Taiwan Cooperative Bank Disclosure... · 2016-06-29 · Taiwan Cooperative Bank Messsage to Shareholders3 zDeposits At the end of 2015, our deposit balance was NTD 2,504.3 billion,

Notice to readers This English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

Taiwan Cooperative Bank

Chairman

( )

Contents 2 Message to Shareholders

2 Major Achievements in 2015 4 Operating Performance in 2015 4 Operating Strategies for 2016 6 Business Targets for 2016 6 Credit Ratings

7 Bank Profile 7 Date of Establishment 7 History

9 Corporate Governance Report 9 Organization Chart

10 Bank’s Subsidiaries Chart 10 Major Corporate Functions 12 Directors, Supervisors and Executive Officers 13 Major Shareholder 13 Corporate Governance Execution Status and Deviations 15 Implementation of Corporate Social Responsibility

18 Operational Highlights 18 Annual Business Plans for 2016 20 Market Analysis 22 Human Resources

23 Financial Information 23 Condensed Consolidated Balance Sheets 24 Condensed Consolidated Statements of Comprehensive Income 24 Financial Analysis 25 Supervisors’ Report 26 Consolidated Financial Statements

107 Stand Alone Financial Statements

112 Risk Management 112 Credit Risk Management System 113 Operational Risk Management System 115 Market Risk Management System

117 Head Office and Branches 117 Head Office 118 Domestic Branches 129 Overseas Units

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1. Message to Shareholders

In year 2015, the global economy had experienced a lowered growth, affecting domestic economic momentum, in which the Central Bank of the Republic of China (hereafter referred to as "Central Bank") had twice cut interest rates, resulting in narrowed spreads, and the bank's reinforced control on overseas exposure, the banking industry in Taiwan did not perform as well as last year. Thanks to our great customer and dedicated staff, we continued to stay ahead of other banks in scale of deposits and loans, and reaped rewards in overseas expansions and wealth management business. Our income after-tax in 2015 reached NTD 12.129 billion, demonstrating a 19.75% growth over 2014. Our after-tax EPS rose NTD 0.06 to reach NTD 1.52; asset quality also showed improvements, in which non-performing loans (NPL) ratio decreased by 0.04% to reach 0.34%, and our coverage ratio increased by 2.04% to reach 312.30%.

Looking to year 2016, we anticipate that the domestic economy will show moderate

growth, and the Central Bank will adapt an appropriate monetary policy to stabilize prices and the financial market. Furthermore, measures taken by the Financial Supervisory Commission (FSC) to facilitate the financial sector to strengthen expansions throughout Asia, the banking sector is anticipated to be in a better position to enhance profitability.

We will continue to seek stable growth, while

maintaining asset quality, and to strengthen our core business. In response to the trends of digitalization, we will also enhance both physical and virtual channels; make use of the product lineup across various units of Taiwan Cooperative Financial Holding Co., to offer comprehensive, quality financial services for our customers.

Our major achievements in 2015 and operating strategies for 2015 are described briefly below: 1.1 Major Achievements in 2015

Capital adequacy To enhance our risk bearing abilities and expand business management capabilities, we underwent two cash capital increases for a total sum of NTD 26.146 billion. At the end of 2015, our capital adequacy ratio, Tier 1 capital ratio, and common equity ratio were 12.64%, 9.32%, and 9.32% respectively, surpassing our annual targets. Chairman Tsan-Chang Liao


Messsage to Shareholders 3

Deposits At the end of 2015, our deposit balance was NTD 2,504.3 billion, ranking Second in Taiwan. The amount of demand deposit stood at NTD 1,132.2 billion (excluding government deposits), this figure exceeded the trillion milestone and placed us in the First Place throughout Taiwan. We effectively improved our deposit structure and lowered capital costs.

Loans (1) At the end of 2015, our loan balance was NTD 1,988.1 billion, ranking in the

Second Place domestically, in which the small-and-medium enterprises (SME) loans stood at NTD 561.8 billion, ranking Second in Taiwan. Our loan to private enterprise loans (excluding government institutions and public enterprises) was NTD 1,054.0 billion, ranking in the First Place throughout Taiwan.

(2) In year 2015, we arranged/coordinated 69 syndication loans, for a total amount of NTD 504.45 billion, and our participation amount reached NTD 61.96 billion. According to Thomson Reuters Basis Point, our bookrunner market share ranked Third in Taiwan.

(3) In coordination with the government policy, to help senior citizens to attain access to capital needed for retirement life, we launched the first-ever reverse-mortgage, the "Bagful of Happiness Loan" on November 19, 2015, which received widespread popularity from all sectors.

Overseas business Our overseas and pretax income (including OBU and overseas branches) was NTD 3.842, accounting for 27.10% of overall income. Our overseas operations and services have expanded to Europe, the US, Australia, and throughout Asia. Our Yangon, Myanmar office was opened on December 31, 2015, and our New York, USA branch was opened on January 6, 2016. We currently have 16 overseas locations.

Wealth management business The net transaction fees from trust, financial planning, insurance (including mortgage life insurance) and gold bankbook reached NTD 3.568 billion, showing a stellar performance of 23.7% growth. We added new products to our lineup in 2015, including domestic and foreign funds, foreign fixed-income and exchange-traded funds (ETF) among other financial products, for a total of 264 funds.

E-banking (1) In response to the trends of digitization, internetization, and mobilization, we have

established the Bank 3.0 Strategy Group on December 27, 2014, in order to enhance customer adhesion and operational efficiency. Moreover, we will continue to develop Bank 3.0 financial products, as we have already completed the 12 items approved by the FSC on December 25, 2015, in which the "Online Application of Increases in Mortgage" was a pioneer innovation.

(2) We have proactively proceeded with provisioning of E-service, and had received the "Excellence Award and Innovation Award for Financial Services Provider's

4

Promotion of ACH Business Transaction Competition" from the Taiwan Clearing House, and the "Best Business Development in Online Transaction Services Award" as well as the "Best Innovation in Mobile Payment Award" from the Financial Information Service Co., Ltd.

Credit card business

In year 2015, we strengthened the promotion in core products such as Worldwide Card, Hi Lai Card, Joint-iPass Card and more, and our total credit card transactions amounted to NTD 27.077 billion, showing a 10.43% growth. We also actively promoted the government's online purchasing card, and in 2015 the transactions amount reached NTD 913 million, ranking in the First Place throughout Taiwan with a market share of 33.76% .

Branch operating scale To enhance the operation and profitability in our branch offices, we accomplished the integration of 11 branches in 2015, and as of year-end in 2015, we had 272 locations throughout Taiwan (including Department of Business and OBU). Additionally, we will continue monitoring the influences of digital bank, as reference for future branch integrations.

1.2 Operating Performance in 2015

Net Interest：NTD29,906.24 million Total Net Revenue and Gain Other than Interest：NTD9,231.64 million

Allowance for Bad-Debt Expenses：NTD2,158.17 million Operating Expenses：NTD22,898.20million

Income before Income Tax：NTD14,081.51 million Net Income：NTD12,129.48 million Basic Earnings Per Share：NTD1.52

1.3 Operating Strategies for 2016

Utilize Big Data to seek for new opportunities (1) Through utilizing big data from public

information and internal data warehouse, improve our business, and enhance operational performance and productivity.

(2) Observe consumer behaviors and needs to offer the optimal products and services, as well as to elevate product penetration rate and customer contribution margin.

President Hong-Chen Lin


Messsage to Shareholders 5

Effectively adjust assets-liabilities structure (1) Continue to promote "Corporate Expansion Project" and "Supply Chain Financing" to

enhance the market share in industrial loans and to focus on target customers. Through adjusting our loan structure, we plan to increase the number of corporate clients, in order to bring forth deposits, foreign exchange, and wealth management, among other businesses.

(2) Cultivate existing customers with good rating and expand to potential new clients. Implement differential pricing strategy to enhance return on risk-weighted assets as well as strengthen capital utilization performance.

Enhance wealth management services (1) Conduct family-integrated wealth management, and in response to the ageing society,

expand our lineup to include products such as insurance plans for senior citizens and insurance trust funds and more. Strengthen TMU marketing momentum to proactively assist our clients to hedge against risks.

(2) Strengthen educational training and experience sharing in practice, enhance our colleagues' wealth management knowledge and professionalism.

Expand the ratio of overseas profit (1) Grasp the financial developments and trends in Asian regions, lay out locations in

China and Southeast Asia through setting up offices, branches (and sub-branches), subsidiaries, and investing in shares, in order to increase the business momentum overseas and to expand the ratio of overseas profitability.

(2) Utilize domestic channels with referral mechanism, bring forth bi-lateral support and performance-sharing in domestic and overseas units, effectively serve the large number of Taiwanese businesses and expand toward foreign markets.

Effectively utilize human resources (1) Implement the internal experience-sharing and job rotation mechanisms to enhance

employees' core competencies and inter disciplinary capabilities. Conduct human resources checkup to effectively adjust personnel allocations and to utilize human resources.

(2) In response to the technology trends in the financial sector, enhance mangers' business expansion and management capacity through both internal and external training. Equip staff with international banking, financial operations, risk management, IT, and wealth management competencies.

Promote digital financial services (1) Strengthen various virtual channels and platforms and integrate actual branch offices,

online financing, and customer center functions while maintaining information safety and consumer protection; offer our client with innovative and diversified products and services.

(2) Construct digital brand and develope online marketing channels, which is incorporated with daily consumer behaivor, and roll out promotions for using our online financial

6 Annual Report 2015

services from time to time, to enhance customer utilization and adhesion.

Implement internal control in practice (1) Set up various quantified evaluations for credit risk, probability of default, LGD, and

EAD model to enhance risk management competency. (2) Implement the "three lines of defense culture" as part of the internal control system.

Ensure the effectiveness of internal control through the first line of defense - Self Evaluations, the second - Legal Compliance and Risk Management, and the third - Internal Audit.

Fulfill corporate social responsibility (1) Implement green financing and SME financing, utilize the "Equator Principles (EPs)"

while processing financing requests, support corporates in developing green technology, energy-conservation products and environmental protection to fulfill our social responsibility.

(2) Implement corporate governance and care for our employees, customers, the environment and the society, in addition to facilitating the disadvantaged and remote groups. Promote national health, arts and humanities, as well as sports activities and community service. Realize the vision of "having taken from the society, now we strive to give back" and fulfill our corporate social responsibility .

1.4 Business Targets for 2016

Deposit：NT$2,507.55 billion (excluding interbank deposits) Loan：NT$2,012.2 billion Foreign Exchange Transactions：USD 110 billion

1.5 Credit Ratings

Chairman President

Rating Agency Global Rating National Rating

Outlook Release DateLong-Term Short-Term Long-Term Short-Term

S&P/TRC A- A-2 twAA twA-1+ Stable Feb.22, 2016Feb.22, 2016


Bank Profile 7

2. Bank Profile 2.1 Date of Establishment

Oct. 5, 1946 2.2 History Taiwan Cooperative Bank Co., Ltd.（hereafter referred to as "TCB" or "the Bank ）was established in 1946 through the reorganization of the “Taiwan Industry Bank”. Total equity capital in the amount of 25 million Old Taiwan Dollars was provided by the Taiwan Provincial Government along with cooperative groups, farmers’ associations, fishermen’s associations, and irrigation associations. The equity capital was divided into 250 thousand shares, with each one worth of NT$100. The government held 150 thousand shares and each group was allotted 10 thousand shares each. Throughout the nearly 70 years, the operating scale of the Bank has been constantly expanded thanks to the efforts of the entire staff, and at the end of 2015 its equity capital stood at NT$83.493 billion. TCB achieved corporate status under the provisions of Article 52 of the Banking Law in May 1985. It was reorganized as Taiwan Cooperative Bank, Ltd. on Jan. 1, 2001; went public in June 2003; was listed on the stock market on Nov. 17, 2004; underwent a Chinese name change in 2006; and merged with The Farmers Bank of China Co., Ltd. on May 1 of the same year. To integrate the Group’s resources to make full use of operating synergies and reinforce business development, TCB, the Co-Operative Asset Management Co., Ltd. and the Taiwan Cooperative Bills Finance Co., Ltd. jointly established Taiwan Cooperative Financial Holding Co., Ltd.（TCFHC）on Dec. 1, 2011 through a share swap. TCFHC thus became TCB’s sole (100%) shareholder. To achieve the cross-industry condition for holding companies, TCB’s securities department was spun off as the Taiwan Cooperative Securities Co., Ltd. on Dec. 2. For the effective management of the Group’s resources, the Bank transferred its shares in the BNP Paribas Cardif TCB Life Insurance Co., Ltd. and BNP Paribas TCB Asset Management Co., Ltd. (renamed Taiwan Cooperative Securities Investment Trust Co., Ltd.) to TCFHC on Apr. 3, 2012, making the two companies as subsidiaries of TCFHC. TCB’s subsidiaries currently include the United Taiwan Bank S.A. and Cooperative Insurance Brokers Co., Ltd.

As of Dec. 31, 2015, the Bank boasts a total of 286 domestic and overseas branches (including the Department of Business, Offshore Banking Branch, Manila Offshore Banking Branch, Los Angeles Branch, Seattle Branch, Hong Kong Branch, Sydney Branch, Suzhou Branch, Suzhou New District Sub-Branch, Tianjin Branch, Fuzhou Branch, Beijing Representative Office, Phnom Pench Branch, Tuek Thla Sub-Branch, Pur Senchey Sub-Branch, and Yangon Representative Office), creating the most extensive network of branches among all Taiwan banks and positioning itself as a market leader in share of deposits and loans. According to the list of the world’s top 1,000 banks by asset size, published in the July 2015 issue of The Banker magazine, TCB ranked 176th in the world and 4th in Taiwan. In the global ranking of the top 500 banking brands, published in February 2016, TCB ranked 312nd in the world.


According to TCB's Articles of Incorporation, the Bank is charged with carrying out the missions of operating a banking business, developing national economic construction, and providing financial adjustment for the farming and fishery industries. In addition to providing financing for cooperative enterprises, the farming and fishery industries, and small and medium enterprises, TCB also offers deposit, loan, and foreign exchange services for business enterprises in general to facilitate funds utilization and promote overall economic development. This makes TCB a consolidated international bank for farming, fishery, cooperative, and business financing.

From left to right：

Fei-Ling Hu, E. V. P. & General Auditor Shih-Chih Tsai / Mei-Tsu Chen, Executive Vice Presidents Hong-Chen Lin, President Tsan-Chang Liao , Chairman Kuang-Hua Hu/ Teng-Shan Tai / Yen-Yi Cheng , Executive Vice Presidents Pe-Chu Wu, Chief Compliance Officer


Corporate Governance Report 9

3. Corporate Governance Report

3.1 Organization Chart As of March 28, 2016

Auditing Department,Board of Directors

Corporate BankingDepartment

Credit ManagementDepartment

TreasuryDepartment

Risk Management Committee

Board of Supervisors

General Auditor

Executive Vice

Presidents

President

Customer Service Center

Training Center

Regional Management

Center

Centralized Operation

Center

Department of Business ．

Branches ． Sub-

Branches ．

Representative Office

Board of Directors

Chairperson

Shareholders’ Meeting

Compliance and Legal Affairs Department

International Banking Department

Personal BankingDepartment

Human Resource Department

Risk Management Department

Credit Analysis and Research Department

Information Technology Department

Accounting Department

Wealth Management Department

Trust Department

Electronic BankingDepartment

Credit CardDepartment

Loan Assets Management Department

AdministrativeManagement Department

Secretariat,Board of Directors

Business Management Department

Chief Compliance

Officer

Remuneration Committee


3.2 Bank’s Subsidiaries Chart

As of March 28, 2016

3.3 Major Corporate Functions

Department FunctionsAuditing Department, Board of Directors

Handling of TCB auditing matters.

Secretariat, Board of Directors

Handling of Board of Directors’ meetings and confidential matters.


Handling of bank-wide operational policy, organizational, and medium- and long-term business planning, deposits and remittances, forwarding of suspected money-laundering cases and liaison with investigation agencies, evaluation and guidance of business units, and establishment and adjustment of branch units.

Corporate Banking Department

Promotion and management of the loan business, guidance of SMEs and corporate financial planning, services, consultation, and management.

Credit Management Department

Planning of bank-wide loan policy, handling of the review and relay of loan cases that exceed regional center loan authorization, preparation of loan follow-up and evaluation reporting forms, and supervision and other reviews related to loan review.

Treasury Department Handling of New Taiwan Dollar and foreign-currency funds allocation and planning, securities investment, reinvestment, and other financial management matters.


Handling of R&D, promotion, and management of the foreign exchange business; applying, establishing and managing of offshore units; establishing, managing and maintainning the relationships with financial interbanks in the foreign exchange business.


Cooperative Insurance

Brokers Co., Ltd.

United Taiwan Bank

S.A.

Shareholding 100.00% Shareholding

90.02%



Department FunctionsPersonal Banking Department

Planning, promotion, and management of consumer loan and personal loan cases.

Wealth Management Department

Handling of planning for the wealth management business and the management of financial advisors, formulation and revision of wealth-management policies and operational guidelines, and promotion, supervision, and management of financial-planning investment by wealth-management customers.

Trust Department Handling of R&D, promotion, and management of the trust business.

Electronic Banking Department

Planning, promotion, management, and consultation services for the personal e-banking business, Internet banking business, electronic commerce, Internet ATM business, home banking MOD business, ATM business, (international) debit card business, and acquiring businesses.

Credit Card Department

Planning, marketing, implementation, and management of the credit card, debit card, stored-value card, and provision of consultation and customer complaint services in regard to the credit card, debit card, stored-value card.


Planning and supervision of the clearance of non-performing loans (NPLs) and funds for collection, bad-debt writeoff and statistical analysis, and handling of other matters related to NPLs and funds for collection.

Administrative Management Department

Handling of documentary, filing, public relations, general affairs, receipts and disbursements, procurement, property management, and construction and maintenance matters, and matters regarding labor safety and health.

Accounting Department

Compilation and analysis of accounting matters, annual budgets, and affiliated bank data.


Development and promotion of the TCB’s information business, and data processing controls.


Establishment of credit investigation rules, promotion and supervision of credit investigation work, and collection and management of industry data.

Risk Management Department

Handling of the organizational framework for risk management; planning of policies and systems; examination of risk identification, weighing, assessment, and control methods; and other matters relating to risk management.

Human Resource Department

Handling of personnel management and employee training.


Review of the contents and related matters regarding the TCB’s regulations and contracts, assistance and supervision for TCB litigation cases, and planning and management of the legal compliance system.


3.4 Directors, Supervisors and Executive Officers As of March 28, 2016

Directors Supervisors Title Name Title Name

Chairperson Tsan-Chang Liao Resident Supervisor Chung-Fern Wu

Managing Directors Hong-Chen Lin

Supervisors Ming-Lei Chang

Ching-Tien Hsiao Jia-Chen Hu Shen-Gang Mai ,James Meng-Tan Lin

Independent Managing Director Chaw Yang

Independent Directors Keh-Chang Gee Ming-Shenq Hwang Maq Lee

Directors

Shyh-Laang Lin Ching-Chun Hua Shin-Rong Shiah-Hou Chin-Chu Chen Yung-Cheng Chang Hsi-Shui Lin Pimg-KunTsay Kuo-Yang Chen Bing-Hsiu Lee

Executive Officers

Title Name Title Name

President Hong-Chen Lin S.V.P. & G.M., International Banking Department Yen-Mao Lin

Executive Vice Presidents

Kuang-Hua Hu S.V.P. & G.M., Personal Banking Department Kuan-Cheyi Chen

Mei-Tsu Chen S.V.P. & G.M., Wealth Management Department Hsiao-Heng Wong

Teng-Shan Tai S.V.P. & G.M., Trust Department Sue-Chuan Wang

Shih-Chih Tsai S.V.P. & G.M., Electronic Banking Department Meng-Ying Chou

Yen-Yi Cheng S.V.P. & G.M., Credit Card Department Sue-Ching Hwang

E. V. P. & General Auditor Fei-Ling Hu S.V.P. & G.M., Loan Assets Management Department Po-Fang Yu

Chief Compliance Officer Pe-Chu Wu S.V.P. & G.M., Administrative Management Department Jen-Wei Ken

S.V.P. & G.M., Auditing Department, Board of Directors Chen-Hsing Tsai S.V.P. & G.M., Accounting

Department Chen-Tsai Chou

S.V.P. & Chief Secretary, Secretariat, Board of Directors Jeng-Rong Tsai S.V.P. & G.M., Information

Technology Department Chien-Hsing Chang

S.V.P. & G.M., Business Management Department Shih-Ching Chen S.V.P. & G.M., Credit Analysis

and Research Department Chun-Lung Chou

S.V.P. & G.M., Corporate Banking Department Wu-Shung Yan S.V.P. & G.M., Risk

Management Department Shiaw-Yen Lun

S.V.P. & G.M., Credit Management Department Bor-Chang Hwang S.V.P. & G.M., Human Resource

Department Hui-Lin Chen

S.V.P. & G.M., Treasury Department Ling-Tsui Huang S.V.P. & G.M., Compliance and

Legal Affairs Department Chao-Yu Hsu



3.5 Major Shareholder

As of March 28, 2016

Shareholder’s Name Shareholding Shares Percentage

Taiwan Cooperative Financial Holding Co., Ltd. 8,349,300,000 100%

3.6 Corporate Governance Execution Status and Deviations from “Corporate

Governance Best-Practice Principles for The Banking Industry”

Item Implementation Status Deviations from the Principles

and reason 1.Shareholding Structure &

Shareholders’ Rights (1) Method of handling

shareholder suggestions or complaints

(1)The Bank is a wholly owned subsidiary of the Taiwan Cooperative Financial Holding Co., and all related matters are handled in accordance with regulations.

Compliant

(2) The Bank’s possession of a list of major shareholders and a list of ultimate owners of these major shareholders

(2)The Taiwan Cooperative Financial Holding Co. holds 100% of the Bank’s shares.

(3) Risk management mechanism and “firewall” between the Bank and its affiliates

(3)The Bank has formulated the regulations and rules in accordance with the authority’s regulations for risk control and firewall mechanisms between the Bank and affiliated enterprises.

2. Composition and Responsibilities of the Board of Directors

(1)Operations of the Bank’s Nomination Committee, Compensation Committee, or other committees of the Board of Directors

(1) The 4th Board of Directors meeting was held on July

27th, 2011 and appointed members of the Remuneration Committee. The operation of Committee shall be in accordance with the provisions of the Articles and the “Remuneration Committee Charter of our bank."

Compliant

(2)Regular evaluation of CPAs’ independence

(2)The Accounting Department will evaluate the independence of certified public accountants while writing the proposal of entrustment with them each year.

3. Communication channel

with stakeholders

The Bank has set up “Telephone Line for Appealing” and “Customer Service Mailbox” on its website for the interested parties to appeal or communicate to smooth the communication channel.

Compliant


Item Implementation Status Deviations from the Principles

and reason 4. Information Disclosure (1)Establishment of a corporate

website to disclose information regarding the Bank’s finances, business and corporate governance status

(1)The Bank has disclosed annual report, finance and

business information, and cooperate governance on its website. (http://www.tcb-bank.com.tw).

Compliant

(2)Other information disclosure channels (e.g., maintaining an English-version website, appointing responsible personnel to handle information collection and disclosure, appointing spokespersons, webcasting investors conference)

(2) The Bank has established an external Chinese- and English- version website to disclose information related to its profile, chief executive, organization chart, locations, annual report, credit rating, finances, and other matters, and has appointed specialized personnel to collect information for it. The Bank implements spokesperson’s system according to the operation directions for news announcement of TCB to release the operation strategy and business development of the Bank.

5. Other important information to facilitate better understanding of the Bank’s corporate governance practices:

(1) Care for employees Accident insurance is taken out for transporters of funds and cash handlers so as to protect their safety. The Bank has regulations providing subsidies for certification testing to encourage employees to obtain

finance-related licenses and thus enhance their service quality. The Bank has established “Taiwan Cooperative Bank Subsidy Guidelines for Employees Involved in

Litigation in the Lawful Performance of their Duties” to help employees so involved. (2) Relations with investors

The Bank’s sole investor and sole shareholder is Taiwan Cooperative Financial Holding Co., and relations with this investor are excellent.

(3) Rights of stakeholders The Bank operates a 24-hour customer service center, customer service e-mailbox, customer complaint

hotline, and branch loan complaint hotline to provide communication and complaint hotlines for shareholders and customers.

The Bank’s internal website contains an employee opinion mailbox, and channels for employee communication with headquarters units and all levels of management are open.

(4) The execution of risk-management policy and risk evaluation criteria The Bank has set up the Risk-Management Committee, controlling and reviewing the bank’s execution of risk management. The bank has also established Risk Management Department to operate a bank-wide risk management mechanism with regular monitoring and reporting, evaluating the overall credit, market, and operational risk according to a set method and set extent to confirm all the controlling effects, and therefore adjusting the risk controlling measures timely.

(5) The execution of customer policy The Bank carefully considers consumer protection laws in formulating its product application forms and standard contracts, and uses models worked out by the Financial Supervisory Commission as the framework for its standard contracts. Explanations of the major contents of the contracts are provided and know-your-customer (KYC) forms are used to assure compliance with legal regulations.



3.7 Implementation of Corporate Social Responsibility

Item Implementation Status Divergences from the Principles

1. Promotion of corporate governance

The Bank has established corporate governance rules and updates information on its “Corporate Governance” website page whenever necessary.

The Bank strives to enhance the efficiency of resource use, has formulated “Energy Conservation Measures,” and monitors water, electricity, and petroleum conservation on a quarterly basis.

The Bank complies with the provisions of the Labor Standards Act, protects the rights of workers, has worked out a labor safety and health management plan, and follows up on implementation by different units every six months; in addition, one hour of on-the-job employee safety and health training is held every year.

The Bank has instituted “Operating Guidelines for Safety Protection＂and has organized a Safety Protection Supervisory Committee which convenes regular safety protection meetings to review the performance of implementation.

None

2. Development of a sustainable environment

The Bank’s procurement rules specify that priority in procurement be given to products bearing government-certified environmental protection labels, and that green building materials be used in line with the government’s environmental protection policy; and, in addition, that lighting equipment be gradually replaced with energy-saving lamps, and that sanitary equipment bearing water-saving labels be used.

None

3. Protection of social benefit

(1) formulation of a appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights

The major policies adopted are as follows: “Guidelines for Assistance to Employees Involved in

Lawsuits Because in the Performance of their Duties” have been established, providing legal assistance for employees so affected.

The Bank has established “Guidelines for Preventive Measures, Complaints, and Punishments for Sexual Harassment in the Workplace” and “Guidelines for Treating Complaints and Investigation of Sexual Harassment,” and carries out related education on a scheduled basis, to protect the safety of female employees in the workplace and allow employees to work in an environment free of sexual harassment.

None



(2) Establishment of a channel for regular communication with employees, and notification, via reasonable methods, of operational changes that may have a major impact on employees

The major measures adopted are as follows: The Bank signed a collective agreement with the union for protection of the rights of labor and management. Relations between labor and management are harmonious pursue the development of the enterprise. The Bank holds regular labor-management meetings with representatives from the both sides, with full communication and negotiation of differing opinions, with the aim of advancing labor-management harmony and upgrading overall work performance. The Bank has set up an employee complaint mechanism and

installed employee suggestion boxes through which employees can submit their complaints and suggestions. Labor-management disputes are settled expeditiously, and a policy that conforms to the rights of both labor and management is implemented.

None

(3) Provision of a safe and healthy working environment for its employees, and implementation of employee safety and health education on a regular basis

Concrete measures for the provision of employees with a comfortable, healthy, and safe office environment:

Formulation of a labor safety and health management plan: This includes implementation of education and training in safety and health, strengthened health measures, active coordination with labor safety and health activities, and implementation of automatic health examinations. The different units carry out the plan in accordance with implementation details and projected working schedules, with follow-up each half year, so as to establish a high-quality working environment, eliminate potential risks in the workplace, and assure the safety and health of employees.

To enhance employee consciousness of safety and health, and prevent the occurrence of occupational accidents, each unit provides one hour of on-the-job safety and health training each year for general employees, and sends personnel to participate in the safety and health officer, first-aid personnel, and fire manager training organized by the Bankers Association so as to comply with legal requirements and maintain the health and safety of employees.

None

4. Other important information that can assist in understanding the operation of corporate social responsibility

The Bank participated in the following social benefit and community activities in 2015:To encourage people to run for health and donate receipt out of charity, the bank worked with TCFHC and the National Taxation Bureau of Central Area to hold the “2015 Ministry of Finance, Receipt Cup Taipei county Run.” This activity raised a total of 335,858 receipts donated to five social welfare organizations.

The bank held charity care activities with TCFHC in remote areas throughout Taiwan to benefit underprivileged groups or students.

In an effert to evoke the rescue spirit from society, the Bank together with TCFHC donated 10 million NT dollars to injured victims from the Formosa Water Park Dust Explosions.

None




To enhance the development of financial studies, the Bank actively took part in both domestic and overseas forums, such as"Creating Multi-lateral Wins with Public-Private Partnership (PPP) seminar" hosted by the Economic Daily News, "Online Accounting Charity Creativity Contest: Promotions of online financing, digital receipt, and XBRL" hosted by the Accounting Research and Development Foundation, "2015 Annual Symposium" hosted by the Institute of Internal Auditors-Chinese Taiwan, and the "2015 Finance Forum" hosted by the Mr. and Madam Hsu Yuan-Tung Memorial Educational Foundation.

The Bank participated in the "2015 CSBF Cross-Strait Financial Summit" hosted by the Banking Education Association of Taiwan, and the "20th Cross-Strait Financial Cooperation Seminar" hosted by the Taipei Foundation of Finance, to show support of Cross-Strait financial services.

In order to contribute toward development of athletic and sports activities, the Bank not only by holding the "TCB Cup" of ball games but also hosting summer and winter children’s camps and donating sporting goods to local school. The Bank have received the Sports Promoter Award for seven consecutive years.

The Bank also encourages students to undertake financial research; to that end it instituted the “Regulations for the Establishment of Research Grants,” under which it is one of the island’s oldest providers of such grants. These grants were received by 11 outstanding students in 2015, bringing the accumulated number of grantees to 728 and making substantial contributions to academic financial research in Taiwan.


4. Operational Highlights 4.1 Annual Business Plans for 2016 4.1.1 Operational Management

(1) Establish target values for risk weighted assets of each department, by taking into account including liquidity, safety, and profitability and incorporated with budget planning. Utilize capital cost and returns on risk weighted asset as performance evaluation factor, to guide branches to effectively adjust the structure of risk weighted assets and enhance capital utilization.

(2) Riding the trends of digital banking, offer innovative online, automated, and mobilized financial services. Undertake integration and relocation of branches based on operation scale, performance, and cost-effectiveness.

(3) Continue to expand overseas business, implement localized operations, and seek for sources of quality bilateral and syndication loans, strengthen the operational efficiency, and create a growth momentum for profitability in overseas units.

(4) Through analyzing big data, enhance the management of market risk, credit risk, procedural risk and liquidity risk and more, as well as lower the default loss.

(5) Conduct repositioning of employees' competencies; choose appropriate job transformation based on employees' characteristics and interests. Enhance training of IT, digital banking, and marketing skills in addition to fostering a second expertise in all employees.

(6) Exert management by walking around and pay attention to the working conditions of employees; implement job rotation and duty agent mechanism, and strengthen staff's familiarity with their tasks.

4.1.2 Corporate Banking

(1) Continue to process "Corporate Expansion Project" to expand our base of corporate financing clients. Find clients from industries with better forecasts and potentials, expand the scale of credit for SME, and conduct marketing activities for up- and downstream enterprises from existing customer.

(2) For clients who only undertake one mid- to long-term loan, take immediate actions to contact and understand the clients' operational conditions and needs to expand the variety of loans and overall business activities.

(3) Proactively pay visits to loan clients and offer the needed capital planning and suggestion; strengthen their utilization of our Bank as a financing center to control and manage the flow of funds. Promote online financial services such as payments for goods and salaries.

(4) Through utilizing the advantages of corporate financing, exert all-rounded marketing functions to grasp the capital needs of clients' overseas subsidiaries. This will help us to explore potential business opportunities overseas (including OBU) and drive up the growth in foreign exchange and international banking business.

(5) Continue to monitor the industry trends. For the industries that have gloomy forecasts, formulate relevant credit control to lower our credit risk.


Operational Highlights 19

4.1.3 Retail Banking (1) Grasp the business opportunities in senior citizens and launch the "Bagful of Happiness

Loan" service. (2) Maintain the sales and marketing momentum for mortgage services, and launch "Happy

Family Promotional Project" and "LOHAS Financial Promotional Project" and proactively market the "Winner Loan - Working Capital Loan" campaign - a financial mortgage and quality loan service, to enhance our profitability.

(3) In coordination with government policy, continue to launch policy loans. (4) Exert our advantage in channels to boost credit card issuance and POS service, in order to

expand our scale of operations and profitability. (5) Expand online banking service, offer integrated and secure financial services to make

utilization more convenient for customers, and to lower the labor costs of teller.

4.1.4 Treasury Management (1) In compliance with capital and liquidity requirement, increase the position of more

profitable foreign currency assets. Enhance the profitability in capital utilization and adjust asset allocations according to market trends.

(2) In comply with the financial situation and the NT dollar interest rate movement, timely adjust bill, bond and stock position to increase capital gains and interest/share income and undertake repo transactions to obtain yielding profit.

(3) Strengthen the ability of foreign currencies operation to support our funding need by trading foreign currency swap of our excessive foreign currencies or a lower interest rate borrowing from interbank market.

(4) Take profit by the trading foreign currencies based on the changes in international market and fluctuation of interest rate and foreign exchange rate.

(5) Expand profit sources by developing derivative financial products based on market trends and clients’ needs.

4.1.5 Wealth Management (1) Incorporated with resources from subsidiaries of TCFHC, including health insurance,

securities, and trust, we offer diversified financial products and marketing projects to satisfy clients' one-stop-purchase needs for financial services, enhance product penetration and client contribution.

(2) Plan family-integrated financial service to satisfy the differential needs of second generations of clients. Launch products such as senior citizen insurance and insurance trust funds in response to the ageing society, in order to enhance customer value.

(3) Establish a new Wealth Management System, offer functions including customer management (including basic information, investment preferences and affiliates management), customer asset/debt overview, suggestions for asset allocation, planning for insurance needs, tracking investment performance, and marketing promotions management etc.

(4) Build a research team to analyze funds, insurance, real estate, and taxes, in order to support financial specialists and offer professional consultation for customers.

(5) Enhance training for financial specialists to enhance their inter-disciplinary professional knowledge, analysis and marketing skills, reinforce their professional ethics and risk


awareness and to emphasize the concept of offering customer-oriented, differentiated service.

4.1.6 Digital Banking (1) Launch innovative financial services and continue to optimize various online and mobile

services in response to the trends of digital banking. Offer customized online cashflow management to satisfy client needs, as well as to enhance the penetration of our services.

(2) Extend the functions and values in physical branches; establish digital service zones in designated branches to offer our clients the opportunity to utilize the online services and enhance customer satisfaction.

(3) Establish a comprehensive database and data analytics platform to conduct refined segmentation on the customers, explore potential customer, and increase the success in transactions.

(4) Offer convenient and diversified e-payment service, which has been incorporated with customers' daily consumer behavior while valuing information safety and consumer protection; Launch promotional activities to target users from time to time, in order to increase customer utilization rate and adhesion.

(5) Develop a third-party payment service in response to the development of e-competence. Efficiently expand our channels and market through alliances with diverse industries.

(6) Establish a flexible, efficient, secure and stable information system. Foster the professional capability of self-development and maintenance to attain efficient development of online services.

4.2 Market Analysis 4.2.1 Competitive Niches

(1) As benchmark bank with a solid operating base

Since being revamped from the "Taiwan Industrial Cooperative" in 1946, we have continued to cultivate the local market. As of year-end in 2015, the scales of our assets, deposit, and loans all place us in a leading position in the banking industry in Taiwan.

(2) Complete financial network of the Group to offer comprehensive financial services Since its establishment in December 2011, TCFHC has utilized the channel advantages of having over 270 TCB operational locations domestically and integrated with subsidiaries under the TCFHC, including Co-Operative Assets Management Co., Ltd., Taiwan Cooperative Bills Finance Co., Ltd., Taiwan Cooperative Securities Co., Ltd., BNP Paribas Cardif TCB Life Insurance Co., Ltd., Taiwan Cooperative Securities Investment Trust Co., Ltd. and Taiwan Cooperative Venture Capital Co., Ltd., to offer comprehensive financial services including securities investment, trust funds investment, and insurance etc., to exert the integrated marketing synergies of TCFHC as a whole.

(3) A solid and stable operation to win the confidence of customers

For almost 70 years, the Bank kept a solid and stable operation, and is well-trusted by customers. The Bank will continue to solidify our core businesses of deposits, loans, and foreign exchange. And we will also strengthen various services including e-banking, wealth


Operational Highlights 21

management, as well as funds and insurance financial planning, in order to offer clients value-added, diversified, and convenient financial services.

(4) Proactive development of overseas market to become a quality regional bank

The Bank currently has a subsidiary bank in Europe - the United Taiwan Bank; branches in North America - including Los Angeles, Seattle, New York (established on January 6, 2016); a Sydney branch in Australia; in the Greater China zone, we have branches in Hong Kong, Suzhou, Suzhou New District sub-branch, Tianjin, Fuzhou, and Beijing representative office; in Southeast Asia we have branches in Manila, Phnom Penh, sub-branches in TuekThla and Pur Senchey, and a Yangon representative office. We are currently planning to establish a Siem Reap sub-branch under the Phnom Penh branch in Cambodia, and a Changsha branch in China. The network of the Bank has expanded across Europe, the US, Asia and Australia, forming a tightly-knit world-wide service web, as we march toward our objective of becoming a quality regional bank.

4.2.2 Favorable and Unfavorable Factors in Future Development, and Countermeasures

Favorable factors (1) Major domestic and foreign economic forecasting institutions predict that Taiwan’s

economy will grow at the rate of 1.4～2.6％ in 2016. (2) Use technology of big data, cloud computation, etc., coupled with our bank’s database to

innovate financial products and service, and lead all kinds of business developments to boost the interest and non-interest income.

(3) Grasp the business opportunity of the emerging market in Asia, expand our operation scale and improve international visibility, connect our overseas units all over the world to build the platform that provides enterprise and personal financial service available 24 hours a day, and effectively increase the proportion of overseas revenue and profit.

(4) Integrate resources of subsidiaries under the Group, and through the Bank’s domestic and overseas channels proceed cross-marketing to elaborate synergies and strengthen competitiveness.

Unfavorable factors (1) The divergent monetary policies of the central banks of countries, the slower economic

growth in China and the increased debt risk of the emerging market countries may increase the risk of global economic sliding.

(2) The central bank lowering interest rate for stimulating economic growth will narrow interest spread of the bank than before. The intensified competition among banks business, the slowed housing market that increases the risk of bank credit, and on-going adjustment to the overseas risk exposure parts will impact bank profit.

(3) The coming age of innovative financial technology and non-financial service providers joining in the market will change the outlook and operations of the financial industry.

Countermeasures (1) Combine the resources from subsidiaries of TCFHC, including life insurance, security,


investment trust, etc. Provide diversified wealth management products and marketing projects to meet customers’ need for one-stop shopping of wealth management, increase the commodity penetration and clients’ contribution to boost income from risk-free service charge.

(2) Detect the regional trend of financial development in Asia, proactively build regional bases in China and South-East Asia by setting up offices, branches (sub-branches), subsidiaries, equity participation, etc. Implement multiple layout strategy to power-up overseas business to expand the proportion of overseas profit.

(3) Combine functions of physical branches, digital financial and customer service, build crossing country, industry and virtual and physical marketing channels, provide innovative financial product and service.

(4) Explore medium and small businesses and overseas loans, realize differentiated pricing, strengthen risk control, enhance the return on risk assets, and increase the return on the use of capital.

(5) Analyze through big data to find out valuable information so that to plan and improve business, develop products and service, enhance operation performance and output ratio.

4.3 Human Resources

Year 2014 2015 As of

March28, 2016

Number of Employees

Administrative Units 1,486 1,414 1,471

Business Units 6,919 6,747 6,680 Total 8,405 8,161 8,092

Average Age 45.90 45.75 46.05

Average Years of Services 19.58 19.47 19.74

Education

Ph.D. 2 0.02% 2 0.02% 2 0.02%Master’s Degree 1,129 13.43% 1,205 14.77% 1,203 14.87%

Bachelor’s Degree 6,213 73.92% 6,034 73.94% 5,972 73.80%Senior High School 970 11.54% 840 10.29% 836 10.33%Below Senior High

School 91 1.09% 80 0.98% 79 0.98%


Financial Information 23

5. Financial Information 5.1 Condensed Consolidated Balance Sheets

Unit: In Thousands of NT Dollars

Note: The earning distribution for 2015 is still awaiting approval by the Shareholders’ Meeting.

