2019 Annual Report · Name/Title: Jerry Harn/President Name/Title: Sophia Wang/ Senior Executive VP...

2019 Annual Report

Prepared by Fubon Financial Holding Co., Ltd. Publication date : Feb. 29, 2020

Spokesperson and Acting Spokesperson Spokesperson Acting Spokesperson Name/Title: Jerry Harn/President Name/Title: Sophia Wang/ Senior Executive VP TEL: (02)6636-6636 E-mail: [email protected]; [email protected]

Address, Phone Number and Website of the Financial Holding Company and Subsidiaries Fubon Financial Holding Co., Ltd. Address: No. 237, Section 1, Jianguo South Road, Taipei City TEL: (02)6636-6636 (main line) Website: www.fubon.com Fubon Life Insurance Co, Ltd. Address: 14F, No. 108, Section 1,

Dunhua South Road, Taipei City

TEL: (02)8771-6699 (main line) Website: www.fubon.com/life/home

Taipei Fubon Commercial Bank Co., Ltd. Address: 1F, 2F, 3F, 5F, 8F and 12F,

No. 50, Section 2, Zhongshan North Road, Taipei City

TEL: (02)2771-6699 (main line) Website:www.fubon.com/banking

Fubon Insurance Co., Ltd. Address: No. 237, Section 1, Jianguo

South Road, Taipei City TEL: (02)6636-7890 (main line) Website:www.fubon.com/insurance

Fubon Securities Co., Ltd. Address: 15F, No. 169, Section 4,

Renai Road, Taipei City TEL: (02)8771-6888 (main line) Website: www.fubon.com/securities

Fubon Bank (Hong Kong) Limited Address: 38 Des Voeux Road Central,

Hong Kong TEL: (852)2842-6222 (main line) Website: www.fubonbank.com.hk

Fubon Asset Management Co., Ltd. Address: 8F, No. 108, Section 1, Dunhua

South Road, Taipei City TEL: (02)8771-6688(main line)) Website:www.fubon.com/asset-management/ph/home/index.html

Fubon Financial Holding Venture Capital Corporation Address: 8F, No. 108, Section 1,

Dunhua South Road, Taipei City

TEL: (02)6606-9088 (main line) Website: None

Fubon Direct Marketing Consulting Co., Ltd. Address: 17F, No. 9, Xiangyang Road,

Taipei City TEL: (02)2370-5199 (main line) Website: www.fubon.com/direct/home

Fubon AMC, Ltd. Address: 4F, No. 50, Section 2,

Zhongshan North Road, Taipei City


Taiwan Sport Lottery Corporation Address: No. 50, Section 2,

Zhongshan North Road, Taipei City


Share Administration Agency Name: Fubon Securities Co., Ltd. Share Administration Department Address: 2F, No. 17, Xuchang Street, Taipei City TEL: (02)2361-1300 (main line); website: www.fubon.com/securities

Credit Rating Agency Name: Standard & Poor's Financial Services LLC Address: Unit 1, Level 69 International Commerce Center, 1 Austin Road West,

Kowloon, Hong Kong TEL: (852)2533-3500

Name: Moody’s Investors Service Hong Kong Limited Address: 24F, One Pacific Place, 88 Queensway Admiralty, Hong Kong TEL: (852)3758-1300 Name: Taiwan Ratings Corp. Address: 49F, No. 7, Section 5, Xiangyang Road, Taipei City TEL: (02)8722-5800

Financial Statements Auditors of the latest fiscal year Name: Chung Tan-Tan and Yu Chi-Lung, CPA Address: 68F, No. 7, Section 5, Xiangyang Road, Taipei City Name of accounting firm: KPMG TEL: (02)8101-6666; website: www.kpmg.com.tw

Name of Overseas Exchange Where Securities Are Listed and Method of Inquiry: Name of overseas exchange where securities are listed: Bourse De Luxembourg Method of inquiry for overseas securities: www.bourse.lu

http://www.fubon.com/life/homehttp://www.fubon.com/bankinghttp://www.fubon.com/insurancehttp://www.bourse.lu/

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Table of Contents

1. Letter to Shareholders .................................................................................................................................. 7 2. Company Description............................................................................................................................... 14

2.1 Date of Establishment .......................................................................................................................... 14 2.2 Company history................................................................................................................................ 14

3. Corporate Governance Report ................................................................................................................ 15 3.1 Organization ...................................................................................................................................... 15

3.1.1 Organizational structure of the company .............................................................................. 15 3.1.2 Departments and responsibilities .......................................................................................... 16 3.1.3 Organizational chart between the Company and subsidiaries .............................................. 18

3.2 Background information of Directors, the President, Executive VPs, First VPs, and heads of departments and branch offices ......................................................................................................... 19 3.2.1 Information about directors .................................................................................................. 19 3.2.2 Background information of the President, Executive VPs, First VPs, and heads of

departments and branch offices ............................................................................................ 39 3.3 Remuneration paid to directors, President, Executive VPs, consultants and employees in the

last year .............................................................................................................................................. 44 3.3.1 Remuneration to General Directors and Independent Directors ........................................... 44 3.3.2 Remuneration to President and Executive VP ...................................................................... 47 3.3.3 Compensation for retired chairmen and presidents of the Company or related

companies re-hired as consultants ........................................................................................ 49 3.3.4 Names of managers entitled to employee compensation and amount entitled ..................... 50 3.3.5 Directors', President's and Vice Presidents' remuneration paid in the last two years as

a percentage to after-tax profit, and association with business performance ........................ 50 3.4 Corporate governance ........................................................................................................................ 51

3.4.1 Functionality of Board of Directors ...................................................................................... 51 3.4.2 Functionality of the Audit Committee .................................................................................. 69 3.4.3 Performance of the Corporate Governance and Sustainability Committee .......................... 79 3.4.4 The disclosure items in accordance with the Corporate Governance Best-Practice

Principles for Financial Holding Companies ........................................................................ 81 3.4.5 Corporate Governance Status and Deviations from the Corporate Governance

Best-Practice Principles for Financial Holding Companies .................................................. 82 3.4.6 Operation of Remuneration and Nomination Committee (In response to the inclusion

of the “Nomination” function, since January 1, 2020, the Company's “Remuneration Committee” has been renamed as “Remuneration and Nomination Committee”.) ............ 100

3.4.7 Performance of social responsibility and differences from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and the reasons ................................................................................................................................ 104

3.4.8 Performance of business integrity and differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons ................................................................................................................................ 122

3.4.9 Inquiry on corporate governance best practice principles and related regulations of the Company ....................................................................................................................... 132

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3.4.10 Other information material to the understanding of corporate governance operations ...... 132 3.4.11 Internal Control ................................................................................................................... 133 3.4.12 Penalties imposed for violations of laws or regulations and major defects of the

Company and its subsidiaries for the last two fiscal years up to the publication date of the annual report and relevant corrective measures. ....................................................... 144

3.4.13 Major Resolutions of Shareholders’ Meetings and the Board of Directors for the most recent year up to the publication date of the annual report ................................................. 162

3.4.14 Documented opinions or declarations made by directors (including independent directors) against the board's resolutions for the most recent year up to the publication date of the annual report .................................................................................. 165

3.4.15 Resignation or dismissal of personnel related to financial statement preparation (including the chairman, president, financial managers, accounting managers, chief internal auditor and chief corporate governance officer) for the most recent year up to the publication date of the annual report............................................................................. 165

3.5 Information on audit fees ................................................................................................................. 165 3.6 Change of certified public accountant ........................................................................................... 166 3.7 The Company’s Chairman, President, or managers in charge of finance or accounting affairs

being employed by the accounting firm of its certified public accountant or affiliated enterprise of such accounting firm within the last year ................................................................... 166

3.8 Transfer or pledge of shares owned by directors, managers, and all parties subject to reporting under Article 11 of Regulations Governing the Ownership of Financial Holding Company By Single Individuals or Stakeholders for the most recent year up to the publication date of the annual report. .............................................................................................. 166

3.9 Relationships among the top ten shareholders, including spouses and second degree relatives or closer ........................................................................................................................................... 169

