Stock Code : 5848

Taishin 2018 Annual Report

Published date: February 28, 2019 Company website: http://www.taishinbank.com.tw Market Observation Post System website: http://mops.twse.com.tw Spokesman Name: Welch Lin Title: President of Taishin Holdings Tel: 886-2- 5576-1888 E-mail address: [email protected] Acting Spokesman Name: Carol Lai Title: Chief Financial Officer of Taishin Holdings Tel: 886-2-5576-2881 E-mail address: [email protected]

Taishin International Bank Co., Ltd. Address: B1&1F, No.44, Sec. 2, Jhongshan N. Rd., Jhongshan Dist., Taipei City 104 , (R.O.C.) Tel: 886-2-2568-3988 Website: http://www.taishinbank.com.tw

Stock Transfer Agency Name: Stock Affairs Agency Department of Taishin International Commercial Bank Address: B1, No. 96, Sec. 1, Jianguo N. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) Tel: 886-2-2504-8125 Website: http://www.taishinbank.com.tw

Credit Rating Institutions Fitch Ratings Address: Rm. 1306, 13F, No.205, Dunhua N. Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) Tel: 886-2-8175-7600 Website: https://www.fitchratings.com/site/taiwan

Taiwan Ratings Address: 49F, No.7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) Tel: 886-2-8722-5800 Website: http://www.taiwanratings.com

Certified Public Accountants CPAs: Tza Li Gung, Kwan-Chung Lai Name of accounting firm: Deloitte & Touche Address: 20F, No. 100, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) Tel: 886-2-2725-9988 Website: http://www.deloitte.com.tw Names of Exchanges Where Overseas Securities Are Listed and Methods of Inquiry: None. 2018Taishin Annual Report Bank

Contents

002 I. Letter to Shareholders

007 II. Company Profile

011 III. Corporate Governance Report

083 IV. Capital Overview

094 V. Operating Status

126 VI. Financial Information

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

153 VIII. Special Disclosure

162 IX. Directory of Head Office & Branches

165 Appendix I. Financial Statements and Independent Auditors' Report

269 Appendix II. Consolidated Financial Statements and Independent Auditors' Report

Rating Agency Date Ratings

Issuer L-Term BBB+ Issuer S-Term F2 Outlook Stable Fitch Ratings 2018.10.22 Support 3 National L-Term AA- (twn) National S-Term F1+ (twn)

Issuer L-Term BBB ssuer S-Term A-2 Taiwan Ratings 2018.11.22 Outlook Positive National L-Term twA+ National S-Term twA-1 I. Letter to Shareholders

01 Letter to Shareholders

Dear Shareholders,

The global economy in 2018 exhibited overall deceleration in momentum. Of all the major economies, only the U.S. still maintained steady expansion throughout the year, whereas the Eurozone and Japan saw quarterly decline within the year, and the Chinese economy experienced significantly stronger downward pressure in the second half of the year due to regulatory policies such as deleveraging of debts and supply-side structural reform as well as the U.S.-China trade disputes, among other negative factors. Consequently, the total demand of major international consumer markets weakened, causing Taiwan and export-dependent countries such as Germany, Japan, and South Korea to experience economic recession in the second half of 2018.

Amid global economic fluctuations, Taiwan saw a cooler economy in the second half of 2018 than in the first half, although its internal demand exhibited relatively stable performance, thanks to the influx of returning Taiwanese business investments caused by the U.S.-China trade war and increased capital expenditure of technological giants, which enabled Taiwan's economic growth to remain at 2.63% in 2018. The stock market, in response to economic factors, fell significantly in the fourth quarter, closing at 9,727 at the end of the year, 9% down from 10,643 in the previous year.