本國銀行業國際化經營的挑戰與經驗分享 2015年12月5日

銀行業務是個需要長期經營的產業 近10年來全球銀行市值排名變化 Rank　 Dec 2003 Market Cap. (USD$Bn) Dec 2008 Dec 2014 1 Citigroup 250 ICBC 174 Wells Fargo 284 2 HSBC 171 CCB 128 270 3 BOA 119 JP Morgan Chase 118 234 4 99 115 213 5 RBS 86 BOC 98 188 6 UBS 80 ABC 187 7 74 Banco Santander 75 181 8 Wachovia 61 71 178 9 Barclays 57 MUFJ 70 164 10 US Bancorp BBVA 45 Commonwealth 112 http://www.relbanks.com/worlds-top-banks/market-cap-2014 Source: www.relbanks.com ; ICBC(Industrial and Commercial Bank of China), CCB(China Construction Bank), ABC (Agricultural Bank of China), MUFJ(Mitsubishi UFJ Financial), BBVA(Banco Bilbao Vizcaya Argentaria)

Annual global CEO survey (2011, PwC survey) 企業加速全球化的步伐與範圍 Annual global CEO survey (2011, PwC survey) 全球企業在Home Market感受到成長性不足的壓力，與日俱增 Q: 貴公司的Home Market的未來成長性如何? (受訪者回覆業務擴張比例) MME: Less than $100mn 13% MME: $100mn~999mn 24% LC: $1bn~10bn 38% LC: Over $10bn 43% Low Medium High 並計畫透過海外擴張，以取得額外的成長機會 Q. 未來幾年，貴公司在以下地區的營運規模是否有增加的計畫? (受訪者回覆業務擴張比例) 各地區營運擴張計劃 Home market North America Western Europe Africa Asia Australia Eastern Europe LaAm Middle east Africa Asia CEE LaAm Middle east North America Western Europe 93% 89% 33% 100% 75% 29% 36% 73% 88% 77% 40% 80% 70% 32% 87% 83% 55% 71% 69% 86% 18% 59% 47% 48% 31% 50% 0% 85% 25% 64% 94% 67% 51% 74% 92% 57% Source: PWC 0% 100%

全球人口老化趨勢加快，2050年65歲以上人口占比將倍增… (Dependency ratio = 每100位工作人口所需扶養的65歲以上人口數) Source: BCG

主管機關監管力道日趨嚴格(1) 2009年至2014年，國際性銀行已付出$178Bn的合規費用 金融風暴後，與主管機關相關之訴訟費用已顯著成長 其中，尤以美國銀行受影響最多，65%的費用產生在美國銀行，歐洲銀行則負擔其餘35% 大部分的費用是用於支付美國主管機關提出之罰款 美國各主要銀行亦大幅增加合規部門人員 JP Morgan預計於合規部門增加13,000人 花旗在2011-2013年間新增約6,000合規人員 匯豐於2013當年度新增1,800合規人員 其中，花旗與匯豐全球同期繼續執行集團裁員計畫 Source: BCG

主管機關監管力道日趨嚴格(2) 監管力道在三方面持續加強: 金融穩定、消費者保護、金融分隔與退場 Source: BCG

大家的成長願景: 成為亞洲領先的區域型銀行 We are ranked among top 50 Asia banks… …with superior results over regional peers Rank Total Asset in 2014 (USD Bn) Benchmark/ Ranking CTBC 1 2 3 4 5 6 7 8 9 10 20 21 23 30 32 35 39 40 45 47 50 ICBC 3,368 CCB 2,736 Asset ABC 2,611 USD 108 Bn Rank # 47 BOC 2,492 MUFJ 1,752 Japan Post Bank 1,732 ROAE (pretax) China Development Bank 1,686 24.4% / 15.9% 12.0% SMBC 1,303 (Median of Top 50 Asia Banks) Mizuho bank 1,024 Bank of Communications P/B Sumitomo Mitsui Trust Bank 1.44x ~1.1x DBS (Avg of Asia Banks) OCBC Woori Bank Moody’s Credit Rating UOB A2 A1 Maybank (Median of Top 50 Asia Banks) Bank of Taiwan Standard Chartered Bank(HK) Overseas/ Total profit (exclude OBU) China Zheshang Bank 33% 38% CTBC Bank (DBS, OCBC) Chengdu Rural Commerical Bank Source: Bankscope, CTBC 2014 Assets

可能的成長策略: 建立並成長差異化的Customer Franchise Capital market rewards 5 differentiated strategies with forward value Key characteristics of 5 value-creating strategies Top 500 banks market capitalization ($Bn) Total forward value ($Bn) Global-at-scale Universals Deliver steady profit growth through a relentless quest for global economies of scale and scope Forward Value 200 (16%) Global-at-scale Universals 1,234 Growth Market Champion Deliver strong top-line growth by effectively capitalizing on large and fast-growing markets Dominant emerging market banks Growth Market Champion 185 (15%) Distinctive Customer Franchise Deliver growth and returns through investment in a set of distinctive customer propositions for retail, commercial, and corporate segments Key performance highlights Premium pricing Higher customer profitability from x-selling Strength in sizable and high growth segments Distinctive Customer Franchise 493 (40%) Book Value 5,750 120 (10%) Balance-sheet Light Specialist Balance-sheet Light Specialist Deliver strong returns by investing in value-added, low risk institutional services, while shedding capital intensive services 246 (20%) Back-to-basics Back-to-basics Deliver steady profit growth with a simple proposition, sustainable cost advantages, and tight managed risk 20132013 Forward value Source: McKinsey Research