Item 2015 2014 2013 Cash and Cash Equivalents, Due from The Central Bank and Call Loans to other Banks

748,571,932 726,625,366 743,524,323

Financial Assets at Fair Value Through Profit or Loss 14,936,076 43,669,323 41,638,773Available-for-Sale Financial Assets 95,884,851 69,774,501 52,973,404Securities Purchased Under Resell Agreements 209,592 1,851,763 0Receivables, Net 13,430,332 13,113,295 14,163,506Current Tax Assets 987,343 1,570,953 1,311,307Discounts and Loans, Net 1,980,775,753 1,860,345,887 1,905,323,210Held-to-Maturity Financial Assets 42,397,377 20,049,579 10,466,449Investments Accounted For Using Equity Method 122,023 115,905 106,127Other Financial Assets, Net 103,033,930 123,253,666 105,758,143Properties And Equipment, Net 39,291,595 39,651,685 38,694,337Investment Properties, Net 2,269,500 2,083,696 2,090,943Intangible Assets 3,628,906 3,695,854 3,728,060Deferred Tax Assets 1,227,279 1,074,891 1,094,684Other Assets, Net 1,062,498 3,771,130 625,365Total Assets 3,047,828,987 2,910,647,494 2,921,498,631Due to The Central Bank and Other Banks 200,245,814 177,020,696 240,391,110Financial Liabilities at Fair Value through Profit or Loss 14,706,922 6,082,468 2,178,102Securities Sold under Repurchase Agreements 17,452,480 23,179,705 32,366,468Payables 35,360,709 41,744,226 36,100,395Current Tax Liabilities 1,351,013 94,645 288,778Deposits and Remittances 2,504,511,887 2,397,276,471 2,340,266,504Bank Debentures 69,610,000 92,110,000 97,880,000Other Financial Liabilities 7,709,368 9,061,067 19,197,898Provisions 9,286,765 8,831,254 8,546,352Deferred Tax Liabilities 3,453,496 3,568,502 3,415,603Other Liabilities 1,185,632 1,170,711 1,103,148

Total Liabilities Before Distribution 2,864,874,086 2,760,139,745 2,781,734,358After Distribution Note 2,767,228,745 2,787,334,358

Equity Attributable To Owners Of The Company 182,760,001 150,310,637 139,563,888

Capital Before Distribution 83,493,000 71,362,760 68,432,520After Distribution Note 71,362,760 68,432,520

Capital Surplus 53,054,992 38,730,516 35,360,741

Retained Earnings Before Distribution 45,153,797 40,730,243 36,239,090After Distribution Note 33,641,243 30,639,090

Other Equities 1,058,212 (512,882) (468,463)Non-Controlling Interest 194,900 197,112 200,385

Total Equity Before Distribution 182,954,901 150,507,749 139,764,273After Distribution Note 143,418,749 134,164,273


5.2 Condensed Consolidated Statements of Comprehensive Income Unit: In Thousands of NT Dollars

Item 2015 2014 2013 Interest Revenue 51,114,765 50,720,752 47,055,185Interest Expense (21,062,243) (22,952,550) (21,540,589)Net Interest 30,052,522 27,768,202 25,514,596 Net Revenues And Gains Other Than Interest 9,435,664 11,994,823 7,751,407Total Net Revenues 39,488,186 39,763,025 33,266,003Bad-Debt Expenses And Provision For Losses On Guarantees (2,148,273) (6,248,353) (3,237,123)Operating Expenses (23,210,190) (21,836,195) (20,613,541)Income Before Income Tax 14,129,723 11,678,477 9,415,339Income Tax Expense (1,989,265) (1,540,207) (1,378,709)Net Income 12,140,458 10,138,270 8,036,630Other Comprehensive Income For The Period, Net Of Tax 940,978 (91,593) (516,904)Total Comprehensive Income 13,081,436 10,046,677 7,519,726Net Income Attributable To Owner of the Company 12,129,481 10,128,559 8,022,060Net Income Attributable To Non-controlling interest 10,977 9,711 14,570Total Comprehensive Income Attributable To Owner of the Company 13,083,648 10,049,950 7,492,507

Total Comprehensive Income Attributable To Non-controlling interest (2,212) (3,273) 27,219

Earnings Per Share（NT$）(Note) 1.52 1.46 1.17Note：The weighted average number of shares outstanding for EPS calculation has been retroactively adjusted to reflect the

effects of the stock dividends distributed. 5.3 Financial Analysis

Item 2015 2014

Consolidated Stand -alone Consolidated Stand -

alone

Operating Ability

Ratio of Loans to Deposits (%) 79.97 79.65 78.57 78.28Ratio of Overdue (%) 0.34 0.34 0.38 0.38Ratio of Interest Cost to Annual Average Deposits (%) 0.77 0.77 0.81 0.81

Ratio of Interest Income to Annual Average Loans Outstanding (%) 2.12 2.12 2.08 2.08

Total Assets Turnover (Times) 0.01 0.01 0.01 0.01

Profitability

Return on Tier I Capital Ratio (%) 9.15 9.18 8.76 8.81Return on Assets Ratio (%) 0.41 0.41 0.35 0.35Return on Shareholders’ Equity Ratio (%) 7.28 7.28 6.99 6.99Ratio of Net Income (%) 30.74 30.99 25.50 25.60Earnings Per Share(NT$) 1.52 1.52 1.46 1.46

Financial Structure

Ratio of Liabilities to Assets (%) 93.98 93.98 94.80 94.80Ratio of Fix Assets to Shareholder’s Equity 21.48 21.50 26.35 26.38

Growth Rate

Ratio of Asset Growth (%) 4.71 4.69 (0.37) (0.38)Ratio of Profit Growth (%) 20.99 20.94 24.04 24.13

Cash Flow

Ratio of Cash flow (%) 60.54 61.48 - -Ratio of Cash Flow Adequacy (%) 168.37 177.68 - -Ratio of Cash Flow for Operating to Cash Flow from Investing (%) 8,316.50 8,411.82 - -

Capital Adequacy Ratio (%) 12.74 12.64 12.85 12.74



5.4 Supervisors’ Report

In accordance with Article 219 of the Company Law, we have examined the financial statements, the consolidated financial statements for the 2015 fiscal year which had been approved by the Board of Directors of the company. The financial statements and the consolidated financial statements have been audited by Certified Public Accountants of Deloitte & Touche. We find no discrepancies and will submit this report to the annual general meeting.

Submitted to the 2016 Annual General Meeting Taiwan Cooperative Bank

Supervisor:

Supervisor:

Supervisor:

Feb. 22, 2016



5.4 Supervisors’ Report

In accordance with Article 219 of the Company Law, we have examined the financial statements, the consolidated financial statements for the 2015 fiscal year which had been approved by the Board of Directors of the company. The financial statements and the consolidated financial statements have been audited by Certified Public Accountants of Deloitte & Touche. We find no discrepancies and will submit this report to the annual general meeting.

Submitted to the 2016 Annual General Meeting Taiwan Cooperative Bank

Supervisor:

Supervisor:

Supervisor:

Feb. 22, 2016


5.5 Consolidated Financial Statements

INDEPENDENT AUDITORS’ REPORT The Board of Directors and the Stockholders Taiwan Cooperative Bank, Ltd. We have audited the accompanying consolidated balance sheets of Taiwan Cooperative Bank, Ltd. and its subsidiaries (collectively, the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements of Financial Institutions by Certified Public Accountants, the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Taiwan Cooperative Bank, Ltd. and its subsidiaries as of December 31, 2015 and 2014, and their consolidated financial performance and their consolidated cash flows for the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Public Banks, the Regulations Governing the Preparation of Financial Reports by Security Firms, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretation of IFRS (IFRIC) and Interpretations of IAS (SIC) endorsed by the Financial Supervisory Commission of the Republic of China. We have also audited the parent company only financial statements of Taiwan Cooperative Bank, Ltd. as of and for the years ended December 31, 2015 and 2014 and have issued an unqualified opinion in our report dated February 22, 2016. February 22, 2016

Notice to Readers The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.



TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars) 2015 2014 (Audited after Retrospected)ASSETS Amount % Amount % CASH AND CASH EQUIVALENTS (Notes 4, 6 and 35) $ 43,115,490 2 $ 44,118,605 2DUE FROM THE CENTRAL BANK AND CALL LOANS TO

OTHER BANKS (Notes 4, 7, 35 and 36) 705,456,442 23 682,506,761 23FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR

LOSS (Notes 4, 8 and 35) 14,936,076 1 43,669,323 2SECURITIES PURCHASED UNDER RESELL AGREEMENTS

(Notes 4, 9 and 35) 209,592 - 1,851,763 -RECEIVABLES, NET (Notes 4, 10, 35 and 42) 13,430,332 1 13,113,295 1CURRENT TAX ASSETS (Notes 4, 32, 35 and 37) 987,343 - 1,570,953 -DISCOUNTS AND LOANS, NET (Notes 4, 11, 35 and 36) 1,980,775,753 65 1,860,345,887 64AVAILABLE-FOR-SALE FINANCIAL ASSETS, NET (Notes 4, 12

and 36) 95,884,851 3 69,774,501 2HELD-TO-MATURITY FINANCIAL ASSETS (Notes 4, 13 and 36) 42,397,377 1 20,049,579 1INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

(Notes 4 and 14) 122,023 - 115,905 -OTHER FINANCIAL ASSETS, NET (Notes 4, 15 and 36) 103,033,930 3 123,253,666 4PROPERTIES AND EQUIPMENT, NET (Notes 4 and 16) 39,291,595 1 39,651,685 1INVESTMENT PROPERTIES, NET (Notes 4 and 17) 2,269,500 - 2,083,696 -INTANGIBLE ASSETS (Notes 4 and 18) 3,628,906 - 3,695,854 -DEFERRED TAX ASSETS (Notes 4 and 32) 1,227,279 - 1,074,891 -OTHER ASSETS, NET (Notes 4, 19 and 37) 1,062,498 - 3,771,130 -TOTAL $ 3,047,828,987 100 $ 2,910,647,494 100 LIABILITIES AND EQUITY DUE TO THE CENTRAL BANK AND OTHER BANKS (Notes 20

and 35) $ 200,245,814 7 $ 177,020,696 6FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT

OR LOSS (Notes 4, 8, 24 and 35) 14,706,922 1 6,082,468 -SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

(Notes 4, 8, 12, 13, 21 and 35) 17,452,480 1 23,179,705 1PAYABLES (Notes 22 and 35) 35,360,709 1 41,744,226 2CURRENT TAX LIABILITIES (Notes 4, 32 and 35) 1,351,013 - 94,645 -DEPOSITS AND REMITTANCES (Notes 23 and 35) 2,504,511,887 82 2,397,276,471 83BANK DEBENTURES (Note 24) 69,610,000 2 92,110,000 3OTHER FINANCIAL LIABILITIES (Notes 25, 35 and 37) 7,709,368 - 9,061,067 -PROVISIONS (Notes 4, 26 and 27) 9,286,765 - 8,831,254 -DEFERRED TAX LIABILITIES (Notes 4, 16 and 32) 3,453,496 - 3,568,502 -OTHER LIABILITIES (Note 4) 1,185,632 - 1,170,711 -

Total liabilities 2,864,874,086 94 2,760,139,745 95EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY

Capital stock Common stock 83,493,000 3 71,362,760 3

Capital surplus Additional paid-in capital from share issuance in excess of par

value 52,951,835 2 38,627,359 1From treasury stock transactions 103,157 - 103,157 -

Total capital surplus 53,054,992 2 38,730,516 1Retained earnings

Legal reserve 25,586,622 1 22,548,376 1Special reserve 1,217,583 - 1,217,583 -Unappropriated earnings 18,349,592 - 16,964,284 -

Total retained earnings 45,153,797 1 40,730,243 1Other equity 1,058,212 - (512,882 ) -

Total equity attributable to owners of the Company 182,760,001 6 150,310,637 5NON-CONTROLLING INTEREST 194,900 - 197,112 -

Total equity 182,954,901 6 150,507,749 5TOTAL $ 3,047,828,987 100 $ 2,910,647,494 100

The accompanying notes are an integral part of the consolidated financial statements.


TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014(In Thousands of New Taiwan Dollars, Except Earnings Per Share Amounts)

2015

2014 (Audited after Retrospected)

Percentage Increase

(Decrease) Amount % Amount % % INTEREST REVENUE (Notes 4, 28 and 35) $ 51,114,765 129 $ 50,720,752 128 1INTEREST EXPENSE (Notes 4, 28 and 35) (21,062,243 ) (53 ) (22,952,550 ) (58 ) (8 )NET INTEREST 30,052,522 76 27,768,202 70 8NET REVENUES AND GAINS OTHER THAN INTEREST

Service fee income, net (Notes 4, 29, 35 and 42) 6,418,129 16 5,558,893 14 15Gains on financial assets and liabilities at fair value through profit

or loss (Notes 4, 30 and 35) 455,847 1 2,663,086 7 (83 )Realized gains on available-for-sale financial assets (Note 4) 633,063 2 550,004 1 15Foreign exchange gains (losses), net (Note 4) 1,243,734 3 (93,905 ) - 1,424Impairment losses on assets (Notes 4, 12, 13, 15 and 19) (5,730 ) - (21,236 ) - (73 )Share of gains of associates and joint ventures accounted for using

the equity method (Notes 4 and 14) 13,432 - 15,018 - (11 )Gains on financial assets carried at cost, net (Note 4) 240,159 1 252,294 - (5 )Gains on disposal of properties and equipment, net (Notes 4 and 35) 154,779 - 3,106,619 8 (95 )Other noninterest gains (losses), net (Notes 35 and 42) 282,251 1 (35,950 ) - 885

Total net revenues and gains other than interest 9,435,664 24 11,994,823 30 (21 )TOTAL NET REVENUES 39,488,186 100 39,763,025 100 (1 )BAD-DEBT EXPENSES AND PROVISION FOR LOSSES ON

GUARANTEES (Notes 4 and 11) (2,148,273 ) (5 ) (6,248,353 ) (16 ) (66 )OPERATING EXPENSES (Notes 4, 16, 17, 18, 27, 31 and 35)

Employee benefits (15,263,368 ) (39 ) (14,656,122 ) (37 ) 4Depreciation and amortization (1,204,900 ) (3 ) (1,214,726 ) (3 ) (1 )General and administrative (6,741,922 ) (17 ) (5,965,347 ) (15 ) 13

Total operating expenses (23,210,190 ) (59 ) (21,836,195 ) (55 ) 6INCOME BEFORE INCOME TAX 14,129,723 36 11,678,477 29 21INCOME TAX EXPENSE (Notes 4 and 32) (1,989,265 ) (5 ) (1,540,207 ) (4 ) 29NET INCOME 12,140,458 31 10,138,270 25 20OTHER COMPREHENSIVE INCOME

Items that will not be reclassified subsequently to profit or loss (Notes 4 and 27) Remeasurement of defined benefit plans (616,927 ) (2 ) (34,190 ) - 1,704Changes in the fair value attributable to changes in the credit

risk of financial liabilities designated as at fair value through profit or loss 2,168 - - - -Items that will not be reclassified subsequently to profit or

loss, net of income tax (614,759 ) (2 ) (34,190 ) - 1,698Items that may be reclassified subsequently to profit or loss

(Notes 4, 14 and 32) Exchange differences on the translation of financial statements

of foreign operations 49,799 - 217,839 1 (77 )Unrealized gains (losses) on available-for-sale financial assets 1,509,479 4 (243,609 ) (1 ) 720Share of other comprehensive losses of associates and joint

ventures accounted for using the equity method (111 ) - (591 ) - (81 )Income tax attributable to other comprehensive income (3,430 ) - (31,042 ) - (89 )

Items that may be reclassified subsequently to profit or loss, net of income tax 1,555,737 4 (57,403 ) - 2,810

Other comprehensive income (losses), net of income tax 940,978 2 (91,593 ) - 1,127 TOTAL COMPREHENSIVE INCOME $ 13,081,436 33 $ 10,046,677 25 30 NET INCOME ATTRIBUTABLE TO:

Owner of the Company $ 12,129,481 31 $ 10,128,559 26 20Non-controlling interest 10,977 - 9,711 - 13

$ 12,140,458 31 $ 10,138,270 26 20TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:

Owner of the Company $ 13,083,648 33 $ 10,049,950 25 30Non-controlling interest (2,212 ) - (3,273 ) - (32 )

$ 13,081,436 33 $ 10,046,677 25 30EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 33)

Basic $1.52 $1.46




TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

Equity Attributable to Owners of the Company

Other Equity

Capital Stock (Note 34) Capital

Surplus (Notes4 and

34)

Retained Earnings (Notes 4 and 34)

ExchangeDifferences

on the Translation

of Financial

Statements of

Foreign Operations

(Note 4)

Unrealized Gains

(Losses) on Available-

for-sale Financial

Assets (Note 4)

Changes in the Fair Value

Attributable to Changes in the Credit Risk of

Financial Liabilities

Designated as at Fair Value

through Profit or Loss (Note 4)

Non- controllingInterests (Notes

4 and 34) Total Equity

Shares (In

Thousands) Common

Stock Legal ReserveSpecial Reserve

Unappropriated Earnings

BALANCE, JANUARY 1, 2014 6,843,252 $ 68,432,520 $ 35,360,741 $ 20,141,758 $ 1,309,025 $ 14,788,307 $ 44,030 $ (512,493) $ - $ 200,385 $ 139,764,273

Effect of retrospective application - - - - - (3,216) - - - - (3,216)

BALANCE, JANUARY 1, 2014 AS RETROSPECTED 6,843,252 68,432,520 35,360,741 20,141,758 1,309,025 14,785,091 44,030 (512,493) - 200,385 139,761,057

Reversal of special reverse - - - - (91,442) 91,442 - - - - -Appropriation of the 2013

earnings Legal reserve - - - 2,406,618 - (2,406,618) - - - - -

Cash dividends - - - - - (5,600,000) - - - - (5,600,000)Capital increase in June 2014 200,000 2,000,000 2,300,000 - - - - - - - 4,300,000Capital increase in December

2014 93,024 930,240 1,069,775 - - - - - - - 2,000,015Total comprehensive income

Net income for the year ended December 31, 2014 - - - - - 10,128,559 - - - 9,711 10,138,270

Other comprehensive losses for the year ended December 31, 2014 - - - - - (34,190) 191,583 (236,002) - (12,984) (91,593)

Total comprehensive income for the year ended December 31, 2014 - - - - - 10,094,369 191,583 (236,002) - (3,273) 10,046,677

BALANCE, DECEMBER 31, 2014 AS RETROSPECTED 7,136,276 71,362,760 38,730,516 22,548,376 1,217,583 16,964,284 235,613 (748,495) - 197,112 150,507,749

Appropriation of the 2014 earnings Legal reserve - - - 3,038,246 - (3,038,246) - - - - -Cash dividends - - - - - (7,089,000) - - - - (7,089,000)

Capital increase in March 2015 993,024 9,930,240 11,419,776 - - - - - - - 21,350,016

Capital increase in October 2015 220,000 2,200,000 2,596,000 - - - - - - - 4,796,000

Share-based payment arrangements involving TCFHC'S common stock - - 308,700 - - - - - - - 308,700

Total comprehensive income Net income for the year

ended December 31, 2015 - - - - - 12,129,481 - - - 10,977 12,140,458

Other comprehensive income for the year ended December 31, 2015 - - - - - (616,927) 52,280 1,516,646 2,168 (13,189) 940,978

Total comprehensive income for the year ended December 31, 2015 - - - - - 11,512,554 52,280 1,516,646 2,168 (2,212) 13,081,436

BALANCE, DECEMBER 31, 2015

8,349,300 $ 83,493,000 $ 53,054,992 $ 25,586,622 $ 1,217,583 $ 18,349,592 $ 287,893 $ 768,151 $ 2,168 $ 194,900 $ 182,954,901



TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

2015 2014(Audited after

Retrospected) CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax $ 14,129,723 $ 11,678,477Adjustments for:

Depreciation expenses 960,229 964,768Amortization expenses 244,671 249,958Bad-debt expenses 2,370,694 5,950,042Gains on financial assets and liabilities at fair value through profit or loss (455,847 ) (2,663,086)Interest expense 21,062,243 22,952,550Interest revenue (51,114,765 ) (50,720,752)Dividend income (395,526 ) (372,030)Provision (reversal of provision) for losses on guarantees (222,421 ) 298,311Salary expense on share-based payments 308,700 -Share of gains of associates and joint ventures accounted for using equity method (13,432 ) (15,018)Gains on disposal of properties and equipment (150,692 ) (3,099,277)Gains on disposal of investments (518,260 ) (454,757)Impairment losses on financial assets 7,857 21,380Reversal of impairment losses on non-financial assets (2,127 ) (144)Net changes in operating assets and liabilities

Decrease (increase) in due from the Central Bank and call loans to other banks 70,094,536 (56,387,178)Decrease in financial assets at fair value through profit or loss 43,798,910 18,033,417Decrease (increase) in receivables (204,424 ) 2,077,290Decrease (increase) in discount and loans (122,231,104 ) 39,195,860Increase in available-for-sale financial assets (24,201,353 ) (16,454,642)Increase in held-to-maturity financial assets (22,605,381 ) (9,293,235)Decrease (increase) in other financial assets 20,234,396 (17,411,864)Decrease (increase) in other assets 2,713,057 (3,109,590)Increase (decrease) in due to the Central Bank and other banks 23,225,118 (63,370,414)Decrease in financial liabilities at fair value through profit or loss (18,986,800 ) (13,777,822)Decrease in securities sold under repurchase agreements (5,727,225 ) (9,186,763)Increase (decrease) in payables (6,177,992 ) 5,791,783Increase in deposits and remittances 107,235,416 57,009,967Decrease in other financial liabilities (1,956,423 ) (9,862,926)Increase (decrease) in provision for employee benefits 60,538 (51,163)Increase (decrease) in other liabilities 156,186 (86,278)

Cash generated by (used in) operations 51,638,502 (92,093,136)Interest received 51,155,730 49,665,730Dividends received 402,729 377,136Interest paid (21,677,027 ) (23,100,503)Income tax paid (416,906 ) (1,628,613)

Net cash generated by (used in) operating activities 81,103,028 (66,779,386)CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition for properties and equipment (795,281 ) (3,199,379 ) Proceeds of the disposal of properties and equipment - 4,290,443 Increase in refundable deposits (4,474 ) (30,582 ) Acquisition for intangible assets (177,535 ) (167,931 ) Proceeds of the disposal of collaterals assumed 2,127 144 Increase in other assets (43 ) (9,436 )

Net cash generated by (used in) investing activities (975,206 ) 883,259 CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds of the issuance of bank debentures 12,516,000 10,000,000 Repayment of bank debentures (22,500,000 ) (15,770,000 ) Increase in guarantee deposits received 604,724 - Decrease in guarantee deposits received - (273,905 ) Dividends paid (7,089,000 ) (5,600,000 ) Capital increase 26,146,016 6,300,015

Net cash generated by (used in) financing activities 9,677,740 (5,343,890 ) EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 889,289 (194,355 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 90,694,851 (71,434,372 ) CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR 337,215,239 408,649,611 CASH AND CASH EQUIVALENTS, END OF THE YEAR $ 427,910,090 $ 337,215,239 Cash and cash equivalent reconciliations: Cash and cash equivalents in the consolidated balance sheets $ 43,115,490 $ 44,118,605Due from the Central Bank and call loans to other banks in accordance with the definition

of cash and cash equivalents under IAS 7 “Statement of Cash Flows” 384,289,088 291,244,871Securities purchased under resell agreements in accordance with the definition of cash and

cash equivalents under IAS 7 “Statement of Cash Flows” 209,592 1,851,763Other items in accordance with the definition of cash and cash equivalents under IAS 7

“Statement of Cash Flows” 295,920 -

Cash and cash equivalents, end of the year $ 427,910,090 $ 337,215,239




TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) 1. ORGANIZATION AND OPERATIONS

Taiwan Cooperative Bank, Ltd. (the “Bank”) was officially established on October 5, 1946 to regulate the supply of and demand for funds for cooperative organizations by accepting their surplus funds as deposits and extending working funds to them. On February 10, 2006, the Bank changed its Chinese name upon approval by the Ministry of Economic Affairs. However, the Bank’s English name remains unchanged. The Bank became a legal entity in 1985 in accordance with the Banking Law. At the start of 2001, the Bank was converted into a corporate entity engaged in (a) all commercial banking operations allowed under the Banking Law; (b) international banking operations; (c) overseas branch operations as authorized by the respective foreign governments; and (d) other operations as authorized by the central authority-in-charge. The Bank’s shares have been listed on the Taiwan Stock Exchange since November 17, 2004. The Bank merged with the Farmers Bank of China (FBC) on May 1, 2006, with the Bank as the survivor entity. On June 24, 2011, the Bank’s stockholders approved the establishment of Taiwan Cooperative Financial Holding Company, Ltd. (TCFHC) by swapping the Bank’s shares with those Co-operative Asset Management Co., Ltd. (CAM) and Taiwan Cooperative Bills Finance Corporation Ltd. (TCBF) in accordance with the “Financial Holding Company Act” and other regulations. The boards of directors of the Bank, CAM and TCBF designated December 1, 2011 as the effective date of the share swap. After the shares transfer, the Bank became a 100% subsidiary of TCFHC. Also on December 1, 2011, the trading of the Bank’s stock on the Taiwan Stock Exchange (TSE) was stopped, and TCFHC’s stock started to be traded on the TSE. On December 2, 2011, the Bank reduced its capital by NT$3 billion and spun off its Security Department to incorporate Taiwan Cooperative Securities Corp. (TCS), which became a 100% subsidiary of TCFHC. The Bank has its Head Office in Taipei. It had a Business, International Banking, Finance, Credit Card and Trust Departments as well as 270 domestic branches, an offshore banking unit (OBU), 9 overseas branches and 2 representative office as of December 31, 2015. The operations of the Bank’s Trust Department are (1) planning, managing and operating the trust business and (2) custodianship of nondiscretionary trust fund in domestic and overseas securities and mutual funds. These operations are regulated under the Banking Law and Trust Law of the Republic of China (ROC). The Bank set up the United Taiwan Bank S.A. (UTB) in Belgium through raising funds with Bank of Taiwan, Land Bank of Taiwan and Taiwan Business Bank and acquired 70% of the shares in UTB. On October 9, 2009, the Bank bought shares of UTB held by Taiwan Business Bank for $127,279 thousand. Thus, the Bank’s holdings in UTB increased to 80%. In July 2010, the Bank subscribed for all the new shares issued by UTB for EUR20,000 thousand ($785,770 thousand). Thus, the Bank’s holdings in UTB increased to 90.02%. UTB started its operation, mainly the general deposits and loans business, on December 23, 1992 and it is a subsidiary of the Bank. Cooperative Insurance Brokers Co., Ltd. (CIB) was established on November 25, 2005 and engaged in life and property insurance broker business. As of December 31, 2015 and 2014, the Bank and its subsidiaries (the “Company”) had 8,195 and 8,437 employees, respectively. The operating units of the Company maintain their accounts in their respective functional currencies. The consolidated financial statements are presented in New Taiwan dollars.

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements were approved by the Bank’s board of directors on February 22, 2016.


3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS a. Initial application of the amendments to the Regulations Governing the Preparation of Financial

Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms and the 2013 version of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) Rule No. 1030010325 and Rule No. 10310006010 issued by the Financial Supervisory Commission (FSC), stipulated that the Company should apply the 2013 version of IFRS, IAS, IFRIC and SIC (collectively, the “IFRSs”) endorsed by the FSC and the related amendments to the Regulations Governing the Preparations of Financial Reports by Public Banks and Regulations Governing the Preparation of Financial Reports by Securities Firms starting January 1, 2015. Except for the following, whenever applied, the initial application of the above 2013 IFRSs version and the related amendments to the Regulations Governing the Preparation of Financial Reports by Public Banks and Regulations Governing the Preparation of Financial Reports by Securities Firms would not have any material impact on the Company’s accounting policies: 1) IFRS 12 “Disclosure of Interests in Other Entities”

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the current standards.

2) IFRS 13 “Fair Value Measurement”

IFRS 13 establishes a single source of guidance for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than those required in the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only will be extended by IFRS 13 to cover all assets and liabilities within its scope. The fair value measurements under IFRS 13 will be applied prospectively from January 1, 2015. Refer to Note 38 for related disclosures.

3) Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”

The amendments to IAS 1 requires items of other comprehensive income to be grouped into those items that (1) will not be reclassified subsequently to profit or loss; and (2) may be reclassified subsequently to profit or loss. Income taxes on related items of other comprehensive income are grouped on the same basis. Under current IAS 1, there were no such requirements. The Company retrospectively apply the above amendments starting in 2015. Items that will not be reclassified to profit or loss are remeasurements of the defined benefit plans and share of the remeasurements arising from defined benefit plans of associates accounted for using the equity method. Items expected to be reclassified to profit or loss are the exchange differences on translating foreign operations, unrealized gains (losses) on available-for-sale financial assets and share of the other comprehensive income (except the share of the remeasurements of the defined benefit plans) of associates accounted for using the equity method. However, the application of the above amendments will not result in any impact on the net profit for the year, other comprehensive income for the year (net of income tax), and total comprehensive income for the year.

4) Revision to IAS 19 “Employee Benefits” Revised IAS 19 requires the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminates the “corridor approach” permitted under current IAS 19 and accelerate the recognition of past service costs. The revision requires all remeasurements of the defined benefit plans to be recognized immediately through other comprehensive income in order for the net pension asset or liability to reflect the full value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assets used in current IAS 19 are replaced with a “net interest” amount, which is calculated by applying the discount rate to the net defined benefit liability or asset. In addition, the revised IAS 19 introduces certain changes in the presentation of the defined benefit cost, and also includes more extensive disclosures. On initial application of the revised IAS 19, the changes in cumulative employee benefit costs as of December 31, 2013 resulting from the retrospective application are adjusted to provision for employee benefits and retained earnings; In addition, in preparing the consolidated financial statements for the year ended December 31, 2015, the Company would elect not to present 2014



comparative information about the sensitivity of the defined benefit obligation. The impact on the prior year is set out below:

As Originally

Stated

Adjustments Arising from

Initial Application Retrospected Impact on assets, liabilities and equity December 31, 2014 Total effect on provision for employee

benefits $ 7,988,477 $ 2,144 $ 7,990,621Total effect on retained earnings $ 40,732,387 $ (2,144) $ 40,730,243Total effect on equity $ 150,509,893 $ (2,144) $ 150,507,749 January 1, 2014 Total effect on provision for employee

benefits $ 8,004,378 $ 3,216 $ 8,007,594Total effect on retained earnings $ 36,239,090 $ (3,216) $ 36,235,874Total effect on equity $ 139,764,273 $ (3,216) $ 139,761,057

Impact on total comprehensive income and earnings per share For the year ended on December 31, 2014 Total effect on operating expense $ 21,837,267 $ (1,072) $ 21,836,195Total effect on net income for the year $ 10,137,198 $ 1,072 $ 10,138,270Total effect on total comprehensive income

for the year $ 10,045,605 $ 1,072 $ 10,046,677 Basic earnings per share (New Taiwan dollars) $1.45 $0.01 $1.46

b. New IFRSs in issue but not yet endorsed by the FSC

The Company has not applied the following New IFRSs issued by the IASB but not yet endorsed by the FSC. As of the date the consolidated financial statements were authorized for issue, the FSC has not announced their effective dates.

New IFRSs Effective Date

Announced by IASB (Note 1) Annual Improvements to IFRSs 2010-2012 Cycle July 1, 2014 (Note 2)Annual Improvements to IFRSs 2011-2013 Cycle July 1, 2014 Annual Improvements to IFRSs 2012-2014 Cycle January 1, 2016 (Note 3)IFRS 9 “Financial Instruments” January 1, 2018 Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of IFRS 9 and Transition

Disclosures” January 1, 2018 Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its

Associate or Joint Venture” To be determined by IASBAmendments to IFRS 10, IFRS 12 and IAS 28 “Investment Entities: Applying the

Consolidation Exception” January 1, 2016 Amendment to IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations” January 1, 2016 IFRS 14 “Regulatory Deferral Accounts” January 1, 2016 IFRS 15 “Revenue from Contracts with Customers” January 1, 2018 IFRS 16 “Leases” January 1, 2019 Amendment to IAS 1 “Disclosure Initiative” January 1, 2016 Amendment to IAS 7 “Disclosure Initiative” January 1, 2017 Amendments to IAS 12 “Recognition of Deferred Tax Assets for Unrealized Losses” January 1, 2017 Amendments to IAS 16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and

Amortization” January 1, 2016 Amendments to IAS 16 and IAS 41 “Agriculture: Bearer Plants” January 1, 2016 Amendment to IAS 19 “Defined Benefit Plans: Employee Contributions” July 1, 2014 Amendment to IAS 27 “Equity Method in Separate Financial Statements” January 1, 2016 Amendment to IAS 36 “Impairment of Assets: Recoverable Amount Disclosures for

Non-financial Assets” January 1, 2014 Amendment to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” January 1, 2014 IFRIC 21 “Levies” January 1, 2014 Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their

respective effective dates.


Note 2: The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.

Note 3: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods

beginning on or after January 1, 2016; the remaining amendments are effective for annual periods beginning on or after January 1, 2016.

The initial application of the above New IFRSs, whenever applied, would not have any material impact on the Company’s accounting policies, except for the following: 1) IFRS 9 “Financial Instruments”

Recognition and measurement of financial assets With regards to financial assets, all recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at amortized cost or fair value. For the Company’s debt instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, their classification and measurement are as follows: a) For debt instruments, if they are held within a business model whose objective is to collect

the contractual cash flows, the financial assets are measured at amortized cost and are assessed for impairment continuously with impairment loss recognized in profit or loss, if any. Interest revenue is recognized in profit or loss by using the effective interest method;

b) For debt instruments, if they are held within a business model whose objective is achieved by

both the collecting of contractual cash flows and the selling of financial assets, the financial assets are measured at fair value through other comprehensive income (FVTOCI) and are assessed for impairment. Interest revenue is recognized in profit or loss by using the effective interest method, and other gain or loss shall be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses. When the debt instruments are derecognized or reclassified, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

Except for above, all other financial assets are measured at fair value through profit or loss. However, the Company may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss. No subsequent impairment assessment is required, and the cumulative gain or loss previously recognized in other comprehensive income cannot be reclassified from equity to profit or loss. The impairment of financial assets IFRS 9 requires that impairment loss on financial assets is recognized by using the “Expected Credit Losses Model”. The credit loss allowance is required for financial assets measured at amortized cost, financial assets mandatorily measured at FVTOCI, lease receivables, contract assets arising from IFRS 15 “Revenue from Contracts with Customers”, certain written loan commitments and financial guarantee contracts. A loss allowance for the 12-month expected credit losses is required for a financial asset if its credit risk has not increased significantly since initial recognition. A loss allowance for full lifetime expected credit losses is required for a financial asset if its credit risk has increased significantly since initial recognition and is not low. However, a loss allowance for full lifetime expected credit losses is required for trade receivables that do not constitute a financing transaction. For purchased or originated credit-impaired financial assets, the Company takes into account the expected credit losses on initial recognition in calculating the credit-adjusted effective interest rate. Subsequently, any changes in expected losses are recognized as a loss allowance with a corresponding gain or loss recognized in profit or loss.

2) Amendment to IAS 36 “Recoverable Amount Disclosures for Non-financial Assets” In issuing IFRS 13 “Fair Value Measurement”, the IASB made consequential amendment to the disclosure requirements in IAS 36 “Impairment of Assets”, introducing a requirement to disclose in every reporting period the recoverable amount of an asset or each cash-generating unit. The amendment clarifies that such disclosure of recoverable amounts is required only when an impairment loss has been recognized or reversed during the period. Furthermore, the Company is required to disclose the discount rate used in measurements of the recoverable amount based on fair value less costs of disposal measured using a present value technique.



3) IFRS 15 “Revenue from Contracts with Customers”

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers, and will supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations. When applying IFRS 15, the Company shall recognize revenue by applying the following steps:

Identify the contract with the customer; Identify the performance obligations in the contract; Determine the transaction price; Allocate the transaction price to the performance obligations in the contracts; and Recognize revenue when the entity satisfies a performance obligation.

When IFRS 15 is effective, the Company may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this Standard recognized at the date of initial application.

4) IFRS 16 “Leases” IFRS 16 sets out the accounting treatment for leases and has superseded IAS 17 “Leases” and a number of related interpretations. Under IFRS 16, if the Company is a lessee, it should recognize in the balance sheets right-of-use assets and lease liabilities for all leases on the consolidated balance sheets except for low-value and short-term leases. The Company may elect to apply the operating lease accounting method under IAS 17 to the low-value and short-term leases. In the consolidated statements of comprehensive income, the Company should present the depreciation expense charged on the right-of-use asset separately from the interest expense accrued on the lease liability; interest is computed by using effective interest method. In the consolidated statements of cash flows, cash payments for the principal portion of the lease liability are classified under financing activities; cash payments for the interest portion are classified under operating activities. The application of IFRS 16 is not expected to have a material impact on the accounting principles of the Company as a lessor. When IFRS 16 becomes effective, the Company may elect to apply this Standard either (a) retrospectively to each prior reporting period presented, or (b) retrospectively, with the cumulative effect of the initial application of this Standard recognized at the date of initial application.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Company was continuing to assess the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance, and will disclose this impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and IFRSs as endorsed by the FSC. Basis of Preparation The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value. The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: a. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;


b. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

c. Level 3 inputs are unobservable inputs for the asset or liability. Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Bank and the entities controlled by the Bank (United Taiwan Bank S.A. and Cooperative Insurance Brokers Co., Ltd.). The accounting policies of the Bank and its subsidiaries are consistent. All significant intercompany transactions and balances have been eliminated for consolidation purposes. The accompanying consolidated financial statements also include accounts of the Bank’s Head Office, OBU, and all branches. All interoffice account balances and transactions have been eliminated. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. For more information on the consolidated entities, please see Table 1 (attached). Foreign-currency Transactions The Bank records foreign-currency transactions in the respective currencies in which these are denominated. Every month-end, foreign currency income and expenses are translated into New Taiwan dollars at the prevailing exchange rates. At month-end, monetary assets and liabilities denominated in foreign currencies are reported using the prevailing exchange rates, and exchange differences are recognized in profit or loss. Nonmonetary assets and liabilities measured at fair value are translated using the prevailing exchange rates at month-end. Translation differences on nonmonetary assets and liabilities measured at fair value are recognized in profit or loss, except for translation difference arising from nonmonetary items of which the change in fair values is recognized in other comprehensive income, in which case, the translation differences are also recognized directly in other comprehensive income. Nonmonetary assets and liabilities that are classified as carried at cost are recognized at the exchange rate on the transaction date. In preparing the consolidated financial statements, foreign operations’ financial statements are translated at the following rates: Assets and liabilities - the prevailing exchange rates on the balance sheet date; and income and expenses - at the average exchange rate for the year. Translation difference net of income tax is recorded as “other comprehensive income” and accumulated in equity, FSC and is attributed to the owner of the Company and non-controlling interests. Classification of Current and Noncurrent Assets and Liabilities Since the operating cycle in the banking industry cannot be reasonably identified, accounts included in the consolidated financial statements are not classified as current or noncurrent. Nevertheless, these accounts are properly categorized in accordance with the nature of each account and sequenced by liquidity. Cash and Cash Equivalents In the balance sheet, cash and cash equivalents comprise cash on hand and demand deposits, together with short-term, highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. In the consolidated statement of cash flows, cash and cash equivalents comprise cash and cash equivalents defined in the consolidated balance sheet, due from the Central Bank and call loans to other banks, call loans to securities firms securities purchased under resell agreements and call loans to securities firms that correspond to the definition of cash and cash equivalents in IAS 7 “Cash Flow Statements,” as endorsed by the FSC. Financial Instruments Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Financial assets



All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. a. Measurement category

Financial assets are classified into the following categories: Financial assets at fair value through profit or loss (FVTPL), available-for-sale (AFS) financial assets, held-to-maturity financial assets and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. 1) Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or designated as at FVTPL. A financial asset is classified as designated as at FVTPL upon initial recognition if:

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

The financial asset forms part of a group of financial assets or financial liabilities or both,

which is managed and its performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

The contract contains one or more embedded derivatives so that the entire hybrid (combined)

contract can be designated as at fair value through profit or loss. Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 38.

2) Available-for-sale (AFS) financial assets

AFS financial assets are non-derivatives that are either designated as AFS or are not classified as (a) loans and receivables, (b) held-to-maturity financial assets, or (c) financial assets at fair value through profit or loss. AFS financial assets are stated at fair value at each balance sheet date. Fair value is determined in the manner described in Note 38. Changes in the carrying amount of AFS monetary financial assets relating to changes in foreign currency rates, interest income calculated using the effective interest method and dividends on AFS equity investments are recognized in profit or loss. Other changes in the carrying amount of AFS financial assets are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed or is determined to be impaired. Cash dividends on AFS equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established. Stock dividends are recorded as an increase in the number of shares held and do not affect investment income. The cost per share is recalculated on the basis of the new number of investee’s shares held. AFS financial assets that do not have a quoted market price in an active market and have a fair value that cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the balance sheet date and are recognized in a separate line item as financial assets carried at cost. These financial assets are measured at fair values if the fair values can be reliably measured subsequently. The difference between carrying amount and fair value is recognized in profit or loss or other comprehensive income. When an AFS financial asset is considered impaired, the losses are recognized to profit or loss.

3) Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Company has the positive intent and ability to hold to maturity. After initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest method less any impairment.


4) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including cash and cash equivalents, due from the Central Bank and call loans to other banks, receivables, debt instruments with no active markets) are measured at amortized cost using the effective interest method less any impairment.

b. Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. Objective evidence of impairment could include:

Significant financial difficulty of the asset issuer and debtor; The financial assets becoming overdue; Probability that the debtor will enter into bankruptcy or undergo financial reorganization.

Amortized cost of the presentation of financial assets (loans and receivables) that are individually assessed had no objective evidence of impairment are further assessed collectively for impairment. Objective evidence of impairment of a portfolio of receivables could include the Company’s past difficulty in collecting payments and an increase in the number of delayed payments, as well as observable changes in national or local economic conditions that correlate with defaults on financial assets. For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows with consideration to the collaterals and guarantees, discounted at the financial asset’s original effective interest rate. For financial assets measured at amortized cost, if the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. For AFS equity instruments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. When an AFS financial asset is considered impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss. For AFS equity instruments, impairment losses previously recognized in profit or loss can not be reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. For AFS debt instruments, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss. For financial assets that are carried at cost, the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. This impairment loss can not be reversed in subsequent periods. Impairment loss on financial asset is recognized by reducing its carrying amount through the use of an allowance account. When financial assets are considered uncollectible, they are written off against the allowance account. Recoveries of amounts previously written off are credited to the allowance account. Changes in the carrying amount of the allowance account are recognized in profit and loss. Under FSC guidelines, the Bank should classify credit assets as sound credit assets or unsound credit assets, with the unsound assets further categorized as special mention, substandard, with collectability highly doubtful and uncollectible, on the basis of the customers’ financial position, valuation of collaterals and the length of time the principal repayments or interest payments have become overdue. The Bank made 100%, 50%, 10%, 2% and 1% provisions for credits deemed uncollectible, with collectability highly doubtful, substandard, special mention and sound credit assets (excluding assets that represent claims against an ROC government agency), respectively, as minimum provisions. For the sound credit assets, minimum provisions were required be contributed before December 31, 2014. In addition, The Bank was required to make provisions of at least 1.5% each for the sound credit assets on loans granted to Mainland China clients (including short-term trading financing) and



for mortgage loans granted for housing acquisition, renovation and construction before December 31, 2015 and 2016, respectively. Credits deemed uncollectible may be written off if the write-off is approved by the board of directors.

c. Derecognition of financial assets

The Company derecognizes a financial asset only the contractual rights to cash flow from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received. On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amounts and the sum of the consideration received, receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss.

Equity instruments The Company classifies the debt and equity instruments issued either as financial liabilities or as equity in accordance with the substance of the contractual agreements and the definitions of a financial liability or an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs. Repurchase of the Bank’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Bank’s own equity instruments. Financial liabilities a. Subsequent measurement

Except for the cases stated below, all financial liabilities are measured at amortized cost using the effective interest method: 1) Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or designated as at FVTPL. A financial liability is classified as designated as at FVTPL upon initial recognition if:

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

The financial liability forms part of a group of financial assets or financial liabilities or both,

which is managed and its performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

The contract contains one or more embedded derivatives so that the entire combined contract

(asset or liability) can be designated as at fair value through profit or loss. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising from remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability. For a financial liability designated as at fair value through profit or loss, the amount of changes in fair value attributable to changes in the credit risk of the liability is presented in other comprehensive income, and it will not be subsequently reclassified to profit or loss. The gain or loss accumulated in other comprehensive income will be transferred to retained earnings when the financial liabilities are derecognized. If this accounting treatment related to credit risk would create or enlarge an accounting mismatch, all changes in fair value of the liability are presented in profit or loss. Fair value is determined in the manner described in Note 38.

2) Financial guarantee contracts


Financial guarantee contracts issued by the Company are not designated as at FVTPL and are subsequently measured at the higher of (a) the amount of the obligation under the contract, as determined in accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”; or (b) the amount initially recognized less, where appropriate, cumulative amortization recognized in accordance with revenue recognition policies.

b. Derecognition of financial liabilities

The Company derecognizes financial liabilities only when the Company’s obligations are discharged, cancelled, or expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid (includes transfer of non-cash assets and liabilities assumed) is recognized in profit or loss.

Derivatives Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to fair value at the balance sheet date. The resulting gain or loss is recognized in profit or loss immediately. If the fair value of a derivative is a positive number, the derivative is carried as an financial asset and if the fair value is a negative number, the derivative is carried as a financial liability. Derivatives embedded in non-derivative host contracts are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the contracts are not measured at FVTPL. Overdue Loans Loans and other credits (including accrued interest) that are overdue for at least six months are classified as overdue loans in accordance with the guideline issued by the FSC. Overdue loans (except other credits) are classified as discounts and loans, and the remaining are classified as other financial assets. Securities Purchased/Sold Under Resell/Repurchase Agreements Securities purchased under resell agreements and securities sold under repurchase agreements are generally treated as collateralized financing transactions. Interest earned on resell agreements or interest incurred on repurchase agreements is recognized as interest revenue or interest expense over the life of each agreement. Investment in Associates and Joint Ventures An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement. Under the equity method, investment in an associate or a joint ventures is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate or joint venture. The Company also recognizes the changes in the Company’s share of equity of associates or joint ventures. When the Company subscribes for additional new shares of the associate or joint ventures at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate or joint ventures. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription of the new shares of the associate or joint ventures, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate or joint ventures is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings. When the Company’s share of losses of an associate or a joint venture equals or exceeds its interest in that associate or joint ventures, which includes any carrying amount of the investment accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate or joint ventures, the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate or joint venture.



Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss. The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases. The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and the joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate and the joint venture on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Company continues to apply the equity method and does not remeasure the retained interest. When the Company transacts with its associate or joint ventures, profits and losses resulting from the transactions with the associate or joint ventures are recognized in the Company’s consolidated financial statements only to the extent of interests in the associate or joint ventures that are not related to the Company. Investment Properties Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method. Any gain or loss arising on derecognition of the property is calculated as the difference between the net disposal proceeds and the carrying amount of the asset and is included in profit or loss in the year which the property is derecognized. Properties and Equipment Properties and equipment are initially recognized at cost and subsequently measured at costs less accumulated depreciation and accumulated impairment. Land for self-use is not depreciated. Depreciation is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Any gain or loss recognized on the disposal or retirement of an item of property and equipment is the difference between the sales proceeds and the carrying amount of the asset and is included in profit or loss in the period which the asset is derecognized. Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Company as a lessor Rental income from operating leases is recognized in revenues over the lease periods on a straight-line basis. Contingent rents arising under operating leases are recognized as income in the year in which they are incurred. Lease incentives offered in the operating lease are recognized as an asset. The aggregate cost of incentives is recognized as a reduction of rental income on a straight-line basis over the lease term.


The Company as a lessee Lease payments under an operating lease are expensed on a straight-line basis over the lease period. Under operating lease, contingent rentals are recognized as expenses at current year. Lease incentives received for operating leases are recognized under liabilities. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis. When the Company sales and leasebacks a property, the excess of sales proceeds over the carrying amount resulted from the sale of the property is deferred and amortized over the lease term regardless of operating lease or finance lease. For indefinite lease term, the excess is amortized over 10 years. Goodwill Goodwill (part of intangible assets) from business combination is recorded at acquisition cost and subsequently measured at cost less accumulated impairment. For the purposes of impairment testing, goodwill is allocated to each of the Company’s cash-generating units or groups of cash-generating units (referred to as cash-generating units (CGU)) that is expected to benefit from the synergies of the combination. In testing assets for impairment, the Company compares the carrying amounts of operating segments (CGUs with allocated goodwill) to their recoverable amounts on a yearly basis (or when impairment indicators exist). CGUs with allocated goodwill arise from the current year should be tested for impairment before the end of the year. When the recoverable amount of CGUs is below the carrying amount, an impairment loss should be recognized to reduce first the carrying amount of goodwill of the CGU and then the carrying amounts of other assets of the CGU proportionately. Any impairment loss should be directly recognized as loss in the current year, and subsequent reversal of impairment loss is not allowed. On disposal of the relevant cash-generating unit, the amount attributable to goodwill is included in the determination of the profit or loss on disposal. Intangible Assets Other Than Goodwill Separate acquisition Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis. At year-end, the Company examines its estimates of the useful lives, residual values and amortization method of the assets, and any changes in estimates are accounted for prospectively. Unless the Company expects to dispose of an intangible asset before the end of its useful life, the residual value of an intangible asset with limited useful life is estimated to be zero. Acquisition as part of a business combination Intangible asset acquired through business combination is measured at its fair value on the acquisition date, and is recognized separately from goodwill. Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately. Derecognition Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the assets is derecognized. Impairment of Tangible and Intangible Assets Other Than Goodwill At the balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets (except goodwill) for any indication of impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Corporate assets are allocated to the individual cash-generating units or a reasonable and consistent basis of allocation. The recoverable amount is the higher of fair value less selling costs or value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount is reduced to its recoverable amount. If asset impairment loss reverses, the increase in the carrying amount resulting from reversal is credited to earnings. However, loss reversal should not be more than the carrying amount (net of depreciation or amortization) had the impairment loss



not been recognized. Foreclosed Collaterals Foreclosed collaterals (part of other assets) are recorded at the fair value on recognition and recorded at the lower of cost or net fair value as of the balance sheet dates. Net fair value falling below book value indicates impairment, and impairment loss should be recognized. If the net fair value recovers, the recovery of impairment loss is recognized in gains. For foreclosed collaterals that should have been disposed of in the statutory term, unless the disposal period is prolonged, additional provision for losses should be made and impairment loss should be recognized, as required under a FSC directive. Provisions Provisions are the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties on the obligation. A provision is measured using the cash flows estimated to settle the present obligation. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Recognition of Revenue Interest revenue on loans is recorded on an accrual basis. Under the guidance of the FSC, no interest revenue is recognized on loans that are classified as overdue loans. The interest revenue on these loans is recognized upon collection of the loans and credits. Service fees are recognized when a major part of the earnings process is completed and cash is collected. Dividend income from investments is recognized when the stockholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably). Service that results in award credits for customers, under the Company’s award scheme, is accounted for as multiple element revenue transactions and the fair value of the consideration received or receivable is allocated between the service rendered and the award credits granted. The consideration allocated to the award credits is measured by reference to their fair value. Such consideration is not recognized as revenue at the time of the initial sale transaction but is deferred and recognized as revenue when the award credits are redeemed and the Company’s obligations have been fulfilled. Employee Benefits Short-term employee benefits Short-term and non-discounted employee benefits are recognized as expenses in the current year as services are rendered. Retirement benefits Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions. Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans. Preferential interest deposits for employees The Bank provides preferential interest deposits to current and retired employees, and these deposits, including payments of the preferential interest deposits, are within certain amounts. The preferential


rates for employees’ deposits in excess of market rate should be treated as employee benefits. Under the Guidelines Governing the Preparation of Financial Reports by Public Banks, the Bank should follow the requirement of IAS 19 “Employee Benefits” endorsed by FSC to determine the excess interest on the preferential interest deposits of retired employees by applying an actuarial valuation method when the employees retire. The actuarial assumptions should be in accordance with the requirements set by the authorities. Termination benefits A liability for a termination benefit is recognized at the earlier of when the Company can no longer withdraw the offer of the termination benefit and when the Company recognizes any related restructuring costs. Share-based Payment The Company’s employees subscribed for the reserved shares of Taiwan Cooperative Financial Holding Company, Ltd. (TCFHC) in accordance with the Financial Holding Company Act, and the Company recognized the fair value of the stock options under salary expenses and under capital surplus for share-based payment on the grant date, i.e., the date when the Company and its employees made an agreement for the employees to subscribe for TCFHC’s shares. Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. Current tax According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain the earnings. Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision. Deferred tax Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which these deductible temporary differences can be used. If the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit, the resulting deferred tax asset or liability is not recognized. In addition, a deferred tax liability is not recognized on taxable temporary difference arising from the initial recognition of goodwill. Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to use the benefits of the temporary differences and these differences are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed each balance sheet date and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences based on the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Current and deferred tax for the year Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred



tax are also recognized in other comprehensive income or directly in equity, respectively. Where current tax or deferred taxes arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. TCFHC and its subsidiaries elected to file consolidated tax returns for periods starting in 2012. However, since the Company applied the accounting treatment mentioned in the preceding paragraph to income tax, any distribution of cash payments and receipts among the consolidated group members is recorded as current tax assets or current tax liabilities. Business Combination Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized as expense as incurred. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value. Business combination involving entities under common control is not accounted for by acquisition method but accounted for at the carrying amounts of the entities. Prior period comparative information in the financial statements is restated as if a business combination involving entities under common control had already occurred in that period.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Company’s accounting policies, which are described in Note 4, the Company’s management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Unless stated in other notes, the following are the critical judgments, assumptions and estimation uncertainty estimations that the Company’s management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements: a. Impairment losses on loans

The Company monthly assesses loans collectively. When determining whether an impairment loss should be recognized, the Company mainly seeks for observable evidence that indicates impairment. Objective evidence of impairment of a portfolio of loans and receivables could include the Company’s past difficulty in collecting payments and an increase in the number of delayed payments, as well as observable changes in national or local economic conditions that correlate with defaults on loans and receivables. The management uses past loss experience on assets that have similar credit risk characteristics to estimate the expected future cash flows. The Company reviews the methods and assumptions of cash flow estimation regularly to eliminate the difference between expected and actual loss.

b. Fair values of financial instruments Fair values of financial instruments in an inactive market or with no quoted market prices are determined by valuation techniques. Under these circumstances, fair values are derived from observable market data of other similar financial assets. When there are no observable inputs in the market, the fair values of financial instruments are estimated by making appropriate assumptions.


The Company applies appropriate valuation models to determine the fair values of financial instruments subjective to valuation techniques. All models are fine-tuned to ensure the valuation results fairly reflect actual market information and prices. The Company’s management believes that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of financial instruments. For the fair value determination of financial instruments, refer to Note 38 to the consolidated financial statements.

c. Income tax

The Company is required to make substantive estimates when calculating income tax. The final tax assessment is based on considerable transactions and calculations. When the final tax amount differs from the amount on original recognition, the difference affects the recognition of both current and deferred income tax. The realizability of deferred tax assets mainly depends on whether sufficient future profits or taxable temporary differences will be available. In cases where the actual future profits generated are less than expected, a material reversal of deferred tax assets may arise, which would be recognized in profit or loss for the period in which such a reversal takes place.

d. Employment benefits The calculation of the present value of post-employment benefits and preferential rates for retired employees’ deposits is based on the actuarial result under several assumptions. Any change in these assumptions may affect the carrying amount of post-employment benefits and preferential rates interest deposits plan for retired employees. One of the estimates used for determining the net pension costs (revenues) is discount rate. The Company determines appropriate discount rates at the end of each year and estimates the present values of future cash outflows resulting from fulfilling the post-employment obligation by the discount rates. To better determine the discount rates, the Company takes into account the interest rates of high-quality corporate bonds or government bonds, with currencies the same as those of post-employment benefit payments, and with durations that match those of the corresponding pension liabilities. Other significant assumptions for post-employment obligation are subject to current market condition. Significant assumptions for the obligation of preferential interest deposits for retired employee are determined by the authorities.

e. Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise.

f. Impairment assessment on available-for-sale equity investment Objective evidences of the impairment of an available-for-sale equity investment include the fair value of that investment falling significantly or constantly below the cost. Subjective judgments are required when assessing the impairment. The Company’s management considers past market fluctuation, historical prices of the investment and other factors that affect the performance of the industries to which the investees belong to make the subjective judgments.

g. The valuation of provisions on financial guarantee contracts

Except for the minimum standards under certain laws, the Company’s main basis for deciding the amounts of provisions is whether there is any observable evidence that the Company has payment obligations to compensate the losses of guarantee holders. The Company regularly reviews the economic situation in terms of defaults on debt repayments to reduce the difference between the estimated and the actual amounts of loss.



6. CASH AND CASH EQUIVALENTS

December 31 2015 2014 Cash on hand $ 21,450,139 $ 22,605,114Notes and checks in clearing 9,279,476 14,207,885Due from banks 12,385,875 7,305,606 $ 43,115,490 $ 44,118,605 Reconciliations of cash and cash equivalents between the consolidated statements of cash flows and the consolidated balance sheets as of December 31, 2015 and 2014 are shown in the consolidated statements of cash flows.

7. DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS

December 31 2015 2014 Reserves for deposits - account A $ 39,790,008 $ 34,584,333Reserves for deposits - account B 64,299,766 61,768,836Reserves for deposits - community financial institutions 52,801,642 50,837,686Reserves for deposits - foreign-currency deposits 318,069 292,232Deposits in the Central Bank 39,200,000 39,200,000Negotiable certificates of deposit in the Central Bank 443,715,000 461,665,000Due from the Central Bank - others 8,815,848 7,694,909Due from the Central Bank - central government agencies’ deposits 3,156,360 1,713,740Call loans to banks 53,359,749 24,750,025 $ 705,456,442 $ 682,506,761 The deposit reserves are determined monthly at prescribed rates based on the average balances of various types of deposit accounts held by the Company. The deposit reserves are subject to withdrawal restrictions, but deposit reserve - account A and foreign-currency deposit reserves may be withdrawn anytime. Under the guideline issued by the Central Bank of the Republic of China (CBC), the Bank should deposit 60 percent of the deposits of central government agencies in the CBC, and the deposits are subject to withdrawal restrictions.

8. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

December 31 2015 2014 Held-for-trading financial assets Commercial paper $ 10,497,699 $ 33,541,140Listed and emerging stocks - domestic 82,461 89,606Government bonds - 250,519Currency swap contracts 3,722,007 7,537,894

(Continued)


December 31 2015 2014 Cross-currency swap contracts $ 225,100 $ 788,108Forward contracts 209,482 795,203Foreign-currency margin contracts 122,685 6,521Currency option contracts - buy 66,725 237,293Interest rate swap contracts 5,888 220Futures exchange margins 4,029 5,092 14,936,076 43,251,596Financial assets designated as at fair value through profit or loss Corporate bonds - 326,993Bank debentures - 90,734 - 417,727 Financial assets at fair value through profit or loss $ 14,936,076 $ 43,669,323 Held-for-trading financial liabilities Currency swap contracts $ 1,327,544 $ 3,818,932Forward contracts 330,601 1,209,990Cross-currency swap contracts 231,737 778,608Currency option contracts - sell 66,958 237,751Interest rate swap contracts 38,488 16,788Foreign-currency margin contracts 8,531 20,399 2,003,859 6,082,468Financial liabilities designated as at fair value through profit or loss Bank debentures (Note 24) 12,703,063 - Financial liabilities at fair value through profit or loss $ 14,706,922 $ 6,082,468

(Concluded) As of December 31, 2015 and 2014, some securities amounting to $5,124,914 thousand and $6,581,877 thousand, respectively, had been sold under repurchase agreements. The Bank enters into derivative transactions mainly to accommodate customers’ needs and to manage its exposure to adverse changes in exchange rates and interest rates. The Bank’s strategy for hedging against risk is to avoid most of the market price risk or cash flow risk. As of December 31, 2015 and 2014, the contract (notional) amounts of derivative transactions of Bank were as follows: December 31 2015 2014 Currency swap contracts $ 441,253,332 $ 451,023,013Forward contracts 27,179,346 35,806,344Interest rate swap contracts 15,152,000 3,135,010Currency option contracts - sell 11,907,017 13,884,274Currency option contracts - buy 11,907,017 13,811,464Cross-currency swap contracts 6,639,328 25,450,445Foreign-currency margin contracts 5,198,399 1,323,912

9. SECURITIES PURCHASED UNDER RESELL AGREEMENTS

Securities acquired for $209,592 thousand and $1,851,763 thousand under resell agreements as of December 31, 2015 and 2014, respectively, will subsequently be sold for $209,629 thousand and $1,852,528 thousand, respectively.



10. RECEIVABLES, NET

December 31 2015 2014 Accrued interest $ 5,848,895 $ 5,666,229Acceptances 3,305,845 2,803,356Credit cards 2,652,085 2,545,072Receivable from merchant accounts in credit cards business 557,158 710,985Credits receivable 475,799 484,557Accounts receivable 428,701 329,593Refundable deposits receivable in leasehold agreements 272,993 272,993Accounts receivable factored without recourse 216,084 384,088Receivable on securities 3,136 184,944Others 266,400 252,676 14,027,096 13,634,493Less: Allowance for possible losses 596,764 521,198 $ 13,430,332 $ 13,113,295 Credits receivable due to the merger with the Farmers Bank of China on May 1, 2006 were recognized at fair value of credits written off by the Farmers Bank of China in the past. The fair values were evaluated by PricewaterhouseCoopers Financial Advisory Service Co., Ltd. The allowances for possible losses on receivables (except spot exchange receivable - foreign currencies, which amounted to $77 thousand and $10,115 thousand, respectively) assessed for impairment as of December 31, 2015 and 2014 were as follows:

Items December 31, 2015 December 31, 2014

Receivables Allowance for Possible Losses Receivables Allowance for

Possible Losses

With objective evidence of impairment

Assessment of individual impairment

$ 464,354 $ 308,474 $ 402,533 $ 264,499

Assessment of collective impairment

129,651 49,511 140,083 59,059

With no objective evidence of impairment


13,433,014 238,779 13,081,762 197,640

Total 14,027,019 596,764 13,624,378 521,198 The changes in allowance for possible losses are summarized below: For the Year Ended December 31 2015 2014 Balance, January 1 $ 521,198 $ 538,956Provision for possible losses 89,310 103,020Write-offs (14,096) (121,023)Recovery of written-off receivables 6 -Effects of exchange rate changes and other changes 346 245 Balance, December 31 $ 596,764 $ 521,198


11. DISCOUNTS AND LOANS, NET December 31 2015 2014 Bills discounted $ 2,004,757 $ 2,432,955Overdraft

Unsecured 161,789 210,204Secured 111,712 370,963

Import and export negotiations 542,432 743,226Short-term loans

Unsecured 242,899,521 196,557,949Accounts receivable financing 608,195 733,675Secured 161,485,690 146,582,665

Medium-term loans Unsecured 301,683,991 317,700,013Secured 307,329,399 287,136,072

Long-term loans Unsecured 34,629,232 38,195,391Secured 944,885,625 885,415,448

Overdue loans 6,371,809 7,048,376 2,002,714,152 1,883,126,937Less: Allowance for possible losses 21,461,997 22,270,721Less: Adjustment of discount 476,402 510,329 $ 1,980,775,753 $ 1,860,345,887 As of December 31, 2015 and 2014, accrual of interest on the above overdue loans had stopped. Thus, the unrecognized interest revenue was $139,404 thousand and $207,845 thousand in 2015 and 2014, respectively, based on the average loan interest rate for the year. The allowances for possible losses on discounts and loans assessed for impairment as of December 31, 2015 and 2014 were as follows:

Items December 31, 2015 December 31, 2014

Discounts and Loans

Allowance for Possible Losses

Discounts and Loans

Allowance for Possible Losses

With objective evidence of impairment

Assessment of individual impairment

$ 14,581,806 $ 4,597,960 $ 23,544,651 $ 7,120,928


11,167,720 2,418,484 11,152,065 2,527,760

With no objective evidence of impairment


1,976,964,626 14,445,553 1,848,430,221 12,622,033

Total 2,002,714,152 21,461,997 1,883,126,937 22,270,721 The changes in allowance for possible losses are summarized below: For the Year Ended December 31 2015 2014 Balance, January 1 $ 22,270,721 $ 20,776,250Provisions for possible losses 1,990,276 5,867,907Write-offs (3,793,034) (5,426,523)Recovery of written-off credits 882,611 846,435Effects of exchange rate changes and other changes 111,423 206,652 Balance, December 31 $ 21,461,997 $ 22,270,721 The details of bad-debt expenses and provision for losses on guarantees in 2015 and 2014 were as follows: For the Year Ended December 31 2015 2014Provision for possible losses on discounts and loans $ 1,990,276 $ 5,867,907Provision for possible losses on receivables 89,310 103,020Provision (reversal of provision) for possible losses on overdue

receivables 291,108 (20,885)Provision (reversal of provision) for possible loss on guarantees (222,421) 298,311 $ 2,148,273 $ 6,248,353



The Financial Supervisory Commission (FSC) required 1% minimum provisions for category one sound credit assets. The Bank made the required provision in 2014. As of December 31, 2015 and 2014, The Bank was in compliance with the FSC-required provision for credit assets.

12. AVAILABLE-FOR-SALE FINANCIAL ASSETS, NET

December 31 2015 2014 Government bonds $ 63,810,846 $ 53,419,695Bank debentures 16,536,276 10,130,042Corporate bonds 11,243,453 2,563,964Listed stocks 3,423,360 3,507,963Emerging market stocks 551,655 -Beneficial certificates 319,261 152,837 $ 95,884,851 $ 69,774,501 The Company evaluated its available for sale financial assets and recognized impairment loss of $3,178 thousand because of the fall in credit rating of the bond issuer in 2015. As of December 31, 2015 and 2014, available-for-sale financial assets amounting to $11,559,296 thousand and $13,799,489 thousand, respectively, had been sold under repurchase agreements.

13. HELD-TO-MATURITY FINANCIAL ASSETS

December 31 2015 2014 Government bonds $ 19,746,164 $ 7,001,616Corporate bonds 16,353,321 5,310,814Bank debentures 5,992,108 5,290,602Certificates of deposit 305,784 446,547Preferred stocks - 2,000,000 $ 42,397,377 $ 20,049,579 The Company evaluated its held-to-maturity financial assets and recognized an impairment loss of $4,679 thousand and a reversal of impairment loss of $2,455 thousand on some bonds because of the fall in credit ratings of the bond issuers in 2015 and 2014, respectively. As of December 31, 2014, held-to-maturity financial assets amounting to $957,386 thousand has been sold under repurchase agreements.

14. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

December 31 2015 2014

AmountPercentage of

Ownership Amount Percentage of

Ownership Investment in associate United Real Estate Management Co., Ltd. $ 122,023 30.00 $ 115,905 30.00 Aggregate information of associate that is not individually material: For the Year Ended December 31 2015 2014The Company’s share of:

Net income $ 13,432 $ 15,018Other comprehensive income (111) (591) Total comprehensive income for the year $ 13,321 $ 14,427

The investments accounted for by the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2015 and 2014 were based on the financial statements audited by the auditors for the same years.


15. OTHER FINANCIAL ASSETS, NET

December 31 2015 2014 Overdue receivables $ 393,929 $ 259,195Less: Allowance for possible losses 318,024 247,568Overdue receivables, net 75,905 11,627Debt instruments with no active market, net 84,539,585 84,850,371Due from banks - time deposits 14,030,137 34,968,885Financial assets carried at cost 4,092,383 3,422,783Call loans to securities firms 295,920 - $ 103,033,930 $ 123,253,666 Debt instruments with no active market are summarized as follows: December 31 2015 2014 Corporate bonds $ 66,319,881 $ 68,310,511Bank debentures 17,890,904 16,223,160Government bonds - domestic and overseas 328,800 316,700 $ 84,539,585 $ 84,850,371 Financial assets carried at cost are summarized as follows: December 31 2015 2014

AmountPercentage of

Ownership Amount Percentage of

Ownership Taiwan Asset Management Co., Ltd. $ 2,370,934 17.03 $ 2,370,934 17.03Taipei Financial Center Corp. 669,600 1.63 - -Taiwan Power Company 631,153 0.24 631,153 0.24Financial Information Service Co., Ltd. 135,405 2.89 135,405 2.89Taiwan Financial Asset Service Co., Ltd. 101,125 5.88 101,125 5.88Others 184,166 184,166 $ 4,092,383 $ 3,422,783 Management believed that the above equity investments held by the Company, whose fair value cannot be reliably measured due to the range of reasonable fair value estimates was so significant; therefore they were measured at cost less impairment at the end of reporting period. Some investees had operating losses; thus the Company recognized an impairment loss of $23,835 thousand on financial assets carried at cost for the year ended December 31, 2014. Due from banks (part of other financial assets, net) held by the Company were time deposits could not be withdrawn and had maturity periods of more than three months and could not be used before maturity.

16. PROPERTIES AND EQUIPMENT, NET

December 31 2015 2014Carrying amount Land $ 24,818,969 $ 24,875,173Buildings 8,346,175 8,672,758Machinery and equipment 952,153 1,172,758Transportation equipment 109,598 132,810Other equipment 115,138 144,864Leasehold improvements 159,795 152,880Prepayments for equipment, land and buildings and construction in

progress 4,789,767 4,500,442 $ 39,291,595 $ 39,651,685



Land Buildings Machinery and

Equipment Transportation

Equipment Other

Equipment Leasehold

Improvements Prepayments Total Cost Balance, January 1, 2015 $ 24,890,350 $ 14,627,718 $ 5,352,333 $ 650,597 $ 1,194,146 $ 789,786 $ 4,500,442 $ 52,005,372 Additions 51,551 85,496 48,375 17,389 23,756 75,161 493,553 795,281 Disposals - - (521,323 ) (43,623 ) (55,671 ) (52,764 ) - (673,381 )Reclassification 12,508 49,192 136,909 - - 5,447 (204,056 ) - Transferred to investment properties (120,366 ) (114,113 ) - - - - - (234,479 )Transferred to intangible assets - - - - - - (172 ) (172 )Effects of exchange rate changes 103 219 2,869 40 211 (568 ) - 2,874 Balance, December 31, 2015 $ 24,834,146 $ 14,648,512 $ 5,019,163 $ 624,403 $ 1,162,442 $ 817,062 $ 4,789,767 $ 51,895,495 Balance, January 1, 2014 $ 25,951,605 $ 14,638,617 $ 5,648,172 $ 638,785 $ 1,235,668 $ 820,693 $ 2,115,533 $ 51,049,073 Additions 31,963 65,044 144,852 17,329 38,195 36,961 2,865,035 3,199,379 Disposals (1,093,378 ) (234,246 ) (659,396 ) (60,957 ) (82,857 ) (73,960 ) - (2,204,794 )Reclassification - 157,961 213,957 54,921 2,320 5,717 (434,876 ) - Transferred to intangible assets - - - - - - (45,246 ) (45,246 )Transferred to other assets - - - - - - (4 ) (4 )Effects of exchange rate changes 160 342 4,748 519 820 375 - 6,964 Balance, December 31, 2014 $ 24,890,350 $ 14,627,718 $ 5,352,333 $ 650,597 $ 1,194,146 $ 789,786 $ 4,500,442 $ 52,005,372

Land Buildings Machinery and

Equipment Transportation

Equipment Other Equipment Leasehold

Improvements Total Accumulated depreciation and impairment Balance, January 1, 2015 $ 15,177 $ 5,954,960 $ 4,179,575 $ 517,787 $ 1,049,282 $ 636,906 $ 12,353,687Disposals - - (518,321 ) (43,400 ) (55,107 ) (52,466 ) (669,294 )Transferred to investment

properties - (31,049 ) - - - - (31,049 )Depreciation expenses - 378,299 404,036 39,353 50,164 70,751 942,603Effects of exchange rate changes - 127 1,720 1,065 2,965 2,076 7,953 Balance, December 31, 2015 $ 15,177 $ 6,302,337 $ 4,067,010 $ 514,805 $ 1,047,304 $ 657,267 $ 12,603,900 Balance, January 1, 2014 $ 15,177 $ 5,661,846 $ 4,413,540 $ 534,820 $ 1,078,370 $ 650,983 $ 12,354,736Disposals - (83,415 ) (653,728 ) (60,674 ) (82,208 ) (73,218 ) (953,243 )Depreciation expenses - 376,350 417,252 43,327 52,436 58,908 948,273Effects of exchange rate changes - 179 2,511 314 684 233 3,921 Balance, December 31, 2014 $ 15,177 $ 5,954,960 $ 4,179,575 $ 517,787 $ 1,049,282 $ 636,906 $ 12,353,687 The Bank revalued its properties five times in 1979, 1998, 2007, 2011 and 2012. As December 31, 2015, the reserve for land revaluation increment tax (part of deferred tax liabilities) was $2,596,230 thousand. Properties and equipment were depreciation on the straight-line method over service lives estimated as follows: Buildings

Main buildings 50 yearsEquipment installed in buildings 10 to 15 years

Machinery and equipment 3 to 10 yearsTransportation equipment 5 to 10 yearsOther equipment 3 to 20 yearsLeasehold Improvements 5 years As of December 31, 2015 and 2014, the Bank’s prepayments for equipment, land and buildings and construction in progress pertained to the construction of the head office. The license for the construction of the head office was obtained in January 2015, the building acceptance check was still in progress as of the date of the accompanying independent auditors’ report, and the property will be classified under buildings after completion and acceptance. In testing assets for impairment, the Bank defined each operating unit or operating segment as a cash-generating unit (CGU). The recoverable amount of a CGU was determined at its value in use. The discount rates for the CGUs’ value in use were 8.78% and 9.66% as of December 31, 2015 and 2014, respectively.


17. INVESTMENT PROPERTIES, NET

December 31 2015 2014 Land $ 1,754,257 $ 1,633,891Buildings 515,243 449,805 $ 2,269,500 $ 2,083,696

Land Buildings Total Cost Balance, January 1, 2015 $ 1,633,891 $ 678,938 $ 2,312,829Transferred from properties and equipment 120,366 114,113 234,479 Balance, December 31, 2015 $ 1,754,257 $ 793,051 $ 2,547,308 Balance, January 1, 2014 $ 1,633,891 $ 669,690 $ 2,303,581Additions - 9,248 9,248 Balance, December 31, 2014 $ 1,633,891 $ 678,938 $ 2,312,829 Accumulated depreciation and impairment Balance, January 1, 2015 $ - $ 229,133 $ 229,133Depreciation expenses - 17,626 17,626Transferred from properties and equipment - 31,049 31,049 Balance, December 31, 2015 $ - $ 277,808 $ 277,808 Balance, January 1, 2014 $ - $ 212,638 $ 212,638Depreciation expenses - 16,495 16,495 Balance, December 31, 2014 $ - $ 229,133 $ 229,133 Investment properties (except for land) were depreciated through 50 years on a straight-line basis. As of December 31, 2015, the fair value of investment properties was $6,445,664 thousand. The fair value was determined through calculations using the market value method. As of December 31, 2014, the fair value of investment properties was $5,915,460 thousand. The fair value was based on the valuation made through a discounted cash-flow analysis and the cost of land development analysis. The revenues generated from the investment properties are summarized as follows: For the Year Ended December 31 2015 2014 Rental income from investment properties $ 163,950 $ 169,201Direct operating expenses for investment properties that generate

rental income (44,881) (44,481) $ 119,069 $ 124,720

18. INTANGIBLE ASSETS

December 31 2015 2014 Goodwill $ 3,170,005 $ 3,170,005Computer software 458,901 525,849 $ 3,628,906 $ 3,695,854



Goodwill Computer Software Total Balance, January 1, 2015 $ 3,170,005 $ 525,849 $ 3,695,854Separate acquisition - 177,535 177,535Amortization expenses - (244,583) (244,583)Transferred from properties and

equipment - 172

172Effect of exchange rate changes - (72) (72) Balance, December 31, 2015 $ 3,170,005 $ 458,901 $ 3,628,906 Balance, January 1, 2014 $ 3,170,005 $ 558,055 $ 3,728,060Separate acquisition - 167,931 167,931Amortization expenses - (246,117) (246,117)Transferred from properties and

equipment - 45,246 45,246Effect of exchange rate changes - 734 734 Balance, December 31, 2014 $ 3,170,005 $ 525,849 $ 3,695,854 The computer software with limited useful lives is amortized on a straight-line basis by the useful lives in 5 years.

Goodwill resulting from merger of the Bank with the Farmers Bank of China was allocated to operating units or operating segment (cash-generating units with allocated goodwill). There was no impairment loss on goodwill as of December 31, 2015 and 2014.

19. OTHER ASSETS, NET

December 31 2015 2014 Prepaid expenses $ 628,881 $ 3,341,938Refundable deposits 373,148 368,678Operating deposits 48,000 48,000Collaterals assumed, net - -Others 12,469 12,514 $ 1,062,498 $ 3,771,130 Collaterals assumed are summarized as follows: December 31 2015 2014 Cost $ - $ 2,375Less: Accumulated impairment - 2,375 $ - $ - On the basis of the guidelines of the Financial Supervisory Commission and the Company’s evaluation of the possibilities of recovery, the Company recognized $2,127 thousand and $144 thousand in reversal of impairment losses on collaterals assumed in 2015 and 2014, respectively. Of the prepaid expenses as of December 31, 2015 and 2014, an amount of $323,205 thousand and $2,950,882 thousand referred to the Bank’s investment in its overseas branches.


20. DUE TO THE CENTRAL BANK AND OTHER BANKS

December 31 2015 2014 Due to banks $ 116,665,130 $ 103,149,357Call loans from banks 67,680,073 51,297,833Deposits from Chunghwa Post Co., Ltd. 14,531,307 21,122,619Bank overdraft 857,336 1,107,203Due to the Central Bank 511,968 343,684 $ 200,245,814 $ 177,020,696

21. SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

Securities sold for $17,452,480 thousand and $23,179,705 thousand under repurchase agreements as of December 31, 2015 and 2014, respectively, would subsequently be purchased for $17,463,265 thousand and $23,194,806 thousand, respectively.

