 ) (4,069,388 ) (4,069,388 ) - - - - (11,997,483 ) ’

reports ﬁnancial Exchange differences translation of overseas

subsidiaries ------(1,614,049 ) (2,800,314 ) (2,800,314 ) - - - - (4,414,363 ) - (3,463,761 ) 1,849,712 1,849,712 - - - - - WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo earnings Undistributed - - 28,249,266 34,864,222 (533,354 ) - - - 91,663 28,020,640 (3,494,198 ) 39,238,646 35,397,576 (3,943,699 ) 34,941,972 27,928,977 (2,194,692 ) (14,602,366 ) (14,422,090 ) (13,484,353 ) (12,358,398 ) 2,983,952 (12,358,398 )

Special reserve - 21,886,995 ------9,191,902 - - - - 19,692,303 - 2,194,692 - - 13,484,353 - - (2,983,952 ) Retained earnings Legal reserve - 17,674,655 - - - - - 3,494,198 - 10,236,758 - 3,943,699 - - 14,180,457 ------82 Capital surplus Capital - 36,637,717 ------(17,043 ) 23,845,351 - - 3,803 12,805,606 36,654,760 ------Capital stock Capital - - - $ 194,969,896 - Common stock - -

- - - - 15,616,593 180,547,806 - $ 152,572,815 - - - 14,422,090 - - 12,358,398 - earnings: earnings: appropriated Legal reserve earnings: earnings: appropriated Legal reserve Special reserve appropriated Special reserve Cash dividends-common stock Stock dividends-common stock Stock dividends-common stock of special reserve Reversal Special reserve appropriated Special reserve Cash dividends-common stock Balance - December 31, 2016 Balance - December 31, Changes in other capital surplus Changes in other capital interests Changes in non-controlling Appropriation and distribution of retained retained and distribution of Appropriation Net income income (losses) Other comprehensive income (losses) comprehensive Total Shares issued for pursuant to acquisitions issued for Shares stock of treasure Repurchase 2015 Balance - December 31, Changes in other capital surplus Changes in other capital Appropriation and distribution of retained and distribution of retained Appropriation Net income (losses) income Other comprehensive income (losses) comprehensive Total Balance - January 1, 2015 Balance - January 1, For The Years Ended December 31, 2016 and 2015 31, Ended December Years The For (English Translation of Consolidated Financial Statements and Report of Consolidated Financial Issued in Chinese) Originally Translation (English AND SUBSIDIARIES LTD. HOLDING CO., CTBC FINANCIAL EQUITY IN STOCKHOLDER'S OF CHANGES STATEMENTS CONSOLIDATED 5.

Financial Information (English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) CTBC FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES 5. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY For The Years Ended December 31, 2016 and 2015 (Expressed In Thousands of New Taiwan Dollars) Stockholder's Equity - Parent company Other equity interest Capital stock Retained earnings Changes in designated as financial Exchange liabilities differences measured of overseas Unrealized at fair value subsidiaries’ losses on through profit financial available-for- or loss Stockholders' Legal Special Undistributed reports sale financial attributable to Treasury equity-parent Non-controlling Common stockCapital surplus reserve reserve earnings translation assets credit risk Others stock company interests Total equity Balance - January 1, 2015 $ 152,572,815 23,845,351 10,236,758 9,191,902 39,238,646 (3,463,761 ) (2,731,322 ) 464,012 (1,641 ) - 229,352,760 86,638 229,439,398 Net income - - - - 35,397,576 - - - - - 35,397,576 4,466 35,402,042 Other comprehensive (losses) income - - - - (533,354 ) 1,849,712 (5,196,773 ) 1,150,729 1,641 - (2,728,045 ) (3,999 ) (2,732,044 ) Total comprehensive income (losses) - - - - 34,864,222 1,849,712 (5,196,773 ) 1,150,729 1,641 - 32,669,531 467 32,669,998 Appropriation and distribution of retained earnings: Legal reserve appropriated - - 3,943,699 - (3,943,699 ) ------Special reserve appropriated - - - 13,484,353 (13,484,353 ) ------Cash dividends-common stock - - - - (12,358,398 ) - - - - - (12,358,398 ) - (12,358,398 ) Stock dividends-common stock 12,358,398 - - - (12,358,398 ) ------Reversal of special reserve - - - (2,983,952 ) 2,983,952 ------Changes in other capital surplus - 3,803 ------3,803 - 3,803 Shares issued for pursuant to acquisitions 15,616,593 12,805,606 ------28,422,199 - 28,422,199 Repurchase of treasure stock ------(582,754 ) (582,754 ) - (582,754 ) Balance - December 31, 2015 180,547,806 36,654,760 14,180,457 19,692,303 34,941,972 (1,614,049 ) (7,928,095 ) 1,614,741 - (582,754 ) 277,507,141 87,105 277,594,246 Net income - - - - 27,928,977 - - - - - 27,928,977 3,897 27,932,874 Other comprehensive income (losses) - - - - 91,663 (2,800,314 ) (4,069,388 ) (1,931,883 ) - - (8,709,922 ) (2,258 ) (8,712,180 ) Total comprehensive income (losses) - - - - 28,020,640 (2,800,314 ) (4,069,388 ) (1,931,883 ) - - 19,219,055 1,639 19,220,694 Appropriation and distribution of retained earnings: Legal reserve appropriated - - 3,494,198 - (3,494,198 ) ------Special reserve appropriated - - - 2,194,692 (2,194,692 ) ------Cash dividends-common stock - - - - (14,602,366 ) - - - - - (14,602,366 ) - (14,602,366 ) Stock dividends-common stock 14,422,090 - - - (14,422,090 ) ------Changes in other capital surplus - (17,043 ) ------(17,043 ) - (17,043 ) Changes in non-controlling interests ------(112 ) (112 ) Balance - December 31, 2016 $ 194,969,896 36,637,717 17,674,655 21,886,995 28,249,266 (4,414,363 ) (11,997,483 ) (317,142 ) - (582,754 ) 282,106,787 88,632 282,195,419

