Q2 2026 Fubon Financial Holding Co Earnings Call
[Company Representative] (Fubon Financial Holding): H1 2026 results briefing. We will begin with the overall financial highlights and then go through the performance of the major subsidiaries. In page 5, the holding company delivered another strong set of results. The net income reached over TWD 97 billion, and the after-tax FVOCI equity disposal gain is another TWD 91 billion. From the balance sheet perspective, the total asset is over TWD 13.7 trillion. That is up by over 15%, and the net worth exceeds TWD 1.2 trillion. That is up by over 55%. Therefore, that brings the adjusted net worth over TWD 1.6 trillion, and adjusted book value per share reached TWD 109.30. In each of the subsidiaries, in Fubon Life, the profit, combined with the FVOCI disposal gain, reached over TWD 143 billion. That set another historical high level.
[Company Representative] (Fubon Financial): H1 2026 results briefing. We will begin with the overall financial highlights and then go through the performance of the major subsidiaries. In page five, the holding company delivered another strong set of results. The net income reached over TWD 97 billion, and the after-tax FVOCI equity disposal gain is another TWD 91 billion.
Speaker #1: First half 2026, result briefing. We'll begin with the overall financial highlights and then go through the performance of the major subsidiaries. On page 5, the holding company delivered another strong set of results, with net income reaching over $97 billion, and the after-tax FBOCI equity disposal gain was another $91 billion.
Speaker #1: And from the balance sheet perspective, the total assets are over $13.7 trillion, up by over 15%. The net worth exceeds $1.2 trillion, which is up by over 55%.
[Company Representative] (Fubon Financial): From the balance sheet perspective, the total asset is over TWD 13.7 trillion. That is up by over 15%, and the net worth exceeds TWD 1.2 trillion. That is up by over 55%. Therefore, that brings the adjusted net worth over TWD 1.6 trillion, and adjusted book value per share reached TWD 109.30. In each of the subsidiaries, in Fubon Life, the profit, combined with the FVOCI disposal gain, reached over TWD 143 billion. That set another historical high level.
Speaker #1: And therefore, let's bring the adjusted net worth over 1.6 trillion and adjusted book value per share, that reached 109 dollars 30 cents. In each of the subsidiaries, in Fubon Life, the profit combined with the FBOCI disposal gain, that reached over 143 billion, that set another historical high level.
Speaker #1: While the premium side remained the second largest, investment return at the total level reached over 9%, including the FBOCI disposal gains. In Taipei Fubon Bank, the net income was up by over 30% year over year, setting another historical high and reaching over $25 billion.
[Company Representative] (Fubon Financial Holding): The premium side remains the second-largest in investment return, the total level reached over 9% plus, including FVOCI disposal gains. In Taipei Fubon Bank, the net income up by over 30% year-over-year. That sets another historical high and reached over TWD 25 billion. It was driven by both the NII and the fee, while the asset quality remains stable. In Fubon Securities, the net income also reached a historical high level that benefits from the trading activity in the Taiwan Stock Exchange, while its market position remains solid at top three across major business lines. In Fubon Insurance, the net income also grows and reached TWD 5.5 billion plus, and combined with the FVOCI gains, that reached over TWD 7.4 billion. With the premium growth of over 8% and market share of over 24%, keeping its number one market position.
[Company Representative] (Fubon Financial): The premium side remains the second-largest in investment return, the total level reached over 9% plus, including FVOCI disposal gains. In Taipei Fubon Bank, the net income up by over 30% year-over-year. That sets another historical high and reached over TWD 25 billion. It was driven by both the NII and the fee, while the asset quality remains stable.
Speaker #1: It was driven by both the NII and also the fee, while the asset quality remained stable. In Fubon Securities, the net income also reached a historical high level, benefiting from the trading activity in the China stock market.
[Company Representative] (Fubon Financial): In Fubon Securities, the net income also reached a historical high level that benefits from the trading activity in the Taiwan Stock Exchange, while its market position remains solid at top three across major business lines. In Fubon Insurance, the net income also grows and reached TWD 5.5 billion plus, and combined with the FVOCI gains, that reached over TWD 7.4 billion. With the premium growth of over 8% and market share of over 24%, keeping its number one market position.