3.10 Shares jointly held by the Company, subsidiaries, the Company's directors, managers, and directly/indirectly controlled entities on any single investee. Calculate shareholding percentage in aggregate of the above parties ................................................................................... 170

4. Funding ................................................................................................................................................... 172 4.1 Capital and shares ............................................................................................................................ 172

4.1.1 Source of capital ................................................................................................................. 172 4.1.2 Status of Shareholders ........................................................................................................ 174 4.1.3 Status Distribution of Ownership ....................................................................................... 175 4.1.4 List of major shareholders .................................................................................................. 177 4.1.5 Market price, net worth, earnings, and dividends per share for the last two years ............. 177 4.1.6 Dividend policy and implementation .................................................................................. 178 4.1.7 Impact of proposed stock dividend on the Company's business performance and

earnings per share ............................................................................................................... 179 4.1.8 Employees’ compensation and directors’ remuneration ..................................................... 179 4.1.9 Share repurchased by the Company .................................................................................... 179

4.2 Corporate bonds ............................................................................................................................... 180 4.3 Issuance of preferred shares ............................................................................................................ 187 4.4 Issuance of global depository receipts ............................................................................................. 190 4.5 Employee stock options ................................................................................................................... 191 4.6 Employees’ restricted shares ............................................................................................................ 191

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4.7 Merger and acquisition of other financial institutions ..................................................................... 191 4.7.1 CPA’s opinions on share exchange ratio for merger and acquisition of financial

institutions for the most recent year, if any ......................................................................... 191 4.7.2 Merger and acquisition of other financial institutions in the last five years. ...................... 191 4.7.3 Issuance of new shares for merger and acquisition of other financial institutions that

the board of directors has approved for the most recent year up to the publication date of the annual report ..................................................................................................... 191

4.8 Capital plans and execution ............................................................................................................. 191 5. Business Overview .................................................................................................................................. 192

5.1 Business overview of the Company ................................................................................................ 192 5.1.1 Scope of business ................................................................................................................ 192 5.1.2 Business plans for the year ................................................................................................. 193 5.1.3 Industry overview ............................................................................................................... 194 5.1.4 Research and development spending and accomplishments in the last two years .............. 194 5.1.5 Future research and development plans .............................................................................. 195 5.1.6 Long and short-term business plans .................................................................................... 195 5.1.7 Market and business overview ............................................................................................ 195

5.2 Business overview of Fubon Life .................................................................................................... 196 5.2.1 Scope of business ................................................................................................................ 196 5.2.2 Business plans for the year ................................................................................................. 197 5.2.3 Industry overview ............................................................................................................... 197 5.2.4 Research and development spending and accomplishments in the last two years .............. 198 5.2.5 Future research and development plans .............................................................................. 198 5.2.6 Long and short-term business plans .................................................................................... 199 5.2.7 Market and business overview ............................................................................................ 199

5.3 Business overview of Taipei Fubon Bank (including the subsidiary, Fubon Bank (China)) ........... 201 5.3.1 Scope of business ................................................................................................................ 201 5.3.2 Business plans for the year ................................................................................................. 202 5.3.3 Industry overview ............................................................................................................... 203 5.3.4 Research and development spending and accomplishments in the last two years .............. 204 5.3.5 Future research and development plans .............................................................................. 205 5.3.6 Long and short-term business plans .................................................................................... 206 5.3.7 Market and business overview ............................................................................................ 208

5.4 Business overview of Fubon Insurance ........................................................................................... 212 5.4.1 Scope of business ................................................................................................................ 212 5.4.2 Business plans for the year ................................................................................................. 213 5.4.3 Industry overview ............................................................................................................... 214 5.4.4 Research and development spending and accomplishments in the last two years .............. 214 5.4.5 Future research and development plans .............................................................................. 215 5.4.6 Long and short-term business plans .................................................................................... 216

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5.4.7 Market and business overview ............................................................................................ 216 5.5 Business overview of Fubon Securities ........................................................................................... 218

5.5.1 Scope of business ................................................................................................................ 218 5.5.2 Business plans for the year ................................................................................................. 220 5.5.3 Industry overview ............................................................................................................... 222 5.5.4 Research and development spending and accomplishments in the last two years .............. 225 5.5.5 Future research and development plans .............................................................................. 226 5.5.6 Long and short-term business plans .................................................................................... 227 5.5.7 Market and business overview ............................................................................................ 230

5.6 Business Overview of Fubon Bank (Hong Kong) ........................................................................... 237 5.6.1 Scope of operations ............................................................................................................. 237 5.6.2 Business plans for the year ................................................................................................. 238 5.6.3 Industry overview ............................................................................................................... 238 5.6.4 Research and development spending and accomplishments in the last two years .............. 238 5.6.5 Research and development plans ........................................................................................ 239 5.6.6 Long and short-term business plans .................................................................................... 239 5.6.7 Market and business overview ............................................................................................ 240

5.7 Business overview of Fubon Asset Management ............................................................................ 240 5.7.1 Scope of business ................................................................................................................ 240 5.7.2 Business plans for the year ................................................................................................. 241 5.7.3 Industry overview ............................................................................................................... 241 5.7.4 Research and development spending and accomplishments in the last two years .............. 242 5.7.5 Future research and development plans .............................................................................. 243 5.7.6 Long and short-term business plans .................................................................................... 243 5.7.7 Market and business overview ............................................................................................ 244

5.8 Business overview of Fubon Financial Holding Venture Capital .................................................... 245 5.8.1 Scope of business ................................................................................................................ 245 5.8.2 Business plans for the year ................................................................................................. 245 5.8.3 Industry overview ............................................................................................................... 246 5.8.4 Research and development spending and accomplishments in the last two years .............. 246 5.8.5 Future research and development plans .............................................................................. 246 5.8.6 Long and short-term business plans .................................................................................... 246 5.8.7 Market and business overview ............................................................................................ 246

5.9 Business overview of Fubon Direct Marketing ............................................................................... 247 5.9.1 Scope of business ................................................................................................................ 247 5.9.2 Business plans for the year ................................................................................................. 248 5.9.3 Industry overview ............................................................................................................... 249 5.9.4 Research and development spending and accomplishments in the last two years .............. 249 5.9.5 Future research and development plans .............................................................................. 249 5.9.6 Long and short-term business development plans .............................................................. 249

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5.9.7 Market and business overview ............................................................................................ 250 5.10 Business overview of Fubon AMC .................................................................................................. 251

5.10.1 Scope of business ................................................................................................................ 251 5.10.2 Business plans for the year ................................................................................................. 251 5.10.3 Industry overview ............................................................................................................... 251 5.10.4 Research and development spending and accomplishments in the last two years .............. 252 5.10.5 Future research and development plans .............................................................................. 252 5.10.6 Long and short-term business plans .................................................................................... 252 5.10.7 Market and business overview ............................................................................................ 252

5.11 Business overview of Taiwan Sport Lottery .................................................................................... 253 5.12 Cross-selling and joint marketing .................................................................................................... 253 5.13 Employees and Labor-management Relations ................................................................................ 255

5.13.1 Employee backgrounds ....................................................................................................... 255 5.13.2 Employee Welfare Measures and Retirement System, and Implementation Status ........... 262 5.13.3 Enforcement of labor agreements and employee rights ...................................................... 262 5.13.4 Employees' continuing education, training and career development planning ................... 262 5.13.5 Any losses suffered by the Company for the most recent year up to the publication

date of the annual report due to labor disputes, and estimated losses thereof, current or in the future, and any response measures taken shall be disclosed ................................ 264

5.13.6 Work environment and employees’ safety .......................................................................... 265 5.14 Corporate Responsibilities and Ethics ............................................................................................. 265 5.15 Number of full-time non-supervisor employees, average and median salaries, and the

difference between the first three and the previous year ................................................................. 268 5.16 IT Equipment ................................................................................................................................... 269 5.17 Major Contracts ............................................................................................................................... 270

6. Financial Overview................................................................................................................................. 274 6.1 Summary balance sheet and statement of comprehensive income in the last five years ................. 274 6.2 Financial analysis in the last five years and changes in financial ratios in the last two years ......... 279 6.3 Key performance indicators ............................................................................................................. 283 6.4 Audit Committee's report on the financial statements of the latest fiscal year ................................ 284 6.5 Financial statements of the latest fiscal year ................................................................................... 284 6.6 Any financial distress experienced by the Company or its affiliated enterprises and impacts

on the Company's financial position for the most recent year up to the publication date of the annual report .................................................................................................................................... 284

