0505_§§�H���Ê≠^§���≠±�oΩZ.pdf 1 2020/5/5 下午1:55 2019 ANNUAL REPORT C Stock code: 5841 T B Printed on April 21, 2020 C BANK CO., L https://www.ctbcbank.com https://mops.twse.com.tw T D. C M Y CM MY CY CMY K ANNUAL REPORT *OTJEFPVSNFUFSIJHIMPCCZJTUIFMBSHFTUJOUFSBDUJWFBSUJOTUBMMBUJPO TeamLab & DEM Inc. JO5BJXBO0OJUTTDSFFOT TFBTPOBMBOEDMJNBUFDIBOHFTBSFNBOJGFTUFE $JSDVMVN'PSNPTB UISPVHIEJHJUBM$IJOFTFJOLBOEXBUFSDPMPSJNBHFSZ"TBHPMEFOWFJM EFTDFOETVQPOUIFXIJUFXBUFSGBMMPOIPMJEBZTBOETQFDJBMPDDBTJPOT "SUXPSLJO$5#$'JOBODJBM1BSL 2 XBUFSPXTBCVOEBOUMZ FNCPEZJOHPVSDPSQPSBUFNJTTJPOUP1SPUFDU /BOHBOH%JTU 5BJQFJ$JUZ 0 BOE#VJME 1 9 CTBC Bank Co., Ltd. 6 3*OREDO5DWLQJV Address: No. 166, 168, 170, 186, 188, Jingmao 2nd Rd., Nangang Dist., Address: Unit 1, Level 69, International Commerce Centre, Taipei City 115, Taiwan (R.O.C.) 1 Austin Rd. West, Kowloon, Hong Kong Tel: +886-2-3327-7777 Tel: +852-2533-3500 Website: https://www.ctbcbank.com Website: https://www.standardandpoors.com Spokesperson Moody’s Investors Service Hong Kong Limited Name: Ya-Ling Chiu $GGUHVV)2QH3DFLÀF3ODFH4XHHQVZD\$GPLUDOW\ Position: Executive vice president Hong Kong Tel: +886-2-3327-7777 Tel: +852-3758-1300 Email: [email protected] Website: https://www.moodys.com Acting spokesperson Overseas Exchange for Trading of Company Name: Roger Kao 6HFXULWLHV Position: Senior executive vice president (None) Tel: +886-2-3327-7777 Email: [email protected] For the contact information of our headquarters and various branches in Taiwan and overseas, please refer to page 40-46 Stock Transfer Agency Agency: Corporate Trust Operation and Service Department, CTBC Bank Co., Ltd. Address: 5F., No. 83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.) Tel: +886-2-6636-5566 Website: https://www.ctbcbank.com &HUWLÀHG3XEOLF$FFRXQWDQWV Names: Jeff Chen, Lin Wu %XVLQHVV2IÀFH.30*&HUWLÀHG3XEOLF$FFRXQWDQWV Address: 68F., No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) Tel: +886-2-8101-6666 Website: http://www.kpmg.com.tw &UHGLWUDWLQJLQVWLWXWLRQV Taiwan Ratings Corp. Address: 49F., Taipei 101 Tower No. 7, Xinyi Road, Section 5, Xinyi Dist., Taipei City 110, Taiwan Tel: +886-2-8722-5800 Website: https://www.taiwanratings.com 2019中信銀行英文封面裡.indd 1 2020/5/8 下午8:10 Contents 1. Letter to shareholders ................................................................................................................. 2 2. Company profile 2.1 Company overview ................................................................................................................. 7 2.2 The organization ................................................................................................................... 12 3. Business overview 3.1 Business performance ........................................................................................................... 21 3.2 Employees ............................................................................................................................ 25 3.3 Social responsibility ............................................................................................................. 25 4. Dividend policy and earnings distribution 4.1 Dividend policy and execution status ................................................................................... 34 4.2 Influence of dividend allocation on business performance and EPS .................................... 34 4.3 Information relating to compensation of employees, directors, and supervisors ................. 35 5. Internal Control Statement ...................................................................................................... 37 6. Audit Committee Report on last year’s financial statement ................................................. 39 7. Head office and domestic branches ......................................................................................... 40 ȤAppendix 1ȥ Consolidated Financial Reports for 2019 ȤAppendix 2ȥ Annual Financial Reports for 2019 1 1. Letter to shareholders Dear Shareholders: Taiwan’s economy experienced moderate growth in 2019, with increased loan demand momentum throughout the market thanks to the growing number of overseas Taiwanese businesses returning to invest domestically. CTBC Bank was therefore able to sustain an outstanding level of performance, achieving record-high profits in its three major business domains of corporate banking, retail banking, and capital markets. The Bank’s various businesses also received significant recognition from domestic and international industry assessment institutions, further demonstrating its position as Taiwan’s banking industry leader. Looking at the remainder of 2020, the COVID-19 pandemic has generated an unprecedented impact on the global economy, and we can expect the still-evolving geopolitical, economic, and industrial effects to foster even greater uncertainty. We are addressing this challenge head on, having quickly adopted a series of actions to ensure our Bank’s resilience as well as to stand by and support our government and community. 