Speaker #1: While its market position remained solid at top 3 across major business lines, in Fubon Insurance, again, the net income also grew and reached $5.5 billion plus. Combined with the FBOCI gains, that reached over $7.4 billion.
Speaker #1: With premium growth of over 8% and a market share of over 24%, we maintained our number one market position. The combined ratio further improved, and investment return reached over 10%, including the FBOCI gains.
[Company Representative] (Fubon Financial Holding): With the combined ratio further improved, and investment return reached over 10%, including the FVOCI gains. In page 6, as we assess Fubon's profitability and the dividend-paying capacity, we will consider both the reported earnings and the realized FVOCI gains. Here we can see the net income of TWD 97 billion, and combined with the FVOCI disposal gains of over TWD 91 billion. Put it together, that was equivalent of TWD 13.17 per share. That also set a record high for the same period in the history. In page 7, it shows the profit contribution by subsidiaries. We can see all major subsidiaries all deliver a year-over-year growth in H1. Taipei Fubon Bank's security insurance from Fubon Bank (Hong Kong) and Fubon Bank (China) all reach its record high level.
[Company Representative] (Fubon Financial): With the combined ratio further improved, and investment return reached over 10%, including the FVOCI gains. In page 6, as we assess Fubon's profitability and the dividend-paying capacity, we will consider both the reported earnings and the realized FVOCI gains. Here we can see the net income of TWD 97 billion, and combined with the FVOCI disposal gains of over TWD 91 billion. Put it together, that was equivalent of TWD 13.17 per share.
Speaker #1: On page 6, as we assess Fubon's profitability and also the dividend-paying capacity, we'll consider both the reported earnings and also the realized FBOCI gains.
Speaker #1: So here we can see the net income of $97 billion, and combined with the FBOCI disposal gains of over $91 billion, put together, that will be equivalent to $13.17 per share.
Speaker #1: That also set a record high for the same period in history. On page 7, it shows the profit contribution by subsidiaries. We can see all major subsidiaries delivered year-over-year growth in the first half, while Taipei Fubon Bank, Fubon Insurance, Fubon Bank Hong Kong, and Fubon Bank China all reached their record high levels.
[Company Representative] (Fubon Financial): That also set a record high for the same period in the history. In page 7, it shows the profit contribution by subsidiaries. We can see all major subsidiaries all deliver a year-over-year growth in H1. Taipei Fubon Bank's security insurance from Fubon Bank (Hong Kong) and Fubon Bank (China) all reach its record high level.
Speaker #1: And in Fubon Life, if we look at the net income together with the FBOCI disposal gain after tax, it also reached a record high.
[Company Representative] (Fubon Financial Holding): In Fubon Life, if we look at the net income together with the FVOCI disposal gain after tax, it also reached the record high. Overall speaking, it demonstrates the strength of Fubon's diversified financial platform nature. In page 8, turning to the balance sheet. As of end of H1, the total asset is over TWD 13.7 trillion. That is up by 15.7%, and the net worth is over TWD 1.2 trillion. That is up by over 55%. On the adjusted net worth basis, including the after-tax CSM, that reached over TWD 1.6 trillion, and also reached a per share basis of TWD 109.30. Also worth noting that the unaudited net worth in July remained broadly stable compared to the level of June under the market's volatility. That also demonstrates the resilience of Fubon's capital position under the changing capital market condition.
[Company Representative] (Fubon Financial): In Fubon Life, if we look at the net income together with the FVOCI disposal gain after tax, it also reached the record high. Overall speaking, it demonstrates the strength of Fubon's diversified financial platform nature. In page 8, turning to the balance sheet. As of end of H1, the total asset is over TWD 13.7 trillion. That is up by 15.7%, and the net worth is over TWD 1.2 trillion. That is up by over 55%.
Speaker #1: And overall speaking, it demonstrates the strength of Fubon’s diversified financial platform nature. On page 8, turning to the balance sheet, as of the end of the first half, total assets are over $13.7 trillion, which is up by 15.7%, and the net worth is over $1.2 trillion, up by over 55%.