7. Review and analysis of financial position and financial performance, and risk management ...... 285 7.1 Financial position ............................................................................................................................ 285 7.2 Financial performance ..................................................................................................................... 288 7.3 Cash flow ......................................................................................................................................... 290 7.4 Financial and business impacts of material capital expenditures in the last year ............................ 291 7.5 Causes of profits or losses incurred on investments in the last year, and any improvements or

investments planned for the next year ............................................................................................. 292 7.6 Risk Management ............................................................................................................................ 292

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7.6.1 Risk management framework and policies ......................................................................... 292 7.6.2 Methods of risk assessment and control ............................................................................. 293 7.6.3 Risk Management of subsidiaries ....................................................................................... 294 7.6.4 Hedging and Risk Mitigation Policies Adopted by Subsidiaries ........................................ 307 7.6.5 Quantified Risk Exposure ................................................................................................... 308 7.6.6 Financial and business impacts and responding measures against changes in domestic

or foreign laws or major policies ........................................................................................ 309 7.6.7 Financial and business impacts and responding measures in the event of

technological or industry changes ....................................................................................... 309 7.6.8 Impacts, response, and crisis management in the event of change in corporate image

of the company and subsidiaries ......................................................................................... 309 7.6.9 Potential benefits, risks and response measures of merger and acquisition ........................ 310 7.6.10 Business concentration risks and response measures: ........................................................ 310 7.6.11 Impact, risk and response measures involving significant transfer of shareholding by

directors or shareholders with more than 1% ownership interest: ...................................... 310 7.6.12 Impact, risk and response measures associated with change of management..................... 310 7.6.13 Litigation and non-contentious cases .................................................................................. 311 7.6.14 Other key risks and response measures .............................................................................. 311

7.7 Crisis response and handling ........................................................................................................... 312 7.8 Other material issues ....................................................................................................................... 313

8. Special Disclosures ................................................................................................................................. 314 8.1 Relationship of affiliated enterprises ............................................................................................... 314

8.1.1 Consolidated business report of affiliated enterprises ........................................................ 314 8.1.2 Consolidated financial statements of affiliated enterprises ................................................. 336 8.1.3 Affiliation reports ............................................................................................................... 336

8.2 Private placement of securities for the most recent year up to the publication date of the annual report .................................................................................................................................... 336

8.3 Disposal of the Company's shares by subsidiaries for the most recent year up to the publication date of the annual report ............................................................................................... 336

8.4 Other supplementary notes, where applicable ................................................................................. 336 8.5 Occurrences that have significant impact to shareholders' equity or securities prices, as

defined in Subparagraph 2, Paragraph 2, Article 36 of the Securities and Exchange Act, for the most recent year up to the publication date of the annual report ............................................... 336

Schedule: Fubon Financial Holding Co., Ltd. and Subsidiaries Consolidated Financial Statements as of December 31, 2019 ................................................................................................................. 337

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1. Letter to Shareholders

Dear Shareholders,

The trade war between the United States and China weakened global economic demand and exports in 2019, but the overall profitability of Taiwan’s financial holding companies remained relatively strong. Fubon Financial Holdings reported net profit of NT$58.5 billion, or NT$5.46 per share, and led Taiwan’s financial holding company sector in profitability based on EPS for the 11th consecutive year.

In December 2019, Fubon Financial Holdings took a key step to strengthen its asset management business, bringing Fubon Asset Management under its corporate umbrella after it had been a wholly owned subsidiary of Fubon Securities. The move reflected the long-term strategic importance of the business to Fubon and its potential as one of the company’s most promising areas of development. We expect it will position us to integrate and better manage the resources of our asset management channels and strengthen cross-selling opportunities.

In the year to come, we will maintain our dual-track banking strategy in China featuring both a national and commercial city bank to deepen our presence in the market. Fubon Bank (China), focused on the Yangtze River Delta, the Pearl River Delta, the Beijing-Tianjin-Hebei region and major metropolitan areas in Sichuan, is the only fully licensed Taiwanese-invested bank in China and the one with the most locations. Xiamen Bank, which has 61 modern outlets, aspires to emerge as a leading regional financial services institution focused on serving SMEs on both sides of the Taiwan Strait.

Beyond deepening its presence in Taiwan, Fubon Financial Holdings will focus on strengthening its regional network. Our business in Greater China already spans banking, insurance, securities and asset management, and the goal is to optimize our wide-ranging financial department store services there while also extending our gaze to other parts of Asia. Every effort will be made to pursue opportunities for cooperation and strategic partnerships to expand our financial network through investments or acquisitions. Another priority will be to more actively cultivate overseas markets, develop customer bases, and strengthen services wherever Fubon operates to increase their overall profit contribution. These many initiatives will maximize shareholder value and help move Fubon closer to its vision of becoming one of Asia’s first-class financial institutions.

Financial Sector Leader in EPS for 11 Years Running

The U.S.-China trade war continued to depress global demand in 2019 and adversely affect some Taiwanese companies, but it also benefited Taiwan through trade diversion effects and private sector expansion of production capacity, resulting in stronger-than-expected growth in exports and fixed investment. Those trends, along with a strong showing by the stock market and public policies targeted at boosting domestic demand, fueled moderate private consumption growth, helping Taiwan’s economy improve quarter by quarter and post the highest growth of any of the four Asian Tigers.

Taiwan’s financial sector also exhibited strong growth in 2019 despite ongoing global trade disputes and the U.S. Federal Reserve’s preventive interest rate cuts. Fubon Financial Holdings remained Taiwan’s most profitable financial holding company by earnings per share for the 11th year in a row with EPS of NT$5.46 on net profit of NT$58.5 billion. 80% of that net profit was contributed by the group’s two key profit engines, Fubon Life and Taipei Fubon Bank. Return on assets and return on equity were 0.73% and 10.94%, respectively.

Assets under management reached a new high in 2019, exceeding NT$8 trillion for the first time. As of the end of the year, Fubon Financial Holdings had total assets of NT$8.55 trillion, up 11% from the end of 2018, to remain Taiwan’s second-largest financial holding company by assets.

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Fubon Life: New Highs for Total Premium, Total Assets

Fubon Life delivered outstanding results through its flexible product and channel diversification strategies. Its net profit of NT$26.51 billion made it Fubon Financial Holdings’ biggest profit engine, and its first-year premium of NT$206.3 billion ranked first in the industry and total premium of NT$596.2 billion ranked second. Investible funds continued to grow, reaching nearly NT$4.4 trillion.

The life insurer continues to roll out InsurTech innovations and applications with the customer in mind, including such innovative services as the “Mobile e-Convenience” app that optimizes policyholder services and a new service that uses insurance benefits to directly offset inpatient hospital fees. Sales agents have also been helped by innovative digital support systems, including through such apps as “M+ Smart Robot” and “Policy Health Check” that integrate the M+ Messenger instant messaging service and AI technology as well as the upgraded “Mobile Agent 3.0” platform.

Overseas, Fubon Life’s Vietnam subsidiary has generated steady growth and the focus going forward will be on building an elite business team and diversified channel network to expand the business. In Korea, Fubon Hyundai Life became a Fubon Life subsidiary in September 2018 and gradually instilled the Fubon corporate culture in 2019. Efforts in the future will concentrate on improving the profitability of the business, strengthening product development and channel strategies, and engaging in pension markets. The Hong Kong subsidiary remains intent on leveraging Fubon resources to develop products that help customers accumulate wealth and protect their assets, while also building bancassurance and brokerage channels that can drive sales growth.

Taipei Fubon Bank: Better Customer Experiences through Innovation

Taipei Fubon Bank’s performance in 2019 was as strong as always despite the challenges posed by the U.S.-China trade dispute, the uncertainty created by Brexit and the protests that gripped Hong Kong. Net profit grew 8.1% to just above NT$20 billion, making the bank a key profit engine.

