0

Yuanta Acquisition of

TC Bank

( Fight for ROE Enhancement )

August 13, 2015

1

Contents

Transaction Summary

Financial Rationale

Strategic Rationale

Synergies

2

Description

Structure

Timeline

Transaction Summary

Ta Chong Bank (“TC Bank”), 2847.TT to become a 100%

subsidiary of Yuanta Financial Holdings (“Yuanta”), 2885.TT

Combination of cash purchase and share swap

Approved by board meetings of both companies : August 21, 2015

Approved by extraordinary AGM of both companies: October 2015

Pending regulatory approval

3

Transaction Summary- Transaction Price

Common Shares: 2,581mn

ECB: US$ 350mn

@16.3 = 8.15 +

Cash Shares

Total Amount: NT$ 42,063 mn

Total Amount: NT$ 14,485 mn

Yuanta will convert the ECB into shares

resulting in capital injection to TC Bank

Equity

Estimated Equity after ECB Conversion

P/B (X)

2Q15Unit: NT$ mn

34,458

44,939

1.26

NT$ 56,548 mn

*

The share swap will be approximately NT$ 8.15 in Yuanta Financial Holdings shares. Yuanta’s share

price is set by adding the average closing share prices of its stock for 20 days, 40 days, and 60 days

before the execution. The swap ratio will be adjusted accordingly if there is any ex-dividend prior to the

execution date.

According to the tentative calculation of the financial consultant, the share exchange ratio will

be approximately 1 TC Bank share in exchange for 0.46 Yuanta shares if the necessary related

due diligence items do not require adjustment.

*

TC Bank

4

Transaction Summary- Terms of Transaction are Subject to

1. The stock conversion price shall not be adjusted unless, after both parties have

done due diligence, one party intends to cut the book value of the other party by

an amount exceeding 10% of that company’s book value as of the end of the

second quarter of 2015 (these adjustments must be made reasonably and in good

faith). In the event that this occurs, the stock conversion price shall be adjusted

through consultations between the two parties made reasonably and in good faith.

2. In order to safeguard the interests of TCB employees, the same personnel

regulations, collective agreements, employee salaries, and welfare system shall

apply to TCB employees for 36 months after the settlement date (this does not

extend to the operating system)

3. The stock conversion plan will take effect only upon receiving approval from a

Yuanta shareholders meeting and the relevant authorities.

4. Upon August 31, 2015, or a prior date mutually agreed on, the two parties to the

transaction shall not engage in further negotiations with other partners.

5. After approving the stock conversion contract, Yuanta will call a shareholder

meeting to consult on the stock conversion plan, and make the necessary relevant

announcements.

5

Financial Rationale- ROE Enhancement

176,292

7,585

8.8%

34,458

1,544

9.2%

Shareholders’ equity

Net Income

ROE (annualized)

Unit: NT$ mn Yuanta FHC TC Bank Pro-forma

Note:

1) Data as of June 30, 2015

2) Sources: Yuanta FHC ; TC Bank

173,551

9,129

10.5% 19%

6

Strategic Rationale

Enhance Bank Earning Contribution

Domestic Banks

Domestic Brokers

Historical ROE Performance

Securities Overseas Diversification

bank

broker

R E

- Fight for ROE Enhancement

Note:

1) The ROE calculation for domestic banks is earnings before tax; that of domestic brokers is earnings after tax

2) Source: Taiwan Banking Bureau and Taiwan Securities Association

7

Strategic Rationale

Yuanta Korea

Securities Regional Footprints

Equity: NT$ 27,692 mn

Ownership: 52.7%

Yuanta Hong Kong

Equity: NT$ 7,794 mn

Ownership: 100%

Yuanta Indonesia

Equity: NT$ 652 mn

Ownership: 99%

First Sec. (Vietnam)

Equity: NT$ 508 mn

Ownership: 44.7%

TY Cambodia

Equity: NT$ 340 mn

London Sales Office

Bank Regional Footprints

Yuanta Saving Bank (Philippines)

Equity: NT$ 255 mn

Ownership: 100%

HK Rep. Office Myanmar Rep. Office

China Rep. Office

Beijing ; Shanghai;

ShenzhenEquity: NT$ 95 mn

Ownership: 100%

Note:

1) Data as of June 30, 2015 and all numbers are un-audited

2) Sources: Yuanta Securities; Yuanta Bank

100%

- Building a Regional Network

8

- Scale Matters

Become Tier I Bank by Asset Size

Pre-tax ROE

> 1,000

500 - 1,000

< 500

14.8%

10.4%

10.5%

Note:

1) Data as of May 31, 2015 and all numbers are un-audited

Total assets(private domestic banks)

UnitL NT$ bn

Note:

1) Data as of May 31, 2015

To

tal A

ss

ets

To

tal

Lo

an

sT

ota

l D

ep

os

its

777 450

UnitL NT$ bn

1,227 (#15)

Pro-forma Mkt. Share: 2.9%

468 277 745 (#15)

Pro-forma Mkt. Share: 3%

650 343 993 (#15)