Speaker #1: And on the adjusted net worth basis, including the after-tax CSM, that reached over $1.6 trillion, and also reached a per share basis of $109.30.
[Company Representative] (Fubon Financial): On the adjusted net worth basis, including the after-tax CSM, that reached over TWD 1.6 trillion, and also reached a per share basis of TWD 109.30. Also worth noting that the unaudited net worth in July remained broadly stable compared to the level of June under the market's volatility. That also demonstrates the resilience of Fubon's capital position under the changing capital market condition.
Speaker #1: And it's also worth noting that the unaudited net worth in July remained broadly stable compared to the level in June, despite the market's volatility.
Speaker #1: That also demonstrates the resilience of Fubon's capital position under the changing capital market conditions. On page 9, in terms of the return metrics, the annualized ROA and ROE are 1.47% and 18%, respectively.
[Company Representative] (Fubon Financial Holding): In page 9, in terms of the return metrics, the annualized ROA and ROE is 1.47% and 18% respectively. While adding into the FVOCI disposal gains from equity, the adjusted basis of ROA will be 2.85%, and adjusted ROE will be 34.8%. In page 10, we highlight to you the ESG progress in the H1 for your reference. Moving to the section of Fubon Life. In page 12, we summarize the key metrics. On the business side, the FYP reached TWD 85 billion. That is up by over 35% year-over-year. The new business CSM is TWD 34.9 billion. That is up by over 11%, while the CSM balance reach over TWD 428 billion. That is up by 6.4% year-to-date. On the financial performance, the net income will be TWD 55.6 billion, while we add the FVOCI equity disposal gains, that is TWD 87.7 billion.
[Company Representative] (Fubon Financial): In page 9, in terms of the return metrics, the annualized ROA and ROE is 1.47% and 18% respectively. While adding into the FVOCI disposal gains from equity, the adjusted basis of ROA will be 2.85%, and adjusted ROE will be 34.8%. In page 10, we highlight to you the ESG progress in the H1 for your reference. Moving to the section of Fubon Life. In page 12, we summarize the key metrics.
Speaker #1: While adding into the FBOCI disposal gains from equity, the adjusted basis of ROA will be 2.85%, and adjusted ROE will be 34.8%. On page 10, we highlight for you the ESG progress in the first half for your reference.
Speaker #1: Moving to the section on Fubon Life, on page 12 we summarize the key metrics. On the business side, first-year premiums reached $85 billion, which is up by over 35% year over year.
[Company Representative] (Fubon Financial): On the business side, the FYP reached TWD 85 billion. That is up by over 35% year-over-year. The new business CSM is TWD 34.9 billion. That is up by over 11%, while the CSM balance reach over TWD 428 billion. That is up by 6.4% year-to-date. On the financial performance, the net income will be TWD 55.6 billion, while we add the FVOCI equity disposal gains, that is TWD 87.7 billion.
Speaker #1: And the new business CSM is $34.9 billion, that is up by over 11%. Meanwhile, the CSM balance reached over $428 billion, which is up by 6.4% year to date.
Speaker #1: And on the financial performance, the net income will be $55.6 billion. While if we add the FBOCI equity disposal gains, that's $87.7 billion. So put it together, we'll have $143.3 billion.
[Company Representative] (Fubon Financial Holding): So put it together, we will have TWD 143.3 billion. The net worth continue to grow, while the adjusted net worth, including the after-tax CSM, reached TWD 1.2 trillion. Also the equity to asset ratio of 15.3% or adjusted basis of over 21%, that indicate a strong capital position in Fubon Life. In page 13, if we further look into the profit component, the insurance service result is TWD 19.8 billion, mainly supported by the CSM amortization, while the financial result contribute TWD 54 billion, coming from the recurring investment income, the valuation mark to market, and also the realized investment gains. Including the after-tax FVOCI equity disposal gains, the combined amount will be TWD 143.3 billion. That also bring the ROA and ROE adjusted basis of 4.56% for adjusted ROA and 14.53% for adjusted ROE.
[Company Representative] (Fubon Financial): So put it together, we will have TWD 143.3 billion. The net worth continue to grow, while the adjusted net worth, including the after-tax CSM, reached TWD 1.2 trillion. Also the equity to asset ratio of 15.3% or adjusted basis of over 21%, that indicate a strong capital position in Fubon Life.