22. PAYABLES

December 31 2015 2014 Checks for clearing $ 9,279,476 $ 14,207,885Collections payable 5,703,084 6,632,080Collections of notes and checks for various financial institutions

in other cities 5,201,546 5,701,648Accrued expenses 4,035,713 4,057,947Accrued interest 3,366,692 3,576,711Acceptances 3,321,956 2,816,912Payables on notes and checks collected for others 1,693,053 1,606,723Tax payable 526,184 504,852Dividends payable 178,980 181,542Payable on securities 155,970 18,270Factored accounts payable 114,474 87,215Others 1,783,581 2,352,441 $ 35,360,709 $ 41,744,226

23. DEPOSITS AND REMITTANCES

December 31 2015 2014

Deposits

Checking $ 40,520,013 $ 41,143,803Demand 486,268,687 423,138,829Savings - demand 744,683,401 701,731,007Time 472,703,035 458,959,005Negotiable certificates of deposit 3,543,000 2,059,800Savings - time 683,100,935 703,248,764Treasury 73,374,578 66,581,720

Remittances 318,238 413,543 $ 2,504,511,887 $ 2,397,276,471



24. BANK DEBENTURES

December 31 2015 2014 First cumulative subordinated bonds in 2007: Reuters’ fixing rate for 90 days’ New

Taiwan dollar commercial paper plus 0.7% in first five years; Reuters’ fixing rate for 90 days’ New Taiwan dollar commercial paper plus 1.7% if the Bank fails to redeem the bank debenture after five years from the issuance date; no maturity $ - $ 13,000,000

First subordinated bonds in 2008, Type A: Reuters’ fixing rate for 90 days’ NewTaiwan dollar commercial paper plus 0.43%; maturity - May 28, 2015 - 1,000,000

First subordinated bonds in 2008, Type B: Fixed rate of 3.0%; maturity - May 28, 2015 - 4,500,000

Second subordinated bonds in 2009: Fixed rate of 2.10%; maturity - March 28, 2015 - 4,000,000

First subordinated bonds in 2010: The Bank’s floating interest rate for 1-year time deposit plus 0.25%; maturity - June 21, 2017 8,000,000 8,000,000

Second subordinated bonds in 2010, Type A: Reuters’ fixing rate for 90 day’s New Taiwan dollar commercial paper plus 0.15%; maturity - October 25, 2017 3,000,000 3,000,000

Second subordinated bonds in 2010, Type B: Fixed rate of 1.45%; maturity -October 25, 2017 1,000,000 1,000,000

First subordinated bonds in 2011, Type A: Reuters’ fixing rate for 90 day’s New Taiwan dollar commercial paper plus 0.15%; maturity - May 25, 2018 7,300,000 7,300,000

First subordinated bonds in 2011, Type B: Fixed rate of 1.65%; maturity - May 25, 2018 2,700,000 2,700,000

Second subordinated bonds in 2011, Type A: Reuters’ fixing rate for 90 day’s New Taiwan dollar commercial paper plus 0.25%; maturity - July 28, 2018 1,200,000 1,200,000

Second subordinated bonds in 2011, Type B: Fixed rate of 1.70%; maturity - July 28, 2018 3,410,000 3,410,000

First subordinated bonds in 2012: Fixed rate of 1.65%; maturity - June 28, 2022 11,650,000 11,650,000Second subordinated bonds in 2012, Type A: Fixed rate of 1.43%; maturity -

December 25, 2019 1,000,000 1,000,000Second subordinated bonds in 2012, Type B: Fixed rate of 1.55%; maturity -

December 25, 2022 7,350,000 7,350,000First subordinated bonds in 2013, Type A: Reuters’ fixing rate for 90 day’s New

Taiwan dollar commercial paper plus 0.43%; maturity - March 28, 2020 4,000,000 4,000,000First subordinated bonds in 2013, Type B: Fixed rate of 1.48%; maturity - March

28, 2020 3,500,000 3,500,000Second subordinated bonds in 2013, Type A: Fixed rate of 1.72%; maturity -

December 25, 2020 900,000 900,000Second subordinated bonds in 2013, Type B: Reuters’ fixing rate for 90 day’s New

Taiwan dollar commercial paper plus 0.45%; maturity - December 25, 2023 4,600,000 4,600,000First subordinated bonds in 2014, Type A: Fixed rate of 1.70%; maturity - May 26,

2021 1,500,000 1,500,000First subordinated bonds in 2014, Type B: Fixed rate of 1.85%; maturity - May 26,

2024 2,700,000 2,700,000First subordinated bonds in 2014, Type C: Reuters’ fixing rate for 90 day’s New

Taiwan dollar commercial paper plus 0.43%; maturity - May 26, 2024 5,800,000 5,800,000 $ 69,610,000 $ 92,110,000

The above Reuters’ fixing rate for 90 days’ New Taiwan dollar commercial paper refers to the Taipei Interbank Offered Rate (TAIBOR) for three months announced by The Bankers Association of the Republic of China on January 1, 2015. FSC approved the Bank’s redemption of the First cumulative subordinated bonds - Type C issued in 2008, which amounted to $4,500,000 thousand on April 8, 2014. The Bank redeemed the bonds on May 28, 2014. FSC approved the Bank’s redemption of the Second cumulative subordinated bonds - Type B issued in 2007, which amounted to $5,810,000 thousand on July 29, 2014. The Bank redeemed the bonds on September 29, 2014. FSC approved the Bank’s redemption of the First cumulative subordinated bonds issued in 2007, which amounted to $13,000,000 thousand on February 17, 2015. The Bank decided to redeem the bonds on April 28, 2015. To expand its long-term USD capital, the Bank applied for the issuance of unsecured bank debentures amounting to US$1,000,000 thousand. The application was approved by the Financial Supervisory Commission (FSC) on January 22, 2015. The Bank issue unsecured bank debentures with an aggregate face value of US$400,000 thousand, consisting of type A bonds worth US$300,000 thousand with 0%


interest rate and type B bonds worth US$100,000 thousand with 0% interest rate; the Bank may exercise its redemption rights at an agreed price after two years and three years, respectively, from the issue dates. If the Bank do not exercise its redemption rights during issue period, all unsecured bank debentures will be refunded on settlement date, March 30, 2045. To manage exposure to adverse changes in interest rates, the Bank enters into interest rate swap contracts measured at fair value through profit or loss and to eliminate measurement or recognition inconsistency, the unsecured bank debentures are reclassified as designated as at FVTPL upon initial recognition. They were as follows: December 31, 2015 Unsecured bank debentures bonds issued in 2015, Type A $ 9,515,762Unsecured bank debentures bonds issued in 2015, Type B 3,187,301 $ 12,703,063

25. OTHER FINANCIAL LIABILITIES

December 31 2015 2014Structured products - host contracts $ 5,422,591 $ 7,266,986Guarantee deposits received 1,525,407 920,683Appropriation for loans 761,370 873,398 $ 7,709,368 $ 9,061,067

26. PROVISIONS

December 31 2015 2014 Provision for employee benefits

Net defined benefit liability $ 4,658,134 $ 4,106,199Present value of retired employees’ preferential interest deposits

obligation 4,009,952 3,884,422 8,668,086 7,990,621Provision for losses on guarantees 618,679 840,633 $ 9,286,765 $ 8,831,254

27. EMPLOYEE BENEFITS PLAN

a. Defined contribution plan

The pension plan under the Labor Pension Act (the “Act”) is a defined contribution plan. Based on the Act, the Company’s monthly contributions to individual pension accounts of employees covered by the defined contribution plan is at 6% of monthly salaries and wages. The funds are deposited in individual labor pension accounts at the Bureau of Labor Insurance. The Company recognized expense of $111,204 thousand and $103,823 thousand in the consolidated statement of comprehensive income in 2015 and 2014, respectively, in accordance with the defined contribution plan.

b. Defined benefit plan

The defined benefit plan adopted by the Company in accordance with the Labor Standards Law is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contributes amounts equal to 15% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company has no right to influence the investment policy and strategy. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The amounts included in the consolidated balance sheets in respect of the Company’s defined benefit plans were as follows:



December 31 2015 2014 Present value of defined benefit obligation $ 11,800,882 $ 11,120,627Fair value of plan assets (7,142,748) (7,014,428) Net defined benefit liability $ 4,658,134 $ 4,106,199 Movements in net defined benefit liability were as follows:

Present Value of the Defined

Benefit Obligation

Fair Value of the Plan Assets

Net Defined Benefit Liability

(Asset) Balance at January 1, 2014 $ 10,302,614 $ (6,274,167) $ 4,028,447Service cost Current service cost 938,749 - 938,749 Net interest expense (income) 183,197 (117,615) 65,582Recognized in profit or loss 1,121,946 (117,615) 1,004,331Remeasurement

Return on plan assets (excluding amounts included in net interest) - (29,457) (29,457)

Actuarial loss - changes in financial assumptions 61,070 - 61,070

Actuarial loss - experience adjustments 2,577 - 2,577Recognized in other comprehensive income 63,647 (29,457) 34,190Contributions from the employer - (960,769) (960,769)Benefits paid (367,580) 367,580 -Balance at December 31, 2014 11,120,627 (7,014,428) 4,106,199Service cost Current service cost 851,165 - 851,165 Net interest expense (income) 186,467 (120,660) 65,807Recognized in profit or loss 1,037,632 (120,660) 916,972Remeasurement

Return on plan assets (excluding amounts included in net interest) - (60,865) (60,865)

Actuarial loss - changes in financial assumptions 499,289 - 499,289

Actuarial loss - experience adjustments 178,503 - 178,503Recognized in other comprehensive income 677,792 (60,865) 616,927Contributions from the employer - (981,964) (981,964)Benefits paid (1,035,169) 1,035,169 - Balance at December 31, 2015 $ 11,800,882 $ (7,142,748) $ 4,658,134 Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks: 1) Investment risk: The plan assets are invested in domestic/and foreign/equity and debt securities,

bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

2) Interest risk: A decrease in the government bond interest rate will increase the present value of

the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the

future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:


December 31 2015 2014 Discount rate(s) 1.35% 1.75%Expected rate(s) of salary increase 2.00% 2.00%Expected rate(s) of return on plan asset 1.35% 1.75% Had there been a possible reasonable change in each of the significant actuarial assumptions and all other assumptions remained constant, the present value of the defined benefit obligation would have increased (decreased) as follows: December 31, 2015 Discount rate(s)

0.25% increase $ (315,821)0.25% decrease $ 328,924

Expected rate(s) of salary increase 0.25% increase $ 313,4850.25% decrease $ (302,769)

The sensitivity analysis presented above might not have been representative of the actual change in the present value of the defined benefit obligation as it was unlikely that the changes in assumptions would have occurred independently of each other because some of the assumptions might have correlated. December 31 2015 2014 The expected contributions to the plan for the next year $ 2,871,100 $ 605,000 The average duration of the defined benefit obligation 11 years 11 years

c. Employees’ preferential deposit plan

The Bank’s payment obligations on fixed-amount preferential interest deposits for retired employees and current employees after retirement are in compliance with the Bank’s internal rules. Under the Guidelines Governing the Preparation of Financial Reports by Public Banks, the Bank should determine the excess interest from the preferential interest deposits of employees by applying an actuarial valuation method when the employees retire. The amounts included in the balance sheet arising from the Company’s obligation in the employees’ preferential interest deposits plan were as follows: December 31 2015 2014 Present value of retired employees’ preferential interest

deposits obligation (part of provisions) $ 4,009,952 $ 3,884,422 The changes in present value of retired employees’ preferential interest deposits obligation were as follows: For the Year Ended December 31 2015 2014 Present value of retired employees’ preferential interest deposits

obligation, January 1 $ 3,884,422 $ 3,979,147Interest expense 152,379 151,452Actuarial losses 760,838 523,661Benefits paid (787,687) (769,838) Present value of retired employees’ preferential interest deposits

obligation, December 31 $ 4,009,952 $ 3,884,422 Amounts recognized in profit or loss in employee preferential deposit plans for retired employees in the statement of comprehensive income were as follows: For the Year Ended December 31



2015 2014 Interest expense $ 152,379 $ 151,452Actuarial losses 760,838 523,661 Excessive interest of retired employees’ preferential interest

deposits $ 913,217 $ 675,113 Under Rule No. 10110000850 issued by the Financial Supervisory Commission, effective March 15, 2012, the actuarial assumptions for calculating the expense for the retired employees’ preferential interest deposit benefit are as follows: December 31 2015 2014 Discount rate 4.00% 4.00%Return on deposit 2.00% 2.00%Account balance decrease rate per year 1.00% 1.00%Rate of probability of change in the preferential deposit system 50.00% 50.00% Had there been a possible reasonable change in each of the significant actuarial assumptions and all other assumptions remained constant, the present value of the retired employees’ preferential interest deposit benefit obligation would have increased (decreased) as follows: December 31, 2015 Discount rate(s)

1% increase $ (293,925)1% decrease $ 339,856

Return on deposit 1% increase $ (748,637)1% decrease $ 748,637

Account balance decrease rate per year 1% increase $ (310,616)1% decrease $ 354,540

Rate of probability of change in the preferential deposit system 20% increase $ (1,603,981)20% decrease $ 1,603,981

The sensitivity analysis presented above might not have been representative of the actual change in the present value of the retired employees’ preferential interest deposit benefit obligation because it was unlikely that the change in assumptions would have occurred independently of each other because some of the assumptions correlated.

28. NET INTEREST

For the Year Ended December 31 2015 2014 Interest revenue

From discounts and loans $ 40,592,706 $ 40,133,017From due from banks and call loans to other banks 6,226,138 6,856,762From investments 3,499,033 2,774,368Others 796,888 956,605

51,114,765 50,720,752Interest expense

From deposits (18,741,413) (19,249,289)From subordinated bank debentures (1,197,324) (1,767,858)From funds borrowing from the Central Bank and other banks (486,117) (1,159,813)From due to the Central Bank and other banks (423,188) (415,662)From securities sold under repurchase agreements (97,483) (124,796)From structure products (92,149) (225,607)Others (24,569) (9,525) (21,062,243) (22,952,550)

$ 30,052,522 $ 27,768,202


29. SERVICE FEE INCOME, NET

For the Year Ended December 31 2015 2014 Service fee income

From insurance service $ 2,707,785 $ 1,902,221From trust business 1,379,546 1,352,565From loans 701,065 743,274From credit cards 560,735 529,636From guarantee 444,957 392,743From remittance 366,280 321,565From cross-bank transactions 244,288 227,117From trust affiliated business 179,750 151,426From import/export service 120,170 140,026Others 468,341 490,415 7,172,917 6,250,988

Service charge From cross-bank transactions (255,417) (241,290)From credit cards (176,804) (134,467)From credit cards acquiring (130,617) (111,726)From custody (44,500) (39,424)From selling insurance policy (27,738) (29,948)Others (119,712) (135,240) (754,788) (692,095) $ 6,418,129 $ 5,558,893

30. GAINS (LOSSES) ON FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH

PROFIT OR LOSS

For the Year Ended December 31, 2015

Interest Revenue

(Expense) Gain (Loss) on

Disposal Gain (Loss) on Valuation

Dividend Income Total

Held-for-trading financial assets $ 242,998 $ 18,847,971 $ (3,786,619) $ 4,986 $ 15,309,336Financial assets designated as at fair

value through profit or loss 8,387 (7,529) 11,840 - 12,698

Held-for-trading financial liabilities - (17,628,958) 2,720,767 - (14,908,191)Financial liabilities designated as at

fair value through profit or loss (404,765) - 446,769 - 42,004

$ (153,380) $ 1,211,484 $ (607,243) $ 4,986 $ 455,847


Interest Revenue

Gain (Loss) on Disposal

Gain (Loss) on Valuation

Dividend Income Total

Held-for-trading financial assets $ 263,253 $ 9,315,112 $ 10,766,374 $ 457 $ 20,345,196Financial assets designated as at fair

value through profit or loss 17,597 - (17,519) - 78Held-for-trading financial liabilities - (9,608,815) (8,073,373) - (17,682,188) $ 280,850 $ (293,703) $ 2,675,482 $ 457 $ 2,663,086



31. EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES

For the Year Ended December 31 2015 2014 Employee benefits

Salaries $ 7,963,183 $ 7,632,724Incentives 2,687,099 2,936,329Excessive interest from preferential interest deposits 1,343,384 1,116,634Post-employment benefits, termination benefits and

compensation 1,364,020 1,131,708Overtime 395,956 394,713Others 1,509,726 1,444,014

Depreciation expenses 960,229 964,768Amortization expenses 244,671 249,958 Under the Bank’s Articles of Incorporation amended on February 25, 2015, the bonus to employees for the year ended December 31 2014 was estimated at $529,182 thousand on the basis of past experience. When the Company Act was amended in May 2015, TCB’s board of directors amended its Articles of Incorporation on March 28, 2016. Under the amended Articles, The Bank will distribute employees’ compensation at a fixed ratio 1% to 8% of its annual profit (pretax income which exclude compensation to employees). However, the actual appropriation of the bonus should be made only from the annual net income less any accumulated deficit. For the year ended December 31, 2015, the compensation to employees was $711,078 thousand, based on the amended Company Act and the amended Articles. Material differences between such estimated amounts and the amounts proposed by the board of directors on or before the annual consolidated financial statements are authorized for issue are adjusted in the year the compensation were recognized. If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in accounting estimate. The appropriations of bonuses to employees for 2014 and 2013 have been proposed by the board of directors on May 25, 2015 and May 26, 2014, respectively, were as follows: For the Year Ended December 31 2014 2013 Bonus to employees - cash $ 529,182 $ 449,235 There was no difference between the amounts of the bonus to employees proposed by the board of directors and the amounts recognized in the consolidated financial statements for the years ended December 31, 2014 and 2013, respectively. Information on the bonus to employees proposed by the Bank’s board of directors is available on the Market Observation Post System website of the Taiwan Stock Exchange (http://emops.tse.com.tw).

32. INCOME TAX a. Income tax recognized in profit or loss

Main components of income tax expense were as follows: For the Year Ended December 31 2015 2014Current tax

Current year $ 2,260,497 $ 730,232Additional 10% income tax on unappropriated earnings - 34,374Prior year’s adjustments (408) 418,787

2,260,089 1,183,393Deferred tax

Current year (270,824) 531,393Prior year’s adjustments - (174,579)

(270,824) 356,814 Income tax expense recognized in profit or loss $ 1,989,265 $ 1,540,207


A reconciliation of accounting profit and current income tax expenses were as follows: For the Year Ended December 31 2015 2014 Income before income tax $ 14,129,723 $ 11,678,477 Income tax expense at the 17% statutory rate $ 2,402,053 $ 1,985,341Nondeductible expenses in determining taxable income 78,103 3,153Tax-exempt income (536,020) (1,047,143)Additional income tax under the Alternative Minimum Tax Act - 166,204Additional 10% income tax on unappropriated earnings - 34,374Unrecognized deductible temporary differences (112,557) 26,003Effect of different tax rate of overseas branches operating in other

jurisdictions 158,094 128,067Adjustments for prior year’s tax (408) 244,208 Income tax expense recognized in profit or loss $ 1,989,265 $ 1,540,207

b. Income tax recognized in other comprehensive income For the Year Ended December 31 2015 2014Deferred tax Recognized in other comprehensive income - items that may be

reclassified subsequently to profit or loss Exchange differences on the translation of financial statements

of foreign operations $ 10,708 $ 39,240Unrealized gains on available-for-sale financial assets (7,278) (8,198)

Total income tax recognized in other comprehensive income $ 3,430 $ 31,042

c. Current tax assets and liabilities

December 31 2015 2014Current tax assets

Tax refund receivable $ 134,645 $ 781,706Tax receivable - consolidated tax return 744,306 743,899Others 108,392 45,348

$ 987,343 $ 1,570,953Current tax liabilities

Tax payable $ 38,923 $ 54,765Tax payable - consolidated tax return 1,251,673 -Others 60,417 39,880

$ 1,351,013 $ 94,645

d. Deferred tax assets and liabilities

Movements in deferred tax assets and liabilities were as follows:



For the year ended December 31, 2015

Opening Balance

Recognized in Profit or Loss

Recognized in Other Com- prehensive

Income Closing Balance

Deferred tax assets Temporary differences

Available-for-sale financial assets $ 1,454 $ - $ 3,764 $ 5,218Investments accounted for using

equity method 31,034 (16,840) - 14,194Properties and equipment 10,541 (547) - 9,994Payable for annual leave 70,056 (3,295) - 66,761Defined benefit obligation 295,341 78,914 - 374,255Employee’s preferential interest

deposits obligation 660,352 21,340 - 681,692Other liabilities 6,113 242 - 6,355Unrealized interests expense - 68,810 - 68,810

$ 1,074,891 $ 148,624 $ 3,764 $ 1,227,279Deferred tax liabilities Temporary differences

Financial instruments at fair value through profit or loss $ 543,486 $ (127,705) $ - $ 415,781

Available-for-sale financial assets 4,343 - (3,514) 829Intangible assets 364,322 - - 364,322The reserve for land revaluation

increment tax 2,596,230 - - 2,596,230Exchanges difference on foreign

operations 60,121 - 10,708 70,829Others - 5,505 - 5,505 $ 3,568,502 $ (122,200) $ 7,194 $ 3,453,496

For the year ended December 31, 2014

Opening Balance

Recognized in Profit or Loss

Recognized in Other Com- prehensive

Income Closing Balance

Deferred tax assets Temporary differences

Available-for-sale financial assets $ 1,229 $ - $ 225 $ 1,454Investments accounted for using

equity method 45,931 (14,897) - 31,034Properties and equipment 11,089 (548) - 10,541Payable for annual leave 64,092 5,964 - 70,056Defined benefit obligation 295,341 - - 295,341Employee’s preferential interest

deposits obligation 676,455 (16,103) - 660,352Other liabilities 547 5,566 - 6,113

$ 1,094,684 $ (20,018) $ 225 $ 1,074,891Deferred tax liabilities Temporary differences

Financial instruments at fair value through profit or loss $ 32,111 $ 511,375 $ - $ 543,486

Available-for-sale financial assets 12,316 - (7,973) 4,343Intangible assets 538,901 (174,579) - 364,322The reserve for land revaluation

increment tax 2,811,394 (215,164) - 2,596,230Exchanges difference on foreign

operations 20,881 - 39,240 60,121 $ 3,415,603 $ 121,632 $ 31,267 $ 3,568,502


e. Unused deductible temporary differences for which no deferred tax assets have been recognized in the consolidated balance sheets December 31 2015 2014 Deductible temporary differences $ 882,504 $ 1,728,875

f. Imputed tax credits are summarized as follows:

TCB CIB Balances of stockholders’ imputed tax credit

December 31, 2015 $ 140,889 $ 12,798December 31, 2014 645,738 10,407

Estimated creditable tax ratio for distributing the 2015 earnings 0.71% 20.48%Actual creditable tax ratio for distributing the 2014 earnings 0.22% 20.48% The actual stockholders’ imputation credits should be based on the balance of the imputation credit account as of the dividend distribution date. As a result, the estimated creditable ratio for the 2015 earnings may differ from the actual creditable ratio.

g. Under the Income Tax Law, the unappropriated retained earnings of $19,985 thousand generated by the Bank until December 31, 1997 were included in the unappropriated retained earnings as of December 31, 2015 and 2014. CIB had no retained earnings generated until December 31, 1997.

h. The income tax returns of the Bank and CIB through 2011 and 2013 had been examined by tax

authorities, respectively. The Bank initiated administrative litigations due to the taxable income authorized by tax authorities was different from income tax returns from 2006 to 2011. Please refer to Note 37 for more information.

33. EARNINGS PER SHARE

The numerators and denominators used in calculating earnings per share were as follows:

Net Income

(Numerator)

Shares (Denominator in

Thousands) Earnings Per

Share (Dollars) For the year ended December 31, 2015 Basic earnings per share $ 12,129,481 7,956,221 $ 1.52 For the year ended December 31, 2014 Basic earnings per share $ 10,128,559 6,960,652 $ 1.46 The number of shares outstanding was retrospectively adjusted to reflect the effects of the stock dividends distributed in the year following earnings appropriation.

34. EQUITY

a. Capital stock

Common stocks December 31 2015 2014 Numbers of shares authorized (in thousands) 10,000,000 8,000,000Authorized capital $ 100,000,000 $ 80,000,000Number of shares issued and fully paid (in thousands) 8,349,300 7,136,276Common stocks issued $ 83,493,000 $ 71,362,760 Fully paid common stocks, which have a par value of $10, carry one vote per share and carry a right to dividends. On April 28, 2014, the Bank’s board of directors resolved to increase its capital by issuing 200,000



thousand shares of common stocks at NT$21.50 per share. TCFHC subscribed for all the new shares and this capital increase transaction was approved by FSC and MOEA. On November 27, 2014, the Bank’s board of directors resolved to increase its capital by issuing 93,024 thousand shares of common stocks at NT$21.5 per share. TCFHC subscribed for all the new shares and this capital increase transaction was approved by FSC and MOEA. On February 25, 2015, the Bank’s stockholders resolved to increase its capital by issuing 993,024 thousand shares of common stocks at NT$21.5 per share. TCFHC subscribed for all the new shares and enhance the authorized capital to 100,000,000 thousand. The capital increase transaction was approved by FSC and MOEA.

On August 24, 2015, the Bank’s board of directors resolved to increase its capital by issuing 220,000 thousand shares of common stocks at NT$21.8 per share. TCFHC subscribed for all the new shares and this capital increase transaction was approved by FSC and MOEA.

b. Capital surplus

On December 22, 2014, TCFHC’s board of directors resolved to increase its capital and reserve 15% of the new shares for the subscription by the employees of TCFHC and its subsidiaries. In 2015, the Bank recognized $308,076 thousand arising from the share based payment under salary expenses and under capital surplus, based on the fair value of the options on the grant date. The Bank also recognized $624 thousand to capital surplus under subsidiaries’ share based payment based on the shareholding proportion. Under related regulations, capital surplus may be used to offset a deficit. Capital surplus arising from the issuance of shares in excess of par value (including additional paid-in capital from the issuance of common shares and capital surplus from mergers and treasury stock transactions) and donations may be distributed as cash dividends or transferred to common stock on the basis of the percentage of shares held by the stockholders. Any capital surplus transferred to common stock should be within a certain percentage prescribed by law. Under related regulations, the capital surplus from equity investments under the equity method cannot be distributed for any purpose.

c. Special reserve

Under FSC guidelines, the Bank reclassified to special reserve $165,255 thousand, the sum of trading loss reserve and reserve for loss on branch of purchase commitments, which were in place until December 31, 2010. The reclassified special reserve is unavailable to be used unless: (1) offset a deficit or (2) when the special reserve reaches 50% of the Bank’s paid-in capital, 50% of the excess may be used to issue new capital or (3) the FSC has approved that excess may be reversed to unappropriated earnings when special reserve has exceeded the Bank’s paid-in capital. As of December 31, 2015, the special reserve from equity investments under the equity method was $14,944 thousand. On the first-time adoption of IFRSs, the Bank should appropriate to a special reserve of an amount that was the same as these of unrealized revaluation increment and cumulative translation differences (gains) transferred to retained earnings as a result of the Bank’s use of exemptions under IFRS 1. However, at the date of transitions to IFRSs, if the increase in retained earnings that resulted from all IFRSs adjustments is not enough for this appropriation, only the increase in retained earnings that resulted from all IFRSs adjustments will be appropriated to special reserve. The special reserve appropriated as above may be reversed in proportion to the usage, disposal or reclassification of the related assets and thereafter distributed. The special reserve appropriated on the first-time adoption of IFRSs may be used to offset deficits in subsequent years. No appropriation of earnings shall be made until any shortage of the aforementioned special reserve is appropriated in subsequent years if the Bank has earnings and the original need to appropriate a special reserve is not eliminated. The increase in retained earnings that resulted from all IFRSs adjustments was not enough for this appropriation; therefore, the Bank appropriated to the special reserve an amount of $1,132,019 thousand on January 1, 2013, the increase in retained earnings that resulted from all IFRSs adjustments on transitions to IFRSs. Information regarding the above special reserve appropriated or reversed on elimination of the original need to appropriate a special reserve was as follows:


For the Year Ended December 31 2015 2014 Balance on January 1 $ 1,037,384 $ 1,128,826Reversed on elimination of the original need to appropriate a

special reserve: Disposal of properties and equipment - (91,442)

Balance on December 31 $ 1,037,384 $ 1,037,384

d. Appropriation of earnings From the annual net income less any deficit should be appropriated 30% as legal reserve and a certain amount, depending on regulations and operating needs, as special reserve. The remaining net income and unappropriated earnings of prior years, which should be approved by stockholders, are as follows: 1) Dividends. 2) Bonus to employees ranging from 1% to 8%, determined annually by the board of directors. 3) Other appropriations, in compliance with relevant regulations. Unless it is otherwise restricted by related regulations, the Bank’s policy indicates that cash dividends must be 50% or above of the total dividends and bonus distributed. If the legal reserve reaches the amount of paid-in capital or the Bank is sound in both its finance and business operations and have set aside a legal reserve in compliance with the Company Law, the legal reserve is not subject to the limitation of 30% set under the Banking Law and related regulations. In accordance with the amendments to the Company Act in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. The Bank will make consequential amendments to the Bank’s Articles of Incorporation. For information about the accrual basis of the employees compensation or employee bonus for the years ended December 31, 2015 and 2014, and the actual appropriations for the years ended December 31, 2014 and 2013, please refer to Note 31.

Under related regulations, a special reserve is appropriated from the balance of the retained earnings at an amount from the net income and unappropriated earnings that is equal to the debit balance of accounts in the stockholders’ equity section (such as exchange differences in translation of financial statements of foreign operations and unrealized gains or losses on available-for-sale financial assets). The special reserve should be appropriated from the prior years’ unappropriated earnings to the extent of the debit balance accumulated from prior years and such special reserve should not be appropriated. The balance of the special reserve is adjusted to reflect any changes in the debit balance of the related accounts. If there is difference between appropriation of special reserve and net amount of deduction in other stockholder’s equity, the Company should appropriate on additional amount of special reserve in the first-time adoption of IFRSs. Afterwards, if there is any reversal in of the deduction in other stockholder’s equity, the Company is allowed to appropriating retained earnings from the reversal amount. Under the Company Law, legal reserve should be appropriated until the reserve equals the Bank’s paid-in capital. This reserve should only be used to offset a deficit. When the reserve exceeds 25% of the Bank’s paid-in capital, the excess may be used to issue new shares or distribute cash dividends. Under the Income Tax Law, except for non-ROC resident shareholders, all shareholders receiving the dividends are allowed a tax credit equal to their proportionate share of the income tax paid by the Bank. Effective from January 1, 2015, ROC resident shareholders receiving the dividends are allowed half of original tax credit equal to their proportionate share of the income tax paid by the Bank according to the revised Income Tax Law. The appropriations from the earnings of 2014 and 2013 were approved in the stockholders’ meetings on May 25, 2015 and May 26, 2014, respectively. The appropriations and dividends per share were as follows: Appropriation of Earnings Dividends Per Share (NT$) 2014 2013 2014 2013 Legal reserve $ 3,038,246 $ 2,406,618 Cash dividends 7,089,000 5,600,000 $ 0.872031 $ 0.818324



The appropriation from the earnings of 2015 was waiting for the approval of the Bank’s board of directors. Information on the appropriation of earnings or deficit offsetting can be accessed through the website of the Taiwan Stock Exchange (http://emops.tse.com.tw).

e. Non-controlling interest

For the Year Ended December 31 2015 2014 Balance, January 1 $ 197,112 $ 200,385Attributable to non-controlling interest

Net income 10,977 9,711Exchange differences in translation of financial statements of

foreign operations (13,189) (12,984) Balance, December 31 $ 194,900 $ 197,112

35. RELATED-PARTY TRANSACTIONS

Taiwan Cooperative Financial Holding Co., Ltd. is the ultimate parent of the Company, and the Ministry of Finance is the major government stockholder. Based on IAS 24 “Related Party Disclosures”, the Company’s transactions with government-related parties are exempt from disclosure requirements. All transactions, account balances, earnings, expenses and gains (losses) on transactions between the Company and subsidiaries have all been excluded from consolidation and are not disclosed in this note. In addition to those mentioned in other notes, the related-party transactions are summarized as follows: a. Related parties

Related Party Relationship with the Bank Taiwan Cooperative Financial Holding Company, Ltd.

(TCFHC) Parent company

Co-operative Assets Management Co., Ltd. Sister companyTaiwan Cooperative Bills Finance Co., Ltd. Sister companyTaiwan Cooperative Securities Co., Ltd. (TCS) Sister companyBNP Paribas Cardif TCB Life Insurance Co., Ltd.

(BPCTLI) Sister company

Taiwan Cooperative Securities Investment Trust Co., Ltd. (former name: BNP Paribas TCB Asset Management Co., Ltd.)

Sister company

Cooperative I Asset Management Co., Ltd. Sister company (before December 2014)Taiwan Cooperation Venture Capital Co., Ltd. (TCVC) Sister companyUnited Real Estate Management Co., Ltd. Associated enterprise TCB Fund of Emerging Markets Bond Fund (former name:

BNP Paribas TCB Elite Fund of Emerging Markets Bond Fund)

Fund managed by Taiwan Cooperative Securities Investment Trust Co., Ltd.

TCB Global High Yield Bond fund (former name: BNP Paribas TCB Elite Global High Yield Bond Fund)

Fund managed by Taiwan Cooperative Securities Investment Trust Co., Ltd.

Giga Solution Tech. Co., Ltd. Giga’s independent director is also the parent company’s independent director.

Others Main management of the parent company and other related parties.

b. Significant transactions between the Company and related parties:

1) Due from banks (part of cash and cash equivalents)

December 31 2015 2014 Main management $ 1 $ 966


2) Call loans to banks

Highest Balance Ending BalanceInterest Revenue

Interest Rate (%)

For the year ended December 31, 2015 Sister companies $ 4,400,000 $ 3,500,000 $ 14,560 0.350-0.650Main management 7,880,660 - 783 0.010-0.400Others 9,000,000 1,000,000 21,276 0.280-0.600 $ 21,280,660 $ 4,500,000 $ 36,619 For the year ended December 31, 2014 Sister companies $ 5,000,000 $ 1,800,000 $ 14,042 0.390-0.650Main management 10,356,090 - 2,729 0.130-1.250Others 7,000,000 2,600,000 10,785 0.390-0.600 $ 22,356,090 $ 4,400,000 $ 27,556

3) Due to banks

For the Year Ended December 31 2015 2014 Ending Interest Ending Interest Balance Expense Balance Expense Main management $ 167,114 $ 2,620 $ 599,742 $ 9,155Others 24,747,119 304,369 24,001,686 332,769 $ 24,914,233 $ 306,989 $ 24,601,428 $ 341,924

4) Call loans from banks

Highest Balance Ending Balance Interest Expense Interest Rate

(%) For the year ended December 31, 2015 Main management $ 18,779,577 $ 1,532,092 $ 10,103 0.100-3.000Others 3,000,000 - 32 0.388 $ 21,779,577 $ 1,532,092 $ 10,135 For the year ended December 31, 2014 Main management $ 4,909,587 $ 792,487 $ 6,447 0.180-1.600

5) Loans

Highest Ending Interest Interest Rate Balance Balance Revenue (%)For the year ended December 31, 2015 Sister companies $ 12,697 $ - $ 6 2.475-2.545Main management 192,304 126,978 2,030 1.470-2.708Others 99,024 78,959 1,457 1.500-2.700 $ 304,025 $ 205,937 $ 3,493 For the year ended December 31, 2014 Sister companies $ 85,137 $ - $ 6 2.545Main management 208,026 130,808 2,041 1.525-2.708Others 116,282 76,119 1,476 1.417-2.810 $ 409,445 $ 206,927 $ 3,523



Under the Banking Law, except for customer loans and government loans, credits extended by the Bank to any related party should be 100% secured, and the terms of credits extended to related parties should be similar to those for third parties.

6) Securities purchased under resell agreements

Ending Interest Interest Balance Revenue Rate (%)For the year ended December 31, 2015 Sister companies $ 199,597 $ 4,280 0.440-0.810 For the year ended December 31, 2014 Sister companies $ 898,819 $ 3,906 0.600-0.700

7) Securities sold under repurchase agreements

Ending Interest Interest Balance Expense Rate (%)

For the year ended December 31, 2015 Parent company $ - $ 48 0.400

8) Deposits

Ending Interest Interest Rate Balance Expense (%) For the year ended December 31, 2015 Parent company $ 34,739 $ 1,139 0-0.170Sister companies 4,405,864 6,261 0-1.360Associates 189,203 866 0-1.130Main management 534,878 10,910 0-13.000Others 10,923,024 34,821 0-13.000 $ 16,087,708 $ 53,997 For the year ended December 31, 2014 Parent company $ 23,659 $ 152 0-0.170Sister companies 1,199,420 8,376 0-1.360Associates 181,242 806 0-1.130Main management 530,003 11,647 0-13.000Others 14,518,535 41,028 0-13.000 $ 16,452,859 $ 62,009

December 31 2015 2014 9) Accrued income (part of receivables)

Sister companies $ 102,298 $ 81,173Main management - 1Others 300 90

$ 102,598 $ 81,264 10) Accrued interest (part of receivables)

Sister companies $ 316 $ 315Others 85 57 $ 401 $ 372


December 31 2015 2014 11) Tax receivable - consolidated tax return (part of

current tax assets) Parent company $ 744,306 $ 743,899

12) Accrued interest (part of payables) Sister companies $ 14 $ 81Main management 2,113 52

$ 2,127 $ 133 13) Accrued expense (part of payables)

Sister companies $ 3,900 $ 192Main management 805 1,167Others 891 334 $ 5,596 $ 1,693

14) Tax payable - consolidated tax return (part of current tax liability) Parent company $ 1,251,673 $ -

15) Guarantee deposits received (part of other financial liabilities) Parent company $ 1,520 $ 1,440Sister companies 13,777 13,360

$ 15,297 $ 14,800 For the Year Ended December 31 2015 2014 16) Service fee (part of service fee income, net)

Sister companies $ 1,182,324 $ 927,869Associates 65 -Main management 350 281Others 626 360 $ 1,183,365 $ 928,510

17) Service charge (part of service fee income, net) Sister companies $ 7,599 $ 776Main management 5,593 21,011Others 11,471 7,219

$ 24,663 $ 29,006 18) Rental income (part of other noninterest gain, net)

Parent company $ 6,080 $ 5,787Sister companies 53,560 51,733Others 12,708 12,708

$ 72,348 $ 70,228 19) Rental expense (part of general and administration)

Sister companies $ 7,086 $ 20,460 20) Information service fee (part of general and

administration) Sister companies $ 38,554 $ -

21) Other income (part of other noninterest gain, net)

Parent company $ 1,340 $ 1,340Sister companies 306 306Associates 24 104Others 2,950 2,985

$ 4,620 $ 4,735



For the Year Ended December 31 2015 2014 22) Donation (part of other noninterest gain, net)

Main management $ 2,000 $ 2,000

Terms of other transactions with related parties were similar to those for third parties, except for the more favorable interest rate for managers’ savings within a prescribed limit. The Bank has operating lease contracts with related parties, which cover certain office spaces within the Bank’s building. The monthly rentals were based on rentals for buildings near the Bank.

23) Purchases and sales of securities


Related Party Purchases Sales

Sales Under Repurchase Agreements

Purchases Under Resell

AgreementsParent company $ - $ - $ 1,093,873 $ -Sister companies - - - 17,117,728 $ - $ - $ 1,093,873 $ 17,117,728


Related Party Purchases Sales

Sales Under Repurchase Agreements

Purchases Under Resell Agreements

Sister companies $ 2,153,222 $ - $ - $ 14,340,829

24) Derivatives


Type of Contract Nominal Valuation Amounts on the Consolidated

Balance Sheet Related Party Derivatives Period Amounts Gain (Loss) Account Amounts

Sister company -

BPCTLI Currency swap 2015.12.22-

2016.03.22US$ 4,935 $ 146 Financial assets at fair

value through profit or loss

$ 146

Currency swap 2015.12.22-2016.03.22

US$10,033 296 Financial assets at fair value through profit or loss

296

Currency swap 2015.12.22-2016.03.22


383

Currency swap 2015.05.06-2016.05.06

US$ 3,187 6,744 Financial assets at fair value through profit or loss

6,744

Currency swap 2015.11.09-2016.01.11


3,672

Currency swap 2015.10.13-2016.01.13


3,201

Currency swap 2015.12.31-2016.01.29


842

Currency swap 2015.11.09-2016.01.11


1,841

Currency swap 2015.12.31-2016.01.29


817

Currency swap 2015.11.09-2016.01.11

US$ 1,699 894 Financial assets at fair value through profit or loss

894

Currency swap 2015.10.15-2016.01.15

US$11,386 4,890 Financial assets at fair value through profit or loss

4,890

Currency swap 2015.12.31-2016.01.29


504

Currency swap 2015.12.31-2016.01.29


225

(Continued)




Balance SheetRelated Party Derivatives Period Amounts Gain (Loss) Account Amounts

Currency swap 2015.12.31-

2016.01.29US$ 5,000 $ 375 Financial assets at

fair value through profit or loss

$ 375

Currency swap 2015.04.07-2016.04.07


16,125

Currency swap 2015.04.15-2016.04.15


5,194

Currency swap 2015.04.15-2016.04.15


5,194

Currency swap 2015.04.15-2016.04.15


8,051

Currency swap 2015.05.08-2016.05.09


43,673

Currency swap 2015.05.13-2016.05.13


22,640

Currency swap 2015.10.13-2016.01.13


615

Currency swap 2015.09.15-2016.03.15


5,124

Other - TCB Fund of Emerging Markets Bond Fund

Currency swap 2015.11.27-2016.01.27


742

Other - TCB Global High Yield Bond Fund

Currency swap 2015.12.16-2016.01.19

US$ 7,300 - Financial assets at fair value through profit or loss

-

Currency swap 2015.12.16-2016.01.19


-

Currency swap 2015.12.16-2016.01.19

US$ 730 - Financial assets at fair value through profit or loss

-

Currency swap 2015.12.16-2016.01.19


-

Currency swap 2015.12.16-2016.01.19

US$ 520 (271) Financial liabilities at fair value through profit or loss

(271)

Other - Giga solution tech. Co., Ltd.

Forward 2015.10.22-2016.01.26

US$ 500 240 Financial assets at fair value through profit or loss

240

Forward 2015.10.30-2016.02.03


169

Forward 2015.11.09-2016.02.16


118

Forward 2015.11.16-2016.02.18


15

Forward 2015.11.27-2016.02.01


147

Forward 2015.12.02-2016.03.07


55

Forward 2015.12.31-2016.03.04


22

(Concluded)





Balance SheetRelated Party Derivatives Period Amounts Gain (Loss) Account Amounts

Sister company -

BPCTLI Cross-currency

swap 2010.11.17-

2015.09.08US$ 5,000 $ 10,184 Financial assets at

fair value through profit or loss

$ 9,133

Cross-currency swap

2010.11.24-2015.01.20


8,414

Cross-currency swap

2010.12.10-2015.09.28


10,445

Currency swap 2014.12.22-2015.06.22


2,799

Currency swap 2014.12.22-2015.09.22


1,390

Currency swap 2014.12.22-2015.06.22


2,797

Currency swap 2014.12.22-2015.12.22


2,916

Currency swap 2014.12.22-2015.12.22


3,779

Currency swap 2014.11.06-2015.02.06-


3,802

Currency swap 2014.12.08-2015.04.08


3,584

Currency swap 2014.12.10-2015.09.10


4,561

Currency swap 2014.11.28-2015.05.29


8,435

Currency swap 2014.12.08-2015.09.08


1,818

Currency swap 2014.12.26-2015.01.26

US$10,897 (2,454) Financial liabilities at fair value through profit or loss

(2,454)

Currency swap 2014.10.02-2015.01.05


2,020

Currency swap 2014.12.11-2015.04.13


2,051

Currency swap 2014.12.15-2015.09.15


4,919

Currency swap 2014.12.29-2015.01.29

US$ 6,722 (1,223) Financial liabilities at fair value through profit or loss

(1,223)

Currency swap 2014.12.31-2015.01.30

US$ 5,000 (466) Financial liabilities at fair value through profit or loss

(466)

Currency swap 2014.12.31-2015.01.30

US$10,000 (933) Financial liabilities at fair value through profit or loss

(933)

Currency swap 2014.12.31-2015.03.31


(283)

Currency swap 2014.12.31-2015.03.31


(471)

Currency swap 2014.12.31-2015.04.30


(460)

Other - TCB Fund of Emerging Markets Bond Fund

Currency swap 2014.11.20- 2015.01.20


3,977


The realized profit on the currency swaps and cross-currency swaps transactions with related parties were as follows: For the Year Ended December 31 2015 2014 Financial assets and liabilities at fair value through profit

or loss Sister companies $ 181,029 $ 210,875Others 41,353 4,587 $ 222,382 $ 215,462

25) Loans

December 31, 2015

Highest Balance in the

Year Ended Loan Classification

Differences in Terms of

Transaction Compared with

Those for

Type Account Volume or

Name December 31, 2015 (Note)

Ending Balance

Normal Loans

Nonperforming Loans Collaterals

Unrelated Parties

Consumer loans 48 $ 151,434 $ 95,322 $ 95,322 $ - Land and buildings None Self-used housing

mortgage loans28 139,894 110,615 110,615 - Land and buildings None

Other Taiwan Cooperative Securities Co., Ltd.