82 83 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

85 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 2015 (10,229,800) 5,312,407 41,050,321 41,050,321 2,072,277 891,486 1,090,866 10,692 1,504,991 177,618 21,389,532 (80,541,643 ) (1,533,922 ) 117,725,465 117,725,465 ) (74,167 ) (11,070 2,352,331 (55,618 ) - 314 889,320 60,971,079

December 31 For the years ended years the For 2016

- (5,507,810 ) $ 33,952,175 33,952,175 $ 2,566,334 117,556 1,173,382 87,028 5,896,362 2,090 2,314,374 18,806,920 (102,274,095 ) (2,939,824 ) 220,215,855 220,215,855 (234,639 ) ) (18,643 32,640 (48,841 ) ) (10,292 138,673,392 (1,505,005 )

(Expressed In Thousands of New Taiwan Dollars) Taiwan Thousands of New In (Expressed 84 Subtotal of income and expense items with no effect on cash flows Subtotal of income and expense items with no effect method Proportionate share of losses from associates or joint ventures under the equity associates or joint ventures of losses from share Proportionate Unrealized foreign exchange(gains) losses on insurance liabilities foreign Unrealized Gains on disposal of assets held for sale Gains on disposal of assets held for Depreciation expenses Depreciation Impairment losses on financial assets Other adjustments Amortization expenses Impairment losses on non-financial assets Provisions for bad debt expense for Provisions properties Losses on disposal of foreclosed Net losses on financial assets or liabilities measured at fair value through profit or loss profit at fair value through measured Net losses on financial assets or liabilities Interest expense Interest Interest income Interest Dividends earned Net change in insurance liabilities Net change in other provisions and equipment of premises Losses on disposal and retirement Gains on disposal of investment under cost method Gains on disposal of investment Gains on disposal and retirement of intangible assets Gains on disposal and retirement Income and expenses items with no effect on cash flow Income and expenses items with no effect Net Income Before Tax Net Income Before Adjustments: Cash Flows from Operating Activities: Operating from Cash Flows For The Years Ended December 31, 2016 and 2015 31, Ended December Years The For (English Translation of Consolidated Financial Statements and Report of Consolidated Financial Issued in Chinese) Originally Translation (English AND SUBSIDIARIES LTD. HOLDING CO., CTBC FINANCIAL OF CASH FLOWS STATEMENTS CONSOLIDATED 6.