Several core businesses were top performers in their respective fields. The bank ranked second among private banks for outstanding personal mortgages and third in outstanding offshore institutional deposits and loans and wealth management bancassurance sales. Credit cards in circulation topped 3.29 million, helping the bank break into the top-five card issuing banks.

To deal with a rapidly changing financial environment, Taipei Fubon Bank has introduced new technologies and created new customer-oriented financial models and applications to elevate the customer experience. For consumers, Taipei Fubon Bank has developed a “Somersault Cloud” smart decision-making system to quickly respond to customers. For investors, the bank launched the “Nano Investments” smart investment platform to meet demand for a low volatility, steady investing experience. The platform has quickly emerged as Taiwan’s leading robo-advisory platform with more than NT$1.4 billion in assets. Emerging payment and blockchain applications have been another priority, with the bank launching a sandbox experiment featuring Taiwan’s first blockchain interbank transfer app.

Meanwhile, Taipei Fubon Bank actively participated in the founding of internet-only bank “LINE Bank,” which has since received regulatory approval, and it intends in the future to forge an ecosystem with strategic partners to demonstrate its industry-leading digital capabilities.

Fubon Insurance: Market Share No. 1 for 38th Year in a Row

Fubon Insurance relied on integrated marketing and diversified channel strategies to set another high for total written premium at NT$41.8 billion in 2019. That represented a market share of 23.8%, the highest in the industry for the 38th year in a row. After- tax net profit was NT$4.39 billion. The company offers various types of agriculture insurance that give farmers and fishermen added protection beyond government subsidies against losses from natural disasters. In 2019, it continued to offer pear, rice, aquaculture and agriculture facility insurance and also pioneered Taiwan’s first banana crop insurance using aerial drone surveys. These products all contribute to Taiwan’s agriculture sustainability. Fubon Insurance operates a growing overseas network that currently consists of subsidiaries in China and Vietnam, insurance brokerage units in Thailand and the Philippines and representative offices in Beijing, Malaysia and Indonesia. The Vietnamese subsidiary, headquartered in Ho Chi Minh City with branches in Hanoi and Binh Duong, has maintained the professional service standards seen in Taiwan in helping Taiwanese companies and local customers protect their wealth. In 2019, its written premium rose 24.7% to 563.2 billion dong.

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Headquartered in Xiamen, the Chinese subsidiary has 64 service outlets spanning Fujian and Sichuan provinces and Chongqing, Liaoning and Dalian. It has embraced localized service and introduced specialized disaster- and loss-prevention technologies from Taiwan. Written premium in 2019 totaled 1.02 billion yuan in 2019, ranking ninth among 22 foreign-invested P&C insurers in China, and it had the eighth highest market share in Xiamen among all P&C companies.

Fubon Securities: Big Brokerage Advantage, Focus on New Businesses

Fubon Securities has benefited from balanced business development to emerge as one of Taiwan’s leading securities firms. In 2019 its brokerage business and overall securities lending business ranked in the top 3 in the industry, and it ranked second and third, respectively, in emerging market brokerage volume and SPO underwriting market share. The overseas bond business grew 78%, while ETF assets and outstanding general purpose loans also posted robust growth. Net profit in 2019 was NT$2.90 billion.

Fubon Securities has made financial inclusion one of its core missions, and it continues to pursue fintech development, optimize its e-trading platform and strengthen its “Robo Guardians” intelligent investment service to forge a more inclusive financial environment. New product development has also been a priority, as seen by the three new ETNs issued in 2019 that earned an industry-leading 45.3% market share, and the company’s dedication to CSR and sustainability remains unwavering. It successfully underwrote the first foreign-currency green bond issued by a non-financial company in Taiwan, which set a milestone for Taiwan’s green energy development.

Facing uncertainty from global stock markets and the U.S.-China trade dispute in 2020, Fubon Securities will work to consolidate core businesses, strengthen its wealth management services, broaden its product portfolio, optimize online services and bolster its venture capital platform as it advances toward its vision of becoming one of Greater China’s leading securities firms.

Fubon Bank (Hong Kong): All in on Open API Opportunities

Fubon Bank (China): The Strategic Partner of Taiwanese Companies

Fubon Bank (Hong Kong) faced a tough environment in 2019. The U.S. Federal Reserve cut interest rates three times and a protest movement erupted in Hong Kong in the second half of the year, hurting local consumption and slowing investment. But the bank still increased its prime loans and external investment by using the funds gained from the transfer of its stake in Xiamen Bank to Fubon Financial Holdings. At the same time, the second stage of the core banking system was completed and preparations made for the next stage, strengthening the bank’s infrastructure and efficiency. Open API was used to enable online “product and service inquiries” followed by online “product applications” – major milestones in ushering in the new era of smart banking.

Fubon Bank (China), a wholly owned subsidiary of Fubon Financial Holdings, plays a key role for Fubon as a financial services platform in the China market. With 27 branches, it has the broadest network and most service locations of any Taiwanese-invested bank in China and covers the main regions where Taiwanese businesses are concentrated, encompassing first- and second-tier cities such as Shanghai, Beijing and Chongqing and 10 provinces and municipalities.

Fubon Bank (China) performed extremely well in 2019 despite the U.S.-China trade war, volatility in international financial markets, and a slight dip in global economic growth. Deposit and loan balances set record highs, and after-tax net profit soared. Relying on the strengths of the Fubon Group, the bank has embraced the concept of “refined service” prized by Taiwan’s financial sector and worked closely with Fubon affiliates, while also introducing emerging technologies to optimize processes and boost capacity. These three pillars of product innovation, sophisticated service and greater efficiency have enabled the bank to overcome external headwinds and emerge as the ideal strategic partner for growth for Taiwanese enterprises in China.

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Robust Risk Management and Balance Sheet Strength

As its business has grown, Fubon Financial Holdings has put a premium on risk management, maintaining strong balance sheet strength and a level of asset quality that exceeds the market average. Those efforts resulted in a CAR of 116.79% in 2019, well above the minimum capital requirement of 100%.

Taipei Fubon Bank was selected as a D-SIB bank in 2019, and its BIS capital adequacy ratio was 14.12% as of the end of the year, an indication of the bank’s strong capital position. Its nonperforming loan ratio was 0.19%, below the industry average (0.21%), and its coverage ratio of 709.16% far exceeded the industry average (651.78%).

Taiwan Ratings Corp. maintained its long-term and short-term ratings for Fubon Financial Holdings as “twAA” and “twA-1+,” respectively, in a report dated Nov. 22, 2019. Moody’s Investors Service maintained the company’s outlook as “stable” in its latest ratings note on Oct. 8, 2019. These ratings reflect Fubon Financial Holdings’ market leadership and its strong financial performance relative to its competitors.

The ratings of various rating agencies in 2019 were as follows:

The Benchmark for Sustainability in Taiwan’s Financial Sector

In 2015, Fubon Financial Holdings launched the Fubon ESG Visioning Project, a sustainability initiative founded on corporate governance and the Fubon brand spirit of “positive energy.” Consisting of five strategies – leading investment, innovative finance, golden practices, honest lending and tender care – it was conceived to apply core financial competencies to environmental, social and governance issues and achieve United Nations sustainable development goals (SDGs).

Fubon Financial Holdings was the first financial institution to install an independent director system and now serves as a benchmark of board independence and diversity in Taiwan and regional markets. That leadership on corporate governance and contribution to sustainable development earned Chairman Richard M. Tsai an Asian Corporate Director Recognition Award from Corporate Governance Asia for a third time in 2019.

Corporate Governance Asia also honored Fubon Financial Holdings for “Best Investor Relations” for the ninth year running in 2019, reflecting the company’s ongoing emphasis on engaging with investors. It also made the prestigious Fortune 500 for a second year in a row and was the only Taiwanese financial holding company to make the cut.

Fubon Financial Holdings’ corporate governance performance was again widely acclaimed in 2019. Among the honors were an “Icon on Corporate Governance” award from Corporate Governance Asia for an 11th year in a row, a Platinum Corporate Award from The Asset for a ninth straight year, and a Best Initiative award in “Diversity and Inclusion,” also from The Asset. These accolades all underscored Fubon’s commitment to maintaining the highest corporate governance standards.