花旗專注於最佳化既有海外布點來支持獲利成長 ASEAN銀行專注於深化特定優先市場的海外布點 除中國外，台灣同業正積極尋找ASEAN的併購機會 國際與國內銀行正重新調整海外發展策略 花旗專注於最佳化既有海外布點來支持獲利成長 ASEAN銀行專注於深化特定優先市場的海外布點 退出無控制權的投資，專注於核心市場 專注於印尼、印度與大中華 退出菲律賓的少數股權投資 市場吸引力 最佳化後再推動成長 18 markets ~55% revenue ~69% efficiency ratio ~0.7% ROA Large developed markets (US, UK) 投資來支持成長 20 markets ~30% revenue ~49% efficiency ratio ~1.9% ROA Fast growing emerging markets (China, India, HK, Singapore, Mexico) 重組 21 markets ~10% revenue ~73% efficiency ratio ~0.4% ROA Unprofitable markets (Japan, ) 維持現況 48 markets ~5% revenue ~43% efficiency ratio ~2.5% ROA Small niche markets (Taiwan) 專注於強化優先成長市場的據點 馬來西亞、印尼、中國與香港 高 除中國外，台灣同業正積極尋找ASEAN的併購機會 透過自發性成長與併購尋求於ASEAN布局的擴張 印尼、菲律賓、馬來西亞、泰國、緬甸 於主要市場設點分行與入股策略夥伴, 透過雙管道參與市場獲利 低 專注於整合中國的布局與尋求ASEAN市場的併購機會 印尼、菲律賓、新加坡 弱 強 花旗網絡的強度

Peers Comparison: Regional Presence Fubon: 以大中華區為發展重心,將轉向東南亞(印尼,菲律賓,新加坡)潛力市場 E-Sun: 在台商市場及東南亞顯擇性布點 Mega: 多以分行型態經營台商法金業務 Cathay: 積極在東南亞(印尼,菲律賓,馬來西亞,泰國)布局,尋找投資機會 Maybank: 偏重在東南亞布局 UOB: 在亞洲市場布局相對完整 H.Q. Subsidiary Branch Agency, Offshore Rep. Office Strategic Inv. Under planning International Banks ASEAN-based Banks Taiwan-based Banks US: “Agency” DBS, OCBC, UOB An agency primarily makes commercial and corporate loans and finances international transactions. An agency does not have general deposit-taking authority, though it may receive credit balances, as described below, related to its operations. OCBC in Philippines: A Rep. office of “Bank of Singapore” (private banking) HSBC DBS OCBC UOB Maybank CTBC Cathay Mega E-Sun Fubon U.S. Canada Developed markets Japan S. Korea Australia India China Hong Kong HangSeng (62%) Indonesia Rep. Office Philippines BPI (20.3%) RCBC (20%) Malaysia Emerging markets Thailand Singapore IB Asia (50%) Viet Nam ABBANK (20%) INDOVINA (50%) Myanmar Cambodia UCB (70%) Brunei Laos PDR Branch

Globalization in Phases Phase I: Business - follow the clients - offshore banking unit (OBU) - correspondent banks Phase II: Beachhead - setting up shop - rep. office, branch, subsidiary Phase III: Building - growing the franchise - building network Phase IV: Benchmarking - regional / global - second home markets - global standards / rules (resource/capital allocation)

經驗分享: A Few Words on Career in Banking CTBC CEO on talent. DBS TW CEO: Where are the talents now? 五年級, 六年級, 七年級… Luke’s story International bank experience

Reference Materials: The Road Back (McKinsey) World Retail Banking Report 2015 (Capgemini) Taiwan Banks Sector In-Depth (Moody’s) Global Trend (CTBC internal) https://www.bcgperspectives.com/content/articles/financial_institutions_growth_building_transparent_bank_global_risk_2014_2015/ http://www.relbanks.com/worlds-top-banks/market-cap

Challenges Can you name a few internal challenges to globalization? How about a few external challenges, too?

Solutions How may we address the internal challenges? And for the external challenges?

Each Team/Group Pls Pick One Country as Example Corporate governance (branch, subsidiary) Regulatory, domestic requirements (e.g. priority sector lending, expatriate policy) Local infrastructural support (e.g. JCIC) ‘Global policy’implementation Operational consistency Talent management

The Road Not Taken Robert Frost Two roads diverged in a yellow wood, And sorry I could not travel both And be one traveler, long I stood And looked down one as far as I could To where it bent in the undergrowth; Then took the other, as just as fair, And having perhaps the better claim, Because it was grassy and wanted wear; Though as for that the passing there Had worn them really about the same, And both that morning equally lay In leaves no step had trodden black. Oh, I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back. I shall be telling this with a sigh Somewhere ages and ages hence: Two roads diverged in a wood, and I – I took the one less travelled by, And that has made all the difference.