2019 business plan and implementation results In terms of its financial performance last year, CTBC Bank reported industry-leading net revenue of NT$103.7 billion, a consolidated pre-tax income of NT$38.5 billion, and a consolidated after-tax income of NT$30.9 billion, while achieving a consolidated after-tax ROE of 10.21%. From the 2018 fiscal year, the Bank’s consolidated net revenue grew by 9% and its consolidated pre-tax income increased by 8%, exceeding the target in our budget released the previous year. The Bank’s major business development efforts in 2019 focused on continuing to serve as the leader of Taiwan’s mobile payments market. To provide customers with more diverse payment tools and expand our mobile payment channels, we collaborated with the LINE instant messaging app to issue co-branded LINE Pay cards. This collaboration drove the total amount of payments made by both CTBC Bank credit and debit cards to the top of the market in 2018 and 2019. Through cross-industry collaboration with the social network, we successfully marketed to younger demographics and further catered to their specific needs. We have also been proactively expanding the Bank’s overseas business, such as by launching our Shenzhen Branch in 2019 to deepen our engagement in the Greater China region, which has already seen significant success. Moreover, in Japan, the Bank’s business expansion continued, with persistent improvement in profitability. Following our success in creating a payment ecosystem using the LINE app, we continued to facilitate the innovation, research, and development of new products and services. In 2019, we teamed up with CPC Corp., the national oil company and Taiwan’s largest gas station chain, to launch the CPC Pay digital wallet. Serving as both a membership card and a stored-value card, CPC 2 Pay allows users to simultaneously accumulate membership reward points for both CPC and CTBC Bank. In addition to accessing information about parking, gas station locations, and real-time gas prices, users can set automatic payments for their automatic freeway toll collection eTags to enjoy a more convenient driving experience. Furthermore, our mobile banking app, Home Bank, was upgraded to incorporate conversational AI for improved usability, enabling users to easily check their balance or conduct a wire transfer by talking to the built-in voice assistant. Providing convenient financial services to more than 3 million app users, CTBC Bank became the first financial institution to obtain an invention patent for “conversational financial service devices and systems”. Fintech has been applied to constantly improve business efficiency. We have incorporated more than 200 robotic automation processes into the system, taking on more than 50% of the total retail banking workload. This effectively enhanced operational efficiency and allowed employee productivity to be transferred to high-value activities, improving the experience for both customers and employees. In addition, CTBC Bank partnered with Chimei Corp. to complete Taiwan’s first commercial trade trial on a blockchain credit platform, which also represented the world’s first blockchain-based letter of credit transaction spanning Asia to Europe. As an advocate of green financing, we served as the host bank, domestic financial consultant, co- sponsor, and underwriter in arranging syndicated loans for a landmark offshore wind farm in Taiwan as well as handled Ørsted A/S’s domestic green bond issuance. In doing so, we set a record for the largest syndicated loan in Taiwan’s project financing history, demonstrating the sustainable influence of CTBC Bank on the environment and society. By shouldering our share of corporate social responsibility, we are working to ensure that Taiwan’s financial sector stays current with global trends in sustainable development. In terms of organizational change, CTBC Bank restructured its retail banking organizational structure to achieve strategic goals in customer-oriented retail banking. In December 2019, the Retail Banking Business Management Group was renamed the Customer Segment Business Group, which is responsible for retail banking channels, high net worth and SME customers, wealth management products, and services development. Specifically, the Customer Segment Business Group governs the Private Wealth Management Division, Wealth Management Product Division, Taiwan Trust Division, Branch Channel Management Division, and