Rating Type Ratings Agency Credit Rating Outlook Effective Date Long-term; Short-term

International

Standard & Poor’s

BBB+；A-2 Stable 2019/11/22

Moody’s Baa1 Stable 2019/10/08

Domestic Taiwan Ratings Corp.

twAA；twA-1+ Stable 2019/11/22

～11～

Widespread Honors for Fubon Subsidiaries

Fubon Financial Holdings’ subsidiaries reaped countless awards of their own in 2019. Fubon Life was named one of the Top100 Most Valuable Insurance Brands by Brand Finance for a third consecutive year and was honored as Taiwan’s Best Life Insurance Company by World Finance for the eighth straight year. It was honored by Risk Management, Insurance & Finance (RMIM) magazine as the Most Admired Life Insurance Company in the back office and field representative categories for a ninth year in a row, and garnered 17 RMIM Faith, Hope, and Love Awards for insurance – including for Insurer of the Year. It also picked up four RMIM Insurance Quality Awards.

In 2019, Taipei Fubon Bank was named Taiwan’s Best Bank for Service and Market Leader Bank for trade finance by Euromoney, and it won five honors from Global Finance, including for Best Digital Consumer Bank and Best Investment Bank in Taiwan. The Asset gave the bank four awards, including Best Private Bank in Taiwan. Domestically, Taipei Fubon Bank won a Gold Award for Banks in the Commercial Times’ Survey of Taiwan’s Service Sector and earned a Growth through Innovation Award at the Taiwan Institute for Sustainable Energy’s Taiwan Corporate Sustainability Awards.

Fubon Insurance was named the Most Admired Company in the P&C insurance sector for a 19th straight year, and was recognized as the most admired P&C insurer among new finance department graduates. It also earned several Taiwan Insurance Best Performance Awards, including for Best Public Service, Best Customer Service, Best Staff Training, Best Risk Management, and Best Promotion of Emerging Risk Protection Products, and an award from Wealth Magazine for Best Fintech Innovation. In terms of corporate governance, it was the only financial services company in Taiwan to earn a Personal Information Management Award from SGS.

Fubon Securities’ professional expertise earned it several international accolades, including awards for Best Brokerage in Taiwan and Best Initiative for Innovation – Highly Commended by The Asset. Domestically, Fubon Securities won awards for Best Wealth Management Securities Brokerage, Best Sales Team and Best Seniors-friendly Service and two other honors from Business Today, and garnered Best Fintech and Best Brokerage Image honors from Wealth Magazine.

Recognized for Sustainability around the World

The 2020 Global Risks Report issued by the World Economic Forum has warned that climate-related risks rank among the “top five risks with the greatest likelihood of long-term severe impacts.” Fubon Financial Holdings has leveraged the influence of the financial sector to bring industries, customers and supply chains together to address this daunting challenge by developing a sustainable risk management framework, promoting the Principles for Responsible Investment and adopting the Task Force on Climate-Related Financial Disclosures framework.

Fubon Financial Holdings’ balanced strategy in addressing economic, environmental and social dimensions has earned it a spot as a constituent of the Dow Jones Sustainability World Index three years in a row, twice in the FBN Diversified Financial Services and Capital Markets category and once in the Insurance category, and as a constituent of the DJSI Emerging Markets index four years running. It was also selected again as a constituent of the MSCI ESG Leaders Indexes and received an “A” MSCI ESG rating in the Life & Health Insurance category. These many honors indicate that Fubon’s ongoing sustainability initiatives have delivered results and are keeping pace with leading global companies in the field.

Fubon Financial Holdings also received an honorable mention in the financial and insurance division of Global Views Monthly’s CSR annual survey and an Excellence Award for Best Financial Holding Company CSR from Wealth Magazine. Other highlights were a “Taiwan Top 50 Corporate Sustainability Report” platinum award in the financial and insurance category for a seventh year in a row and another “Top 50 Corporate Sustainability” award.

Fubon Financial Holdings was also honored for its corporate sustainability management, earning a Taipei Energy Conservation Leadership Award from Taipei’s Department of Environmental Protection. It also received several “Sports Activist Awards” for a third straight year from the Sports Administration for its longtime sponsorship and promotion of sports in Taiwan.

～12～

The company’s longstanding dedication to ESG practices and forging a sustainable corporate culture was also recognized internationally in 2019 when it was the only Taiwanese company invited to attend the “Seminar on Environmental, Social and Governance Factors in Financial Markets” as part of the APEC Finance Ministers’ Process. In drawing international attention for its ESG efforts, Fubon Financial Holdings was able give a voice to Taiwan on a global stage.

Four Foundations: Putting CSR Ideals into Practice

The late founder of the Fubon Group, Wan-tsai Tsai, championed the idea of “giving back to society what one reaps from society.” That spirit has been carried on by the four foundations supported by Fubon Financial Holdings in harnessing positive energy for social good.

The Fubon Charity Foundation has served all corners of Taiwan for the past 31 years. In 2019, the Making Friends with Love campaign raised more than NT$110 million to help 15,845 students stay in school, and the Emergency Relief Fund provided over NT$24 million in assistance to benefit 20,968 individuals and groups. The Fubon Volunteer Association’s “Give a Wish, Build a Future” campaign fulfilled the dreams of 7,639 students while the 10 best proposals under the 2019 “Fubon Social Welfare Ambassador” program as voted by Fubon employees received additional funding for their causes.

The Fubon Cultural & Educational Foundation is dedicated to youth empowerment and media literacy and works with the Fubon Group to promote financial education and environmental sustainability. In 2019, the Young Voice initiative became a more rigorous mentorship program while the media literacy campaign focused on diversifying the film-viewing habits of high school students and strengthening their film appreciation skills. In 2020, a series of literacy-oriented courses will be developed based on the 2019 national curriculum. Meanwhile, the Future Tycoon Outreach Program imparted healthy attitudes toward money to 1,890 elementary school students, and the Fubon EDU initiative encouraged environmental education and participation in social enterprise activities.

The Fubon Art Foundation is devoted to injecting aesthetics into daily life by making them easily accessible and connecting Taiwan’s cultural soft power to the world. In 2019, the “Very Fun Park” invited eight artists to create different memories of the city, and an augmented reality app was introduced during the exhibition period to create a completely new viewing experience. The “Fubon Forum” recorded presentations and turned them into TV shows to give more people who are busy or live outside of Taipei the chance to see them. The “Fubon ART” app combined art and technology to bring art into daily life.

The Taipei Fubon Bank Charity Foundation primarily cares for the elderly and people with disabilities. In 2019, the “Fubon Sweet 60 Jiazi Cup” added a Go competition to its usual ping-pong event, drawing more than 400 seniors and playing partners to champion active aging and intergenerational harmony. The 9th Taipei Fubon Bank Artistic Achievement Awards for the Disabled were held, and the “All Love Orchestra” consisting of award winners put on a 70-minute musical titled “Us” that the audience loved.

Focus on Risk Management, FinTech Development

In the year ahead, the risks of a global economic slowdown and uncertainty in financial markets could weaken private consumption growth. But the trade diversion effects triggered by the U.S.-China trade war should still provide a boost to Taiwan’s electronics exporters and prompt companies to increase their production capacities in Taiwan. Also, increased investment from overseas Taiwanese companies and in wind power and the deployment of 5G could spur sustained fixed investment growth. This strength in exports and private sector investment should offset consumption weakness and enable Taiwan to maintain stable economic growth in 2020.

～13～

The key strategies and goals for 2020 for Fubon Financial Holdings’ main subsidiaries are as follows:

1. Fubon Life: Plans for 2020 include preparing for regulatory changes by monitoring public policies, adjusting product strategies and having channels renew their emphasis on insurance; strengthening the sale of retirement planning products and protection- and investment-oriented policies; and devising a customer/channel/employee-oriented digital blueprint that bolsters service and streamlines administrative processes to provide customers greater convenience.

2. Taipei Fubon Bank: The main focus will be on five main strategies – enhancing cross-strait cooperation, strengthening product and portfolio development, exploiting group synergies, intensifying customer segmentation, and expanding overseas networks and assets – with financial innovation at their core. The goal will be to encourage change, optimize processes, make better use of resources and provide service more efficiently to meet customer needs while respecting risk management principles to improve customer satisfaction and enhance Fubon’s brand value.