Financial Information (Expressed in Thousands of New Taiwan Dollars) For the years ended December 31 2016 2015 Changes in Operating Assets and Liabilities: Net Changes in Operating Assets : Decrease (increase) in due from Central Bank and call loans to banks 19,097,410 (30,476,885 ) Increase in financial assets measured at fair value through profit or loss (42,340,521 ) (37,908,736 ) (Increase) decrease in available-for-sale financial assets (154,001,395 ) 86,898,280 (Increase) decrease in hedging derivative financial assets (308,816 ) 1,391,960 Decrease in receivables 24,667,523 28,951,834 Increase in loans (36,365,265 ) (197,501,520 ) (Increase) decrease in reinsurance assets (462,259 ) 336,148 Decrease (increase) in held-to-maturity financial assets 8,454,782 (83,548,717 ) Increase in other financial assets (159,949,247 ) (67,565,848 ) Net Changes in Operating Assets (341,207,788 ) (299,423,484 ) Net Changes in Operating Liabilities: Increase (decrease) in deposits from Central Bank and other banks 17,864,409 (4,300,154 ) (Decrease) increase in financial liabilities measured at fair value through profit or loss (25,107,262 ) 25,657,999 Decrease in hedging derivative financial liabilities (137,829 ) (474,894 ) Increase (decrease) in payables 11,001,927 (10,921,553 ) Increase in deposits and remittances 48,617,095 289,122,611 (Decrease) increase in employee benefits reserve (300,913 ) 531,896 (Decrease) increase in liability reserve (1,006,355 ) 295,881 Decrease in other financial liabilities (10,800,295 ) (17,002,787 ) Net Changes in Operating Liabilities 40,130,777 282,908,999 Net Changes in Operating Assets and Liabilities (301,077,011 ) (16,514,485 ) Sum of Adjustments (162,403,619 ) 44,456,594

84 85 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

87 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 2015 85,506,915 80,474,299 1,602,234 (26,159,302) (33,548,167) (475,647 ) (2,372,716 ) 4,577,872 (68,350 ) 78,856 32,000,000 (12,358,398) 463,495 (34,157,420) 10,057,737 (582,754 ) 232,833 (6,743,708) (13,560,677 ) 13,640,153 (9,621,328 ) 1,155,348 (1,139,290 ) 68,094 12,141 23,568,934 (2,339,681 ) 813,854 363,814,849 450,272,061 114,274,285 323,568,533 12,429,243 450,272,061 (19,597,592 ) (8,597,576 ) - 3,803 1,569,209 (41,295,032 ) 86,457,212 134,780,611 (6,643,535 ) December 31 For the years ended years the For 2016 $ ) (128,451,444 100,445,293 3,026,255 (20,510,749) (12,173,478) (158,228 ) (1,184,616 ) 16,554,346 8,625,854 75,157 - (14,602,366 ) 594,460 (45,284,127 ) 25,177,620 - 92,223 (8,768,029 ) (2,030,000 ) (1,617,473 ) - (3,511,298 ) 557,777 (1,176,390 ) 11,231 20,088 - (18,530,284 ) 12,979,683 450,272,061 360,203,705 $ 25,510,984 360,203,705 $ 7,401,413 (4,288,029 ) (32,675,451 ) (17,043 ) (6,569,511 ) (52,060,156 ) $ 128,881,516 $ 205,811,205 (1,044,720 ) (90,068,356 )