12,697 - - - Bonds and time deposits

None

December 31, 2014

Highest Balance in the

Year Ended Loan Classification

Differences in Terms of

Transaction Compared with

Those for

Type Account Volume or

Name December 31, 2014 (Note)

Ending Balance

Normal Loans

Nonperforming Loans Collaterals

Unrelated Parties

Consumer loans 43 $ 118,407 $ 85,481 $ 85,481 $ - Land and buildings None Self-used housing

mortgage loans40 205,901 121,446 121,446 - Land and buildings None

Other Taiwan Cooperative Securities Co., Ltd.

85,137 - - - Bonds and time deposits

None

Note: The highest balance is the largest sum in the year of all daily accounts for each type.

26) On December 30, 2013, the Bank’s board of directors approved a property sale and leaseback

transaction with Co-operative Assets Management Co., Ltd. The selling price was $962,000 thousand and the net gain on this disposal was $580,423 thousand after the deduction of a land revaluation increment tax of $17,792 thousand. The gain on disposal should be deferred and amortized over the lease period. The Bank recognized $154,779 thousand and $425,644 thousand as realized gain (part of gains/losses on disposal of properties and equipment, net) for the years ended December 31, 2015 and 2014, respectively.

c. Salaries, bonuses and remunerations to main management

For the Year Ended December 31 2015 2014 Salaries and other short-term employment benefits $ 122,406 $ 118,066Post-employment benefits 12,959 12,894Interest arising from the employees’ preferential rate in excess of

normal rates 7,845 7,012 $ 143,210 $ 137,972



36. PLEDGED ASSETS

a. In addition to those mentioned in other notes, the face values of the pledged bonds and certificates of deposit are summarized as follows: December 31 2015 2014 Collaterals for call loans of foreign currency $ 40,000,000 $ 40,000,000Collaterals for day-term overdraft 30,000,000 30,000,000Collaterals for overdraft of domestic U.S. dollar settlement 11,000,000 11,000,000Collaterals for overdraft of domestic RMB settlement 3,994,400 7,648,500Guarantee deposits for provisional collateral seizure for loan

defaults and others 675,200 769,100Collaterals for overdraft of domestic JPY settlement 500,000 -Overseas branches’ capital adequate reserve 305,784 446,547Guarantee deposits for the trust business compensation reserve 180,000 160,000Guarantee deposits for bills finance business 50,000 50,000Guarantee deposits for securities operation 50,000 50,000Collaterals for overseas branch U.S. dollar settlement 36,168 28,503Collaterals for handling the government treasury affairs - 90,200,000Others 4,400 4,400 $ 86,795,952 $ 180,357,050 To comply with the Central Bank of the Republic of China’s (CBC) clearing system for real-time gross settlement (RTGS), the Bank provided certificates of deposit as collateral for day-term overdraft (part of due from the Central Bank and call loans to other banks). The pledged amount may be adjusted anytime, and the unused overdraft amount at the end of a day can also be treated as the Bank’s liquidity reserve.

b. To expand their capital sourcing and enhance their liquidity position, the Bank’s Seattle Branch and Los Angeles Branch obtained access privileges at the Discount Window of the Federal Reserve Bank of San Francisco. For this access, the two branches pledged the following assets:

(In Thousands of U.S. Dollars)

Outstanding Balance Collateral Date Loan Bond Total Value December 31, 2015 $ 316,666 $ 22,000 $ 338,666 $ 227,840December 31, 2014 $ 278,096 $ 62,000 $ 340,096 $ 247,340

37. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those mentioned in other notes, the significant contingencies and commitments as of December 31, 2015 were as follows: a. Taiwan Cooperative Bank, Ltd.

1) Lease agreements on premises occupied by the Bank’s branches are operating lease. Rentals are

calculated on the basis of the leased areas and are payable monthly, quarterly or semiannually. As of December 31, 2015, refundable deposits on these leases totaled $163,796 thousand (part of refundable deposits). Minimum future annual rentals are as follows:

December 31 2015 2014 Within one year $ 592,570 $ 633,697One to five years 1,016,771 1,109,710Over five years 36,656 14,027 $ 1,645,997 $ 1,757,434 The lease payments recognized as expenses are as follows:


For the Year Ended December 31 2015 2014 Minimum lease payments $ 656,073 $ 662,980 Contingent rentals 1,199 1,095 $ 657,272 $ 664,075

2) Lease agreements on investment properties owned by the Bank and rent to others are operating

lease. Rentals are calculated on the basis of the leased areas and are receivable monthly, quarterly or semiannually. The lessees have no preemptive rights to buy properties at the end of the lease agreements. As of December 31, 2015, refundable deposits on these leases totaled $53,408 thousand (part of guarantee deposits received). Minimum future annual rentals are as follows:

December 31 2015 2014 Within one year $ 177,565 $ 144,649 One to five years 391,877 184,048 $ 569,442 $ 328,697

3) As of December 31, 2015, the Bank’s outstanding major construction and procurement contracts

amounted to $5,687,178 thousand, of which $1,013,309 thousand was still unpaid. 4) According to the joint venture contract signed with BNP Paribas Assurance (BNPPA), the Bank

signed the tri-party agreement with BNP Paribas Cardif TCB Life Insurance Co., Ltd. (BPCTLI) and Cooperative Insurance Brokers Co., Ltd. (CIB) on April 13, 2010, which identified BPCTLI as the sole supplier of life insurance products for the Bank and CIB, also applying the Bank’s marketing channels to sell life insurance products exclusively.

5) For the Bank’s income tax returns (ITRs) from 2006 to 2011, the Taipei National Tax

Administration (TNTA) claimed that the appraisal of goodwill was not reasonable and that there were no unrecognized losses on the sale of nonperforming loans in the Bank’s records on the date of the merger with the Farmers Bank of China (FBC). Thus, TNTA denied the expenses for the goodwill amortization of $3,170,005 thousand and the deferred loss amortization of $3,105,522 thousand on the sale of nonperforming loans. The Bank disagreed with the TNTA’s decision and initiated administrative litigations. On December 30, 2014, TNTA allowed the partial amortization of goodwill expenses and of the losses on sales of nonperforming loans in the tax returns of 2006 to 2011 after negotiating with the Bank. The Bank recognized related income tax expenses of $228,990 thousand in 2014. On February 25, 2015 and April 9, 2015, TNTA reassessed the Bank’s 2006 to 2010 ITRs application. Because the Bank did not file an administrative appeal, the final court decision has been determined. Thus, ITRs have been returned (part of tax refund receivable of current tax assets). Besides the administrative litigation of the Bank’s 2011 ITRs application is still in process.

b. United Taiwan Bank S.A.

United Taiwan Bank S.A. has operating lease agreements with unrelated parties on its office premises. The rentals payable in the next five years are as follows:

December 31 2015 2014 Within one year $ 3,914 $ 3,656 One to five years 16,865 16,159 $ 20,779 $ 19,815

c. Cooperative Insurance Brokers Co., Ltd.

1) The Cooperative Insurance Brokers Co., Ltd. (CIB) entered into insurance agent contracts with

various insurance companies. The contract’s effective period is one year after the contract signed, if either party of contract makes no notice to terminate the contract after contract expired, then the contract automatically extend for one year. The commission charge with every insurance company is according with the contents of contract.

2) CIB and Land Bank signed a contract. Under this contract, CIB should pay Land Bank at 90% of the commission revenue after paying tax that CIB receives from insurance companies. As of



December 31, 2015, the unpaid amount to Land Bank was $805 thousand. 3) CIB and Tamsui Credit-Cooperative Association signed a contract. Under this contract, CIB

should pay Tamsui Credit-Cooperative Association at 90% of the after tax commission revenue that CIB receives from insurance companies. As of December 31, 2015, the unpaid amount to Tamsui Credit-Cooperative Association was $891 thousand.

4) CIB and Hsinchu Credit-Cooperative Association signed a contract. Under this contract, CIB

should pay Hsinchu Credit-Cooperative Association at 90% of the after tax commission revenue that CIB receives from insurance companies. As of December 31, 2015, the unpaid amount to Hsinchu Credit-Cooperative Association was $1 thousand.

5) CIB and Taichung Credit-Cooperative Association signed a contract. Under this contract, CIB

should pay Taichung Credit-Cooperative Association at 90% of the after tax commission revenue that CIB receives from insurance companies. As of December 31, 2015, the unpaid amount to Taichung Credit-Cooperative Association was $183 thousand.

6) CIB and Taiwan Cooperative Securities Corp. signed a contract. Under this contract, CIB

should pay Taiwan Cooperative Securities Corp. at 90% of the after tax commission revenue that CIB receives from insurance companies. As of December 31, 2015, the unpaid amount to Taiwan Cooperative Securities Corp. was $502 thousand.

38. FINANCIAL INSTRUMENTS

a. Fair values of financial instruments that are not measured at fair value. Except for the financial assets and liabilities shown in the following table, management considers that either the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values or the fair values of the financial instruments cannot be reasonably measured. December 31 2015 2014

Carrying Amount

EstimatedFair Value

Carrying Amount

EstimatedFair Value

Financial assets Held-to-maturity financial

assets $ 42,397,377 $ 43,223,477 $ 20,049,579 $ 20,089,002Debt instruments with no active

market 84,539,585 85,416,393 84,850,371 84,839,101 Financial liabilities Bank debentures 69,610,000 70,258,774 92,110,000 92,416,474 Fair value hierarchy as at December 31, 2015 Total Level 1 Level 2 Level 3 Financial assets Held-to-maturity financial

assets $ 43,223,477 $ 6,024,163 $ 37,199,314 $ -Debt investments with no active

market 85,416,393 - 85,416,393 - Financial liabilities Bank debentures 70,258,774 - 70,258,774 -

b. The valuation techniques and assumptions the Company uses for determining fair values are as

follows: The fair values of financial instruments traded on active markets are based on quoted market prices. However, in many instances where there are no quoted market prices for the Company’s various financial instruments, fair values are based on estimates using other financial data and appropriate valuation methodologies. Fair values of forward contracts, currency swap contracts, foreign-currency margin contracts, cross-currency swap contracts and interest rate swap contracts are


calculated using the discounted cash flow method, unless the fair values are provided by counter-parties. Fair values of option contracts are based on estimates using the Black Scholes pricing model. The Company estimates the fair value of each forward contract on the basis of the swap points quoted by Reuters on each settlement date. Fair values of interest rate swap contracts and cross-currency swap contracts are calculated using the Bloomberg information system, unless the fair values are provided by counterparties. The calculation of the fair value of each option contract is based on the mid-price (the average of bid and ask prices) quoted by Reuters. For debt instruments with no active market, if there are theoretical prices from GreTai Securities Market (GTSM, an over-the-counter securities exchange) on the balance sheet date, they are used as the basis for evaluating the fair value of debt instruments with no active market. Otherwise, the latest trade prices and quoted prices by major markets are used. The fair values of bank debentures are recorded as follows: (a) debentures with no maturity dates - at book values; (b) debentures with floating interest rates - at theoretical prices quoted by the GTSM; and (c) debentures with fixed interest rates - at estimates reached using the discounted cash flow method. The discount rates used were between 0.7361% and 1.0960%, between 0.8567% and 1.5995% as of December 31, 2015 and 2014, respectively, and were comparable with interest rates for loans with similar terms and characteristics.

c. The fair value hierarchies of the Company’s financial instruments as of December 31, 2015 and 2014 were as follows:

Financial Instrument December 31, 2015 Measured at Fair Value Total Level 1 Level 2 Level 3

Non-derivative financial instruments Assets Financial assets at FVTPL

Held-for-trading financial assets Stocks $ 82,461 $ 82,461 $ - $ -Others 10,497,699 - 10,497,699 -

Available-for-sale financial assets Stocks 3,975,015 3,423,360 551,655 -Debt instruments 91,590,575 19,974,353 71,616,222 -Others 319,261 319,261 - -

Liabilities Financial liabilities at FVTPL (12,703,063) - (12,703,063) - Derivative financial instruments Assets Financial assets at FVTPL 4,355,916 4,029 4,351,887 - Liabilities Financial liabilities at FVTPL (2,003,859) - (2,003,859) -

Financial Instrument December 31, 2014 Measured at Fair Value Total Level 1 Level 2 Level 3

Non-derivative financial instruments Assets Financial assets at FVTPL

Held-for-trading financial assets Stocks $ 89,606 $ 89,606 $ - $ -Debt instruments 250,519 250,519 - -Others 33,541,140 - 33,541,140 -

Financial assets designated as at FVTPL 417,727 417,727 - -

Available-for-sale financial assets Stocks 3,507,963 3,507,963 - -Debt instruments 66,113,701 14,256,114 51,857,587 -Others 152,837 152,837 - -

Derivative financial instruments Assets Financial assets at FVTPL 9,370,331 5,092 9,365,239 - Liabilities Financial liabilities at FVTPL (6,082,468) - (6,082,468) -



d. Information on financial assets designated as at fair value through profit or loss that should be originally measured at amortized cost is as follows:

December 31 2015 2014Carrying amounts of debt instruments designated as at fair

value through profit or loss $ - $ 90,734

Change in Fair Values Resulting from Credit

Risk Variations Change in amount in the year

2015 $ 6,3112014 $ (5,322)

Accumulated amount of change

As of December 31, 2015 $ -As of December 31, 2014 $ (6,311)

The change in fair value of debt instruments designated as at fair value through profit or loss resulting from credit risk variation is the difference between the total change in fair value and the change in fair value due to market risk variations on these debt instruments. The change in fair value resulting from market risk variations is calculated using the benchmark yield rate plus a fixed credit spread. The fair value of debt instruments is the present value of future cash flows discounted by the benchmark yield rate quoted in the market as of the balance sheet date plus the credit spread estimated using the interest rates for the debt issuers’ financial assets with similar maturities. As of the balance sheet date, the debt instruments designated as at fair value through profit or loss have no concentration of credit risk. Their carrying amounts are the amount of the maximum exposure to credit risks of these debt instruments.

e. Information on financial liabilities designated as at fair value through profit of loss is as follows: December 31, 2015 Difference between carrying amount and contractual amount at maturity:

Fair value $ 12,703,063 Amount payable at maturity 13,152,000

$ (448,937)

Change in Fair Values Resulting from Credit

Risk Variations Change in amount in the year

2015 $ 2,168 Accumulated amount of change

As of December 31, 2015 $ 2,168 The change in fair value attributable to change in credit risk was calculated as the difference between total change in fair value of bank debentures and the change in fair value due to change in market risk factors alone. The change in fair value due to market risk factors was calculated using benchmark interest yield curves as at the end of the reporting period holding. The fair value of bank debentures was estimated by discounting future cash flows using quoted benchmark interest yield curves as at the end of the reporting period and by obtaining lender quotes for borrowing of similar maturity to estimate credit risk margin.

f. Information on financial risk management 1) Risk management

The objective of risk management is to develop a sound risk management mechanism, and on the basis of the risk tolerance level and the expected return level, pursue the maximum value of stockholders’ investments. The main risks faced by the Bank include the business credit risk in- and off- balance-sheet, market risks (including interest, exchange, equity security, and commodity risks) and liquidity risk. The Bank has risk management policies and risk monitoring procedures, which have been reviewed and approved by the Board and are used to effectively identify, measure, monitor and


control credit, market, and operating and liquidity risks. The Board, the highest decision-making unit for the risk management, takes charge of approving the risk management policy and system and building the risk management culture. It also takes ultimate responsibility for overall risk management. Under the risk management decision approved by the Board, the risk management committee takes charge of and reviews all the Bank’s risk management implementation, capital adequacy assessment, and risk exposure management. It also communicates and the inter-departmental risk management issues and coordinates issue handling and continually monitor the execution of risk management procedures. The risk management department is responsible for planning and designing the risk management system, deliberating capital allocation, setting up the instruments for risk measurement and capital provision, and monitoring risk control. This department also regularly prepares reports for submission to senior management, the risk management committee and the Board. Under the business management regulation and risk policy, the business supervising unit manages and oversees each business unit toward proper risk management and carries out risk review and control. In addition, the Audit Department independently audits at least once a year all risk-related businesses and timely provides suggestions for improvement.

2) Credit risk

Credit risk refers to a borrower, a financial instrument issuer or a transaction counterparty undergoing financial difficulty or other adverse situations (such as a dispute between the borrower and its business partner), which could result in loss due to breach of contract. Credit risk can come from in- and off-balance-sheet items. On-balance sheet items are mainly lending, due from bank and call loans to other banks, security investment and derivatives. Off-balance sheet items are mainly guarantees, acceptance, letters of credit and loan commitments. The risk management policy, which is founded on the basic principles of safety, liquidity, profitability, welfare and growth, is implemented by the credit risk management division toward the cultivation of a risk management culture. All on- and off- balance sheet transactions are should be detailed analyzed in detail to identify existing and potential credit risk. Based on the Bank’s business characteristics and the principle of risk diversification, risk status is analyzed and evaluated, centralized limits are set, and a risk monitoring and alert mechanism has been developed and operated. For a more effective credit risk evaluation, an internal rating system has been created to enhance the ability to quantify risk. The Company’s main business items that are measured and managed for credit risks are as follows: a) Loans business (including loan commitment and guarantees):

Credit assets are classified into five categories. In addition to normal credit assets that are classified as sound assets, the unsound assets are classified, on the basis of the valuation of collaterals and the length of time the payments become overdue, as special mention, substandard, with collectability high doubtful and uncollectible. The Company also sets up policies for the management of doubtful credits and the collection of overdue debts to deal with collection problems. The Company applies to its credit business the so-called “5Ps of credit analysis” as the basis for lending approval and evaluation of its counterparties. These 5Ps are: People (know customers’ background and their credit status well); purpose (what will the fund be used for); payment (the borrower’s ability to repay an obligation when it falls due); protection (the Company’ recourse on repayment defaults); and perspective (how the credit is seen in light of rewards and risks). After a loan is granted, the transaction is reviewed and monitored to ensure creditor’s rights of the Company. To quantify credit risk, the Company applies statistical methods using with customers’ qualitative data and lending history to develop a rating module for corporate finance and consumer finance. This module is used to create an internal credit rating system for risk evaluation, in which 9 is the base grade of the credit quality of corporate customers, and 8 or 10 on the business segment consumer customers. The 5P credit analysis and the module rating specifically apply to corporate customers. Micro credits and residential mortgages are assessed by using the credit rating model, and consumer loans are assessed individually for default risks.

b) Due from and call loans to other banks



The Company evaluates the credit status of counterparties before closing deals. The Company grants different limits to the counterparties on the basis of their respective credit ratings as suggested by domestic and foreign credit rating agencies.

c) Investments in debt instruments and derivatives

The Company identifies and manages credit risks from debt instruments through the use of external credit ratings of the debt instruments along with the evaluation of credit qualities of bonds, regional conditions and counterparty risks. The Company conducts derivative transactions with other banks and sets the credit limits (including lending limits) at their credit rating and the ranking given by the Banker magazine. The credits extended to general customers are monitored in accordance with the related contract terms and conditions and the credit limits for derivatives established through normal credit granting processes.

The Company has a series of measures for credit granting to reduce credit risks. One of the procedures is asking for collaterals from the borrowers. To secure a debt, the Company manages and assesses the collaterals following the procedures that determine the scope of collateralization and valuation of collaterals and the process of disposition. In credit contracts, the Company stipulates the security mechanism for debts; the conditions and terms for collaterals; and the terms and conditions of offsetting to state clearly that the Company reserves the right to reduce the granted quota, to reduce the repayment period, to demand immediate settlement or to offset the debts of the borrowers by their deposits in the Company in order to reduce the credit risks. To avoid the concentration of credit risks, the Company sets up centralized credit limits for business segments, countries, collaterals, groups, and construction financing. Monthly, or more frequently, as needed, the Company reviews credit limits, monitors the actual risk-exposure condition and whether the usage rate of limits meets relevant regulations and reports the review results to superior management, risk management committee and the Board periodically. If there is a possibility of breach of the credit limits, the related department or division will apply appropriate procedures to ensure that the credit limits are followed. The Company settles most of its transactions at gross amounts. For further reduction of credit risks, settlement netting is used for some counterparties or in some circumstances where the transactions are terminated because of counterparty’s default. The maximum exposures to credit risks of assets on the consolidated balance sheets without consideration of guarantees or other credit enforcement instruments approximate the assets’ carrying amounts. The maximum exposures of off-balance sheet items to credit risks without consideration of guarantees or other credit enforcement instruments are as follows: December 31 2015 2014 Irrevocable loan commitments issued $ 101,337,530 $ 87,234,668Irrevocable credit card commitments 37,667,998 36,224,758Letters of credit issued yet unused 17,365,650 21,907,342Other guarantees 75,846,447 72,135,567 The Company's management believes its ability to minimize credit risk exposures on off-balance sheet items is mainly due to its rigorous evaluation of credit extended and the periodic reviews of these credits. Concentration of credit risk exists when counterparties to financial transactions are individuals or groups engaged in similar activities or activities in the same region, which would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The profile by group or industry, regions and collaterals of obligations that were 10% or more of total outstanding loans is as follows:

December 31 Credit Risk Profile by 2015 2014 Group or Industry Amount % Amount % Natural person $ 811,865,538 39 $ 766,147,304 39Manufacturing 322,834,983 16 317,386,644 16


Some financial assets held by the Company, such as cash and cash equivalents, due from the Central Bank and call loans to other banks, financial assets at fair value through profit or loss, securities purchased under resell agreements and refundable deposits, are exposed to low credit risks because the counterparties have high credit ratings. In addition to the above assets, credit quality analysis of other financial assets are as follows: a) Credit quality analysis of discounts, loans and receivables

December 31, 2015

Neither Past Due Nor Impaired

(A)

Past Due But Not

Impaired (B)

Impaired (C)

Total (A)+(B)+(C)

Provision for Impairment Losses (D) Net

(A)+(B)+ (C)-(D)

With Objective

Evidence of Impairment

With No Objective


Receivables Credit cards $ 2,549,807 $ 27,980 $ 74,336 $ 2,652,123 $ 34,983 $ 18,435 $ 2,598,705Others 10,828,753 26,551 519,669 11,374,973 323,002 220,344 10,831,627

Discounts and loans 1,968,578,879 8,385,747 25,749,526 2,002,714,152 7,016,444 14,445,553 1,981,252,155

December 31, 2014

Neither Past Due Nor Impaired

(A)

Past Due But Not

Impaired (B)

Impaired (C)

Total (A)+(B)+(C)

Provision for Impairment Losses (D) Net

(A)+(B)+ (C)-(D)

With Objective


With No Objective


Receivables Credit cards $ 2,431,203 $ 24,752 $ 89,248 $ 2,545,203 $ 45,339 $ 14,181 $ 2,485,683Others 10,611,364 24,558 453,368 11,089,290 278,219 183,459 10,627,612

Discounts and loans

1,841,768,677 6,661,544 34,696,716 1,883,126,937 9,648,688 12,622,033 1,860,856,216

b) Credit quality analysis of discounts and loans not past due and not impaired

Items December 31

2015 2014 Loans

Secured $ 1,393,174,736 $ 1,293,517,863Unsecured 575,404,143 548,250,814

Total 1,968,578,879 1,841,768,677

c) Credit quality analysis of securities

December 31, 2015 Neither Past

Due Nor Impaired (A)

Past Due But Not

Impaired (B)

Impaired(C)

Total (A)+(B)+(C)

Provision for Impairment Losses (D)

Net (A)+(B)+ (C)-(D)

Available-for-sale financial assets

Debt instruments $ 91,593,863 $ - $ - $91,593,863 $ 3,288 $ 91,590,575Equities 3,975,015 3,975,015 - 3,975,015Others 319,261 319,261 - 319,261

Held-to-maturity financial assets

Debt instruments 42,106,395 42,106,395 14,802 42,091,593Others 305,784 305,784 305,784

Other financial assets Debt instruments 84,539,585 84,539,585 - 84,539,585Equities 4,092,383 4,092,383 - 4,092,383Others 14,030,137 14,030,137 - 14,030,137

December 31, 2014 Neither Past

Due Nor Impaired (A)

Past Due But Not

Impaired (B)Impaired

(C) Total

(A)+(B)+(C)Provision for Impairment Losses (D)

Net (A)+(B)+ (C)-(D)

Available-for-sale financial assets

Debt instruments $ 66,113,701 $ - $ - $66,113,701 $ - $ 66,113,701Equities 3,507,963 3,507,963 - 3,507,963Others 152,837 152,837 - 152,837

Held-to-maturity financial assets

Debt instruments 17,613,230 17,613,230 10,198 17,603,032Others 2,446,547 2,446,547 - 2,446,547

Other financial assets Debt instruments 84,853,538 84,853,538 3,167 84,850,371Equities 3,397,849 48,769 3,446,618 23,835 3,422,783Others 34,968,885 34,968,885 34,968,885

The processing delays by the borrowers and other administrative reasons may cause financial assets to become past due but not impaired. As defined in the internal rules governing the Company’ risk management, financial asset that are past due within 90 days are not deemed



as impaired, unless there are evidences that indicate impairment. The vintage analysis of financial assets that are past due but not impaired is as follows:

Item December 31, 2015

Past Due Up to 1 Month

Past Due by Over 1 Month-3

MonthsTotal

Receivables Credit cards $ 22,337 $ 5,643 $ 27,980Others 16,298 10,253 26,551

Loans Secured 5,879,070 1,356,697 7,235,767Unsecured 902,419 247,561 1,149,980

Available-for-sale financial assets Debt instruments - - -Others - - -

Held-to-maturity financial assets Debt instruments - - -Others - - -

Other financial assets Debt instruments - - -Others - - -

Item December 31, 2014

Past Due Up to 1 Month

Past Due by Over 1 Month-3

MonthsTotal

Receivables Credit cards $ 19,109 $ 5,643 $ 24,752Others 13,763 10,795 24,558

Loans Secured 4,819,281 1,332,310 6,151,591Unsecured 401,927 108,026 509,953

Available-for-sale financial assets Debt instruments - - -Others - - -

Held-to-maturity financial assets Debt instruments - - -Others - - -

Other financial assets Debt instruments - - -Others - - -

3) Market risks

Market risk refers to the risk of losses in positions arising from adverse movements of market prices. It refers to interest rates, exchange rates, equity security prices, commodity prices, etc. The main market risks that the Company faces are equity security, interest rate, and exchange rate risks. The market risk position of equity security mainly includes domestic listed and OTC stocks, domestic stock index options and stock market index futures; the position of interest rate mainly includes short-term bills, bonds and interest rate derivative instruments; and the instruments exposed to exchange rate risk mainly include spot contracts and forward contracts and derivatives denominated in foreign currency. Under the market risk management policies approved by the board of directors, the new Basel Capital Accord and regulations implemented by relevant authorities and in consideration of the Bank’s own market risk management system and its overall risk management goals and product features, the Company has set all types of investment authorization limits and stop-loss rules, regularly reviews the customers’ credit status and compiles management information reports to control all types of market risks effectively. The Company’s market risk management procedures include risk identification, evaluation, measurement, monitoring, and reporting. Every units’ risk management personnel analyze data on market risk position and evaluate measurement methods, including the statistical basic measurement method, sensitivity analysis, and situational analysis. Monitoring content includes trading processes, collective and individual, of all transaction units and all financial instruments, such as change of position, change of profit and loss, trading pattern, and if trading objects are transacted within the authorized scope and limits. The Company’s business units and risk management unit have established market risk factors for identifying risk exposure positions and use these factors to measure market risks. The market risk factors refer to the components of financial instruments’ position, such as profit and loss and sensitivity to risk, which might be affected by interest rates, exchange rates and equity security market prices.


The Company’s risk management unit reports to management periodically the execution status of measures on market risk management, investment positions, and profit and loss control so that management can fully understand the status of market risk management. The Company also has cleared reporting procedures and rules for all types of transaction limits and the stop-loss order. If any transaction amount reaches the limit, the stop-loss order is executed immediately; if the stop-loss order is not executed, the transaction unit is required to explain the reasons for non-execution and prepare a response plan for management’s approval. The Bank applies market risk sensitivity as a risk control instrument. Market risk sensitivity position refers to the change in the value of a position due to a change in a certain market risk factor. Market risk factors include interest rates, exchange rates, and equity security prices. The Bank’s position sensitivity exposure trading book contains all types of positions exposed to market risk and the range of change to which sensitivity analysis applied under various pressure scenarios for all types of risk factors. Assuming all other factors are held constant, the effects of risks within defined change scenarios are shown below:

Main Risk Change Scenario December 31, 2015

December 31, 2014

Interest rate risk Interest rate curve increased 100 basis points $ (25,435) $ (94,508)Interest rate curve fell 100 basis points 25,524 96,870

Exchange rate risk USD/NT$, EUR/NT$ increased 3% (86,027) (82,661)USD/NT$, EUR/NT$ fell 3% 86,027 82,194Others (RMB, AUD etc.)/NT$ increased 5% (18,673) 35,485Others (RMB, AUD etc.)/NT$ fell 5% 18,673 (36,846)

Equity security price risk

Equity security price increased by 15% 12,369 13,441Equity security price fell by 15% (12,369) (13,441)

Average amount and average interest rate of interest-earning assets and interest-bearing liabilities are as follows: Average balance is calculated by the daily average balances of interest-earning assets and interest-bearing liabilities. a) Taiwan Cooperative Bank, Ltd.

For the Year Ended December 31 2015 2014 Average Average Average Rate Average Rate Balance (%) Balance (%)Interest-earning assets Due from banks and other financial

assets - due from banks $ 32,145,426 2.35 $ 39,147,531 3.68Due from the Central Bank 602,415,776 0.75 599,027,661 0.77Call loans to banks 82,635,880 1.17 72,043,662 1.21Held-for-trading financial assets 31,818,557 0.76 35,488,190 0.74Financial assets designated as at fair

value through profit or loss 140,102 5.99 280,079 6.28Securities purchased under resell

agreements 1,894,914 0.46 1,150,187 0.62Discounts and loans 1,908,703,823 2.12 1,920,309,106 2.08Available-for-sale financial assets 79,494,683 1.80 57,435,929 1.64Held-to-maturity financial assets 31,668,410 1.81 16,489,401 1.82Debt instruments with no active

market 81,837,519 1.79 85,412,305 1.73 Interest-bearing liabilities Due to the Central Bank and other

banks 223,584,339 0.40 248,756,371 0.63Financial liabilities designated as at

fair value through profit or loss 9,686,723 4.18 - -Securities sold under repurchase

agreements 21,520,863 0.45 25,506,195 0.49Demand deposits 441,434,653 0.14 398,559,146 0.14Savings - demand deposits 718,931,183 0.39 681,221,574 0.40Time deposits 459,583,913 1.18 469,369,599 1.21Time savings deposits 695,132,173 1.33 715,754,182 1.35Treasury deposits 73,684,825 0.85 77,410,304 0.81Negotiable certificates of deposits 1,739,192 0.39 2,063,198 0.39Structured products 6,623,598 1.39 11,506,151 1.96Bank debentures 76,956,575 1.56 98,957,589 1.79



b) United Taiwan Bank S.A.

For the Year Ended December 31 2015 2014 Average Average Average Rate Average Rate Balance (%) Balance (%) Interest-earning assets Due from banks $ 478,676 - $ 142,752 0.03Due from the Central Bank 156,856 0.03 136,074 0.08Call loans to banks 28,446 0.01 5,888 0.66Discounts and loans 7,478,201 2.22 6,927,579 2.22Debt instruments with no active market 2,104,437 1.33 2,215,294 2.23 Interest-bearing liabilities Due to the Central Bank and other

banks 8,008,106 0.60 6,914,510 1.28Demand deposits 74,404 - 69,486 -Time deposits 88,023 0.57 101,905 0.51 The exchange rate risk of the Company is as follows:

(In Thousands)

December 31, 2015

Foreign

CurrenciesExchange

Rate New Taiwan

DollarsFinancial assets Monetary items

USD $ 9,438,349 32.8800 $ 310,332,926RMB 9,443,309 4.9930 47,150,444EUR 431,528 35.9200 15,500,469AUD 627,564 23.9750 15,045,854JPY 48,863,783 0.2730 13,339,813HKD 1,465,852 4.2420 6,218,146ZAR 972,188 2.1200 2,061,039GBP 28,763 48.7500 1,402,194CAD 27,447 23.7200 651,032NZD 19,499 22.5000 438,733CHF 3,627 33.2350 120,544SGD 2,417 23.2500 56,207SEK 4,358 3.9100 17,040THB 10,234 0.9168 9,383KHR 751,603 0.0081 6,068PHP 2,581 0.7007 1,809MYR 7 7.6510 54

Financial liabilities Monetary items

USD $ 10,105,448 32.8800 $ 332,267,122RMB 9,190,733 4.9930 45,889,329AUD 678,335 23.9750 16,263,088JPY 32,415,488 0.2730 8,849,428GBP 157,243 48.7500 7,665,610EUR 186,511 35.9200 6,699,476ZAR 2,568,244 2.1200 5,444,677HKD 593,004 4.2420 2,515,523NZD 85,355 22.5000 1,920,493CAD 69,632 23.7200 1,651,680CHF 5,251 33.2350 174,523SGD 6,124 23.2500 142,383SEK 14,172 3.9100 55,413THB 11,050 0.9168 10,131PHP 133 0.7007 93KHR 2,885 0.0081 23MYR - 7.6510 3


(In Thousands) 4) Liquidity risk

Liquidity risk is inherent in all bank operations and might be affected by specific or general industry and environmental events. These events include credit-related events, mergers or acquisitions, systemic changes and natural disasters. The Company defines liquidity risk as the inability to realize assets or to obtain financing for meeting obligations when they fall due, resulting in loss. The liquidity risk management strategy is based on the overall risk management objectives and involves liquidity risk, identification, measurement, monitoring and control to maintain the Bank’s appropriate liquidity and ensure adequate funding for meeting liability obligations or for capital growth. The liquidity risk management procedures cover all types of business activities and financing products. For adequate liquidity for all types of deposits, the Bank follows the relevant regulations issued by the Central Bank to estimate the liquidity reserves and calculates and controls daily the liquidity reserve ratios. For the Bank’s operating liquidity, the fund disbursement unit performs daily cash flow management and monitoring of the payments schedule on the basis of detailed reports by different departments and relevant rules.

December 31, 2014

Foreign

CurrenciesExchange

Rate New Taiwan

Dollars Financial assets Monetary items

USD $ 8,662,353 31.6700 $ 274,336,710RMB 9,162,316 5.0990 46,718,650AUD 479,193 26.0250 12,471,003JPY 45,043,385 0.2656 11,963,523EUR 239,531 38.5400 9,231,482HKD 2,143,327 4.0820 8,749,061ZAR 454,326 2.7400 1,244,852NZD 23,968 24.8500 595,594GBP 10,415 49.3400 513,878CAD 7,878 27.3200 215,235CHF 4,550 32.0450 145,797SGD 2,058 24.0000 49,383SEK 6,309 4.1000 25,868THB 9,566 0.9683 9,262KHR 538,571 0.0078 4,203PHP 2,030 0.7074 1,436MYR 7 9.0680 64

Financial liabilities Monetary items

USD $ 8,840,908 31.6700 $ 279,991,557RMB 7,539,054 5.0990 38,441,637AUD 505,968 26.0250 13,167,816JPY 30,812,811 0.2656 8,183,883ZAR 2,400,419 2.7400 6,577,147EUR 167,324 38.5400 6,448,640HKD 768,642 4.0820 3,137,597SEK 569,636 4.1000 2,335,507CAD 72,509 27.3200 1,980,933GBP 33,545 49.3400 1,655,112NZD 49,455 24.8500 1,228,962SGD 5,415 24.0000 129,971CHF 3,464 32.0450 111,001THB 8,812 0.9683 8,532PHP 1,111 0.7074 786KHR 2,883 0.0078 22MYR - 9.0680 3



The risk management department regularly generates risk reports, which include the liquidity reserve ratios and the maturity analysis of instruments and transactions denominated in major foreign currencies, and submits them to the Asset and Liability Management Committee and the Board as reference for decision making. The Bank stipulates liquidity risk limits, which are regularly monitored and reviewed by the risk management department. If a liquidity risk limit is exceeded or other exception situations occur, the business supervising unit immediately develops appropriate contingency measures and submits them to the Asset and Liability Management Committee for approval and implementation. The Bank contingency measures for business emergency or sudden liquidity crisis are aimed at quick crisis resolution and resumption of normal operations. The Bank’s liquidity reserve ratios were 23.48% and 20.44% in December 2015 and 2014, respectively. The Company disclosed the analysis of cash outflows on non-derivative financial liabilities by their residual maturities as of the balance sheet dates. The amounts of cash outflows are based on contractual cash flows, so some amounts may not correspond to those shown in the consolidated balance sheets. December 31, 2015 0-30 Days 31-90 Days 91-180 Days 181 Days-1 Year Over 1 Year Total

Due to the Central Bank and other banks

$ 129,943,568 $ 61,620,412 $ 499,880 $ 8,181,954 $ - $200,245,814

Financial liabilities at FVTPL - - - - 13,152,000 13,152,000

Securities sold under repurchase agreements

11,324,769 4,138,888 1,961,817 27,006 - 17,452,480

Payables 26,641,525 1,250,741 3,724,904 1,642,602 1,574,763 34,834,535Deposits and

remittances 238,906,777 349,548,292 356,297,049 608,264,851 951,494,918 2,504,511,887Bank debentures - - - - 69,610,000 69,610,000Other items of cash

outflow on maturity 6,944,010 51,121 28,891 76,156 609,190 7,709,368

December 31, 2014 0-30 Days 31-90 Days 91-180 Days 181 Days-1 Year Over 1 Year TotalDue to the Central

Bank and other banks

$101,945,027 $ 49,770,769 $15,298,404 $ 10,006,496 $ - $177,020,696

Securities sold under repurchase agreements

17,825,644 3,208,667 2,143,891 1,503 - 23,179,705

Payables 32,602,250 1,451,036 4,148,507 2,360,923 676,658 41,239,374Deposits and

remittances 239,241,979 343,567,766 333,392,499 605,650,196 875,424,031 2,397,276,471Bank debentures - 4,000,000 18,500,000 - 69,610,000 92,110,000Other items of cash

outflow on maturity 7,549,966 690,785 34,799 81,459 704,058 9,061,067

In the above table, the maturity analysis of deposits and remittances by residual-maturity period was based on the Company’s historical experience. Assuming that all demand deposits as of December 31, 2015 and 2014 must be repaid soon, the capital expenditure will be increased by $1,265,775,142 thousand and $1,159,478,601 thousand, respectively, within 30 days these balance sheet dates. The Company assesses the maturity dates of contracts to understand the basic elements of all derivative financial instruments shown in the balance sheets. The amounts used in the maturity analyses of derivative financial liabilities are based on contractual cash flows, so some of these amounts may not correspond to the amounts shown in the consolidated balance sheets. The maturity analysis of derivative financial liabilities is as follows:


a) Derivative financial liabilities to be settled at net amounts

December 31, 2015 0-30 Days 31-90 Days 91-180 Days 181 Days- 1 Year Over 1 Year Total

Derivative financial liabilities at fair value through profit or loss Currency $ 1,452 $ 3,668 $ 2,279 $ 1,360 $ - $ 8,759Interest (2,141) (435) (2,810) (4,510) (11,384) (21,280)

December 31, 2014 0-30 Days 31-90 Days 91-180 Days 181 Days-

1 Year Over 1 Year Total

Derivative financial liabilities at fair value through profit or loss Currency $ 30,182 $ 17,701 $ 49,514 $ 110,225 $ 4,700 $ 212,322Interest (2,593) (543) (4,292 ) (3,424) 43,697 32,845

b) Derivative financial liabilities to be settled at gross amounts


Derivative financial liabilities at fair value through profit or loss Currency derivatives

Cash outflow $ 121,940,698 $ 61,218,639 $ 8,332,811 $ 6,721,102 $ 139,693 $ 198,352,943Cash inflow 122,438,787 61,450,896 8,404,151 6,782,455 139,717 199,216,006

Interest derivatives Cash outflow 136,070 1,887,838 1,394,754 140,160 851,454 4,410,276Cash inflow 136,452 1,754,559 1,321,384 136,070 1,026,649 4,375,114

Total cash outflow 122,076,768 63,106,477 9,727,565 6,861,262 991,147 202,763,219Total cash inflow 122,575,239 63,205,455 9,725,535 6,918,525 1,166,366 203,591,120Net cash flow 498,471 98,978 (2,030 ) 57,263 175,219 827,901


Derivative financial liabilities at fair value through profit or loss Currency derivatives

Cash outflow $ 99,402,667 $ 68,577,981 $ 55,598,467 $ 23,656,876 $ 1,696,359 $ 248,932,350Cash inflow 145,125,350 50,949,366 26,825,975 17,301,318 2,349,112 242,551,121

Interest derivatives Cash outflow 332,525 1,183,200 106,693 20,866,476 3,109,322 25,598,216Cash inflow 332,628 1,184,847 106,906 20,875,704 3,109,339 25,609,424

Total cash outflow 99,735,192 69,761,181 55,705,160 44,523,352 4,805,681 274,530,566Total cash inflow 145,457,978 52,134,213 26,932,881 38,177,022 5,458,451 268,160,545Net cash flow 45,722,786 (17,626,968 ) (28,772,279 ) (6,346,330 ) 652,770 (6,370,021 ) The Company conducted maturity analysis of off-balance sheet items based on the residual maturities as of the balance sheet dates. For the financial guarantee contracts issued, the maximum amounts of the guarantees are included in the earliest periods that the guarantee obligation might have been required to be fulfilled. The amounts used in the maturity analysis of off-balance sheet items are based on contractual cash flows, so some of these amounts may not correspond to those shown in the balance sheets.