3. Fubon Insurance: Priorities for the personal insurance business include stepping up fintech development to create a full-service smart insurance assistant and devising products geared to daily living. For the corporate insurance business, the goals are to open multiple corporate insurance channels, and leverage an app to market liability insurance, create new products to cope with emerging risks, and get more channels to use marketing apps to extend their reach. Overseas, initiatives will look to forge a Southeast Asian insurance operations platform, promote cooperation on reinsurance between headquarters and overseas subsidiaries, and expand regional interaction.

4. Fubon Securities: Key plans involve deploying intelligent customer service tools, strengthening digital value-added services, and optimizing the trading platform while evolving into a wealth management securities firm; using group resources to create a “one-stop shop” securities and wealth management platform; leveraging the strengths of Taiwan’s capital markets to develop overseas asset management and investment banking opportunities; and integrating securities, futures and equity investment platforms in Greater China to provide more complete services.

5. Fubon Bank (Hong Kong): Improving ROE will be the main goal. The institutional business will focus on maintaining customer relationships and optimizing the bank’s capital structure, while retail banking will emphasize targeted digital banking services. New technologies will be used to simplify processes, improve efficiency, bolster risk management and strictly control costs, and the bank will seize on new fintech opportunities, stay on top of market needs and make use of its advantages to pioneer innovations through a diverse financial services model.

6. Fubon Bank (China): Main initiatives include deepening ties with Taiwanese businesses and better satisfying their many financial needs; optimizing the bank’s capital structure and asset quality; investing in new technologies and strengthening the bank’s technology infrastructure and innovation to drive business growth; enhancing its core competitiveness; and building the bank’s brand image as the ideal strategic financial services partner for Taiwanese businesses in China.

In the year ahead, Fubon Financial Holdings will continue to deepen its presence in Taiwan and expand regionally while strengthening risk management to secure steady, long-term growth. FinTech innovation will remain a top priority to help establish Fubon as an industry leader in financial technology, and the pursuit of good operating results will be supported by the ongoing promotion of the ESG Visioning Project. These many actions will move the company closer to achieving its vision of standing out as one of Asia’s first-class financial institutions.

Richard M. Tsai Chairman, Fubon Financial Holdings

～14～

2. Company Description 2.1 Date of Establishment

December 19, 2001

2.2 Company history Fubon Financial Holding Co., Ltd. (the Company) was established in December 2001 pursuant to the Financial Holding Company Act in Taiwan. In connection with the formation of the Company, substantially all of the assets and liabilities and related operations of Fubon Insurance Co., Ltd. (Fubon Insurance) were transferred to a new wholly owned subsidiary named Fubon Insurance. The name of the “former” Fubon Insurance Co., Ltd. was changed to Fubon Financial Holding Co., Ltd. Furthermore, shares of Fubon Securities Co., Ltd. (Fubon Securities), Fubon Commercial Bank Co., Ltd. (Fubon Bank), and Fubon Life Assurance Co., Ltd. (Fubon Life Assurance) were exchanged for shares in the Company on December 19, 2001.

On August 28, 2002, shares of Fubon Asset Management Co., Ltd. (Fubon Asset Management) were exchanged for shares in the Company. Starting from March 11, 2011, due to the Company’s corporate restructuring, Fubon Asset Management became a wholly owned subsidiary of Fubon Securities. Starting on December 30, 2019, due to the Company’s corporate restructuring, Fubon Asset Management became a wholly owned subsidiary of the Company.

On December 23, 2002, shares of Taipei Bank Co., Ltd. (Taipei Bank) were exchanged for shares in the Company.

In September 2003, shares of Fubon Marketing Co., Ltd. (Fubon Marketing) were acquired in cash by the Company.

In October 2003, shares of Fubon Financial Holding Venture Capital Co., Ltd. (Fubon Financial Holding Venture Capital) were acquired in cash by the Company.

In March 2004, 75% of the shares of Common Stock of International Bank of Asia, Limited, renamed Fubon Bank Hong Kong Limited (Fubon Bank (Hong Kong)), were acquired in cash by the Company. On June 13, 2011, 25% of the remaining outstanding shares of Common Stock of Fubon Bank (Hong Kong) were acquired in cash by the Company. On August 16, 2012, Fubon Bank (Hong Kong) redeemed the preferred shares of stock of $4,004,057 held by the Company. On the same date, the Company subscribed in cash of $4,004,057 for the ordinary shares of stock of Fubon Bank (Hong Kong).

In August 2004, shares of Fubon Asset Management Service Co., Ltd. (Fubon AMC) and Fubon Investment Management Consulting Co., Ltd. (Fubon IMC) were acquired in cash by the Company. On November 7, 2011, the procedures for the liquidation of Fubon IMC were completed.

In March 2008, shares of Taiwan Sport Lottery Co., Ltd. (Taiwan Sport Lottery) were acquired in cash by the Company. In September 2008, the Company owned 51% of the shares of Taiwan Sport Lottery. On July 20, 2011, Taiwan Sport Lottery became wholly owned subsidiary of the Company.

On February 11, 2009, all of the equity shares of ING Life Insurance Co., Ltd. (ING Life Insurance) were exchanged for shares in the Company. On June 1, 2009, ING Life Insurance merged with Fubon Life Assurance Co., Ltd., which was renamed Fubon Life Insurance Co., Ltd.

On January 7, 2014, 80% of the shares of First Sino Bank, Limited, which was renamed as Fubon Bank (China) Co., Ltd. from April, 2014, were acquired in cash by the Company and Taipei Fubon Bank. On October 20, 2016, 20% of the remaining outstanding shares of Fubon Bank (China) were acquired by the Company. Fubon Bank (China) became a wholly owned subsidiary of the Company.

The Company is engaged in the financial businesses including banking, financial bills, credit cards, trust, insurance, securities, futures, ventures, investments in foreign financial institutions approved by the government authorities, investments relevant to other financial services approved by the government authorities and investments, which is excluding the participation in the operation, in the services that are outside the scope of Article 36, Paragraph 2 of Financial Holding Company Act, and approved by the government authorities.

～15～

3. Corporate Governance Report 3.1 Organization 3.1.1 Organizational structure of the company

Note: The organizational chart was authorized at 15th regular meeting of 7th Board of Directors, and became effective as of February 1, 2020.

Chairman

President

Corporate Governance and Sustainability

Committee

Remuneration Committee

Audit Committee

Executive Committee

Risk Management Committee

IT Governance

Committee

Chief Auditor

Auditor Division

Board of Directors

Chief Investment OfficerInvestment Management

Group

Chief Human Resources Officer

Chief Financial Officer

F inance D ivisio n

General Administration Division

Legal & Compliance Division

Economic Research Division

Corporate Communications

Division

Human Resources Division

Accounting and Tax Division

Equity and Alternative Investment

Domestic Fixed Income Investment

International Fixed Income and Currency

Management

Direct Investment

Investment Administration

Information Technology Division

Investment Legal

Chief Risk Officer

Chief Information Officer

General Counsel &Chief Compliance Officer

Risk Management Division

Chief Information Security Officer

Information Security Division

Corporate Development Division

Group Data Management and Integrated Marketing

Division

Real Estate Investment

Alternative and special project investment

～16～

3.1.2 Departments and responsibilities

(1) Auditor Division:

Responsible for evaluating the effectiveness of internal control policies adopted by all entities under the Company, and offering suggestions whenever deemed appropriate to assist the Board of Directors and the management in fulfilling their duties.

(2) Finance Division:

Responsible for investor relationship management, industry trend and peer performance tracking, credit rating, sourcing of working capital, cash management and disbursement, custody, budgeting, monitoring of management indicators, performance evaluation, and analysis of management information.

(3) Accounting and Tax Division:

Responsible for accounting and tax-related affairs, consistency of accounting procedures between the Company and its subsidiaries, evaluating impact of major accounting issues on the Company and subsidiaries, financial statement preparation and disclosure of the financial statements to the public, review and update of accounting policies, promotion of awareness on financial and tax-related policies, and reporting of material information (including press conference).

(4) Corporate Development Division:

Responsible for review and coordination of development strategies of the Company and its subsidiaries, planning and execution of the Company’ strategic equity investment projects, planning and management of the Company's capital, and assistance in execution of subsidiaries’ strategic equity investment projects.