(Expressed in Thousands of New Taiwan Dollars) Taiwan Thousands of New in (Expressed 86 Net Cash Used in Investing Activities Net Cash Used in Investing Activities Financing Used in Net Cash Flows cash equivalents equivalents recognition Net Cash (Used in) Provided by Operating Activities Operating by Net Cash (Used in) Provided Increase in financial liabilities designated as at fair value through profit or loss, upon initial or loss, profit in financial liabilities designated as at fair value through Increase Decrease in payables Decrease Decrease in due to Central Bank and other banks in due to Central Bank and Decrease Purchase of financial assets carried at cost of financial assets carried Purchase Increase in commercial paper payable paper in commercial Increase in other liabilities (decrease) Increase Disposal of financial assets carried at cost Disposal of financial assets carried Issuance of financial debentures Cash dividends distributed Return of capital from financial assets carried at cost carried financial assets from Return of capital of financial debentures Repayments stock Treasure Disposal of financial assets under equity method Disposal of financial assets under equity agreements in securities sold under repurchase Decrease liabilities share of preference Repayments surplus Changes in capital Purchase of financial assets under equity method of financial assets under equity Purchase Disposal of assets held for sale Disposal of assets held for Purchase of premises and equipment and of premises Purchase Disposal of premises and equipment and Disposal of premises Purchase of intangible assets Purchase Disposal of intangible assets Disposal of foreclosed properties Disposal of foreclosed Net cash receipts from acquisitions of subsidiaries and other business units acquisitions of subsidiaries from Net cash receipts Purchase of investment properties of investment Purchase Decrease in receivables Decrease Decrease (increase) in other assets (increase) Decrease Cash and cash equivalents recognized in balance sheet Cash and cash equivalents recognized Due from the Central Bank and call loans to bank which meet IAS 7 definition of cash and Due from and cash which meet IAS 7 definition of cash agreements under resell Securities purchased Cash (Used in) Provided by Operating Activities Operating by Cash (Used in) Provided received Interest Dividends received paid Interest Income tax paid For The Years Ended December 31, 2016 and 2015 31, Ended December Years The For (English Translation of Consolidated Financial Statements and Report of Consolidated Financial Issued in Chinese) Originally Translation (English AND SUBSIDIARIES LTD. HOLDING CO., CTBC FINANCIAL OF CASH FLOWS STATEMENTS CONSOLIDATED 6. Cash and Cash Equivalents, at the End of the Period Cash and Cash Equivalents, Components of cash and cash equivalents: at the End of the Period Cash and Cash Equivalents, Cash Flows from Financing Activities: Financing from Cash Flows of exchange rate changes on cash and cash equivalents Effect in Cash and Cash Equivalents increase (Decrease) at the Beginning of the Period Cash and Cash Equivalents, Cash Flows from Investing Activities: Investing from Cash Flows

Financial Information VII. Review and Analysis of Financial Conditions, Financial Performance and Risk Management

1. Financial Conditions Unit: NTD, in thousands

Difference

2015 2016 Amount %

Cash and cash equivalents 1,855,174 755,937 (1,099,237) (59.25%)

Financial assets 2,542,377 971,101 (1,571,276) (61.80%)

Receivables-net 70,877 70,688 (189) (0.27%)

Investments under equity method-net 312,623,735 333,729,060 21,105,325 6.75%

Other assets 276,632 490,171 213,539 77.19%

Total Assets 317,368,795 336,016,957 18,648,162 5.88%

Payables 981,156 974,165 (6,991) (0.71%)

Preferred stock liabilities 2,030,000 - (2,030,000) (100.00%)

Financial liabilities 27,004,406 27,000,162 (4,244) (0.02%)

Other liabilities 9,846,092 25,935,843 16,089,751 163.41%

Total Liabilities 39,861,654 53,910,170 14,048,516 35.24%

Capital stock 180,547,806 194,969,896 14,422,090 7.99%

Capital surplus 36,654,760 36,637,717 (17,043) (0.05%)

Retained earnings 68,814,732 67,810,916 (1,003,816) (1.46%)

Other equity interest (7,927,403) (16,728,988) (8,801,585) 111.03%

Treasury stock (582,754) (582,754) - -

Total Equity 277,507,141 282,106,787 4,599,646 1.66%

Explanation: Analysis of difference exceeding $100 million and deviation over 20%. 1. Decrease in cash and cash equivalents is mainly due to decrease of approximately $1.1 billion in demand deposits. 2. Decrease in financial assets is mainly due to reduction of approximately $400 million in available-for-sale financial assets and decrease of approximately$1.2 billion in securities purchased under reverse repurchase agreements. 3. Increase in other assets is mainly due to increase of approximately $200 million in current income tax assets. 4. Decrease in preferred stock liabilities is mainly due to early redemption of preferred stock liabilities. 5. Increase in other liabilities is mainly due to increase of approximately $16.2 billion in commercial paper payables. 6. Decrease in other equity is mainly due to decrease of approximately $1.9 billion in the changes in financial liabilities designated at fair value through profit or loss attributable to credit risk, reduction of approximately $2.8 billion in exchange differences of overseas subsidiaries' financial report translation, and increase of approximately $4.1 billion in unrealized losses on available-for-sale financial assets.