December 31, 2015 0-30 Days 31-90 Days 91-180 Days 181 Days-

1 Year Over 1 Year Total

Irrevocable loan commitments issued $ 1,175,415 $ 6,237,551 $ 7,763,379 $ 11,348,130 $ 74,813,055 $ 101,337,530

Irrevocable credit card commitments 13,900 128,504 755,729 1,347,700 35,422,165 37,667,998

Letters of credit issued yet unused 4,430,340 8,766,697 2,230,412 483,024 1,455,177 17,365,650

Other guarantees 3,023,999 6,402,251 6,562,665 9,228,210 50,629,322 75,846,447


Irrevocable loan commitments issued $ 1,380,298 $ 4,522,267 $ 10,127,928 $ 6,081,353 $ 65,122,822 $ 87,234,668

Irrevocable credit card commitments 46,720 373,476 400,932 1,994,668 33,408,962 36,224,758

Letters of credit issued yet unused 4,688,231 10,902,026 3,070,995 1,851,105 1,394,985 21,907,342

Other guarantees 5,501,045 7,439,428 5,155,563 6,263,807 47,775,724 72,135,567 g. Transfers of financial assets

Under the Company operations, most of derecognized financial assets are securities sold under repurchase agreements, and the contractual cash flows have been transferred to others. The Company has the responsibility to repurchase transferred financial assets at fixed prices, and can not use, sell and pledge transferred financial assets. However, the Company is still in the risk exposure of interest rate and credit, so the transferred financial assets can not be removed entirely. The information on derecognized financial assets and liabilities is as follows:

December 31, 2015

Financial Assets Carrying Amount

of Transferred Financial Assets

Carrying Amount of Related Financial Liabilities

Fair Value of Transferred

Financial Assets

Fair Value of Related Financial

Liabilities

Net Position of Fair Value

Financial assets at FVTPL - securities sold under repurchase agreements $ 5,124,914 $ 5,126,880 $ 5,124,914 $ 5,126,880 $ (1,966)

Available-for-sale financial assets - securities sold under repurchase agreements 11,559,296 12,325,600 11,559,296 12,325,600 (766,304)

h. Offsetting financial assets and financial liabilities

The Company is eligible to present in the balance sheet on a net basis certain derivative assets and derivative liabilities pertaining to transactions with counterparties under enforceable master netting arrangements or similar agreements and there is an intention either to make settlements on a net basis or to realize the asset and settle the liability simultaneously. A master netting agreement provides for a single net settlement of all financial instruments covered by the agreement if the counterparty defaults on any contract. Parties may also settle transactions at gross amounts if a single settlement results in cash flows being equivalent to a single net amount. The tables below present the quantitative information on financial assets and financial liabilities that have been offset in the balance sheets or that are covered by enforceable master netting arrangements or similar agreements.


December 31, 2015

Gross Amounts of Recognized

Gross Amounts of Recognized Financial Liabilities

Net Amounts of Financial

Assets Presented in

Related Amounts Not Offset in the Balance Sheet

Financial AssetsFinancial

Assets Offset in the

Balance Sheetthe Balance

SheetFinancial

Instruments

Cash Collateral Received

Net Amount

Resell agreements $ 209,592 $ - $ 209,592 $ (209,592 ) $ - $ -


Gross Amounts of Recognized Financial

Assets Offset

Net Amounts of Financial Liabilities

Presented in Related Amounts Not Offset in

the Balance Sheet

Financial Liabilities Financial Liabilities

in the Balance Sheet

the Balance Sheet

Financial Instruments

Cash Collateral Pledged

Net Amount

Repurchase agreements $ 17,452,480 $ - $ 17,452,480 $ (16,684,210 ) $ - $768,270 December 31, 2014


Gross Amounts of Recognized Financial Liabilities

Net Amounts of Financial

Assets Presented in

Related Amounts Not Offset in the Balance Sheet

Financial AssetsFinancial

Assets Offset in the

Balance Sheetthe Balance

SheetFinancial

Instruments

Cash Collateral Received Net Amount

Resell agreements $ 1,851,763 $ - $ 1,851,763 $ (1,851,763 ) $ - $ -


Gross Amounts of Recognized Financial

Assets Offset

Net Amounts of Financial Liabilities

Presented in Related Amounts Not Offset in

the Balance Sheet

Financial Liabilities Financial Liabilities

in the Balance Sheet

the Balance Sheet

Financial Instruments

Cash Collateral Pledged Net Amount

Repurchase agreements $ 23,179,705 $ - $ 23,179,705 $ (21,178,875 ) $ $2,000,830

39. CAPITAL MANAGEMENT In according to the authority’s regulation for principles of capital adequacy management, the Bank lists all the risks into the capital adequacy evaluation scope. In accordance with the operation plans and budget targets, which approved by the board of directors, also considering the Bank’s development strategy, capital adequacy, liabilities ratios, and dividend policy, the Bank proposes capital adequacy evaluation plan, which include stress testing, estimation for each season’s capital adequacy ratio, etc. to ensure the capital adequacy ratio can be reached and capital structure is sound. To monitor capital adequacy, the risk management department regularly reports capital adequacy ratios every month and also quarterly reviews the execution status of and actual operation data variation on the Bank’s capital adequacy evaluation plan. When the actual capital adequacy ratio might go lower than target, the Bank immediately reviews the causes, prepares a report and proposes a response strategy to maintain the appropriate capital adequacy levels. The Banking Law and related regulations require that the Bank maintain the minimum requirement for unconsolidated and consolidated capital adequacy ratios (CAR), including the common equity Tier 1 ratio, Tier 1 capital ratio, and total capital adequacy ratio. Information on the Bank’s CAR is as follows:



(Unit: In Thousands of New Taiwan Dollars, %)

YearItems

December 31, 2015 Standalone Consolidated

Eligible capital

Common equity $ 169,179,043 $ 170,222,272Other Tier 1 capital - -Tier 2 capital 60,385,900 61,546,641Eligible capital 229,564,943 231,768,913

Risk-w

eighted assets

Credit risk Standardized approach 1,737,278,354 1,739,194,177Internal ratings based approach - -Securitization 750,679 750,679

Operational risk Basic indicator approach - -Standardized approach/alternative

standardized approach 63,325,942 65,270,944Advanced measurement approach - -

Market risk Standardized approach 14,616,127 14,634,941Internal model approach - -

Risk-weighted assets 1,815,971,102 1,819,850,741Capital adequacy ratio 12.64 12.74Ratio of the common equity to risk-weighted assets 9.32 9.35Ratio of Tier 1 capital to risk-weighted assets 9.32 9.35Ratio of leverage 5.25 5.28

(Unit: In Thousands of New Taiwan Dollars, %)

YearItems

December 31, 2014 Standalone Consolidated

Eligible capital

Common equity $ 137,511,724 $ 138,532,074Other Tier 1 capital - -Tier 2 capital 76,451,804 77,587,128Eligible capital 213,963,528 216,119,202

Risk-w

eighted assets Credit risk

Standardized approach 1,611,020,652 1,612,742,538Internal ratings based approach - -Securitization - -

Operational risk Basic indicator approach - -Standardized approach/alternative

standardized approach 58,820,779 59,992,738Advanced measurement approach - -

Market risk Standardized approach 9,675,842 9,670,778Internal model approach - -

Risk-weighted assets 1,679,517,273 1,682,406,054Capital adequacy ratio 12.74 12.85Ratio of the common equity to risk-weighted assets 8.19 8.23Ratio of Tier 1 capital to risk-weighted assets 8.19 8.23Ratio of leverage 3.62 3.63 Note 1: Eligible capital and risk-weighted assets are calculated under the “Regulations Governing the Capital Adequacy Ratio

of Banks” and the “Explanation of Methods for Calculating the Eligible Capital and Risk-Weighted Assets of Banks.” Note 2: Formulas used were as follows:

1) Eligible capital = The common equity + Other Tier 1 capital + Tier 2 capital. 2) Risk-weighted assets = Risk-weighted asset for credit risk + Capital requirements for operational risk and market

risk x 12.5. 3) Capital adequacy ratio = Eligible capital ÷ Risk-weighted assets. 4) Ratio of the common equity to risk-weighted assets = The common equity ÷ Risk-weighted assets. 5) Ratio of Tier 1 capital to risk-weighted assets = (The common equity + Other Tier 1 capital) ÷ Risk-weighted

assets. 6) Ratio of leverage = Tier 1 capital ÷ Exposure measurement.


40. ASSET QUALITY, CONCENTRATION OF CREDIT EXTENSIONS, INTEREST RATE

SENSITIVITY, PROFITABILITY AND MATURITY ANALYSIS OF ASSETS AND LIABILITIES a. Asset quality: Table 2 (attached). b. Concentration of credit extensions

(In Thousands of New Taiwan Dollars, %)

Rank (Note 1)

December 31, 2015

Industry of Group Enterprise (Note 2)

Total Amount of Credit Endorsement

or Other Transactions (Note 3)

Percentage of Bank’s

Equity 1 Group A

Railway transportation $ 52,676,426 28.82

2 Group B Petroleum and coal products manufacturing

23,325,210 12.76

3 Group C Harbor services

21,666,561 11.86

4 Group D Computers and peripheral equipment manufacturing

13,234,917 7.24

5 Group E Shipping agency

11,241,157 6.15

6 Group F Cotton and textile

10,795,986 5.91

7 Group G Liquid crystal panel and component manufacturing

9,763,984 5.34

8 Group H Cotton and textile

8,991,608 4.92

9 Group I Other electronic parts and components manufacturing not classified

elsewhere

8,856,290 4.85

10 Group J Iron and steel smelting

6,177,585 3.38


Rank (Note 1)

December 31, 2014

Industry of Group Enterprise (Note 2)

Total Amount of Credit Endorsement

or Other Transactions (Note 3)

Percentage of Bank’s Equity

1 Group A Railway transportation

$ 53,351,408 35.49

2 Group B Petroleum and coal products manufacturing

23,745,035 15.80

3 Group C Harbor services

20,471,293 13.62

4 Group F Cotton and textile

12,544,042 8.35

5 Group E Shipping agency

11,536,425 7.68

6 Group I Other electronic parts and components manufacturing not classified

elsewhere

10,255,611 6.82

7 Group G Liquid crystal panel and component manufacturing

10,244,921 6.82

8 Group K Cement manufacturing

9,720,061 6.47

9 Group L Harbor services

8,767,179 5.83

10 Group M Iron and steel smelting

8,109,260 5.40

Note 1: The list shows rankings by total amount of credit, endorsement or other transactions but excludes

government-owned or state-run enterprises. If the borrower is a member of a group enterprise, the total amount of credit, endorsement or other transactions of the entire group enterprise must be listed and disclosed by code and line of industry. The industry of the group enterprise should be presented as the industry of the member firm with the highest risk exposure. The lines of industry should be described in accordance with the Standard Industrial Classification System of the Republic of China published by the Directorate-General of Budget, Accounting and Statistics under the Executive Yuan.

Note 2: Group enterprise refers to a group of corporate entities as defined by Article 6 of “Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.”

Note 3: Total amount of credit, endorsement or other transactions is the sum of various loans (including import and export negotiations, discounts, overdrafts, unsecured and secured short-term loans, margin loans receivable, unsecured and secured medium-term loans, unsecured and secured long-term loans and overdue loans), exchange bills negotiated, accounts receivable factored without recourse, acceptances and guarantees.



c. Interest rate sensitivity information

1) Taiwan Cooperative Bank, Ltd.

Interest Rate Sensitivity December 31, 2015


Items 1 to 90 Days 91 to 180 Days 181 Days to One Year

Over One Year Total

Interest rate-sensitive assets $ 2,224,055,786 $ 87,672,073 $ 11,322,931 $ 159,928,135 $ 2,482,978,925Interest rate-sensitive liabilities 909,691,528 1,199,678,568 122,411,693 52,746,552 2,284,528,341Interest rate sensitivity gap 1,314,364,258 (1,112,006,495 ) (111,088,762) 107,181,583 198,450,584Net worth 172,638,090Ratio of interest rate-sensitive assets to liabilities 108.69Ratio of interest rate sensitivity gap to net worth 114.95



Items 1 to 90 Days 91 to 180 Days 181 Days to One Year Over One Year Total

Interest rate-sensitive assets $ 2,135,164,538 $ 73,465,284 $ 11,949,803 $ 145,431,870 $ 2,366,011,495

Interest rate-sensitive liabilities 947,553,098 1,122,120,375 119,175,955 50,439,303 2,239,288,731

Interest rate sensitivity gap 1,187,611,440 (1,048,655,091 ) (107,226,152) 94,992,567 126,722,764

Net worth 138,104,503

Ratio of interest rate-sensitive assets to liabilities 105.66

Ratio of interest rate sensitivity gap to net worth 91.76 Note 1: The above amounts included only New Taiwan dollar amounts held by the head office and branches of the

Bank (i.e., excluding foreign currency). Note 2: Interest rate-sensitive assets and liabilities refer to interest-earning assets and interest-bearing liabilities with

revenues or costs that are affected by interest rate changes. Note 3: Interest rate sensitivity gap = Interest rate-sensitive assets - Interest rate-sensitive liabilities. Note 4: Ratio of interest rate-sensitive assets to liabilities = Interest rate-sensitive assets/Interest rate-sensitive

liabilities (in New Taiwan dollars).


(In Thousands of U.S. Dollars, %)


Over One Year Total

Interest rate-sensitive assets $ 10,149,865 $ 698,630 $ 151,491 $ 565,159 $ 11,565,145Interest rate-sensitive liabilities 10,403,374 993,494 1,109,895 15,000 12,521,763Interest rate sensitivity gap (253,509 ) (294,864 ) (958,404) 550,159 (956,618)Net worth 307,844Ratio of interest rate-sensitive assets to liabilities 92.36Ratio of interest rate sensitivity gap to net worth (310.75 )

Interest Rate Sensitivity

December 31, 2014 (In Thousands of U.S. Dollars, %)


Over One Year Total

Interest rate-sensitive assets $ 10,710,125 $ 870,911 $ 132,636 $ 394,389 $ 12,108,061Interest rate-sensitive liabilities 10,639,807 727,954 827,580 - 12,195,341Interest rate sensitivity gap 70,318 142,957 (694,944) 394,389 (87,280 )Net worth 385,484Ratio of interest rate-sensitive assets to liabilities 99.28Ratio of interest rate sensitivity gap to net worth (22.64 )

Note 1: The above amounts included only U.S. dollar amounts held by the head office, domestic branches, OBU and

overseas branches of the Bank and excluded contingent assets and contingent liabilities. Note 2: Interest rate-sensitive assets and liabilities refer to interest-earning assets and interest-bearing liabilities with


liabilities (in U.S. dollars).


2) United Taiwan Bank S.A.


(In Thousands of U.S. Dollars, %)


Over One Year Total

Interest rate-sensitive assets $ 267,543 $ 72,167 $ - $ - $ 339,710Interest rate-sensitive liabilities 186,779 77,691 9,684 274,154Interest rate sensitivity gap 80,764 (5,524 ) (9,684) 65,556Net worth 59,218Ratio of interest rate-sensitive assets to liabilities 123.91Ratio of interest rate sensitivity gap to net worth 110.70

Interest Rate Sensitivity

December 31, 2014 (In Thousands of U.S. Dollars, %)


Over One Year Total

Interest rate-sensitive assets $ 326,434 $ 42,423 $ - $ - $ 368,857Interest rate-sensitive liabilities 245,248 45,815 8,817 - 299,880Interest rate sensitivity gap 81,186 (3,392 ) (8,817) - 68,977Net worth 62,247Ratio of interest rate-sensitive assets to liabilities 123.00Ratio of interest rate sensitivity gap to net worth 110.81

Note 1: The above amounts included only U.S. dollar amounts held by United Taiwan Bank S.A. and excluded

contingent assets and contingent liabilities. Note 2: Interest rate-sensitive assets and liabilities refer to interest-earning assets and interest-bearing liabilities with


liabilities (in U.S. dollars). d. Profitability

Unit: %

Items December 31 2015 2014

Return on total assets Before income tax 0.47 0.40 After income tax 0.41 0.35

Return on equity Before income tax 8.47 8.05 After income tax 7.28 6.99

Net income ratio 30.74 25.50 Note 1: Return on total assets = Income before (after) income tax/Average total assets Note 2: Return on equity = Income before (after) income tax/Average equity Note 3: Net income ratio = Income after income tax/Total net revenues Note 4: Income before (after) income tax represents income for each period-end date. Note 5: The above profitability ratios are calculated that based on the amount of consolidated financial report.

e. Maturity analysis of assets and liabilities

1) Taiwan Cooperative Bank, Ltd.

Maturity Analysis of Assets and Liabilities December 31, 2015

(In Thousands of New Taiwan Dollars)

Total Remaining Period to Maturity

0 to 10 Days 11 to 30 Days 31 to 90 Days 91 to 180 Days 181 Days to One Year Over One Year

Main capital inflow on maturity $ 2,874,376,823 $ 459,449,410 $ 337,684,146 $ 143,910,031 $ 189,898,631 $ 301,915,264 $ 1,441,519,341

Main capital outflow on maturity 3,383,426,314 201,323,422 196,212,659 423,094,927 423,237,179 685,429,837 1,454,128,290

Gap (509,049,491) 258,125,988 141,471,487 (279,184,896) (233,338,548) (383,514,573) (12,608,949)




(In Thousands of New Taiwan Dollars)


0 to 10 Days 11 to 30 Days 31 to 90 Days 91 to 180 Days

181 Days to One Year Over One Year

Main capital inflow on maturity $ 2,772,108,302 $ 462,739,262 $ 342,538,297 $ 139,189,722 $ 165,210,515 $ 269,912,009 $ 1,392,518,497

Main capital outflow on maturity 3,307,736,387 193,886,553 186,919,821 422,515,601 428,533,810 708,230,989 1,367,649,613

Gap (535,628,085) 268,852,709 155,618,476 (283,325,879) (263,323,295) (438,318,980) 24,868,884 Note: The above amounts included only New Taiwan dollar amounts held by the Bank.




0 to 30 Days 31 to 90 Days 91 to 180 Days 181 Days to One Year Over One Year

Main capital inflow on maturity $ 19,969,621 $ 7,751,534 $ 3,450,908 $ 2,294,517 $ 1,535,694 $ 4,936,968

Main capital outflow on maturity 24,145,661 10,778,451 4,407,558 2,491,497 3,621,382 2,846,773

Gap (4,176,040) (3,026,917) (956,650) (196,980) (2,085,688) 2,090,195





Main capital inflow on maturity $ 20,360,556 $ 8,068,975 $ 3,377,144 $ 2,813,229 $ 1,150,089 $ 4,951,119

Main capital outflow on maturity 25,023,200 11,386,542 4,539,872 2,945,370 3,405,229 2,746,187

Gap (4,662,644) (3,317,567) (1,162,728) (132,141) (2,255,140) 2,204,932 Note: The above amounts included only U.S. dollar amounts held by the Bank.

2) United Taiwan Bank S.A. Maturity Analysis of Assets and Liabilities

December 31, 2015




Main capital inflow on maturity $ 339,710 $ 39,047 $ 5,020 $ 8,900 $ 44,693 $ 242,050

Main capital outflow on maturity 280,492 80,737 106,042 77,691 9,683 6,339

Gap 59,218 (41,690 ) (101,022 ) (68,791 ) 35,010 235,711

Maturity Analysis of Assets and Liabilities

December 31, 2014




Main capital inflow on maturity $ 368,857 $ 69,433 $ 5,324 $ 6,998 $ 37,663 $ 249,439

Main capital outflow on maturity 306,610 100,238 145,010 45,815 8,817 6,730

Gap 62,247 (30,805 ) (139,686 ) (38,817 ) 28,846 242,709 Note: The above amounts included only U.S. dollar amounts held by the United Taiwan Bank S.A.


41. TAIWAN COOPERATIVE BANK, LTD.’S TRUST BUSINESS UNDER THE TRUST LAW

a. Trust-related items are those shown in the following balance sheets, statements of income and trust property list These items were managed by the Bank’s Trust Department. However, these items were not included in the financial statements.

Balance Sheets of Trust Accounts December 31, 2015 and 2014

Trust Assets 2015 2014 Trust Liabilities 2015 2014 Cash in banks $ 1,459,189 $ 2,073,843 Payables Accrued expense $ 3,238 $ 1,290Short-term investments Others 2,403 2,605

Mutual funds 155,580,004 143,206,066 5,641 3,895Stocks 1,628,673 1,128,249 157,208,677 144,334,315 Accounts payable on

securities under

custody 67,632,891 62,177,011Securities lending 804,036 149,781 Trust capital Receivables 6,377 3,902 Cash 157,015,238 145,258,269 Real estate 35,583,450 25,788,673Real estate Securities 2,219,984 1,211,634

Land 31,454,680 25,431,949 Others 176,070 133,798Buildings 15,948 10,585 194,994,742 172,392,374Construction in

process 4,287,799 476,255 35,758,427 25,918,789 Reserves and retained

earnings Securities under custody 67,632,891 62,177,011 Net income 252,803 64,141 Appropriation (60,145 ) - Retained earnings 43,665 20,220 236,323 84,361 Total $ 262,869,597 $ 234,657,641 Total $ 262,869,597 $ 234,657,641

Trust Property List December 31, 2015 and 2014

Investment Items 2015 2014Cash in banks $ 1,459,189 $ 2,073,843Short-term investments

Mutual funds 155,580,004 143,206,066Stocks 1,628,673 1,128,249

Securities lending 804,036 149,781Receivables

Accrued interest 2,623 2,938Cash dividends - 4Mutual funds - 500Others 3,754 460

Real estate Land 31,454,680 25,431,949Buildings 15,948 10,585Construction in process 4,287,799 476,255

Securities under custody 67,632,891 62,177,011 Total $ 262,869,597 $ 234,657,641



Statements of Income on Trust Accounts For the Years Ended December 31, 2015 and 2014

2015 2014

Revenues

Interest revenue $ 4,193 $ 4,554Cash dividends 42,705 18,823Realized gain on investment - stocks 14,373 1,733Unrealized gain on investment - stocks 354,349 62,536Realized gain on investment - mutual funds 576 438Unrealized gain on investment - mutual funds 1,284 2,653Rentals 9,929 1,297Others - 215Total revenues 427,409 92,249

Expenses Management fees 3,674 1,890Taxes 335 373Insurance fees - 42Service charge 318 121Postage 11 13Unrealized loss on investment - stocks 163,465 22,009Realized loss on investment - mutual funds 465 76Unrealized loss on investment - mutual funds 5,069 3,213Others 1,269 371Total expenses 174,606 28,108Income before income tax 252,803 64,141Income tax expense - -

Net income $ 252,803 $ 64,141

b. Nature of trust business operations under the Trust Law: Note 1.

42. ALLOCATION OF REVENUE, COST AND EXPENSE THAT RESULTED FROM THE

SHARING OF RESOURCES BETWEEN TAIWAN COOPERATIVE FINANCIAL HOLDING COMPANY, LTD. AND SUBSIDIARIES Under cooperation arrangements, the Bank and Taiwan Cooperative Securities (TCS) promoted securities brokerage business together, thus, related revenues received by the Bank were calculated as follows: (a) from the first year to fifth year (before January 1, 2015, it was first and second year), revenue based on 20% of the net revenue derived from security transactions; (b) related revenues from utilizing some operating sites and equipment by the TCS; and (c) receiving cross-selling service fees of $2,000 thousand annually. To promote the credit card business together, the Bank and TCS signed cooperation arrangements, marketing expenses paid by the Bank were based on the arrangements. As of December 31, 2015 and 2014, the accrued receivables were $2,690 thousand and $2,871 thousand (part of receivable), respectively. The revenues from cross-selling transactions were $7,060 thousand and $6,653 thousand (part of other noninterest gains, net) in 2015 and 2014, respectively. To promote the insurance business together, the Bank and BNP Paribas Cardif TCB Life Insurance Co., Ltd. signed cooperation arrangements. The service fees earned by the Bank were based on the agreed percentage of the premiums from the insurance companies’ products sold by the Bank. As of December 31, 2015 and 2014, the accrued receivables were $2,111 thousand and $2,914 thousand, respectively (part of receivables). The revenues from cross-selling transactions were $26,219 thousand and $29,386 thousand (part of service fee income, net) in 2015 and 2014, respectively.

43. NON-CASH FINANCING ACTIVITIES Undistributed cash dividends approved by shareholders’ meeting are $178,980 thousand and $181,542 housand as of December 31, 2015 and 2014, respectively.


44. OTHER SIGNIFICANT TRANSACTIONS The Bank’s application to set up the Changsha Branch in Mainland China was approved by the Financial Supervisory Commission on December 31, 2015. The Bank will invest RMB600,000 thousand in the Changsha Branch, under the “Regulations Governing Approvals of Banks to Engage in Financial Activities between the Taiwan Area and the Mainland Area.” As of the date of the accompanying independent auditors’ report, the approval of the investment in the Changsha Branch by the Investment Commission under Mainland China’s Ministry of Economic Affairs and relevant authorities was being awaited. To enhance financial cooperation between China and Taiwan, the board of directors of the Bank approved a memorandum on August 25, 2014, which was signed with Ping An Pay and Chinapay. Details of this cooperation will be shown in a contract. To enhance the financial cooperation between the banks in China and those in Taiwan, the Bank’s board of directors approved on December 22, 2014 the signing of a memorandum of understanding (MOU) between five Taiwan banks (Taiwan Bank, etc.) and five Chinese banks (China Bank, etc.), and the Bank signed this MOU. On February 22, 2015, The Bank’s board of directors approved the Bank’s merger with its own subsidiary, Cooperative Insurance Brokers Co., Ltd. The effective date of this merger is to be determined by management. In this merger, The Bank will be the survivor entity.

45. ADDITIONAL DISCLOSURES

a. Related information of significant transactions and b. investees:

1) Financing provided: The Bank - not applicable; investee company - None or not applicable. 2) Endorsement/guarantee provided: The Bank - Not applicable; investee company - none or not

applicable. 3) Marketable securities held: The Bank and United Taiwan Bank S.A. - Not applicable; investee

company - Table 3 (attached) 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or

10% of the paid-in capital (the Bank disclosed its investments acquired or disposed of): Table 4 (attached)

5) Acquisition of individual real estate at costs of at least NT$300 million or 10% of the paid-in

capital: None. 6) Disposal of individual real estates at costs of at least NT$300 million or 10% of the paid-in

capital: None. 7) Allowance of service fees to related parties amounting to at least NT$5 million: None. 8) Receivables from related parties amounting to at least NT$300 million or 10% of the paid-in

capital: Table 5 (attached) 9) Sale of nonperforming loans: None. 10) Financial asset securitization: None. 11) Other significant transactions which may affect the decisions of users of financial reports: Note

44 to the consolidated financial statements. 12) Percentage share in investees and related information: Table 6 (attached) 13) Derivative transactions: The Bank - Notes 8, 35 and 38 to the consolidated financial statements;

investee company - None.

c. Investment in Mainland China: Based on “Regulations Governing Approvals of Banks to Engage in Financial Activities between the Taiwan Area and the Mainland Area,” the Bank set up the Suzhou Branch, Tianjin Branch and Fuzhou Branch in Mainland China. This investment had been approved by the Financial Supervisory Commission. The 3 branches’ information - major operating items, capital stock, the way of investment, investment inflows and outflows, the holding percentage, the investment income or loss, the book value at year-end, the remitted investment profits and the limit on the amount of investment



in Mainland China - can be seen in Table 7 (attached)

d. Business relationships and significant transactions among the parent company and subsidiaries: Table 8 (attached)

46. OPERATING SEGMENTS

The information reported to the Company’s chief operating decision makers for the assessment of segment performance focuses mainly on business and profit or loss. The Company’s reportable segments are as follows: a. Deposit and loan section, including savings, loans and remittances; b. Credit section, including legal person and personal credit business; c. Funding section, including funding management with domestic and foreign currencies, securities,

investments and other financial management; d. Trust section, including development, promotion and management of trust transactions; e. Other noncore business. The accounting policies of the reportable segments are the same as the Company’s accounting policies described in Note 4. Segment profit is measured at income before income tax, and this measure is reported to the chief operating decision makers for the purposes of resource allocation and assessment of segment performance. The terms of transactions between segments are similar to those for third parties. The revenue, expenses and related information of the Company’s reportable segments are as follows: For the Year Ended December 31, 2015

Deposit and Loan Section

Credit Section

Funding Section Trust Section Others Eliminate Total

Net interest $ 9,166,948 $ 18,788,962 $ 419,627 $ - $ 1,676,985 $ - $ 30,052,522Net revenues and gains

other than interest 366,728 1,507,295 2,991,787 3,428,337 1,426,397 (284,880) 9,435,664Net revenues 9,533,676 20,296,257 3,411,414 3,428,337 3,103,382 (284,880) 39,488,186Bad-debt expenses and

provision for losses on guarantees - (2,188,590) - - 40,317 - (2,148,273)

Operating expenses (9,036,853) (9,101,603) (786,870) (2,611,305) (1,677,153) 3,594 (23,210,190) Income before income

tax $ 496,823 $ 9,006,064 $ 2,624,544 $ 817,032 $ 1,466,546 $ (281,286) $ 14,129,723


Deposit and Loan Section

Credit Section

Funding Section Trust Section Others Eliminate Total

Net interest $ 9,676,008 $ 16,694,602 $ (380,233) $ - $ 1,777,825 $ - $ 27,768,202Net revenues and gains

other than interest 331,802 1,382,656 3,681,003 2,862,543 3,994,079 (257,260) 11,994,823Net revenues 10,007,810 18,077,258 3,300,770 2,862,543 5,771,904 (257,260) 39,763,025Bad-debt expenses and

provision for losses on guarantees - (3,189,588) - - (3,104,660) 45,895 (6,248,353)

Operating expenses (9,283,073) (7,624,239) (591,867) (2,711,155) (1,627,951) 2,090 (21,836,195) Income before income

tax $ 724,737 $ 7,263,431 $ 2,708,903 $ 151,388 $ 1,039,293 $ (209,275) $ 11,678,477


TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES CONSOLIDATED ENTITIES DECEMBER 31, 2015ND 2014

Subsidiaries included in the consolidated financial statements:

Investor Company Investee Company Location Main Business and Products Percentage of Ownership

NoteDecember 31, 2015

December 31, 2014

Taiwan Cooperative

Bank, Ltd.

United Taiwan Bank S.A. Belgium Banking 90.02 90.02

Cooperative Insurance Brokers Co., Ltd. Taipei City Life and property insurance agent 100.00 100.00

Subsidiaries not included in the consolidated financial statements:

Investor Company Investee Company Location Main Business and Products Percentage of Ownership

NoteDecember 31, 2015

December 31, 2014

None - - - - -

TAIWAN COOPERATIVE BANK, LTD.

ASSET QUALITY - NONPERFORMING LOANS AND RECEIVABLES

DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, %)

Period December 31, 2015

Items Nonperforming

Loans (Note 1)

Loans Ratio of

Nonperforming Loans (Note 2)

Allowance for Credit Losses

Coverage Ratio (Note 3)

Corporate banking

Secured $ 3,362,084 $ 666,713,093 0.50 $ 6,133,312 182.43

Unsecured 1,753,741 551,608,460 0.32 7,008,984 399.66

Consumer banking

Housing mortgage (Note 4) 1,031,851 508,940,536 0.20 5,857,699 567.69

Cash card - - - - -

Small-scale credit loans (Note 5) 47,115 12,544,692 0.38 204,713 434.50

Other (Note 6) Secured 592,128 245,391,020 0.24 1,896,174 320.23

Unsecured 18,278 9,442,950 0.19 151,983 831.51

Loan 6,805,197 1,994,640,751 0.34 21,252,865 312.30

Nonperforming Receivables

(Note 1) Receivables

Ratio of Nonperforming

Receivables (Note 2)



Credit cards 8,207 2,660,556 0.31 74,750 910.81

Accounts receivable factored without recourse (Note 7) - 216,084 - 3,552 -

Amounts of executed contracts on negotiated debts not reported as nonperforming loans (Note 8) 15,462

Amounts of executed contracts on negotiated debts not reported as nonperforming receivables (Note 8) 17,085

Amounts of executed debt-restructuring projects not reported as nonperforming loans (Note 9) 22,322

Amounts of executed debt-restructuring projects not reported as nonperforming receivables (Note 9) 61,678

TABLE2

TABLE1



Period December 31, 2014

Items Nonperforming

Loans (Note 1)

Loans Ratio of

Nonperforming Loans (Note 2)



Corporate banking

Secured $ 4,154,033 $ 618,295,520 0.67 $ 6,288,619 151.39

Unsecured 1,388,211 526,873,204 0.26 7,269,553 523.66

Consumer banking

Housing mortgage (Note 4) 1,146,239 492,647,006 0.23 6,520,035 568.82

Cash card - - - - -

Small-scale credit loans (Note 5) 39,567 12,290,737 0.32 210,711 532.54

Other (Note 6)

Secured 354,000 217,296,569 0.16 1,621,616 458.08

Unsecured 27,174 8,804,715 0.31 146,525 539.21

Loan 7,109,224 1,876,207,751 0.38 22,057,059 310.26

Nonperforming Receivables

(Note 1) Receivables

Ratio of Nonperforming

Receivables (Note 2)



Credit cards 17,950 2,562,450 0.70 98,857 550.74Accounts receivable factored without recourse (Note 7) - 384,088 - 4,432 -Amounts of executed contracts on negotiated debts

not reported as nonperforming loans (Note 8) 17,683 Amounts of executed contracts on negotiated debts

not reported as nonperforming receivables (Note 8) 23,871 Amounts of executed debt-restructuring projects

not reported as nonperforming loans (Note 9) 27,225 Amounts of executed debt-restructuring projects not

reported as nonperforming receivables (Note 9) 70,215 Note 1: Nonperforming loans are reported to the authorities and disclosed to the public, as required by the “Regulations Governing the

Procedures for Banking Institutions to Evaluate Assets and Deal with Nonperforming/Non-accrued Loans.” Nonperforming credit card receivables are reported to the authorities and disclosed to the public, as required by the Banking

Bureau’s letter dated July 6, 2005 (Ref. No. 0944000378). Note 2: Ratio of nonperforming loans: Nonperforming loans ÷ Outstanding loan balance. Ratio of nonperforming receivables: Nonperforming receivables ÷ Outstanding receivable balance. Note 3: Coverage ratio of loans: Allowance for credit losses for loans ÷ Nonperforming loans. Coverage ratio of receivables: Allowance for credit losses for receivables ÷ Nonperforming receivables. Note 4: The mortgage loan is for house purchase or renovation and is fully secured by housing that is purchased (owned) by the

borrower, the spouse or the minor children of the borrowers. Note 5: Based on the Banking Bureau’s letter dated December 19, 2005 (Ref. No. 09440010950), small-scale credit loans are

unsecured, involve small amounts and exclude credit cards and cash cards. Note 6: Other consumers banking loans refer to secured or unsecured loans that exclude housing mortgage, cash and credit card, and

small-scale credit loans. Note 7: As required by the Banking Bureau in its letter dated July 19, 2005 (Ref. No. 0945000494), accounts receivable factored

without recourse are reported as nonperforming receivables within three months after the factors or insurance companies refuse to indemnify banks for any liabilities on these accounts.

Note 8: Amounts of executed contracts on negotiated debts that are not reported as nonperforming loans or receivables are disclosed to the public in accordance with the Banking Bureau’s letter dated April 25, 2006 (Ref. No. 09510001270).

Note 9: Amounts of executed debt-restructuring projects not reported as nonperforming loans or receivables are disclosed to the public in accordance with the Banking Bureau’s letter dated September 15, 2008 (Ref. No. 09700318940).

TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES MARKETABLE SECURITIES HELD DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars)

Note: Pledged bonds as collaterals for public guarantee at Financial Supervisory Commission.

Holding Company Name Marketable

Securities Type and Issuer

Relationship with the Holding

Company

Financial Statement Account

December 31, 2015

NoteShares (Thousands)

Carrying ValuePercentage

of Ownership

Market Value or Net Asset

Value Cooperative Insurance

Brokers Co., Ltd. Bonds

Government Bonds - 88 A3

- Held-to-maturity financial assets

- $3,350 - $3,427 Note

TABLE 3


TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 10% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2015

(In Thousands of New Taiwan Dollars / In Thousands of Shares)

Note: Acquisition consists of $533,000 thousand of cash investment and unrealized gain of $18,655 thousand on available-for-sale

financial assets. TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$300 MILLION OR 10% OF THE PAID-IN CAPITAL DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars)

Note: Receivable-consolidated tax return

TAIWAN COOPERATIVE BANK, LTD.

Company Name Related Party RelationshipEnding Balance (Note)

Turnover Rate

Overdue Amounts Received in

Subsequent Period

Allowance for

Impairment Loss

Amount Actions Taken

Taiwan Cooperative Bank, Ltd.

Taiwan Cooperative Financial Holding Company, Ltd.

Parent Company

$ 744,306(Note)

- $ - - $ - $ -

PERCENTAGE SHARE IN INVESTEES AND RELATED INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars)

Investee Company (Note 1) Location Main Businesses and Products

Percentage of

OwnershipCarrying

Value InvestmentGain (Loss)

Percentage Share of the Bank and Its Affiliates in Investees (Note 1)

NoteShares

Pro Forma Shares

(Note 2)

Total

Shares Percentage

of Ownership

Finance-related business United Taiwan Bank S.A. Belgium Banking 90.02 $ 1,758,876 $ 99,060 2,639,659 - 2,639,659 90.02 Note 3Cooperative Insurance Brokers Co.,

Ltd. Taipei City Life and property insurance

agent 100.00 219,104 182,226 1,000,000 - 1,000,000 100.00 Note 3

Taiwan Asset Management Co., Ltd. Taipei City Acquisition of delinquent loans

17.03 2,370,934 182,511 225,000,000 - 225,000,000 17.03

Financial Information Service Co., Ltd.

Taipei City Information service 2.89 135,405 33,863 15,107,985 - 15,107,985 2.89

Taiwan Financial Asset Service Co., Ltd.

Taipei City Property auction 5.88 101,125 - 10,000,000 - 10,000,000 5.88

Taiwan Depository & Clearing Co., Ltd.

Taipei City Custody of securities and short-term bills

0.84 60,694 4,213 3,449,563 - 3,449,563 1.00

Taiwan Futures Exchange Co., Ltd. Taipei City Futures clearing 1.75 53,468 9,891 5,199,035 - 5,199,035 1.75 Financial eSolution Co., Ltd. Taipei City Office machine wholesaling 9.92 24,934 - 2,181,617 - 2,181,617 9.92 Taipei Forex Inc. Taipei City Foreign exchange brokering 7.06 19,198 5,600 1,400,000 - 1,400,000 7.06 Sunny Asset Management Co., Ltd. Taipei City Acquisition of delinquent

loans 0.72 431 47 43,088 - 43,088 0.72

Taiwan Mobile Payment Company Taipei City IT software service 4.00 24,000 - 2,400,000 - 2,400,000 4.00 Non-finance related business United Real Estate Management

Co., Ltd. Taipei City Real estate appraisal 30.00 122,023 13,432 9,543,048 - 9,543,048 30.00

Taiwan Power Company Taipei City Power development and supply

0.24 631,153 - 78,754,764 - 78,754,764 0.24

Taiwan Sugar Company Tainan City Sugar manufacturing 0.08 - 3,387 4,233,752 - 4,233,752 0.08 Lien-An Service Co., Ltd. Taipei City Leasing 5.00 1,250 125 125,000 - 125,000 5.00 Taipei Rapid Transit Co., Ltd. Taipei City Public transportation - 139 9 13,363 - 13,363 - China Daily News Tainan City Newspaper publishing 0.04 52 - 16,768 - 16,768 0.04 Taipei Financial Center Corp. Taipei City Residence and buildings

lease construction and development

1.63 669,600 - 24,000,000 - 24,000,000 1.63

Taiwan High Speed Rail Cooperation

Taipei City High speed railroad transportation business

0.95 551,655 - 53,308,000 - 53,308,000 0.95

Company Name Marketable

Securities Type and Issuer

Financial Statement Account

Counter-party Nature of Relationship

Beginning Balance Acquisition Disposal Ending Balance

Shares Amount Shares Amount Shares Price Carrying Value

Gain (Loss) on Disposal

Shares Amount

Taiwan

Cooperative Bank, Ltd.