(5) Group Data Management and Integrated Marketing Division:

Responsible for establishment of data governance regulations and systems, warehousing and maintenance of the Company's data, big data analysis technology evaluation and introduction, big data application analysis, promotion of cooperation with subsidiaries in data projects, promotion and management of integrated marketing, co-marketing internal control, and planning and promotion of cross-sale service platforms.

(6) Legal & Compliance Division:

Responsible for litigations, non-contentious cases, and legal affairs of the financial holding company and the group; plans and implements compliance system on a group level; contacts with and responds to queries of the financial supervisory authority; responsible for the planning, enforcement and execution of AML and CTF practices on a group level; responsible for board meeting and shareholder meeting affairs, commercial registration, overseeing equity ownership of major shareholders and insiders, and other related matters.

(7) Risk Management Division:

Responsible for setting up the Group's risk management systems and policies; reviews key risk management guidelines and risk limits across subsidiaries; supervises execution of risk management policies; and monitors, analyzes and reports risk exposures of the Group.

(8) Human Resources Division:

Responsible for planning of organization and responsibilities, human resource planning, policy making, determining employee compensation, performance appraisal, employee training, and managing employment relations within the group.

(9) Corporate Communications Division:

Responsible for group-wide brand management, advertising, brand campaign, corporate sponsorship, trademark management, financial education, and the planning, execution and supervision of public relations and media crisis on a group level; development and promotion of ESGTask Force, and maintenance and management of the official website.

～17～

(10) Economic Research Division:

Responsible for in-depth research of domestic/foreign economies, financial trends, and market changes; publishes research reports and provides professional consultation.

(11) Information Technology Division:

Responsible for the development and maintenance of operating systems, research and application of new technologies, coordination on information-related tasks across subsidiaries, and improving information-related policies.

(12) Information Security division:

Responsible for the planning and monitoring of information security infrastructure, supervision on subsidiaries’ information security operations and coordination of related matters, review and promotion of various related rules and management regulations, and planning of information security propagation and training programs.

(13) General Administration Division:

Responsible for sending, receiving, and filing official correspondences; managing, procuring and leasing of business premises and assets; planning and executing major events etc.

(14) Investment Management Group:

Supervises use of capital among subsidiaries. Coordinates investments in local and foreign fixed income instruments, equity, derivatives, and real estate to deliver optimal returns. Confirms transactions and coordinates back-office operations such as settlement, bookkeeping etc., and verifies terms of investment contracts for the Company’s best interests. The department branches out into a number of functional teams including variable income, alternative and project investment, real estate investment, domestic fixed income, foreign fixed income, foreign currency, direct investment, investment administration, and legal affairs.

～18～

3.1.3 Organizational chart between the Company and subsidiaries

Fubon Insurance Co., Ltd.Shareholding Percentage: 100%Shareholding: 317,840 thousand sharesOriginal Investments: NTD 11,506,684 thousands

Fubon Life Insurance Co., Ltd.Shareholding Percentage: 100%Shareholding:11,083,114 thousand sharesOriginal Investments: NTD 44,472,261 thousands

Taipei Fubon Commercial Bank Co., Ltd.Shareholding Percentage: 100%Shareholding: 11,234,756 thousand sharesOriginal Investments: NTD 80,645,186 thousands

Fubon Securities Co., Ltd.Shareholding Percentage: 100%Shareholding: 1,664,355 thousand sharesOriginal Investments: NTD 30,006,865 thousands

Fubon Financial Holding Venture Capital CorporationShareholding Percentage: 100% (Note)Shareholding: 493,748 thousand sharesOriginal Investments: NTD 5,071,480 thousands

Fubon Direct Marketing Consulting Co., Ltd.Shareholding Percentage: 100%Shareholding: 14,500 thousand sharesOriginal Investments: NTD 87,613 thousands

Fubon AMC, Ltd.Shareholding Percentage: 100%Shareholding: 250,000 thousand sharesOriginal Investments: NTD 2,500,000 thousands

Fubon Bank (Hong Kong) LimitedShareholding Percentage: 100%Shareholding: 1,641,273 thousand sharesOriginal Investments: NTD 29,381,489 thousands

Taiwan Sport Lottery CorporationShareholding Percentage: 100%Shareholding: 9,729 thousand sharesOriginal Investments: NTD 97,292 thousands

Fubon Property & Casualty Insurance Co., Ltd.Shareholding Percentage: 80%Shareholding: N/AOriginal Investments: NTD 4,310,273 thousands

Fubon Insurance Vietnam Co., Ltd.Shareholding Percentage: 100%Shareholding: N/AOriginal Investments: NTD 841,606 thousands

Fubon Insurance Broker (Philippines) CorporationShareholding Percentage: 99.99%Shareholding: 200 thousand sharesOriginal Investments: NTD 14,260 thousands

Fubon Life Insurance (Vietnam) Co., Ltd.Shareholding Percentage: 100%Shareholding: N/AOriginal Investments: NTD 2,153,217 thousands

Carter Lane (Guernsey) LimitedShareholding Percentage: 100%Shareholding: 41,515 thousand sharesOriginal Investments: NTD 3,348,784 thousands

Fubon Life Insurance (Hong Kong) Company LimitedShareholding Percentage: 100%Shareholding: 1,975,000 thousand sharesOriginal Investments: NTD 7,809,384 thousands

Fubon MTL Property (Jersey) LimitedShareholding Percentage: 100%Shareholding: 92,581 thousand sharesOriginal Investments: NTD 4,708,389 thousands

Fubon Ellipse (Belgium) S.A.Shareholding Percentage: 100%Shareholding: 1,134 thousand sharesOriginal Investments: NTD 2,579,461 thousands

Fubon Securities (BVI) LimitedShareholding Percentage: 100%Shareholding: 35,046 thousand sharesOriginal Investments: USD 35,046 thousands

Fubon Securities (Hong Kong) LimitedShareholding Percentage: 100%Shareholding: 283,178 thousand sharesOriginal Investments: HKD 283,178 thousands

Fubon Futures Co., Ltd.Shareholding Percentage: 100%Shareholding:140,000 thousand sharesOriginal Investments: NTD 1,424,128 thousands

Fubon Securities Investment Services Co., Ltd.Shareholding Percentage: 100%Shareholding: 30,000 thousand sharesOriginal Investments: NTD 300,444 thousands

Fubon Asset Management Co., Ltd.Shareholding Percentage: 100%Shareholding: 230,345 thousand sharesOriginal Investments: NTD 3,109,830 thousands

Fubon Sports & Entertainment Co., Ltd.Shareholding Percentage: 100%Shareholding: 6,398 thousand sharesOriginal Investments: NTD 48,737 thousands

Fu Sheng General Insurance Agency Co., Ltd.Shareholding Percentage: 100%Shareholding: 2,500 thousand sharesOriginal Investments: NTD 2,000 thousands

Fu Sheng Life Insurance Agency Co., Ltd.Shareholding Percentage: 100%Shareholding: 2,800 thousand sharesOriginal Investments: NTD 2,000 thousands

Bow Bells House (Jersey) LimitedShareholding Percentage: 100%Shareholding: 46,173 thousand sharesOriginal Investments: NTD 2,186,556 thousands

FB Securities (Hong Kong) LimitedShareholding Percentage: 100%Shareholding: 8,000 thousand sharesOriginal Investments: HKD 8,000 thousands

Fubon Fund Management(Hong Kong) Limited.Shareholding Percentage: 100%Shareholding: 28,000 thousand sharesOriginal Investments: HKD 28,000 thousands

Fubon Credit (Hong Kong) LimitedShareholding Percentage: 100%Shareholding: 65,000 thousand sharesOriginal Investments: HKD 65,000 thousands

Fubon Nominees (Hong Kong) LimitedShareholding Percentage: 100%Shareholding: 0.002 thousand sharesOriginal Investments: HKD 0.2 thousands

Fubon Insurance Brokers LimitedShareholding Percentage: 100%Shareholding: 100 thousand sharesOriginal Investments: HKD 100 thousands

Fubon Bank (China) Co., Ltd.Shareholding Percentage: 100%Shareholding: N/AOriginal Investments: NTD 42,122,872 thousands

40%

40%

49%

51%

53.8%

Fubon Ellipse (Jersey) LimitedShareholding Percentage: 100%Shareholding: 90 thousand sharesOriginal Investments: NTD 3,027 thousands

99.9999%

Fubon Stadium Co., Ltd.Shareholding Percentage: 100%Shareholding: 5,841 thousand sharesOriginal Investments: NTD 50,000 thousands

1 share

Fubon Hyundai Life Insurance Co., Ltd.Shareholding Percentage: 62.06%Shareholding: 83,736 thousand sharesOriginal Investments: NTD 12,588,857 thousands

Fubon Financial Holding Co., Ltd.

