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Last update:2016/07/14


Taiwan Financial Holdings
1. Industry Overview

Despite global economic instability, the overall earnings of Taiwanese financial holding companies (FHCs) grew once again in 2015. The competent authority continued to ease regulatory restrictions, encouraged diversification of financial services, provided assistance for investment in overseas markets, promoted expansion of financial holding companies' scope of business, and improved international competitiveness. While taking liberalization measures, the competent authority also asked financial services firms improve their risk controls and corporate governance, and is making plans to go still further with its policy of differential regulatory treatment. In the future, as we deal with such trends as digitization, demographic ageing, and globalization, financial holding companies need to develop comprehensive digital financial services, launch more financial services geared to the needs of an ageing society and a globalized financial services environment, and should also expand their global service networks in order to achieve stable growth in profits.

2. 2016 Business Plan

(1)A smart e-building—responding to the age of digital financial services

In response to the needs of the digital financial services age, TFH will plan for the construction of a smart e-building to serve as a second headquarters building to house a number of core units currently scattered throughout Taipei City. The new building will facilitate more efficient lateral communications, provide for digitized workflows, and will be equipped to meet the challenges of the digital financial services age.

(2)Financial innovation—comprehensive digital financial services

In response to the Bank 3.0 trend toward digital financial services, TFH will set up smart service counters at its business locations to provide cross-platform, cross-device comprehensive digital interfaces and services. TFH also plans to make active use of Big Data to keep close track of customer needs and carry out innovation in such areas as products, channels, workflows, data analysis, and human resources. The goal is to build up digital financial services as one of the TFH Group's core competencies.

(3)Cloud banking integrates the online and offline phases—business in the digital age

To seize upon the business opportunities afforded by the emergence of innovative new technologies and services, TFH will launch a pre-application procedure for customers seeking student loans. Under this procedure, a loan seeker first accesses an application form online and fills it out, then goes to a service counter for offline confirmation of identity. This simplifies the application process and wins more customers among the up-and-coming digital generation.

(4)Dual-track development of human resources—cultivating personnel with multiple fields of expertise

TFH intends to: step up its hiring of professionals in key fields (e.g. digital financial services, e-commerce, information technology, banking, insurance, trust services, wealth management, legal affairs, and international financial services); cultivate people with dual expertise in the two core specialties of financial services and digital technology; implement the Training Program for International Financial Professionals; push for deregulation to meet business needs; and hire senior professionals with international market experience and extensive relationships within the industry, so as to expand the Group's international business.

(5)Generational wealth management—brand image as a leading provider of senior-citizen financial products

Strengthen the Group's wealth management business to provide comprehensive consulting and services designed to provide for the lifetime financial needs of everyone in the customer's family; work to establish a brand image as a leading provider of senior-citizen financial products in order to help customers prepare for old age, financial needs, and estate planning; continue promoting retirement trusts; and study the possible launch of reverse mortgage products as well as combination insurance products tailored to the needs of senior citizens.

(6)Stronger overseas presence—building an international business network


Accelerate the completion of planned business locations in mainland China and around the Asia-Pacific region, and continue evaluating the possible of further branch units in order to complete the Group's overseas business network; actively search international markets for tie-up partners that offer high visibility or are active in complementary lines of business, with an eye to expanding the business scope of overseas branches and boosting our overseas business capabilities and visibility; and seize upon the internationalization of the RMB to become a premier bank for offshore RMB services.

(7) Stable long-term funding—stronger capital, sound operations

TFH has achieved preliminary success in its effort to alleviate the capital shortfall at BOT, the Group's core subsidiary. In order to continue developing its various lines of business, TFH will continue communicating with the Legislative Yuan and the competent authority to gain permission to reduce or discontinue its contributions to the national treasury, and increase retained earnings. The group will also search for multiple sources of stable long-term funding so as to bolster capital and ensure sound business operations.

(8)Charitable trust services—helping to improve the nursing home system

TFH employees provided donations to fund the establishment of the Bank of Taiwan Angel Heart Social Welfare Fund, which makes use of the expertise of financial industry professionals to help people prepare for their old age, and take care of the underprivileged. In this and other ways, the TFH Group will continue to take a systematic approach to its community service activities with an eye to fulfilling its corporate social responsibility and helping to improve the nursing home system.

(9)Sound management of subsidiaries—stronger companies, better performance

Enhance BOT's competitive advantages, launch innovative new products and services, and continue posting strong profits; help BTLI accelerate its business transformation and optimize business management; help BTS strengthen its core businesses and contribute a larger share of group wide profits; and urge BTIB to take on appropriate new products to help the life insurance business and boost the wealth management business.

(10)Seeking amendments to the Act of Taiwan Financial Holding Company—for a more competitive TFH Group

In order to develop the TFH Group in a sound and sustainable manner, and to strengthen its ongoing ability to shoulder the burden of supporting government policy, TFH will continue to push for further amendments to the Act of Taiwan Financial Holding Company to seek easing of regulatory restrictions on its handling of such matters as human resources, purchasing, and budgets. TFH needs to be able to compete on a level playing field with other privatized financial institutions in which the government continues to hold a controlling or substantial interest, so that it can strengthen the Group's competitiveness, run its businesses more flexibly, and achieve greater groupwide profits.

3. Cross-Selling

(1)Cross-selling synergies

In line with the strategic objective of tapping into group synergies, TFH actively developed integrated products and services, built up its groupwide joint business development mechanism, set up a platform for integrated marketing among group subsidiaries, and held monthly meetings of the TFH Cross-selling Committee, which uses the "management by objectives" method to monitor implementation. And the Group used its joint business development and performance evaluation systems to bring about healthy competition and cooperation among the Group's subsidiaries, and to spur diversification of their business. The 2015 Plan for Integrated Marketing Among Group Subsidiaries covered the six principal business lines of corporate finance & bulk collections, wealth management, life insurance, investment of life insurance funds, securities brokerage, and securities underwriting. The subsidiaries used the platform to refer business to each other, and engaged in cross-selling of 17 of the Group's cross-sector products, and monitored the achievement of 25 plan targets. Quantifiable items sold via the cross-selling platform contributed NT$1.19 billion to the Group's profits in 2015, up by 35.28% over the figure for 2014.

(2)Resource integration and cost reductions

TFH continued to promote its groupwide shared operating platforms project; effectively integrated and used logistics resources; and used shared operating platforms for eight major shared business operations (information operations, education and training, legal affairs, property management, community service promotions, purchasing operations, financial and economic information exchange, and human resource exchange) to reap greater benefits from centralized management and professional specialization. TFH continued working in 2015 to make integrated use of the Group's information resources, to upgrade the functionality of the management platform for the Group's basic IT framework, and to carry out leasing and purchasing of out-of-house information sources. Our logistics platform handled 2,763 cross-subsidiary operations in 2015, reducing measurable operating costs over the course of the year by NT$39 million, thus reducing operating costs by tapping into group synergies.