86 87 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

89 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo % 4.30% 24.74% None (21.10%) (32.69%) (21.89%) (20.73%) Financial plan Unit: NT$, in thousands NT$, Unit: Unit: NTD, in thousands NTD, Unit: (39,153) (37,525) (96,586) None (7,468,599) (7,746,048) (7,572,784) Remedial measures for cash deficit for Remedial measures Investment plan Investment Change amount Change 80,619 2016 (deficit) 1,602,163 (911,117) (486,998) 27,928,977 27,640,653 28,958,149 Amount + - Cash surplus 88 119,772 2015 outflow (873,592) (390,412) (2,980,062) Annual cash cash Annual 35,397,576 35,386,701 36,530,933

estimated. 3,826,288 operating Annual net net Annual activities cash flow from from cash flow period 755,937 None. Cash balance at beginning of Operating expenses Net income after tax Other income Other expenses and losses Analysis of cash flow change in 2017: of cash flow Analysis operating activities in 2017 is estimated. thousand from of NT$3,826,288 Net cash inflow Operating activities: and financing activities in 2017 is investment of NT$2,980,062 from thousand Net cash outflow and financing activities: Investment Remedial measures for estimated cash deficit and liquidity analysis: None. estimated cash deficit and liquidity analysis: for Remedial measures Net income before tax Net income before Proportionate share of gains from of gains from share Proportionate under associates or joint ventures equity method 4. 2016 Effect of Capital Spending on Financial Position and Business Operation: and Business Operation: Position Spending on Financial of Capital Effect 2016 4. 3. Cash Flows 3. 2017 for analysis Cash flow (1) Explanation: Analysis of difference exceeding $100 million and deviation over 20%. over million and deviation exceeding $100 of difference Analysis Explanation: of investment due to reduction under equity method is mainly or joint ventures associates of gains from share in proportionate Decrease CTBC Bank in 2016. by income recognized 2. Performance Financial 2.

Review and Analysis of Financial Conditions, Financial Performance and Risk Management 5. 2016 Investment Policy, Main Causes for Proﬁts or Losses, Improvement Plans and the Investment Plans for the Coming Year

(1) Reinvestment policy in 2016 CTBC Holding's reinvestment policy is based on Articles 36 and 37 of the Financial Holding Company Act within the regulations of competent authority and involves evaluating expected return on each investment and cross-selling beneﬁts and strategic values of CTBC Holding subsidiaries to create stable return for shareholders

(2) Main causes for profits in 2016 CTBC Holding's profits in 2016 primarily originate from its subsidiary CTBC Bank and Taiwan Life. CTBC Bank generated a pre-tax net profit totaling NT$28.9 billion in 2016, which accounted for 85% of the consolidated pre-tax net profit. Taiwan Life generated a pre-tax net profit totaling NT$5.1 billion in 2016, which accounted for 15% of the consolidated pre-tax net profit. Please refer to Section V. Business Overview/3. Market and Business Overview for details on the main causes for profits and losses of CTBC Holding subsidiaries and their improvement plans.

(3) 2017 Investment plans Continue to evaluate merger and acquisition between CTBC Group and foreign and domestic ﬁnancial institutions with signiﬁcant synergies that can complement the services of CTBC Group to increase the market share of CTBC Group, thereby building CTBC into a regional bank representative of Asia.

88 89 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

91 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 1.61 6.60 1.18 1.78 0.87 0.12 share (0.03) (0.27) (0.85) NT dollar (after tax); (after tax); Earnings per Earnings As of 12/31/2016 (342) 5,625 66,701 330,132 341,538 Unit: NTD, in thousands NTD, Unit: (36,251) (165,701) 4,933,914 23,092,164 and losses (after tax) Net income (342) 6,144 126,371 391,532 314,072 (11,659) (45,938) (loss) 4,889,261 income 70,747,008 (Note 6) Operating - 14,094 Note 5 229,898 227,611 495,303 1,202,424 1,374,965 income Operating 294,198,024 58,365 55,140 964,997 525,728 7,112,247 5,406,442 4,188,634 67,018,447 253,014,052 Total equity Total 90 166 17,070 56,555 63,165 197,315 132,389 14,109,538 1,210,936,625 2,461,094,760 Total liabilities Total 58,532 582,283 118,305 1,162,312 4,321,023 5,423,512 21,221,785 Total assets Total 1,277,955,072 2,714,108,812 32.279 47,695 500,000 425,000 6,027,140 3,000,000 5,358,820 USD 2,060 30,556,324 131,125,735 TWD 66,495 reporting date reporting Paid-in capital Paid-in Exchange rate on For the year 2016, CTBC Holding that should be included in the consolidated financial statement of financial statement of be included in the consolidated should that CTBC Holding 2016, the year For affiliates affiliates as provided by the Criteria Governing Preparation Affiliation of Reports, Consolidated Business Reports and Consolidated Financial Statements Affiliated of Enterprises are the same as what should be in IFRS No. subsidiary and of parent statements financial in the consolidated provided included as companies financial statements of affiliates. separate consolidated to prepare shall not be required The Company 10. 1) Affiliate organization chart: Please refer to III. Corporate Governance Report. Corporate Governance to III. Please refer Affiliate organization chart: 1) enterprises Affiliated of Operation Overview 2) Company name Company CTBC Securities Ltd. Co., CTBC Capital International Co., Limited (Note 8) Taiwan Lottery Taiwan Ltd. Co., Taiwan Life Life Taiwan Ltd. Insurance Co., CTBC Venture Ltd. Co., Capital CTBC Asset Management Co., Ltd. CTBC Investments CTBC Investments Ltd. Co., CTBC Bank Co., CTBC Bank Co., Ltd. CTBC Security Ltd. Co.,