Note: Fubon Financial Holding Venture Capital Corporation is held by four companiesFubon Financial Holding Co., Ltd. 53.8%Fubon Life Insurance Co., Ltd. 25.0%Fubon Insurance Co., Ltd. 10.0%Fubon Securities Co., Ltd. 11.2%

Fubon Securities Venture Capital Co., LtdShareholding Percentage: 100%Shareholding: 30,000 thousand sharesOriginal Investments: NTD 300,000 thousands

Fubon Mintou Venture Capital Co., Ltd.Shareholding Percentage: 67%Shareholding: 13,400 thousand sharesOriginal Investments: NTD 134,000 thousands

Fubon Securities Equity Investment Co., Ltd.Shareholding Percentage: 100%Shareholding: N/AOriginal Investments: NTD 944,532 thousands

Fubon Eurotower (Luxembourg) S.à r.l.Shareholding Percentage: 100%Shareholding: 220 thousand sharesOriginal Investments: NTD 7,727,154 thousands

Fubon Macquarie Infrastructure Asset Management Co. , Ltd.Shareholding Percentage: 100%Shareholding: 1,530 thousand sharesOriginal Investments: NTD 15,300 thousands

As of February 29, 2020

Subsidiaries’ Shareholding in the company: None.

～19～

3.2 Background information of Directors, the President, Executive VPs, First VPs, and heads of departments and branch offices 3.2.1 Information about directors

February 29, 2020 Unit: share; %

Title Nationality or

Place of Registration

Name Gender On-Board Date Term of Office

Date First Elected

Time Elected Shares Held Current Shareholding Shares Currently Held by

Spouses and/or Children of Minor Age

Shares held in the Name of Others Education and

Major Past/Current

Position

Position(s) Held Concurrently in the Company and/or in Any

Other Company

Any Other Supervisor, Director, or Supervisor Who is a Spouse or

a Relative Within the Second Degree of Kinship of This Person

Remarks

Shares held Ratio of shareholding Shares held Ratio of

shareholding Shares held Ratio of

shareholding Shares held

Ratio of shareholding Title Name Relation

Chairman R.O.C. Ming Dong Co., Ltd. Representative: Richard M. Tsai

─

Male

2017.06.16

2017.06.16

to 2020.06.15

2001.12.19

2001.12.19

864,774,989 *25,000,000

327,125,694

*74,564

8.45 *4.17

3.20

*0.01

864,774,989

327,125,694 *74,564

8.45

3.20 *0.01

29,473,565

0.29

-

-

• Master of Stern School of Business, NYU

• B.S. of Commerce, National Taiwan University

• Chairman of Fubon Securities Co., Ltd.

• Chairman of Fubon Life Insurance Co., Ltd.

• Chairman of Taiwan Mobile

• Chairman of Fubon Life Insurance Co., Ltd.

• Vice Chairman of Fubon Bank (Hong Kong) Limited

• Director of Taiwan Mobile

• Director of Ming Dong Co., Ltd.

• Director of Dao Ying Co., Ltd.

• Director of Tien Chien Co., Ltd.

• Director of Ti Kun Co., Ltd.

• Director of Hsi Po Lai Co., Ltd.

• Director of Yi Fu So Co., Ltd.

• Director of Colossians Co., Ltd.

• Director of Chung Shing Development Co., Ltd.

• Director of Fubon Direct Broker Consulting Co., Ltd.

• Director of Kuo Chi Investment Co., Ltd.

• Director of Taiwan Fixed Network Co., Ltd.

• Director of TCCI Investment & Development Co., Ltd.

• Director of TCC Communication

Director Daniel M. Tsai Brothers

～20～




Date First Elected




Major Past/Current

Position


Other Company



Remarks





Co., Ltd. • Director of Ta

Fu Media Technology Co., Ltd.

• Director of TCC Investment Co., Ltd.

• Director of TCCI Investment & Development Co., Ltd

• Director of TFN Union Investment Co., Ltd.

• Director of Fu Pen Construction Co., Ltd.

• Director of CHO Pharma, Inc.

• Director of Lucky Way Limited

• Director of Rainbow Cheer Limited

• Director of Key Gain Limited

• Director of Ultimate Epoch Limited

• Director of Orientland International Limited

• Director of Oceana Glory Limited

• Director of Eagle Legacy Limited

• Director of DRJ Development Limited

• Director of Globotex International Limited

• Director of Cosgrove Global Limited

• Director of Vantage Horizon Global Limited

• Director of Star Top Ventures

～21～




Date First Elected




Major Past/Current

Position


Other Company



Remarks





CO LTD • Director of Total

Formation INC. • Director of

International Advisory Board of the New York Philharmonic

• Director of Carnegie Hall Corporation

• Director of Castle Lion Investments Limited

• Director of Fame Dynasty Enterprises Limited

• Director of Penny Lane Investment Limited

• Director of Ta Hsin Chuan Development Co., Ltd.

• Director of ABG-WTT Global Life Science Capital Partners GP Limited

Director R.O.C Ming Dong Co., Ltd. Representative: Daniel M. Tsai

─

Male

2017.06.16

2017.06.16

to 2020.06.15

2001.12.19

2001.12.19

864,774,989 *25,000,000

308,507,129

8.45 *4.17

3.01

864,774,989

308,507,129 (Including

100,000,000 shares

entrusted for purposes yet to be determined)

*2,500,000

8.45

3.01

*0.20

28,458,053

0.28

-

-

• Master of Laws, Georgetown University

• B.A. Law Science, National Taiwan University

• Chairman of Fubon Insurance Co., Ltd.

• Chairman of Taipei Fubon Commercial Bank Co., Ltd.

• Chairman of Fubon Financial Holding Co., Ltd.

• Chairman of Taiwan

• Standing Director of Taipei Fubon Commercial Bank Co., Ltd.

• Chairman of Fubon Bank (Hong Kong) Limited

• Director of Fubon Bank (China) Co., Ltd.

• Director of Fubon Financial Holding Venture Capital Corp.

• Chairman of Fubon Sports & Entertainment Co., Ltd.

• Chairman of Taiwan Mobile

• Chairman of Ming Dong Co.,

Chairman Richard M. Tsai Brothers

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Date First Elected




Major Past/Current

Position


Other Company



Remarks





Mobile Ltd. • Chairman of

Dao Ying Co., Ltd.

• Chairman of Tien Chien Co., Ltd.

• Chairman of Ti Kun Co., Ltd.

• Chairman of Hsi Po Lai Co., Ltd.

• Chairman of Yi Fu So Co., Ltd.

• Chairman of Chung Shing Development Co., Ltd.

• Chairman of Fubon Direct Broker Consulting Co., Ltd.

• Director of Fu Pen Construction Co., Ltd.

• Chairman of Kuo Chi Investment Co., Ltd.

• Chairman of TCC Investment Co., Ltd.

• Chairman of TCCI Investment & Development Co., Ltd

• Chairman of TFN Union Investment Co., Ltd.

• Chairman of TCCI Investment & Development Co., Ltd.

• Chairman of TCC Communication Co., Ltd.

• Director of Taiwan Win TV Media CO., Ltd.

• Chairman of Taiwan Fixed Network Co., Ltd.

• Chairman of Ta

～23～

Title N

2019 Annual Report · Name/Title: Jerry Harn/President Name/Title: Sophia Wang/ Senior Executive VP...

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Transcript of 2019 Annual Report · Name/Title: Jerry Harn/President Name/Title: Sophia Wang/ Senior Executive VP...