Taipei Financial Center Corp.

financial assets carried at cost

Cathay United Bank Company Limited

- - $ - 24,000 $669,600 - $ - $ - $ - 24,000 $669,600

Taiwan High Speed Rail Corporation

available-for-sale financial assets

- - - - 53,300 551,655 (Note)

- - - - 53,300 551,655

TABLE 6

TABLE 5

TABLE 4



Note 1: Shares or pro forma shares held by the Bank, directors, supervisors, president, vice president and affiliates in accordance with the Company Law have been included.

Note 2: a. Pro forma shares are shares that are assumed to be obtained through buying equity-based securities or entering into equity-linked derivative contracts for purposes defined in Article 74 of the Banking Law.

b. Equity-based securities, such as convertible bonds and warrants, are covered by Article 11 of the “Securities and Exchange Law Enforcement Rules.”

c. Derivative contracts, such as those on stock options, are those conforming to the definition of derivatives in Statement of International Accounting Standards No. 39 - “Financial Instruments.”

Note 3: When preparing the consolidated financial statements, the amount had been eliminated.

TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company

Name

Main Businesses and

Products

Total Amount of Paid-in

Capital

Investment Type

Accumulated Outflow of Investment

from Taiwan as of

January 1, 2015

Investment Flows Accumulated Outflow of Investment

from Taiwan as of

December 31, 2015

Investee Net

Income (Loss)

% Ownership of Direct or

Indirect Investment

Investment Gain (Loss)

Carrying Value as ofDecember 31, 2015

Accumulated Inward

Remittance of Earnings as of December

31, 2015

Outflow Inflow

Suzhou Branch

Deposits, loans, import and export, exchange and foreign exchange business

$ 4,547,235 (US$ 154,395)

(Note 1)

Direct $ 4,547,235(US$154,395)

(Note 1)

$ - $ - $ 4,547,235(US$154,395)

(Note 1)

$ (93,408) 100 $ (93,408) $ 5,433,226 $ -

Tianjin Branch


2,947,314 (US$ 97,387)

(Note 1)

Direct 2,947,314(US$97,387)

(Note 1)

- - 2,947,314(US$ 97,387)

(Note 1)

(51,337) 100 (51,337)

3,138,529 -

Fuzhou Branch


2,950,882 (US $97,549)

(Note 1)

Direct 2,950,882(US$ 97,549)

(Note 1)

- - 2,950,882(US$ 97,549)

(Note 1)

(83,662) 100 (83,662)

3,092,672 -

Note 1: Translation into New Taiwan dollars at the exchange rates on the date of each outflow of investment. Note 2: Based on the Investment Commission’s “Regulation on the Examination of Investment or Technical Cooperation in Mainland

China,” investments are limited to the largest of 60% of the Bank’s net asset value or 60% of the Bank’s consolidated net asset value.

Accumulated Investment in Mainland China as of

December 31, 2015

Investment Amount Approved by the Investment Commission, MOEA

Maximum Investment Allowable (Note 2)

$ 10,445,431 (US$ 349,331 ) (Note 1)

$ 10,445,431 (US$ 349,331 ) (Note 1)

$ 109,772,941

TABLE 7


Note 1: These companies listed in Table 8 are identified as follows:

a. Parent company: 0. b. Subsidiaries are numbered sequentially from 1.

Note 2: Transaction flows are as follows:

a. From parent company to subsidiary. b. From subsidiary to parent company. c. Between subsidiaries.

Note 3: For calculating the percentages, asset or liability account is divided by the consolidated total assets and revenue or expense account is divided by the total consolidated net revenue of the same year.

Note 4: The terms for the transactions between the transacting company and related parties are similar to those for unrelated parties. Note 5: Referring to transactions exceeding New Taiwan dollars $100 million.

TAIWAN COOPERATIVE BANK, LTD. AND SUBSIDIARIES BUSINESS RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS AMONG THE PARENT COMPANY AND SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars)

No. (Note 1) Transacting Company Counter-party

Transaction Flow

(Note 2)

Description of Transactions (Notes 3 and 5)

Financial Statement Account Amounts Trading

Terms

Transaction Amount/Total

Consolidated Net Revenue or Total

Consolidated Assets (%)

0 Taiwan Cooperative Bank, Ltd. United Taiwan Bank S.A. a Due from banks $ 582,372 Note 4 0.02

1 United Taiwan Bank S.A. Taiwan Cooperative Bank, Ltd. b Due to banks 582,372 Note 4 0.02

0 Taiwan Cooperative Bank, Ltd. United Taiwan Bank S.A. a Call loans to banks 6,435,789 Note 4 0.21

1 United Taiwan Bank S.A. Taiwan Cooperative Bank, Ltd. b Call loans from banks 6,435,789 Note 4 0.21

0 Taiwan Cooperative Bank, Ltd.

Cooperative Insurance Brokers Co., Ltd. a Deposits and remittance 242,200 Note 4 0.01

2 Cooperative Insurance Brokers Co., Ltd. Taiwan Cooperative Bank, Ltd. b

Cash and cash equivalents, refundable deposits

242,200 Note 4 0.01


Cooperative Insurance Brokers Co., Ltd. a Receivables 198,226 Note 4 0.01

2 Cooperative Insurance Brokers Co., Ltd. Taiwan Cooperative Bank, Ltd. b Payables 198,226 Note 4 0.01


Cooperative Insurance Brokers Co., Ltd. a Service fee income 2,196,255 Note 4 5.56

2 Cooperative Insurance Brokers Co., Ltd. Taiwan Cooperative Bank, Ltd. b Service charge 2,196,255 Note 4 5.56

TABLE 8



5.6 Stand Alone Financial Statements INDEPENDENT AUDITORS’ REPORT The Board of Directors and the Stockholders Taiwan Cooperative Bank, Ltd. We have audited the accompanying balance sheets of Taiwan Cooperative Bank, Ltd. as of December 31, 2015 and 2014, and the related statements of comprehensive income, changes in equity and cash flows for the years then ended. These financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements of Financial Institutions by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Taiwan Cooperative Bank, Ltd. as of December 31, 2015 and 2014, and its financial performance and its cash flows for the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Public Banks and the Regulations Governing the Preparation of Financial Reports by Securities Firms. February 22, 2016

Notice to Readers The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.


TAIWAN COOPERATIVE BANK, LTD. BALANCE SHEETS DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

2015 2014

(Audited after Retrospected) ASSETS Amount % Amount % CASH AND CASH EQUIVALENTS (Notes 4, 6 and 35) $ 42,442,551 2 $ 42,029,035 1DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER

BANKS (Notes 4, 7, 35 and 36) 711,892,231 23 690,813,486 24FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

(Notes 4, 8 and 35) 14,936,076 1 43,669,323 2SECURITIES PURCHASED UNDER RESELL AGREEMENTS (Notes

4, 9 and 35) 209,592 - 1,851,763 -RECEIVABLES, NET (Notes 4, 10, 35 and 42) 13,369,207 1 13,074,168 1CURRENT TAX ASSETS (Notes 4, 32, 35 and 37) 987,343 - 1,570,953 -DISCOUNTS AND LOANS, NET (Notes 4, 11, 35 and 36) 1,972,923,223 65 1,853,660,859 64AVAILABLE-FOR-SALE FINANCIAL ASSETS, NET (Notes 4, 12 and

36) 95,884,851 3 69,774,501 2HELD-TO-MATURITY FINANCIAL ASSETS (Notes 4, 13 and 36) 42,394,027 1 20,046,117 1INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

(Notes 4 and 14) 2,100,003 - 2,052,636 -OTHER FINANCIAL ASSETS, NET (Notes 4, 15 and 36) 101,187,401 3 120,615,984 4PROPERTIES AND EQUIPMENT, NET (Notes 4 and 16) 39,286,038 1 39,650,610 1INVESTMENT PROPERTIES, NET (Notes 4 and 17) 2,269,500 - 2,083,696 -INTANGIBLE ASSETS (Notes 4 and 18) 3,625,263 - 3,695,654 -DEFERRED TAX ASSETS (Notes 4 and 32) 1,227,216 - 1,074,810 -OTHER ASSETS, NET (Notes 4, 19 and 37) 1,061,451 - 3,770,694 -TOTAL $ 3,045,795,973 100 $ 2,909,434,289 100 LIABILITIES AND EQUITY DUE TO THE CENTRAL BANK AND OTHER BANKS (Notes 20 and

35) $ 198,372,977 7 $ 176,001,915 6FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR

LOSS (Notes 4, 8, 24 and 35) 14,706,922 1 6,082,468 -SECURITIES SOLD UNDER REPURCHASE AGREEMENTS (Notes 4,

8, 12, 13, 21 and 35) 17,452,480 1 23,179,705 1PAYABLES (Notes 22 and 35) 35,302,680 1 41,690,572 2CURRENT TAX LIABILITIES (Notes 4, 32 and 35) 1,326,368 - 79,910 -DEPOSITS AND REMITTANCES (Notes 23 and 35) 2,504,628,491 82 2,397,346,915 83BANK DEBENTURES (Note 24) 69,610,000 2 92,110,000 3OTHER FINANCIAL LIABILITIES (Notes 25, 35 and 37) 7,710,161 - 9,061,589 -PROVISIONS (Notes 4, 26 and 27) 9,286,765 - 8,831,254 -DEFERRED TAX LIABILITIES (Notes 4, 16 and 32) 3,453,496 - 3,568,502 -OTHER LIABILITIES (Notes 4 and 35) 1,185,632 - 1,170,822 -

Total liabilities 2,863,035,972 94 2,759,123,652 95 EQUITY

Capital stock Common stock 83,493,000 3 71,362,760 3

Capital surplus Additional paid-in capital from share issuance in excess of par

value 52,951,835 2 38,627,359 1From treasury stock transactions 103,157 - 103,157 -

Total capital surplus 53,054,992 2 38,730,516 1Retained earnings

Legal reserve 25,586,622 1 22,548,376 1Special reserve 1,217,583 - 1,217,583 -Unappropriated earnings 18,349,592 - 16,964,284 -

Total retained earnings 45,153,797 1 40,730,243 1Other equity 1,058,212 - (512,882 ) - Total equity 182,760,001 6 150,310,637 5

TOTAL $ 3,045,795,973 100 $ 2,909,434,289 100 The accompanying notes are an integral part of the financial statements.



TAIWAN COOPERATIVE BANK, LTD. STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015AND 2014 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2015

2014(Audited after Retrospected)

Percentage Increase

(Decrease) Amount % Amount % % INTEREST REVENUE (Notes 4, 28 and 35) $ 50,960,726 130 $ 50,598,352 128 1INTEREST EXPENSE (Notes 4, 28 and 35) (21,054,489) (54) (22,945,405 ) (58 ) (8)NET INTEREST 29,906,237 76 27,652,947 70 8NET REVENUES AND GAINS OTHER THAN

INTEREST Service fee income, net (Notes 4, 29, 35 and 42) 5,929,969 15 5,259,824 13 13Gains on financial assets and liabilities at fair value

through profit or loss (Notes 4, 30 and 35) 455,847 1 2,663,086 7 (83)Realized gains on available-for-sale financial assets

(Note 4) 633,063 2 550,004 1 15Foreign exchange gains (losses), net (Note 4) 1,243,147 3 (95,262 ) - 1,405Impairment losses on assets (Notes 4, 12, 13, 15 and

19) (5,730) - (21,236 ) - (73)Share of gains of subsidiaries, associates and joint

ventures accounted for using the equity method (Notes 4 and 14) 294,718 1 224,293 - 31

Gains on financial assets carried at cost, net (Note 4) 240,159 1 252,294 1 (5)Gains on disposal of properties and equipment, net

(Notes 4 and 35) 154,779 - 3,106,619 8 (95)Other noninterest gains (losses), net (Notes 35 and

42) 285,691 1 (34,569 ) - 926Total net revenues and gains other than

interest 9,231,643 24 11,905,053 30 (22)TOTAL NET REVENUES 39,137,880 100 39,558,000 100 (1)BAD-DEBT EXPENSES AND PROVISION FOR

LOSSES ON GUARANTEES (Notes 4 and 11) (2,158,168) (6) (6,270,689 ) (16 ) (66)OPERATING EXPENSES (Notes 4, 16, 17, 18, 27, 31

and 35) Employee benefits (15,073,800) (38) (14,569,944 ) (37 ) 3Depreciation and amortization (1,202,766) (3) (1,213,900 ) (3 ) (1)General and administrative (6,621,632) (17) (5,859,677 ) (15 ) 13

Total operating expenses (22,898,198) (58) (21,643,521 ) (55 ) 6INCOME BEFORE INCOME TAX 14,081,514 36 11,643,790 29 21INCOME TAX EXPENSE (Notes 4

and 32) (1,952,033) (5) (1,515,231 ) (4 ) 29NET INCOME 12,129,481 31 10,128,559 25 20OTHER COMPREHENSIVE INCOME

Items that will not be reclassified subsequently to profit or loss (Notes 4 and 27) Remeasurement of defined benefit plans (616,927) (2) (34,190 ) - 1,704Changes in the fair value attributable to changes

in the credit risk of financial liabilities designated as at fair value through profit or loss 2,168 - - - -Items that will not be reclassified subsequently

to profit or loss, net of income tax (614,759) (2) (34,190 ) - 1,698Items that may be reclassified subsequently to profit

or loss (Notes 4, 14 and 32) Exchange differences on the translation of

financial statements of foreign operations 182,004 - 347,989 1 (48)Unrealized gains (losses) on available-for-sale

financial assets 1,509,479 4 (243,609 ) (1 ) 720Share of other comprehensive losses of

subsidiaries, associates and joint ventures accounted for using the equity method (119,127) - (117,757 ) - 1

Income tax attributable to other comprehensive income (3,430) - (31,042 ) - (89)Items that may be reclassified subsequently to

profit or loss, net of income tax 1,568,926 4 (44,419 ) - 3,632Other comprehensive income (losses), net of

income tax 954,167 2 (78,609 ) - 1,314TOTAL COMPREHENSIVE INCOME $ 13,083,648 33 $ 10,049,950 25 30

EARNINGS PER SHARE (NEW TAIWAN DOLLARS;

Note 33) Basic $1.52 $1.46

The accompanying notes are an integral part of the financial statements.


TAIWAN COOPERATIVE BANK, LTD. STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

Other Equity

Capital Stock (Note 34)

Capital Surplus

(Notes 4 and 34)

Retained Earnings (Notes 4 and 34)

Exchange Differences

on the Translation

of Financial

Statements ofForeign

Operations(Note 4)

Unrealized Gains

(Losses) on Available-

for-sale Financial

Assets (Note 4)

Changes in the Fair Value

Attributable to Changes in the Credit Risk of

Financial Liabilities

Designated as at Fair Value

Total EquityShares

(In Thousands) Common

Stock Legal

ReserveSpecial Reserve

Unappropriated Earnings

through Profit or Loss (Note 4)

BALANCE, JANUARY 1, 2014 6,843,252 $ 68,432,520 $ 35,360,741 $ 20,141,758 $ 1,309,025 $ 14,788,307 $ 44,030 $(512,493) $ - $ 139,563,888

Effect of retrospective application - - - - - (3,216) - - - (3,216)

BALANCE, JANUARY 1, 2014 AS RETROSPECTED 6,843,252 68,432,520 35,360,741 20,141,758 1,309,025 14,785,091 44,030 (512,493) - 139,560,672

Reversal of special reverse - - - - (91,442) 91,442 - - - -

Appropriation of the 2013 earnings Legal reserve - - - 2,406,618 - (2,406,618) - - - -

Cash dividends - - - - - (5,600,000) - - - (5,600,000)Capital increase in June

2014 200,000 2,000,000 2,300,000 - - - - - - 4,300,000Capital increase in

December 2014 93,024 930,240 1,069,775 - - - - - - 2,000,015Total comprehensive

income Net income for the

year ended December 31, 2014 - - - - - 10,128,559 - - - 10,128,559

Other comprehensive losses for the year ended December 31, 2014 - - - - - (34,190) 191,583 (236,002) - (78,609)

Total comprehensive income for the year ended December 31, 2014 - - - - - 10,094,369 191,583 (236,002) - 10,049,950

BALANCE, DECEMBER 31, 2014 AS RETROSPECTED 7,136,276 71,362,760 38,730,516 22,548,376 1,217,583 16,964,284 235,613 (748,495) - 150,310,637

Appropriation of the 2014 earnings Legal reserve - - - 3,038,246 - (3,038,246) - - - -Cash dividends - - - - - (7,089,000) - - - (7,089,000)

Capital increase in March 2015 993,024 9,930,240 11,419,776 - - - - - - 21,350,016

Capital increase in October 2015 220,000 2,200,000 2,596,000 - - - - - - 4,796,000

Share-based payment arrangements involving TCFHC's common stock - - 308,700 - - - - - - 308,700

Total comprehensive income Net income for the

year ended December 31, 2015 - - - - - 12,129,481 - - - 12,129,481

Other comprehensive income for the year ended December 31, 2015 - - - - - (616,927) 52,280 1,516,646 2,168 954,167

Total comprehensive income for the year ended December 31, 2015 - - - - - 11,512,554 52,280 1,516,646 2,168 13,083,648

BALANCE, DECEMBER 31, 2015

8,349,300 $ 83,493,000 $ 53,054,992 $ 25,586,622 $ 1,217,583 $ 18,349,592 $ 287,893 $ 768,151 $ 2,168 $ 182,760,001

The accompanying notes are an integral part of the financial statements.



TAIWAN COOPERATIVE BANK, LTD. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014(In Thousands of New Taiwan Dollars)

2015

2014 (Audited after Retrospected)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 14,081,514 $ 11,643,790Adjustments for:

Depreciation expenses 958,352 964,425Amortization expenses 244,414 249,475Bad-debt expenses 2,380,589 5,972,378Gains on financial assets and liabilities at fair value through profit or loss (455,847 ) (2,663,086)Interest expense 21,054,489 22,945,405Interest revenue (50,960,726 ) (50,598,352)Dividend income (395,526 ) (372,030)Provision (reversal of provision) for losses on guarantees (222,421 ) 298,311Salary expenses on share-based payments 308,076 -Share of gains of subsidiaries, associates and joint ventures accounted for using

equity method (294,718 ) (224,293)Gains on disposal of properties and equipment (150,692 ) (3,099,277)Gains on disposal of investments (518,260 ) (454,757)Impairment losses on financial assets 7,857 21,380Reversal of impairment losses on non-financial assets (2,127 ) (144)Net changes in operating assets and liabilities

Decrease (increase) in due from the Central Bank and call loans to other banks 70,642,643 (57,984,315)Decrease in financial assets at fair value through profit or loss 43,798,910 18,033,417Decrease (increase) in receivables (203,153 ) 2,012,152Decrease (increase) in discount and loans (121,068,132 ) 40,004,587Increase in available-for-sale financial assets (24,201,353 ) (16,454,642)Increase in held-to-maturity financial assets (22,605,381 ) (9,293,235)Decrease (increase) in other financial assets 19,564,808 (17,230,474)Decrease (increase) in other assets 2,713,585 (3,109,795)Increase (decrease) in due to the Central Bank and other banks 22,371,062 (63,729,269)Decrease in financial liabilities at fair value through profit or loss (18,986,800 ) (13,777,822)Decrease in securities sold under repurchase agreements (5,727,225 ) (9,186,763)Increase (decrease) in payables (6,176,434 ) 5,796,829Increase in deposits and remittances 107,281,576 57,125,185Decrease in other financial liabilities (1,956,423 ) (9,862,926)Increase (decrease) in provision for employee benefits 60,538 (51,163)Increase (decrease) in other liabilities 156,076 (86,278)

Cash generated by (used in) operations 51,699,271 (93,111,287)Interest received 51,015,813 49,542,701Dividends received 524,374 475,900Interest paid (21,670,712 ) (23,093,144)Income tax paid (389,602 ) (1,606,797)

Net cash generated by (used in) operating activities 81,179,144 (67,792,627)CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition for properties and equipment (788,922 ) (3,199,040)Proceeds of the disposal of properties and equipment - 4,290,443Increase in refundable deposits (4,387 ) (30,582)Acquisition for intangible assets (173,835 ) (167,831)Proceeds of the disposal of collaterals assumed 2,127 144Increase in other assets (43 ) (9,436)

Net cash generated by (used in) investing activities (965,060 ) 883,698CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds of the issuance of bank debentures 12,516,000 10,000,000Repayment of bank debentures (22,500,000 ) (15,770,000)Increase in guarantee deposits received 604,995 -Decrease in guarantee deposits received - (273,905)Dividends paid (7,089,000 ) (5,600,000)Capital increase 26,146,016 6,300,015

Net cash generated by (used in) financing activities 9,678,011 (5,343,890)EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH

EQUIVALENTS 896,558 (91,714)NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 90,788,653 (72,344,533)CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR 340,376,527 412,721,060CASH AND CASH EQUIVALENTS, END OF THE YEAR $ 431,165,180 $ 340,376,527Cash and cash equivalent reconciliations: Cash and cash equivalents in the balance sheets $ 42,442,551 $ 42,029,035Due from the Central Bank and call loans to other banks in accordance with the

definition of cash and cash equivalents under IAS 7 “Statement of Cash Flows” 388,217,117 296,495,729Securities purchased under resell agreements in accordance with the definition of cash

and cash equivalents under IAS 7 “Statement of Cash Flows” 209,592 1,851,763Other items in accordance with the definition of cash and cash equivalents under IAS 7

“Statement of Cash Flows” 295,920 -Cash and cash equivalents, end of the year $ 431,165,180 $ 340,376,527 The accompanying notes are an integral part of the financial statements.


6. Risk Management

6.1 Credit Risk Management System

Items Contents 1. Credit risk

strategies, goals, policies, and procedures

(1) The Bank’s credit risk strategy is to comply with and observe relevant internal and external laws and regulations in the establishment and utilization of an effective credit risk management mechanism that complies with the New Basel Capital Accord and is able to identify, measure, monitor, and control various credit risks.

(2) The Bank’s credit risk goal is to develop a strong credit risk management mechanism and, under an acceptable level of risk and expected rate of return, to pursue maximum shareholder value.

(3) The Bank’s credit risk policy is founded on the basic principles of safety, liquidity, profitability, public benefit, and growth, with the implementation of a division of labor in credit risk management, cultivation of a bank-wide risk management culture, analysis and assessment of risk, and the adoption of responsive measures with the aim of optimizing asset portfolio management and capital allocation.

(4) The Bank carries out its credit risk process by complying with the rules of various businesses, implementing a prior review and post management and follow-up review mechanism, setting up an objective credit examination mechanism, introducing credit rating tools, and carrying out stress tests to evaluate potential losses under unfavorable circumstances, thereby effectively quantifying credit risk.

2. Organization and framework of credit risk management

(1) The Board of Directors is the Bank’s highest policymaking body for risk management, and bears ultimate responsibility for the Bank’s credit risk.

(2) The Risk Management Committee operates the credit risk management mechanism in accordance with credit risk decisions approved by the Board of Directors, reviews credit risk regulations, provides interdepartmental coordination on matters regarding credit risk management, and continuously monitors the performance of implementation.

(3) The Risk Management Department is responsible for the planning, establishment, and integration of the Bank’s credit risk management operations, for implementing overall bank-wide credit risk management monitoring, and for the step-by-step development of a credit risk quantitative model designed to upgrade the Bank’s risk quantification capability. The Department also regularly compiles bank-wide credit risk data and reports to the Board of Directors and Risk Management Committee; and, in accordance with the regulations of the competent authority, carries out provision for capital requirements and handles the disclosure of risk information.

(4) The headquarters and branches have established Credit Management Committees to review loan cases, and to approve or reject loan applications in accordance with their level of loan authorization.

(5) The Corporate Banking Department is responsible for loan review work and for supervising the business units in reviewing procedures.. In case of irregularity in the operation of business units or in important loan cases, special reviews will be carried out as necessary, the causes of the irregularities will be investigated and reviewed.

(6) The Credit Management Department is responsible for post-lending follow-up management. For cases which are approved above the authority of Supervisors in Regional Management Center, follow-up should be completed within 6 months unless specified otherwise, to get


Risk Management 113

Items Contents fully understanding of clients' operation, capital outflow, and the conditions of credit criteria.

(7) A Loan Assets Management Committee has been set up to review the disposition and writing off of nonperforming loans and loans for collection, and the writing off of losses from the disposition of assumed collateral, so as to strengthen the management of NPLs and loans for collection.

(8) The Auditing Department of the Board of Directors carries out its audits independently, with at least one inspection per year of businesses related to credit risk and provides suggestions for improvement whenever necessary.

3. Scope and characteristics of the credit risk reporting and measuring system

(1) The Bank reports credit risk information, including different underlying exposures in the asset portfolio, utilization of concentration quotas, and asset quality, to high-level management, the Risk Management Committee and Board of Directors on a regular basis so as to provide an understanding of the Bank’s overall credit risk for their reference in making decisions.

(2) The Bank has developed various types of corporate finance and consumer finance rating models, has introduced loan management systems that automatically produce default probabilities, losss given default, and rating grades, and has established an internal rating system that effectively weighs credit risk to serve as a reference for the Bank in setting loan authorization limits and interest rate pricing.

4. Hedging policy, and strategies and procedures for monitoring the continuing effectiveness of risk-hedging tools

(1) TCB has established the Loan and Investment Policy and Credit Risk Management Criteria, which sets regulations for the concentration of different kinds of credit risk and for dealings with materially interested parties so as to manage credit risk effectively and reinforce the Bank’s credit risk management mechanism.

(2) The Bank observes the limit regulations established by the competent authority in its loan and investment businesses.

(3) The Bank sets limits for the same enterprise, business group, industry, country, and type of collateral, and monitors the limits constantly. It also readjusts the limits on a regular or as-needed basis so as to avoid the excessive concentration of risk and assure the Bank’s stable operation.

(4) The handling of loan and investment businesses is always done in accordance with the customer＇s credit status and with the provision of appropriate collateral or guarantees, so as to lower risk. The monitoring of risk mitigation tools is accomplished through the review system and collateral management system.

5. Method adopted for legal capital charge

Standardized approach

6.2 Operational Risk Management System

Items Contents 1. Strategies and

procedures of operational risk

(1) Strategies Focus on implementing an effective bank-wide operational risk

management consciousness and culture.


Items Contents management Establishment of operational risk management methods, use of operational

risk management tools, and monitoring of the operational risk of various businesses so as to maintain operational safety and strengthen the operating structure.

(2) Procedures Use of the following methods to identify, evaluate, monitor, and control operational risk:

Establishment of various codes of practice, strengthening of operating procedure controls, and reduction of potential operating risks.

Use of operational risk control self-assessment to identify different types of potential operational risk, assess operational risk exposure, review the effectiveness and implementation of controls, and strengthen business management.

Production of key operational risk indexes, in accordance with the major risks identified through self-assessment process, so as to monitor risk changes by quantified indexes and set up an early-warning mechanism.

Review of the causes of risk incidents through the reporting and management of operational risk to improve operating procedures.

2. Organization and framework of operational risk management

(1) Organizational framework Includes the Board of Directors, Risk Management Committee, Risk Management Department, headquarters units, branches, and Board of Directors Auditing Department.

(2) Implementation of operational risk management through three lines of defense.

First line of defense (branches and headquarters units) Each branch should observe the laws of the competent authority and the Bank’s internal operating regulations in carrying out daily operational risk management.

The headquarters units in charge of different areas of business should fully understand the risks faced by businesses under their jurisdiction, should include operational risk management in the formulation of their operational management rules, and should monitor the daily implementation of operational risk management of businesses under their jurisdiction.

Second line of defense (The Risk Management Department) The Risk Management Department plans out the establishment and

introduction of the bank-wide operational risk management framework and management tools, and being responsible for bank-wide operational risk assessment, monitoring, control, review, and reporting.

Third line of defense (The Auditing Department, Board of Directors) The Auditing Department of the Board of Directors carries out

independent auditing and review of the status of operational risk management by units bank-wide.

3. Scope and

characteristics of operational risk reporting and measurement system

(1) Scheduled review, compilation, and analysis of the bank-wide status of operational risk exposure, including risk-control self-assessment and analysis, monitoring of key risk indexes, review and improvement of major operational risk incidents, and reporting to the Risk Management Committee and Board of Directors.

(2) Establishment of operational risk management systems (including operational risk incident reporting and risk-control self-assessment management) and reinforcement of linkage between operational risk incidents and self-assessment management tools, and related report enquiry to enhance the efficiency of management.

4. Risk hedging and (1) Different units carry out overall assessment of probability and severity of


Risk Management 115

Items Contents mitigation policies, and monitoring of strategies and procedures for the continuing effectiveness of hedging and mitigation tools

impact in accordance with the results of operational risk assessment and monitoring of key risk indexes, and adopt appropriate risk-reduction policies such as the strengthening of personnel training, the improvement of operating procedures, the reinforcement of system controls, the use of insurance, and outsourcing to control operational risk within the range of tolerance.

(2) Residual risk assessment in regard to risk incidents and control measures in various areas of business is carried out using risk control self-assessment on a scheduled basis so as to assure the effectiveness of control measures.

5. Method adopted for legal capital charge Standardized approach

6.3 Market Risk Management System

Items Contents 1. Strategies and

procedures of market risk management

(1) Strategies Establishment of a market risk management system in accordance with the market risk management strategy approved by the Board of Directors and in compliance with Basel III and the regulations set by the competent authority, establishment of investment authorization quotas and stop-loss rules in accordance with the Bank’s overall risk management objectives and product characteristics, and scheduled assessment and compilation of management information reports in order to effectively control various kinds of market risk.

(2) Procedures The Bank’s market risk management procedures include risk identification, assessment, measuring, monitoring, and reporting. The risk management personnel of the different units analyze market risk position data with assessment and measurement methods including statistical basic measurement methods, sensitivity analysis, and scenario analysis. Monitoring is used to determine whether the general and individual trading procedures for the trading units and financial products, such as changes in position, changes in profit and loss, trading models, and trading instruments conform to the rules, and whether they are carried out within the established limits and authorization.

2. Organization and framework of market risk management

(1) The organizational framework of market risk management includes the Board of Directors, Risk Management Committee, units in charge of different areas of business, business trading units, and the Auditing Committee, Board of Directors.

(2) The Board of Directors is the Bank’s highest policymaking body for risk management, and bears ultimate responsibility for the Bank’s market risk.

(3) The Bank’s Risk Management Committee operates the market risk management mechanism in accordance with management decisions approved by the Board of Directors, reviews the limits for different kinds of market risk as well as limits at the sectoral level, and reviews changes in business strategies and market conditions on a scheduled or as-needs basis.

(4) The Risk Management Department carries out the overall work of bank-wide risk management; it is responsible for centralized middle office monitoring, the collation, monitoring, and disclosure of market risk information and status of implementation, and the submission of reports and suggestions to the Risk Management Committee and Board of


Items Contents Directors on a scheduled basis.

(5) The mid-office personnel of the different trading units follow the Bank’s market risk management regulations in managing everyday operations in real time, monitor limits actively, and assist the Risk Management Committee with bank-wide monitoring of the various areas of risk.

(6) The Auditing Department of the Board of Directors carries out its audits independently, with at least one inspection per year of businesses related to market risk and provide suggestions for improvement whenever necessary.

3. Scope and characteristics of market risk reporting and measurement system

(1) Market risk reporting The different trading units report trading information to their superior units

on a real-time, daily, or scheduled basis, and assure the accuracy and validity of the information.

The Risk Management Department reports to high management levels on bank-wide trading positions and changes in profit-loss evaluation on a daily basis and submits regular reports and suggestions to the Risk Management Committee and the Board of Directors on the bank-wide implementation of market risk management, including such factors as market risk positions, risk levels, profit and loss, limits utilization, and the status of conformance with market risk management regulations.

The Bank currently uses the market risk standardized approach to calculate the allocation of capital reserves; and, in conformity with the principle of public disclosure, makes public disclosures of the Bank’s market risk management information on a scheduled basis.

(2) Market risk measurement system The scope of financial products currently measured by the value-at-risk

assessment system includes bond, bill, stock, fund, and forex positions. The Risk Management Department daily calculates trading-book value at

risk; monitors DVO1, individual product and overall value-at-risk limits; and makes reports to bank-wide risk management authorities.

Bank-wide market risk stress tests are carried out on a scheduled basis, the amount of potential losses under different risk factors are measured when markets are in poor condition, and reports and suggestions are submitted to the Risk Management Committee and the Board of Directors.

4. Risk hedging and mitigation policies, and monitoring of strategies and procedures for the continuing effectiveness of hedging and mitigation tools

(1) To avoid market, credit, or other financial risks to assets and liabilities, various derivative products may be used to engage in hedging operations.

(2) The Bank’s current risk-avoidance activity is used primarily to avoid the risk of foreign exchange and interest rate changes when investing in foreign-currency capital and securities, and hedging tools are confined mainly to derivative swaps.

(3) Positions in non-hedging derivatives trading are assessed daily at market value, and hedging positions are evaluated twice monthly. The related assessment reports are submitted for approval to risk management authorities.

(4) To maintain an effective control mechanism for derivatives, the Risk Management Department carries out verification of the derivatives appraisal model on a scheduled basis. The items of verification include the accuracy of trading information, the rationality of parameters, and the correctness in calculation formulas. The results of verification are reported to the Risk Management Committee.

5. Method adopted for legal capital charge Standardized approach


Head Office and Branches 117

7. Head Office and Branches

7.1 Head Office

Department Name Address Telephone Auditing Department, Board of Directors

8F, No.77, Kunming St., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) (02)23317531

Secretariat, Board of Directors 6F, No.77, Guan Qian Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23118811

Human Resource Department No.125, Sec. 2, Minsheng E. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25672900

Administrative Management Department

9F, No.77, Guan Qian Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23118811

Accounting Department 9F, No.77, Guan Qian Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23118811


9F, No.325, Sec. 4, Zhongxiao E. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27520058




No.9, Ln. 30, Sec. 4, Xinyi Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27045799

Risk Management Department No.46, Nanjing W. Rd., Datong Dist., Taipei City 103, Taiwan (R.O.C.) (02)25569800



Treasury Department 5F, No.325, Sec. 4, Zhongxiao E. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27312798

Credit Management Department 4F, No.77, Guan Qian Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23118811

Corporate Banking Department 4F, No.77, Guan Qian Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23118811

Personal Banking Department 5F, No.77, Kunming St., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) (02)23317531

Trust Department No.7, Yongsui St., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23118001

Wealth Management Department 3F, No.97, Sec. 1, Roosevelt Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23222616


3F, No.325, Sec. 4, Zhongxiao E. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27400628


13F, No.85, Sec. 2, Nanjing E. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)77431800

Electronic Banking Department 6F, No.77, Kunming St., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) (02)23317531

Credit Card Department 4F, No.77, Kunming St., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) (02)23317531


7.2 Domestic Branches

Branch Name Address Telephone SWIFT Code Taipei City

Jhongshan Lu Branch No.71, Sec. 2, Jhongshan N. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25213211 TACBTWTP002

Simen Branch No.77, Kunming St., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) (02)23814949 TACBTWTPXXX

Yanping Branch No.301, Nanjing W. Rd., Datong Dist., Taipei City 103, Taiwan (R.O.C.) (02)25554111 TACBTWTP004

Dadaocheng Branch No.67, Sec. 2, Chongcing N. Rd., Datong Dist., Taipei City 103, Taiwan (R.O.C.) (02)25568111 TACBTWTPXXX

Dongmen Branch No.208, Sec. 2, Sinyi Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)23933123 TACBTWTPXXX

Songshan Branch No.622, Sec. 4, Bade Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) (02)27656261 TACBTWTPXXX

Nanjing Donglu Branch No.98, Sec. 1, Nanjing E. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25623150 TACBTWTP041

Wujhou Branch No.237, Songjiang Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25077666 TACBTWTPAAA

Datong Branch No.10, Sec. 3, Chengde Rd., Datong Dist., Taipei City 103, Taiwan (R.O.C.) (02)25932323 TACBTWTP043

Jhongsiao Branch No.285, Sec. 4, Jhongsiao E. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27718811 TACBTWTP045

Jingmei Branch No.457, Sec. 6, Roosevelt Rd., Wunshan Dist., Taipei City 116, Taiwan (R.O.C.) (02)29318111 TACBTWTPXXX

Shihlin Branch No.469, Zhongzheng Rd., Shilin Dist., Taipei City 111, Taiwan (R.O.C.) (02)28805161 TACBTWTPXXX

Taipei Branch No.55, Fusing N. Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) (02)27724277 TACBTWTP054

Department of Business No.77, Guancian Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23118811 TACBTWTP056

Chengdong Branch No.87, Songjiang Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25070111 TACBTWTP060

Da-an Branch No.1, Ln. 81, Sec. 2, Dunhua S. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27553482 TACBTWTP076

Mincyuan Branch No.58, Sec. 3, Mincyuan E. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25057011 TACBTWTP077

Dong Taipei Branch No.325, Sec. 4, Jhongsiao E. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27721234 TACBTWTPXXX

Chengnei Branch No.87, Hengyang Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23311041 TACBTWTPXXX

Jianguo Branch No.77, Sec. 3, Sinyi Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27027851 TACBTWTPXXX

Yuanshan Branch No.89-4, Sec. 2, Jhongshan N. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25113245 TACBTWTPXXX

Sinyi Branch No.172, Sec. 4, Sinyi Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27067188 TACBTWTP083

Changchun Branch No.201, Changchun Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25035015 TACBTWTPXXX

Ren-ai Branch No.325, Sec. 4, Ren-ai Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27763071 TACBTWTP085

Yucheng Branch No.815, Sec. 5, Jhongsiao E. Rd., Nangang Dist., Taipei City 115, Taiwan (R.O.C.) (02)27856060 TACBTWTPXXX

Guting Branch No.65, Sec. 1, Heping E. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)23949205 TACBTWTPXXX



Branch Name Address Telephone SWIFT Code

Chang-an Branch No.9, Sec. 1, Chang-an E. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25637181 TACBTWTP088

Songsing Branch No.202-1, Sec. 5, Nanjing E. Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) (02)27643131 TACBTWTPXXX

Minzu Branch No.277, Sec. 3, Chengde Rd., Datong Dist., Taipei City 103, Taiwan (R.O.C.) (02)25962271 TACBTWTP090

Fusing Branch No.237, Sec. 1, Fusing S. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27541111 TACBTWTP091

Shuanglian Branch No.113, Minsheng W. Rd., Datong Dist., Taipei City 103, Taiwan (R.O.C.) (02)25577151 TACBTWTPXXX

Minsheng Branch No.77, Sec. 3, Minsheng E. Rd., Songshan Dist., Taipei City 10480, Taiwan (R.O.C.) (02)25162338 TACBTWTP093

Sinsheng Branch No.93, Sec. 1, Sinsheng S. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27771888 TACBTWTPXXX

Songjiang Branch No.152, Songjiang Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25224567 TACBTWTP095

Yongji Branch No.279, Songshan Rd., Sinyi Dist., Taipei City 110, Taiwan (R.O.C.) (02)27675226 TACBTWTPXXX

Offshore Banking Branch

6F., No.325, Sec. 4, Jhongsiao E. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27400628 TACBTWTP106

Beining Branch No.16, Sec. 4, Nanjing E. Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) (02)25798811 TACBTWTPXXX

Fudan Branch No.100, Sec. 4, Civic Blvd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27215551 TACBTWTPXXX

Taida Branch B1., No.7-B, Jhongshan S. Rd., Jhongjheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23568071 TACBTWTPXXX

Sansing Branch No.77, Sec. 2, Keelung Rd., Sinyi Dist., Taipei City 110, Taiwan (R.O.C.) (02)27388181 TACBTWTPXXX

Dunhua Branch No.88, Sec. 1, Dunhua S. Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) (02)27769666 TACBTWTPXXX

Shihpai Branch B1., No.201, Sec. 2, Shihpai Rd., Beitou Dist., Taipei City 112, Taiwan (R.O.C.) (02)28747611 TACBTWTPXXX

Neihu Branch No.502, Rueiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) (02)26590001 TACBTWTP156

Nangang Branch No.19-13, Sanchong Rd., Nangang Dist., Taipei City 115, Taiwan (R.O.C.) (02)26550777 TACBTWTPXXX

Sinhu Branch No.255, Sinhu 2nd Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) (02)27908118 TACBTWTPXXX

Zihciang Branch No.85, Sec. 2, Nanjing E. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)21003100 TACBTWTP501

Jhongshan Branch No.2, Sec. 2, Nanjing E. Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)25214065 TACBTWTP502

Dunnan Branch No.362, Sec. 1, Dunhua S. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27011117 TACBTWTP503

World Trade Center Branch

2F., No.333, Sec. 1, Keelung Rd., Sinyi Dist., Taipei City 110, Taiwan (R.O.C.) (02)27291333 TACBTWTP505

Guangfu South Road Branch

No.102, Guangfu S. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27518770 TACBTWTPXXX

Bei Shihlin Branch No.837, Sec. 5, Jhongshan N. Rd., Shihlin Dist., Taipei City 111, Taiwan (R.O.C.) (02)88665959 TACBTWTP508

Sinwei Branch No.303, Sec. 1, Fusing S. Rd., Da-an Dist., Taipei City 106, Taiwan (R.O.C.) (02)27053828 TACBTWTPXXX