(2) Consolidated Operation Report of Affiliated enterprises Operation ReportConsolidated of (2) (1) Consolidated Financial Statement of Affiliated enterprises Financial Statement of Consolidated (1) VIII. Special Disclosure Special VIII. Information Enterprises Affiliated 1.

Special Disclosure Operating Earnings per Net income Operating (loss) share Company name Paid-in capital Total assets Total liabilities Total equity and losses income income (after tax); (after tax) (Note 6) NT dollar CTBC Venture USD 2,000 Capital Investment Exchange rate on Management reporting date 34,165 2,421 31,744 - (6,022) (6,218) N/A (Shanghai) Co., Ltd. 32.279 (Note 8) TWD 64,558 USD 70,000 CTBC Exchange rate on International Co., reporting date 2,031,986 166 2,031,820 129 (240) (240) (0.003) Limited 32.279 (Note 7) TWD2,259,530 RMB 433,802 CTBC Leasing Co., Exchange rate on Ltd. reporting date 9,196,001 7,772,735 1,423,266 728,482 31,965 37,588 N/A (Note 7) 4.622 TWD 2,005,033 USD 6.43028 CTBC Capital Exchange rate on Corp. reporting date 95,420,861 73,335,404 22,085,457 Note 5 2,886,895 632,146 98,308 (Note 1) 32.279 TWD 208 USD 771.108 CTBC Bank Corp. Exchange rate on (USA) reporting date 95,415,103 81,574,872 13,840,231 Note 5 2,880,187 631,502 230,605 (Note 1, 2) 32.279 TWD 24,891 CAD 28,000 CTBC Bank Corp. Exchange rate on (Canada) reporting date 10,647,554 9,499,168 1,148,386 Note 5 276,459 83,587 36.15 (Note 1) 23.928 TWD 669,984 PHP 2,479,687 CTBC Bank Exchange rate on (Philippines) Corp. reporting date 23,481,569 18,835,046 4,646,523 Note 5 1,474,407 149,025 0.60 (Note 1) 0.6512 TWD 1,614,772

90 91 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

93 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 1.48 share 51.52 3,297 (0.62) (0.08) (0.83) 45,558 NT dollar 229,142 (after tax); (after tax); Earnings per per Earnings 2,964 99,759 18,223 (6,859) (6,788) 343,713 (147,451) 2,307,987 and losses (after tax) Net income 3,252 (6,843) (8,220) 710,022 170,790 (loss) (184,621) 1,519,316 income 14,463,377 (Note 6) Operating 0 25,092 17,753 26,811 Note 5 Note 5 211,346 1,511,757 income Operating 31,668 23,048 32,327 496,880 6,420,688 3,025,257 1,747,421 35,451,367 Total equity Total 92 1,303 4,954 7,110 9,776 78,012 2,756,272 22,198,681 688,841,565 Total liabilities Total 32,971 39,437 28,003 506,656 3,103,269 4,503,693 28,619,369 724,292,932 Total assets Total

4.162 20,000 0.2757 0.2757 32.279 0.2757 2,000,000 0.0023981 JPY 500,000 JPY 500,000 USD 11,113 HKD 86,679 TWD137,850 TWD137,850 reporting date reporting reporting date reporting reporting date reporting date reporting reporting date reporting reporting date reporting TWD 359,715 TWD 360,758 TWD 358,717 JPY 26,000,000 TWD7,168,200 Paid-in capital Paid-in IDR 150,000,000 Exchange rate on Exchange rate on Exchange rate on Exchange rate on Exchange rate on Exchange rate on Company name Company The Tokyo Star The Tokyo Ltd. Bank, (Note 1) PT Bank CTBC Indonesia (Note 1) CTBC Asia Limited (Note 4) CTBC (Mauritius) Ltd. Holding Co., (Note 4) Tokyo Star Tokyo Business Finance, Ltd. 3) (Note 1, TSB Servicer, Ltd. Ltd. TSB Servicer, (Note 1,3) CTBC Securities Service Investment Ltd. Co., (Note 4) TLG Insurance Ltd. Co., (Note 9)