Pro-forma Mkt. Share: 3%

Yuanta Bank TC Bank

Earnings Performance by Private

Domestic Banks

Source: Taiwan Banking Bureau

Strategic Rationale

Tier I

Tier II

Tier III

Total

9

- A More Balanced Structure

Interest Income

Fee Income

Other Income

Total Revenue

YB TC Bank Pro-forma

3,655

1,326

1,122

6,103

2,719

1,322

802

4,843

6,374

2,648

1,924

10,946

UnitL NT$ mn

60%

22%

18%

100%

56%

27%

17%

100%

58%

24%

18%

100%

Revenue Structure

58%24%

18%

Pro-forma

Interest

Income

Fee

Income

Other

Income

NTD Demand Deposits

NTD Time Deposits

FCY Deposits

YB TC Bank Pro-forma

259.8

240.1

4.9

135.0

639.8

97.0

165.7

7.4

69.5

339.6

354.4

410.4

12.3

198.0

975.1

UnitL NT$ bn

Deposit Structure

Postal Savings Redeposit

& Others

Pro-forma

36%21%

41%

NTD Demand

Deposit

NTD Time

Deposit

FCY

Deposits

Postal

Savings

Redeposit &

others

1%

41%

38%

1%

21%

100%

29%

49%

2%

20%

100%

36%

41%

1%

21%

100%

Strategic Rationale

Note:

1) Data as of June 30, 2015 and all numbers are un-audited

2) Data represents the consolidated figures for Yuanta Bank and the TC Bank parent company, respectively

3) Sources: Yuanta Bank; TC Bank.

Corporate Lending

SME Lending

General Corp. Lending

FCY Lending

Consumer Lending

Mortgage

Unsecured Personal Loans

Others

Non-Accrual Loans

Total Loans

YB TC Bank Pro-forma

300.6

99.8

134.2

66.6

174.0

148.7

1.2

24.1

0.8

475.4

63%

21%

28%

14%

37%

31%

0%

5%

0%

100%

45%

13%

12%

20%

55%

50%

5%

0%

0%

100%

122.0

35.1

32.6

54.3

151.3

137.9

12.8

0.6

0.2

273.6

56%

18%

22%

16%

44%

38%

2%

4%

0%

100%

422.6

134.9

166.8

120.9

325.3

286.6

14.0

24.7

1.0

749.0

Loan Structure

Note:

1) Data as of June 30, 2015 and all numbers

are un-audited

2) Sources: Yuanta Bank; TC Bank

- A More Balanced Structure

Unit: NT$ bn

Strategic Rationale

YB Pro-forma

Consumer Lending

Corporate Lending

63%

37%44%

56%

10

1.20% 1.21%1.19%

1.14% 1.14%1.16%

1.36% 1.37% 1.39% 1.37% 1.39% 1.40%

1.1%

1.2%

1.3%

1.4%

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

YB

TCB

NIM

1.50% 1.51% 1.48% 1.45% 1.45% 1.47%

1.76% 1.76%1.72% 1.71%

1.75%1.80%

1.4%

1.6%

1.8%

2.0%

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

YB

TCB

Spread

11

- Asset Quality Remains Strong

Strategic Rationale

NPL NT$ mn

Total Reserves NT$ mn

Coverage Ratio

NPL Ratio

General Provision

YB TC Bank Pro-forma

954 254 1,208

0.20% 0.09% 0.16%

610% 1,870% 875%

5,823 4,741 10,564

1.22% 1.73% 1.41%

Note:

1) Data as of June 30, 2015

2) Taiwan Banking Bureau

12

Synergies

Key Highlights

Lower funding cost for Yuanta Bank : NT$ 574 mn

- The acquisition of TC Bank gives Yuanta Bank a more extensive

branch network to match securities branch allocation and allows it to

transfer an additional NT$ 40bn in settlement cash from Yuanta Securities

to lower its funding cost

Lower IT operational expenses through the integration of IT

infrastructure: NT$ 170 mn

55%

22%

23%

North

Central

South

59%

24%

17%

YS: 161 YB:88 TCB: 67+

Settlement Cash Transfer Plan

62.5%

Total Settlement Cash

of YS : NT$ 240bn

37.5%

Yuanta

Bank

Other Banks

Unit: NT$ bn

103.2

150.1

46.9

4Q11 4Q14

YB Settlement Cash Deposit

from Polaris

Securities

2016

150

10

2017

160

15

2018

175

15

190

2019

funding cost

saving0.074 0.254 0.469 0.574

- NT$ 744 mn Projected Synergies Annually by 2019

Unit: NT$ bn

Note:

1) Data as of July 31, 2015

51%

10%

39%

Sources: Yuanta Securities; Yuanta Bank; TC Bank

13

Disclaimer

This presentation and the presentation materials distributed herewith

include forward-looking statements. All statements that address

activities, events or developments that Yuanta Financial Holding Co.,

Ltd. (“Yuanta”) and Ta Chong Bank (“TCB”) expect or anticipate will or

may occur in the future (including but not limited to projections, targets,

estimates and business plans) are forward-looking statements.

Yuanta’s and TCB’s actual results or developments may differ

materially from those indicated by these forward-looking statements as

a result of various factors and uncertainties, including but not limited to

price fluctuations, actual demand, exchange rate fluctuations, market

shares, competition, changes in legal, financial and regulatory

frameworks, international economic and financial market conditions,

political risks, cost estimates and other risks and factors beyond our

control. In addition, Yuanta and TCB make the forward-looking

statements referred to herein as of today and undertake no obligation

to update these statements.