Sihu Branch No.206, Rueiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) (02)27971989 TACBTWTP510



Dahu Branch No.314, Sec. 6, Mincyuan E. Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) (02)26328600 TACBTWTPXXX

National Medical Center Branch

No.325, Sec. 2, Chenggong Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) (02)87925745 TACBTWTPXXX

Nanmen Branch No.97, Sec. 1, Roosevelt Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.) (02)23966363 TACBTWTPXXX

Dajhih Branch No.409, Bei-an Rd., Jhongshan Dist., Taipei City 104, Taiwan (R.O.C.) (02)85099188 TACBTWTP504

Ganghu Branch No.223, Chongyang Rd., Nangang Dist., Taipei City 115, Taiwan (R.O.C.) (02)27862268 TACBTWTPXXX

New Taipei City

Xindian Branch No.32, Guangming St., Xindian Dist., New Taipei City 231, Taiwan (R.O.C.) (02)29111111 TACBTWTPXXX

Liouhe Branch No.2, Sanmin Rd., Xindian Dist., New Taipei City 231, Taiwan (R.O.C.) (02)29172911 TACBTWTPXXX

Yonghe Branch No.575, Jhongjheng Rd., Yonghe Dist., New Taipei City 234, Taiwan (R.O.C.) (02)29236611 TACBTWTPXXX

Sanchong Branch No.17, Jhengyi S. Rd., Sanchong Dist., New Taipei City 241, Taiwan (R.O.C.) (02)29738111 TACBTWTP010

Banciao Branch No.20, Sec. 1, Wunhua Rd., Banciao Dist., New Taipei City 220, Taiwan (R.O.C.) (02)29660971 TACBTWTP011

Sijhih Branch No.225, Jhongsiao E. Rd., Sijhih Dist., New Taipei City 221, Taiwan (R.O.C.) (02)26413211 TACBTWTPXXX

Sinjhuang Branch No.379, Jhongping Rd., Sinjhuang Dist., New Taipei City 242, Taiwan (R.O.C.) (02)29929981 TACBTWTP049

Jhonghe Branch No.9, Taihe St., Jhonghe Dist., New Taipei City 235, Taiwan (R.O.C.) (02)22499500 TACBTWTP062

Dong Sanchong Branch No.37, Sec. 2, Sanhe Rd., Sanchong Dist., New Taipei City 241, Taiwan (R.O.C.) (02)29728111 TACBTWTP067

Nanshihjiao Branch No.20, Sec. 1, Singnan Rd., Jhonghe Dist., New Taipei City 235, Taiwan (R.O.C.) (02)29461266 TACBTWTPXXX

Dong Sinjhuang Branch No.339, Sihyuan Rd., Sinjhuang Dist., New Taipei City 242, Taiwan (R.O.C.) (02)29973456 TACBTWTP098

Lujhou Branch No.84, Sanmin Rd., Lujhou Dist., New Taipei City 247, Taiwan (R.O.C.) (02)82825678 TACBTWTPXXX

Haishan Branch No.443, Sec. 2, Wunhua Rd., Banciao Dist., New Taipei City 220, Taiwan (R.O.C.) (02)22551333 TACBTWTPXXX

Pucian Branch 2F., No.33, Sec. 2, Sanmin Rd., Banciao Dist., New Taipei City 220, Taiwan (R.O.C.) (02)29631122 TACBTWTPXXX

Shuanghe Branch No.196, Jian 1st Rd., Jhonghe Dist., New Taipei City 235, Taiwan (R.O.C.) (02)82271627 TACBTWTP144

Tucheng Branch No.96, Sec. 2, Jhongyang Rd., Tucheng Dist., New Taipei City 236, Taiwan (R.O.C.) (02)22651611 TACBTWTP145

Sansia Branch No.61, Wunhua Rd., Sansia Dist., New Taipei City 237, Taiwan (R.O.C.) (02)26747999 TACBTWTPXXX

Erchong Branch No.81, Sec. 1, Guangfu Rd., Sanchong Dist., New Taipei City 241, Taiwan (R.O.C.) (02)29993399 TACBTWTP158

Wugu Branch No.2, Sec. 1, Jhongsing Rd., Wugu Dist., New Taipei City 248, Taiwan (R.O.C.) (02)89769698 TACBTWTPXXX

Shulin Branch No.152, Sec. 1, Jhongshan Rd., Shulin Dist., New Taipei City 238, Taiwan (R.O.C.) (02)86872211 TACBTWTPXXX

Taishan Branch No.148, Sec. 3, Mingjhih Rd., Taishan Dist., New Taipei City 243, Taiwan (R.O.C.) (02)29082811 TACBTWTPXXX

Dapinglin Branch No.67, Mincyuan Rd., Xindian Dist., New Taipei City 231, Taiwan (R.O.C.) (02)29138611 TACBTWTPXXX




Yingge Branch No.175, Jhongshan Rd., Yingge Dist., New Taipei City 239, Taiwan (R.O.C.) (02)86781188 TACBTWTPXXX

Sinshu Branch No.224, Sinshu Rd., Sinjhuang Dist., New Taipei City 242, Taiwan (R.O.C.) (02)22012797 TACBTWTPXXX

Lide Branch No.105, Lide St., Jhonghe Dist., New Taipei City 235, Taiwan (R.O.C.) (02)82282121 TACBTWTPXXX

Bei Jhonghe Branch No.35, Sec. 3, Jhongshan Rd., Jhonghe Dist., New Taipei City 235, Taiwan (R.O.C.) (02)22263667 TACBTWTPXXX

Danfong Branch No.657-10, Jhongjheng Rd., Sinjhuang Dist., New Taipei City 242, Taiwan (R.O.C.) (02)29088979 TACBTWTP536

Nan Tucheng Branch 1F., No.6, Sec. 4, Jhongyang Rd., Tucheng Dist., New Taipei City 236, Taiwan (R.O.C.) (02)22686888 TACBTWTP145

Bei Sansia Branch No.71, Wunhua Rd., Sansia Dist., New Taipei City 237, Taiwan (R.O.C.) (02)26711110 TACBTWTP531

Bansin Branch No.43, Sec. 2, Nanya S. Rd., Banciao Dist., New Taipei City 220, Taiwan (R.O.C.) (02)89663889 TACBTWTP531

Nan Sanchong Branch No.120, Jhengyi N. Rd., Sanchong Dist., New Taipei City 241, Taiwan (R.O.C.) (02)29817117 TACBTWTP532

Beisin Branch No.6, Sec. 1, Beisin Rd., Xindian Dist., New Taipei City 231, Taiwan (R.O.C.) (02)29188321 TACBTWTP535

Baociao Branch No.2, Lane 235, Baociao Rd., Xindian Dist., New Taipei City 231, Taiwan (R.O.C.) (02)29185506 TACBTWTP535

Sintai Branch No.115, Sintai Rd., Sinjhuang Dist., New Taipei City 242, Taiwan (R.O.C.) (02)29986688 TACBTWTP536

Bei Tucheng Branch No.200, Sec. 1, Syuefu Rd., Tucheng Dist., New Taipei City 236, Taiwan (R.O.C.) (02)22731688 TACBTWTPXXX

Nan Sijhih Branch No.94-1, Sec. 1, Sintai 5th Rd., Sijhih Dist., New Taipei City 221, Taiwan (R.O.C.) (02)26968888 TACBTWTP538

Bei Shulin Branch No.793, Jhongjheng Rd., Shulin Dist., New Taipei City 238, Taiwan (R.O.C.) (02)26762789 TACBTWTP531

Wugu Industrial Park Branch

No.119, Wugong Rd., Wugu Dist., New Taipei City 248, Taiwan (R.O.C.) (02)22989898 TACBTWTP536

Danshuei Branch No.119, Jhongjheng Rd., Danshuei Dist., New Taipei City 251, Taiwan (R.O.C.) (02)26211415 TACBTWTPXXX

Keelung City

Keelung Branch No.255, Ren 2nd Rd., Ren-ai Dist., Keelung City 200, Taiwan (R.O.C.) (02)24284181 TACBTWTPXXX

Dong Keelung Branch No.143, Sin 1st Rd., Sinyi Dist., Keelung City 201, Taiwan (R.O.C.) (02)24283111 TACBTWTPXXX

Taoyuan City

Taoyuan Branch No.58, Jhongjheng Rd., Taoyuan Dist., Taoyuan City 330, Taiwan (R.O.C.) (03)3326121 TACBTWTP015

Dasi Branch No.43, Sinyi Rd., Dasi Dist., Taoyuan City 335, Taiwan (R.O.C.) (03)3874666 TACBTWTP015

Gueishan Branch No.1068, Sec. 2, Wanshou Rd., Gueishan Dist., Taoyuan City 333, Taiwan (R.O.C.) (03)3299661 TACBTWTP015

Jhongli Branch No.180, Jhongshan Rd., Jhongli Dist., Taoyuan City 320, Taiwan (R.O.C.) (03)4225141 TACBTWTP015

Longtan Branch No.221, Jhongjheng Rd., Longtan Dist., Taoyuan City 325, Taiwan (R.O.C.) (03)4893512 TACBTWTP015

Cihwun Branch No.720, Jhongjheng Rd., Taoyuan Dist., Taoyuan City 330, Taiwan (R.O.C.) (03)3578811 TACBTWTP015



Hueilong Branch No.163, Sec. 1, Wanshou Rd., Gueishan Dist., Taoyuan City 333, Taiwan (R.O.C.) (02)82098266 TACBTWTP015

Nan Taoyuan Branch No.845, Jhongshan Rd., Taoyuan Dist., Taoyuan City 330, Taiwan (R.O.C.) (03)3692188 TACBTWTP015

Jhongyuan Branch No.392, Sec. 2, Jhongbei Rd., Jhongli Dist., Taoyuan City 320, Taiwan (R.O.C.) (03)4688998 TACBTWTP015

Pingjhen Branch No.290, Sec. 2, Huannan Rd., Pingjhen Dist., Taoyuan City 324, Taiwan (R.O.C.) (03)4689299 TACBTWTP015

Linkou Branch No.49, Wunhua 2nd Rd., Gueishan Dist., Taoyuan City 333, Taiwan (R.O.C.) (03)3183880 TACBTWTP015

Bade Branch No.767, Sec. 1, Jieshou Rd., Bade Dist., Taoyuan City 334, Taiwan (R.O.C.) (03)2185888 TACBTWTP015

Luchu Branch No.387, Dajhu Rd., Lujhu Dist., Taoyuan City 338, Taiwan (R.O.C.) (03)3232010 TACBTWTP545

Dayuan Branch No.47-1, Zhongzheng E. Rd., Dayuan Dist., Taoyuan City 337, Taiwan (R.O.C.) (03)3867733 TACBTWTP543

Dong Taoyuan Branch No.12, Jhonghua Rd., Taoyuan Dist., Taoyuan City 330, Taiwan (R.O.C.) (03)3355009 TACBTWTP543

Lisin Branch No.119, Jhongshan Rd., Jhongli Dist., Taoyuan City 320, Taiwan (R.O.C.) (03)4222131 TACBTWTP544

Nankan Branch No.11, Nanshang Rd., Lujhu Dist., Taoyuan City 338, Taiwan (R.O.C.) (03)3221199 TACBTWTP545

Sinming Branch No.366, Jhongjheng Rd., Jhongli Dist., Taoyuan City 320, Taiwan (R.O.C.) (03)4939393 TACBTWTP544

Yangmei Branch No.10-1, Damo St., Yangmei Dist., Taoyuan City 326, Taiwan (R.O.C.) (03)4754411 TACBTWTP543

Changgung Branch No.5, Fusing St., Gueishan Dist., Taoyuan City 333, Taiwan (R.O.C.) (03)3970781 TACBTWTP543

Hsinchu City

Hsinchu Branch No.23, Jhongjheng Rd., East Dist., Hsinchu City 300, Taiwan (R.O.C.) (03)5244151 TACBTWTP017

Bei Hsinchu Branch No.168, Beida Rd., North Dist., Hsinchu City 300, Taiwan (R.O.C.) (03)5284001 TACBTWTP124

Guangfu Branch No.57, Dongguang Rd., East Dist., Hsinchu City 300, Taiwan (R.O.C.) (03)5753666 TACBTWTP017

Jhucian Branch No.60, Dongmen St., Hsinchu City 300, Taiwan (R.O.C.) (03)5215121 TACBTWTP563

Hsinchu Science-based Industrial Park Branch

No.1, Keji Rd., Hsinchu City 300, Taiwan (R.O.C.) (03)5783962 TACBTWTP564

Hsinchu County

Jhudong Branch No.92, Sec. 2, Changchun Rd., Jhudong Township, Hsinchu County 310, Taiwan (R.O.C.) (03)5963126 TACBTWTP564

Jhubei Branch No.261, Guangming 6th Rd., Jhubei City, Hsinchu County 302, Taiwan (R.O.C.) (03)5546000 TACBTWTP131

Lioujia Branch No.259, Dong Sec. 1, Guangming 6th Rd., Jhubei City, Hsinchu County 302, Taiwan (R.O.C.) (03)6586969 TACBTWTP017

Dong Jhubei Branch No.343, Jhongjheng E. Rd., Jhubei City, Hsinchu County 302, Taiwan (R.O.C.) (03)5540108 TACBTWTP551

Miaoli County

Miaoli Branch No.660, Jhongjheng Rd., Miaoli City, Miaoli County 360, Taiwan (R.O.C.) (037)320921 TACBTWTP018

Toufen Branch No.70, Ren-ai Rd., Toufen Township, Miaoli County 351, Taiwan (R.O.C.) (037)665115 TACBTWTP563




Bei Miaoli Branch No.396, Jhongjheng Rd., Miaoli City, Miaoli County 360, Taiwan (R.O.C.) (037)351111 TACBTWTP018

Zhunan Branch No.218, Daying Rd., Zhunan Township, Miaoli County 350, Taiwan (R.O.C.) (037)466790 TACBTWTP018

Taichung City

Taichung Branch No.2, Sec. 2, Zihyou Rd., Central Dist., Taichung City 400, Taiwan (R.O.C.) (04)22245121 TACBTWTP022

Jhongsing Branch No.5, Gongyuan Rd., Central Dist., Taichung City 400, Taiwan (R.O.C.) (04)22241161 TACBTWTP050

Wucyuan Branch No.61, Sec. 2, Gongyi Rd., Nantun Dist., Taichung City 408, Taiwan (R.O.C.) (04)23229191 TACBTWTP069

Nan Taichung Branch No.789, Jhongming S. Rd., South Dist., Taichung City 402, Taiwan (R.O.C.) (04)22617211 TACBTWTP107

Nantun Branch No.103, Sec. 2, Wucyuan W. Rd., Nantun Dist., Taichung City 408, Taiwan (R.O.C.) (04)24752171 TACBTWTP069

Si Taichung Branch No.151, Sec. 2, Hankou Rd., Situn Dist., Taichung City 407, Taiwan (R.O.C.) (04)23170311 TACBTWTP022

Situn Branch No.67, Sec. 3, Wunsin Rd., Situn Dist., Taichung City 407, Taiwan (R.O.C.) (04)23112411 TACBTWTP022

Beitun Branch No.670, Sec. 4, Wunsin Rd., Beitun Dist., Taichung City 406, Taiwan (R.O.C.) (04)22301199 TACBTWTP050

Bei Taichung Branch No.375, Wucyuan Rd., North Dist., Taichung City 404, Taiwan (R.O.C.) (04)22055588 TACBTWTP022

Jyungong Branch No.315, Sec. 1, Dongshan Rd., Beitun Dist., Taichung City 406, Taiwan (R.O.C.) (04)22390128 TACBTWTP022

Yong-an Branch No.15, Yongfu Rd., Situn Dist., Taichung City 407, Taiwan (R.O.C.) (04)24623181 TACBTWTP022

Jhongcyuan Branch No.728, Sec. 1, Taiwan Blvd., West Dist., Taichung City 403, Taiwan (R.O.C.) (04)22037979 TACBTWTP022

Taiyuan Branch No.247, Beitun Rd., Beitun Dist., Taichung City 406, Taiwan (R.O.C.) (04)22334291 TACBTWTP022

Songjhu Branch No.95, Sec. 2, Changping Rd., Beitun Dist., Taichung City 406, Taiwan (R.O.C.) (04)24228751 TACBTWTP022

Jhongcing Branch No.17, Sec. 2, Zhongqing Rd., Beitun Dist., Taichung City 406, Taiwan (R.O.C.) (04)22913176 TACBTWTP022

Jiancheng Branch No.1499, Jiancheng Rd., East Dist., Taichung City 402, Taiwan (R.O.C.) (04)22873311 TACBTWTP022

Chaoma Branch No.526, Sec. 3, Taiwan Blvd., Situn Dist., Taichung City 407, Taiwan (R.O.C.) (04)27013115 TACBTWTP022

Dong Taichung Branch No.380, Sec. 3, Fusing Rd., South Dist., Taichung City 402, Taiwan (R.O.C.) (04)22203161 TACBTWTP022

Meichun Branch No.136, Sec. 2, Fuxing Rd., South Dist., Taichung City 402, Taiwan (R.O.C.) (04)22614377 TACBTWTP107

Liming Branch No.1064, Sec. 1, Liming Rd., Nantun Dist., Taichung City 408, Taiwan (R.O.C.) (04)23892493 TACBTWTP069

Changping Branch No.163, Sec. 1, Changping Rd., Beitun Dist., Taichung City 406, Taiwan (R.O.C.) (04)22443037 TACBTWTP022

Jingwu Branch No.170, Jingwu E. Rd., East Dist., Taichung City 401, Taiwan (R.O.C.) (04)22116358 TACBTWTP022

Wunsin Branch No.316, Sec. 1, Wunsin Rd., Nantun Dist., Taichung City 408, Taiwan (R.O.C.) (04)23223300 TACBTWTP069

Fongjia Branch No.252, Sec. 2, Situn Rd., Situn Dist., Taichung City 407, Taiwan (R.O.C.) (04)27089075 TACBTWTP022



Sinjhong Branch No.91, Mincyuan Rd., West District, Taichung City 403, Taiwan (R.O.C.) (04)22237711 TACBTWTP516

Jhonggang Branch No.152, Sec. 3, Wunsin Rd., Situn District, Taichung City 407, Taiwan (R.O.C.) (04)23138811 TACBTWTP517

Weidao Branch 1F., No.447, Sec. 1, Zhongqing Rd., North Dist., Taichung City 406, Taiwan (R.O.C.) (04)22987988 TACBTWTP517

Jhongming South Road Branch

No.451, Jhongming S. Rd., West Dist., Taichung City 403, Taiwan (R.O.C.) (04)23764066 TACBTWTP516

Shueinan Branch No.2, Hanxiang Rd., Situn Dist., Taichung City 407, Taiwan (R.O.C.) (04)27029354 TACBTWTP516

Fongyuan Branch No.102, Jhongjheng Rd., Fongyuan Dist., Taichung City 420, Taiwan (R.O.C.) (04)25231122 TACBTWTP020

Shalu Branch No.106, Shatian Rd., Shalu Dist., Taichung City 433, Taiwan (R.O.C.) (04)26622141 TACBTWTP021

Nan Fongyuan Branch No.222, Yuanhuan S. Rd., Fongyuan Dist., Taichung City 420, Taiwan (R.O.C.) (04)25244180 TACBTWTP022

Dali Branch No.384, Sec. 1, Jhongsing Rd., Dali Dist., Taichung City 412, Taiwan (R.O.C.) (04)24934111 TACBTWTP102

Taiping Branch No.84, Jhongsing Rd., Taiping Dist., Taichung City 411, Taiwan (R.O.C.) (04)22761515 TACBTWTP022

Wurih Branch No.598, Sec. 1, Jhongshan Rd., Wurih Dist., Taichung City 414, Taiwan (R.O.C.) (04)23369911 TACBTWTP022

Shenggang Branch No.799-1, Zhongzheng Rd., Shengang Dist., Taichung City 429, Taiwan (R.O.C.) (04)25621111 TACBTWTP554

Daya Branch No.95, Sec. 2, Yahuan Rd., Daya Dist., Taichung City 428, Taiwan (R.O.C.) (04)25660199 TACBTWTP022

Tanzih Branch 1F., No.281, Sec. 2, Jhongshan Rd., Tanzih Dist., Taichung City 427, Taiwan (R.O.C.) (04)25325566 TACBTWTP050

Fongjhong Branch No.351, Jhongjheng Rd., Fongyuan Dist., Taichung City 420, Taiwan (R.O.C.) (04)25280369 TACBTWTP554

Bei Dali Branch No.261, Sec. 2, Sinren Rd., Dali Dist., Taichung City 412, Taiwan (R.O.C.) (04)24836699 TACBTWTP516

Dong Shalu Branch No.307, Guanghua Rd., Shalu Dist., Taichung City 433, Taiwan (R.O.C.) (04)26653311 TACBTWTP021

Houli Branch No.233-3, Sanfong Rd., Houli Dist., Taichung City 421, Taiwan (R.O.C.) (04)25563188 TACBTWTP020

Nantou County

Nantou Branch No.96, Jhongshan St., Nantou City, Nantou County 540, Taiwan (R.O.C.) (049)2234141 TACBTWTP025

Jhushan Branch No.839, Sec. 3, Jishan Rd., Jhushan Township, Nantou County 557, Taiwan (R.O.C.) (049)2652721 TACBTWTP022

Puli Branch No.299, Sec. 2, Jhongshan Rd., Puli Township, Nantou County 545, Taiwan (R.O.C.) (049)2986411 TACBTWTP022

Caotun Branch No.864, Jhongjheng Rd., Caotun Township, Nantou County 542, Taiwan (R.O.C.) (049)2338141 TACBTWTP516

Jiji Branch No.176, Minsheng Rd., Jiji Township, Nantou County 552, Taiwan (R.O.C.) (049)2761501 TACBTWTP516

Dong Puli Branch No.320, Jhongjheng Rd., Puli Township, Nantou County 545, Taiwan (R.O.C.) (049)2989160 TACBTWTP584

Changhua County

Changhua Branch No.279, Minsheng Rd., Changhua City, Changhua County 500, Taiwan (R.O.C.) (04)7225151 TACBTWTP023

Yuanlin Branch No.844, Sec. 1, Jhongshan Rd., Yuanlin City, Changhua County 510, Taiwan (R.O.C.) (04)8322181 TACBTWTP024




Jhangying Branch No.532, Minzu Rd., Changhua City, Changhua County 500, Taiwan (R.O.C.) (04)7229221 TACBTWTP023

Jhangchu Branch No.321, Sec. 1, Jhongjheng Rd., Changhua City, Changhua County 500, Taiwan (R.O.C.) (04)7240082 TACBTWTP023

Sihu Branch No.56, Sihuan Rd., Sihu Township, Changhua County 514, Taiwan (R.O.C.) (04)8829121 TACBTWTP510

Hemei Branch No.361, Sec. 6, Luhe Rd., Hemei Township, Changhua County 508, Taiwan (R.O.C.) (04)7570123 TACBTWTP023

Dajhu Branch No.239, Sec. 2, Jhangnan Rd., Changhua City, Changhua County 500, Taiwan (R.O.C.) (04)7373311 TACBTWTP023

Shengang Branch No.35, Sinsing Rd., Shengang Township, Changhua County 509, Taiwan (R.O.C.) (04)7996922 TACBTWTP023

Lugang Branch No.120, Minzu Rd., Lugang Township, Changhua County 505, Taiwan (R.O.C.) (04)7788511 TACBTWTP023

Yuansin Branch No.733, Sec. 1, Jhongshan Rd., Yuanlin City, Changhua County 510, Taiwan (R.O.C.) (04)8322741 TACBTWTP560

Nan Changhua Branch No.43, Siaoyang Rd., Changhua City, Changhua County 500, Taiwan (R.O.C.) (04)7254611 TACBTWTP560

Beidou Branch No.168, Jhongjheng Rd., Beidou Township, Changhua County 521, Taiwan (R.O.C.) (04)8880181 TACBTWTP560

Yunlin County

Douliou Branch No.3, Datong Rd., Douliou City, Yunlin County 640, Taiwan (R.O.C.) (05)5323981 TACBTWTP566

Beigang Branch No.53, Yimin Rd., Beigang Township, Yunlin County 651, Taiwan (R.O.C.) (05)7836136 TACBTWTP028

Huwei Branch No.15, Jhongjheng Rd., Huwei Township, Yunlin County 632, Taiwan (R.O.C.) (05)6313821 TACBTWTP028

Linnei Branch No.21, Jhongsi Rd., Linnei Township, Yunlin County 643, Taiwan (R.O.C.) (05)5897811 TACBTWTP566

Yunlin Branch No.223, Minsheng Rd., Douliou City, Yunlin County 640, Taiwan (R.O.C.) (05)5324811 TACBTWTP566

Chiayi City

Chiayi Branch No.279, Guohua St., East Dist., Chiayi City 600, Taiwan (R.O.C.) (05)2224571 TACBTWTP028

Nan Chiayi Branch No.746, Minzu Rd., West Dist., Chiayi City 600, Taiwan (R.O.C.) (05)2286311 TACBTWTP028

Bei Chiayi Branch No.3, De-an Rd., West Dist., Chiayi City 600, Taiwan (R.O.C.) (05)2815500 TACBTWTP028

Dong Chiayi Branch No.425, Mincyuan Rd., Chiayi City 600, Taiwan (R.O.C.) (05)2225281 TACBTWTP584

Chiayi County

Puzih Branch No.62, Haitong Rd., Puzih City, Chiayi County 613, Taiwan (R.O.C.) (05)3794171 TACBTWTP028

Bei Puzih Branch No.3, Wunhua N. Rd., Puzih City, Chiayi County 613, Taiwan (R.O.C.) (05)3790808 TACBTWTP584

Tainan City

Tainan Branch No.48, Chenggong Rd., West Central Dist., Tainan City 700, Taiwan (R.O.C.) (06)2232101 TACBTWTP030

Chenggong Branch No.97, Sec. 1, Beimen Rd., East Dist., Tainan City 700, Taiwan (R.O.C.) (06)2269161 TACBTWTP031

Nansing Branch No.72, Sec. 2, Minsheng Rd., West Central Dist., Tainan City 700, Taiwan (R.O.C.) (06)2221291 TACBTWTP030



Chengda Branch No.138, Shengli Rd., East Dist., Tainan City 704, Taiwan (R.O.C.) (06)3028001 TACBTWTP030

Dong Tainan Branch No.197, Sec. 2, Jhonghua E. Rd., East Dist., Tainan City 701, Taiwan (R.O.C.) (06)2882211 TACBTWTP030

Bei Tainan Branch No.159, Sec. 3, Simen Rd., North Dist., Tainan City 704, Taiwan (R.O.C.) (06)2209211 TACBTWTP030

Chihkan Branch No.204, Chenggong Rd., North Dist., Tainan City 704, Taiwan (R.O.C.) (06)2201302 TACBTWTP521

Fucheng Branch No.380, Sec. 2, Jiankang Rd., South Dist., Tainan City 702, Taiwan (R.O.C.) (06)2910896 TACBTWTP521

Kaiyuan Branch No.147, Kaiyuan Rd., North Dist., Tainan City 704, Taiwan (R.O.C.) (06)2753345 TACBTWTP521

Xinying Branch No.115, Jhongshan Rd., Xinying Dist., Tainan City 730, Taiwan (R.O.C.) (06)6324121 TACBTWTP028

Jiali Branch No.83, Heping St., Jiali Dist., Tainan City 722, Taiwan (R.O.C.) (06)7223131 TACBTWTP030

Yongkang Branch No.357, Jhonghua Rd., Yongkang Dist., Tainan City 710, Taiwan (R.O.C.) (06)2316971 TACBTWTP153

Bei Xinying Branch No.360, Minjhih Rd., Xinying Dist., Tainan City 730, Taiwan (R.O.C.) (06)6562718 TACBTWTP584

Rende Branch No.4, Sec. 3, Jhongjheng Rd., Rende Dist., Tainan City 717, Taiwan (R.O.C.) (06)2794616 TACBTWTP570

Nan Yongkang Branch No.202, Jhonghua Rd., Yongkang Dist., Tainan City 710, Taiwan (R.O.C.) (06)3121916 TACBTWTP153

Kaohsiung City

Kaohsiung Branch No.97, Dayong Rd., Yancheng Dist., Kaohsiung City 803, Taiwan (R.O.C.) (07)5514221 TACBTWTP034

Cianjhen Branch No.56, Caoya 1st Rd., Cianjhen Dist., Kaohsiung City 806, Taiwan (R.O.C.) (07)8416491 TACBTWTPAAB

Sinsing Branch No.110, Cisian 2nd Rd., Sinsing Dist., Kaohsiung City 800, Taiwan (R.O.C.) (07)2887121 TACBTWTP034

Siande Branch No.182, Gongjheng Rd., Cianjhen Dist., Kaohsiung City 806, Taiwan (R.O.C.) (07)7112046 TACBTWTP035

Bei Kaohsiung Branch No.232, Jhonghua 3rd Rd., Sanmin Dist., Kaohsiung City 801, Taiwan (R.O.C.) (07)2863000 TACBTWTP034

Lingya Branch No.394, Cingnian 1st Rd., Sinsing Dist., Kaohsiung City 800, Taiwan (R.O.C.) (07)2918151 TACBTWTP034

Sanmin Branch No.30, Bo-ai 1st Rd., Sanmin Dist., Kaohsiung City 807, Taiwan (R.O.C.) (07)3127191 TACBTWTP059

Nan Kaohsiung Branch No.94, Sanduo 3rd Rd., Cianjhen Dist., Kaohsiung City 802, Taiwan (R.O.C.) (07)3348141 TACBTWTP352

Tashun Branch No.20, Dashun 3rd Rd., Lingya Dist., Kaohsiung City 802, Taiwan (R.O.C.) (07)7131886 TACBTWTP034

Dong Kaohsiung Branch

No.176, Minsheng 1st Rd., Sinsing District, Kaohsiung City 800, Taiwan (R.O.C.) (07)2265666 TACBTWTP034

Cianjin Branch No.45, Jhonghua 4th Rd., Lingya Dist., Kaohsiung City 802, Taiwan (R.O.C.) (07)3363966 TACBTWTP352

Wannei Branch No.675, Jiangong Rd., Sanmin Dist., Kaohsiung City 807, Taiwan (R.O.C.) (07)3861591 TACBTWTP128

Guanghua Branch No.148-82, Guanghua 1st Rd., Sinsing Dist., Kaohsiung City 800, Taiwan (R.O.C.) (07)2223020 TACBTWTP034

Yisin Lu Branch No.119, Yisin 2nd Rd., Cianjhen Dist., Kaohsiung City 806, Taiwan (R.O.C.) (07)3332020 TACBTWTP034

Zuoying Branch No.580, Bo-ai 2nd Rd., Zuoying Dist., Kaohsiung City 813, Taiwan (R.O.C.) (07)5562226 TACBTWTP059




Gushan Branch No.352, Jhonghua 1st Rd., Gushan Dist., Kaohsiung City 804, Taiwan (R.O.C.) (07)5223311 TACBTWTP524

Kaohsiung Software Park Branch

No.11-2, Chenggong 2nd Rd., Cianjhen Dist., Kaohsiung City 806, Taiwan (R.O.C.) (07)5351888 TACBTWTP352

Gangdu Branch No.230, Jhongjheng 4th Rd., Cianjin District, Kaohsiung City 801, Taiwan (R.O.C.) (07)2914131 TACBTWTP524

Cisian Branch No.216, Cisian 1st Rd., Sinsing District, Kaohsiung City 800, Taiwan (R.O.C.) (07)2365503 TACBTWTP525

Shihcyuan Branch No.189, Bo-ai 1st Rd., Sanmin Dist., Kaohsiung City 807, Taiwan (R.O.C.) (07)3230611 TACBTWTP527

Jiouru Branch No.581, Jyuemin Rd., Sanmin Dist., Kaohsiung City 807, Taiwan (R.O.C.) (07)3805001 TACBTWTP524

Siaogang Branch No.526, Hongping Rd., Siaogang Dist., Kaohsiung City 812, Taiwan (R.O.C.) (07)8062289 TACBTWTP524

Fongshan Branch No.95, Jhongjheng Rd., Fongshan Dist., Kaohsiung City 830, Taiwan (R.O.C.) (07)7460181 TACBTWTP032

Gangshan Branch No.2, Siaocian Rd., Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.) (07)6216161 TACBTWTP033

Lujhu Branch No.68, Guochang Rd., Lujhu Dist., Kaohsiung City 821, Taiwan (R.O.C.) (07)6966122 TACBTWTPAAC

Singfong Branch No.32, Jhongshan Rd., Fongshan Dist., Kaohsiung City 830, Taiwan (R.O.C.) (07)7453101 TACBTWTP032

Dafa Branch No.345, Fonglin 3rd Rd., Daliao Dist., Kaohsiung City 831, Taiwan (R.O.C.) (07)7830589 TACBTWTP032

Dashe Branch No.177-1, Cueiping Rd., Dashe Dist., Kaohsiung City 815, Taiwan (R.O.C.) (07)3582121 TACBTWTP524

Linyuan Branch No.200, Linyuan N. Rd., Linyuan Dist., Kaohsiung City 832, Taiwan (R.O.C.) (07)6416171 TACBTWTP524

Chi Shan Branch No.3, Huazhong St., Qishan Dist., Kaohsiung City 84243, Taiwan (R.O.C.) (07)6622333 TACBTWTP524

Fongsong Branch No.3-4, Fongsong Rd., Fongshan Dist., Kaohsiung City 830, Taiwan (R.O.C.) (07)7471131 TACBTWTP524

Bei Gangshan Branch No.12, Jhongshan N. Rd., Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.) (07)6222871 TACBTWTP524

Meinong Branch No.172-2, Tai'an Rd., Meinong Dist., Kaohsiung City 843, Taiwan (R.O.C.) (07)6816101 TACBTWTP122

Dashu Branch No.2-8, Jhongsing E. Rd., Dashu Dist., Kaohsiung City 840, Taiwan (R.O.C.) (07)6517726 TACBTWTP524

Renmei Branch No.87-2, Syuetang Rd., Renmei Village, Niaosong Dist., Kaohsiung City 833, Taiwan (R.O.C.) (07)7321370 TACBTWTP032

Wujia Branch No.164, Wujia 2nd Rd., Fongshan Dist., Kaohsiung City 830, Taiwan (R.O.C.) (07)7172250 TACBTWTP032

Nanzih Branch No. 1111, Houchang Rd., Nanzih Dist., Kaohsiung City 81152, Taiwan (07)3625678 TACBTWTP524

Pingtung County

Pingtung Branch No.42, Jhongjheng Rd., Pingtung City, Pingtung County 900, Taiwan (R.O.C.) (08)7343611 TACBTWTP034

Chaojhou Branch No.91-1, Sinsheng Rd., Chaojhou Township, Pingtung County 920, Taiwan (R.O.C.) (08)7883101 TACBTWTP034

Pingnan Branch No.287, Minsheng Rd., Pingtung City, Pingtung County 900, Taiwan (R.O.C.) (08)7326391 TACBTWTP122

Donggang Branch No.186, Sec. 1, Guangfu Rd., Donggang Township, Pingtung County 928, Taiwan (R.O.C.) (08)8353701 TACBTWTP122



Wandan Branch No.661, Sec. 2, Jhongsing Rd., Wanhuei Village, Wandan Township, Pingtung County 913, Taiwan (R.O.C.)

(08)7779311 TACBTWTP122

Fangliao Branch No.255-2, Zhongshan Rd., Fangliao Township, Pingtung County 940, Taiwan (R.O.C.) (08)8787611 TACBTWTP122

Shepi Branch No.500, Sec. 2, Shepi Rd., Wandan Township, Pingtung County 913, Taiwan (R.O.C.) (08)7071578 TACBTWTP122

Yilan County

Yilan Branch No.30, Sec. 3, Jhongshan Rd., Yilan City, Yilan County 260, Taiwan (R.O.C.) (03)9323911 TACBTWTPXXX

Su-ao Branch No.56, Yugang Rd., Su-ao Township, Yilan County 270, Taiwan (R.O.C.) (03)9962521 TACBTWTPXXX

Luodong Branch No.51, Gongjheng Rd., Luodong Township, Yilan County 265, Taiwan (R.O.C.) (03)9545191 TACBTWTPXXX

Bei Luodong Branch No.54, Jhongjheng N. Rd., Luodong Township, Yilan County 265, Taiwan (R.O.C.) (03)9545795 TACBTWTP541

Jiaosi Branch No.32, Sec. 5, Jiaosi Rd., Jiaosi Township, Yilan County 262, Taiwan (R.O.C.) (03)9887100 TACBTWTPXXX

Hualien County

Hualien Branch No.124, Jhongshan Rd., Hualien City, Hualien County 970, Taiwan (R.O.C.) (03)8338111 TACBTWTPXXX

Bei Hualien Branch No.371, Jhongshan Rd., Hualien City, Hualien County 970, Taiwan (R.O.C.) (03)8350151 TACBTWTPXXX

Taitung County

Taitung Branch No.336, Sec. 1, Jhonghua Rd., Taitung City, Taitung County 950, Taiwan (R.O.C.) (089)323011 TACBTWTPXXX

Dong Taitung Branch No.181, Datong Rd., Taitung City, Taitung County 950, Taiwan (R.O.C.) (089)325130 TACBTWTP524

Penghu County

Penghu Branch No.26, Ren’ai Rd., Magong City, Penghu County 880, Taiwan (R.O.C.) (06)9272766 TACBTWTPXXX



7.3 Overseas Units Unit Name Address Tel/Fax/Email

United Taiwan Bank

7F Boulevard du Regent 45/46, 1000 Brussels, Belgium

Tel: +322-2305359 Fax: +322-2300470 Email: [email protected]

Manila Offshore Banking Branch

26th Floor, Citibank Tower, 8741, Paseo de Roxas, Makati City, Metro Manila, Philippines

Tel:+632-8481959 Fax: +632-8481952 Email: [email protected]

Los Angeles Branch

601, South Figueroa Street, Suite 3500, Los Angeles, CA 90017 U.S.A.

Tel: +1-213-4895433 Fax: +1-213-4895195 Email: [email protected]

Seattle Branch 1201, Third Avenue, Suite 1200, Seattle, WA 98101 U.S.A.


New York Branch 88 Pine Street, 31st Floor, New York, New York 10005, U.S.A.

Tel:+1-212-6341818 Fax:+1-212-6341828 E-mail：[email protected]

Hong Kong Branch

Suites 1303-1310, 13/F, Dah Sing Financial Centre, 108, Gloucester Road, Wanchai, Hong Kong

Tel: +852-25981128 Fax: +852-25981028 Email: [email protected]

Suzhou Branch Room 1601, No.24 Building, Times Square, Hua Chi St., SIP, Suzhou 215028, China


Suzhou New District Sub-Branch

Room 3601, 36 Floor, No.28 Shishan Road.SND, Suzhou 215011 China


Tianjin Branch Room 1801,1802,1803,1804,1807,18 Floor, Golden Valley Center Building 1, No.1 Binjiang Road, Heping District, Tianjin, 300041 China

Tel: +86-22-58526999 Fax:+86-22-59956011 E-mail: [email protected]

Fuzhou Branch Room 2608, 26F, Shenglong Financial Center, Guangming Nan Road No.1, Fuzhou 350000 China

Tel: +86-591-86320069 Fax: +86-591-86320109 E-mail: [email protected]

Sydney Branch Suite 101, Level 1, 50 Carrington Street, Sydney NSW 2000, Australia


Phnom Penh Branch

No.171, Norodom Blvd Corner Street 322, Sangkat Boeng Keng Kang Ti Muoy, Khan Chamkarmon, Phnom Penh, Cambodia


Tuek Thla Sub-Branch

Tuek Thla Building No.A111, Confederation de la Russie Blvd Corner Northbridge Street, Sangkat Tuek Thla, Khan Saen Sok, Phnom Penh, Cambodia


Pur Senchey Sub-Branch

Building No.62, National Road 4, Sangkat Chaom Chau, Khan Pur Senchey, Phnom Penh, Cambodia


Beijing Representative Office

Room 1805, Office Tower 1, Henderson Centre, 18 Floor, No. 18, Jianguomen Nei Avenue, Dong Cheng District, Beijing, 100005 China


Yangon Representative Office

Unit No. 80-01, Level 8, Union Financial Centre (UFC), Corner of Maharbandoola Road and Thein Phyu Road, Botahtaung Township, Yangon, Myanmar

Tel: +95-18610478 Email: [email protected]

Head Office United Taiwan Bank Manila Offshore Banking Branch

Los Angeles Branch Seattle Branch Hong Kong Branch

Suzhou Branch Suzhou New District Sub-Branch Tianjin Branch

Fuzhou Branch Sydney Branch Phnom Penh Branch

Phnom Penh Phnom Penh New York Branch Tuek Thla Sub-Branch Pur Senchey Sub-Branch Beijing Yangon Representative Office Representative Office

Notice to readers This English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.


Chairman

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Documents

Taiwan Cooperative Bank Disclosure... · 2016-06-29 · Taiwan Cooperative Bank Messsage to Shareholders3 zDeposits At the end of 2015, our deposit balance was NTD 2,504.3 billion,