Special Disclosure Operating Earnings per Net income Operating (loss) share Company name Paid-in capital Total assets Total liabilities Total equity and losses income income (after tax); (after tax) (Note 6) NT dollar TLG Capital Co., Ltd. 553,182 5,624,562 4,853,539 771,023 2,556,543 28,955 130,633 2.36 (Note 9) Note 1: The company's net income and losses are already reflected in CTBC Bank Co., Ltd. Note 2: The company's net income and losses are already reflected in CTBC Capital Corp. Note 3: The company's net income and losses are already reflected in The Tokyo Star Bank, Ltd. Note 4: The company's net income and losses are already reflected in CTBC Securities Co., Ltd. Note 5: Banking industry is subjected to the Regulations Governing the Preparation of Financial Reports by Public Banks and, therefore, operating income was not categorized. Note 6: Bank subsidiaries are expressed in terms of net revenue. Note 7: The company's net income and losses are already reflected in CTBC Asset Management Co., Ltd. Note 8: The company's net income and losses are already reflected in CTBC Venture Capital Co., Ltd. Note 9: The company's net income and losses are already reflected in Taiwan Life Insurance Co., Ltd.

3) Profiles of affiliated enterprises Unit: NTD, in thousands As of 12/31/2016 Date of Main business Company name Address Paid-in capital Establishment scope Commercial banking No. 166, 168, 170, 186, and 188, CTBC Bank Co., Ltd. 1966.3.14 131,125,735 and financing Jingmao 2nd Rd, Taipei City business Taiwan Life Insurance 8F, No. 188, Jingmao 2nd Rd., Taipei Life insurance 1947.12.1 30,556,324 Co., Ltd. City business CTBC Securities Co., 3F, No. 168, Jingmao 2nd Rd., Taipei Securities and 1989.7.5 6,027,140 Ltd. City futures business CTBC Venture Capital 21F, No. 168, Jingmao 2nd Rd., Taipei Venture capital 2003.3.11 3,000,000 Co., Ltd. City investment CTBC Asset 19F, No. 168, Jingmao 2nd Rd., Taipei Asset management 2003.5.20 5,358,820 Management Co., Ltd. City business CTBC Investments Co., 12F, No. 188, Jingmao 2nd Rd., Taipei Investment trust 1998.3.3 425,000 Ltd. City and business 5F, No. 188, Jingmao 2nd Rd., Taipei CTBC Security Co., Ltd. 1995.2.15 47,695 Security business City Public welfare 15F, No. 188, Jingmao 2nd Rd., Taipei Taiwan Lottery Co., Ltd 2006.7.10 500,000 lottery distributor City and agency USD 2,060 Romm 511, 5F, Tower 1 CTBC Capital Exchange rate on Silvercord Centre International Co., 2012.4.30 reporting date Investment business No.30 Canton Road Limited 32.279 Tsim Sha Tsui, HongKong TWD 66,495

92 93 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68

95 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo scope Main business Main business Venture capital capital Venture investment General investment General investment business Financing leasing Investment business Investment Commercial banking Commercial and financing business Commercial Commercial banking and financing business Commercial bank Commercial deposit and loan services Commercial Commercial banking and financing business

4.622 32.279 32.279 32.279 32.279 23.928 0.6512 TWD 208 0.0023981 USD 2,000 USD 70,000 CAD 28,000 TWD 64,558 TWD 24,891 USD 6.43028 USD 771.108 RMB 433,802 reporting date reporting reporting date reporting reporting date reporting reporting date reporting reporting date reporting reporting date reporting reporting date reporting reporting date reporting TWD 669,984 TWD 359,715 PHP 2,479,687 TWD2,259,530 Paid-in capital Paid-in TWD 2,005,033 TWD 1,614,772 IDR 150,000,000 Exchange rate on Exchange rate on Exchange rate on Exchange rate on Exchange rate on Exchange rate on Exchange rate on Exchange rate on 94 Address 12F, Wenguang Building, No. 1386 No. Building, Wenguang 12F, Changning Dist., Hongqiao Rd, China Shanghai, Romm 511, 5F, Tower 1 Tower 5F, Romm 511, Centre Silvercord Road Canton No.30 HongKong Tsui, Tsim Sha 12F, Wenguang Building, No. 1386 No. Building, Wenguang 12F, Changning Dist., Hongqiao Rd, China Shanghai, 801 S. Figueroa Street, Suite 2300, Los Suite 2300, Street, Figueroa 801 S. CA 90017 Angeles, 801 S. Figueroa Street, Suite 2300, Los Suite 2300, Street, Figueroa 801 S. CA 90017 Angeles, 1518 West Broadway, Vancouver B.C., B.C., Vancouver Broadway, West 1518 V6J1W8 Canada, 16th to 19th Floors, Fort Legend 16th to 19th Floors, Corner 3rd 31st Street Towers, Taguig Bonifacio Global City, Avenue, Philippines 1634 City , Tamara Center, 15th-17th F1, JI 15th-17th F1, Center, Tamara Jakarta 24 Sudirman Kev. Jenderal 12920 Indonesia 2012.7.3 1995.9.7 Date of 2012.4.24 1989.2.27 1995.2.27 2012.11.22 1998.11.12 1996.10.15 Establishment Company name Company CTBC Venture CTBC Venture Investment Capital Management (Shanghai) Ltd. Co., CTBC International Co.,Limited CTBC Leasing Co., Ltd. CTBC Leasing Co., CTBC Capital Corp. CTBC Capital CTBC Bank Corp. CTBC Bank Corp. (USA) CTBC Bank Corp. (Canada) CTBC Bank (Philippines) Corp. PT Bank CTBC Indonesia

Special Disclosure Date of Main business Company name Address Paid-in capital Establishment scope JPY 26,000,000 Exchange rate on Commercial banking The Tokyo Star Bank, 2-3-5 Akasaka, Minato-Ku, Tokyo, 107- 2001.6.11 reporting date and financing Ltd. 8480, Japan 0.2757 business TWD7,168,200 JPY 500,000 Exchange rate on Debt management TSB Servicer, Ltd. 1997.1.17 2-2-17, Akasaka,Minato,Tokyo reporting date business 0.2757 TWD137,850 JPY 500,000 Exchange rate on Tokyo Star Business 2010.9.10 2-7-1, Nishi-Shinjuku, Shinjuku, Tokyo reporting date Financing business Finance ,Ltd. 0.2757 TWD137,850 USD 11,113 3rd Floor, Raffles Tower,19 Cybercity, Exchange rate on CTBC(Mauritius) 2002.12.19 Ebene, Republic of Mauritius. reporting date Holding company Holding Co., Ltd 32.279 TWD 358,717 CTBC Securities 14F, No. 188, Jingmao 2nd Rd., Taipei Securities investment Investment Service Co., 2015.5.21 20,000 City Co., Ltd Ltd. HKD 86,679 Rm. 2809, 28F, Phase 2 International Exchange rate on Securities related CTBC Asia Limited 2003.4.4 Finance Centre,No. 8 Finance St., reporting date business Central, Hong Kong 4.162 TWD 360,758 TLG Insurance Co., Ltd. 2006.5.8 18F-1 No. 17 , Xuchang St, Taipei City 2,000,000 Property insurance Installment payments business, financial TLG Capital Co., Ltd. 2003.8.1 17F, No. 17, Xuchang St, Taipei City 553,182 leasing and account receivable factoring business

94 95 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68 - WorldReginfo 96 Company Act and therefore did not compile an afﬁliation report. Act and therefore Company None. April 28,2017:None. http://ir.ctbcholding.com/c/gov_ website: company on the published Conduct is practice.php#c2 2. CTBC Holding Private Placement of Securities in 2016 up to April 28, 2017 : 2017 : April 28, CTBC Holding Private of Placement Securities to in 2016 up 2. to up 2016 in Subsidiaries by Disposed OR Held company the in Shares The 3. Ethical CTBC Holding Code of on Information necessaryOther : supplements 4. (3) Affiliation Reports: CTBC Holding is not an affiliate of other company as defined in the in the as defined of other company is not an affiliate CTBC Holding Reports: Affiliation (3)

Special Disclosure WorldReginfo - 5921ff3d-0686-4bc3-a27d-1fb49b397a68