Speaker #1: The net worth continued to grow, while the adjusted net worth, including the after-tax CSM, reached $1.2 trillion. Also, the equity-to-asset ratio of 15% and 15.3%, or an adjusted basis of over 21%, indicates a strong capital position in Fubon Life.
[Company Representative] (Fubon Financial): In page 13, if we further look into the profit component, the insurance service result is TWD 19.8 billion, mainly supported by the CSM amortization, while the financial result contribute TWD 54 billion, coming from the recurring investment income, the valuation mark to market, and also the realized investment gains. Including the after-tax FVOCI equity disposal gains, the combined amount will be TWD 143.3 billion. That also bring the ROA and ROE adjusted basis of 4.56% for adjusted ROA and 14.53% for adjusted ROE.
Speaker #1: On page 13, if we further look into the profit component, the insurance service result is $19.8 billion, mainly supported by the CSM amortization, while the financial result contributed $54 billion.
Speaker #1: Coming from the recurring investment income, the valuation mark-to-market, and also the realized investment gains. And including the after-tax FBOCI equity disposal gains, the combined amount will be $143.3 billion.
Speaker #1: That also brings the ROA and ROE on an adjusted basis to 4.56% for adjusted ROA and 40.53% for adjusted ROE. On page 14, the total premium is up by more than 18%, mainly driven by the first-year premium, which is up by over 35%.
[Company Representative] (Fubon Financial Holding): In page 14, the total premium up by 18%+, and mainly driven by the FYP up by over 35%. As we can see, the participating policy and also investment-linked product are a key growth driver. Fubon Life maintain its leading position as the second largest in terms of FIP, renewal premium, and also the total premium. In page 15, it shows more detail on the FIP by product and also by channel. As we see, the capital markets strong, and therefore support the par policy and also investment link. While the strong sales of the US dollar product from the par policy that bring up the share of the non-NTD share. So we can see it can go up from 60.5% up to 76.1% if we include in the investment-linked product for H1, 2026 versus 2025.
[Company Representative] (Fubon Financial): In page 14, the total premium up by 18%+, and mainly driven by the FYP up by over 35%. As we can see, the participating policy and also investment-linked product are a key growth driver. Fubon Life maintain its leading position as the second largest in terms of FIP, renewal premium, and also the total premium. In page 15, it shows more detail on the FIP by product and also by channel.
Speaker #1: As we can see, the participating policy and also investment-linked product are the key growth drivers. Fubon Life maintains its leading position as the second largest in terms of FIP renewal premium and also total premium.
Speaker #1: On page 15, it shows more detail on the FIP by product and also by channel. As we see, the capital markets are strong and therefore support the policy and also investment-linked.
[Company Representative] (Fubon Financial): As we see, the capital markets strong, and therefore support the par policy and also investment link. While the strong sales of the US dollar product from the par policy that bring up the share of the non-NTD share. So we can see it can go up from 60.5% up to 76.1% if we include in the investment-linked product for H1, 2026 versus 2025.
Speaker #1: While the strong sales of the US dollar product from the policy led to an increase in the share of the non-NTD share, we can see it go up from 60.5% to 76.1% if we exclude the investment-linked product for the first half of '26 versus '25.
Speaker #1: And that will be a positive factor from the SLR abilities perspective. And by channel, the first-year premium from the Thai agent grew by over 40%, and from Taipei Fubon Bank also delivered strong growth of over 80%.
[Company Representative] (Fubon Financial Holding): That will be a positive factor from the SLR abilities perspective. By channel, the FYP from the tied agent grow by over 40%, and from Taipei Fubon Bank also deliver strong growth of over 80%. Together with other affiliate channels under Fubon Financial Holding, including Fubon Securities and P&C, et cetera, the internal channels contribute a total of over 85% of the FIP. This also highlights the strength of Fubon's internal platform and cross-selling capability. In the FYP perspective, it came down by 5.3% year-over-year, mainly reflect a higher mix from a single premium and the shorter term payment product. Even so, the FYP to FIP ratio of 33.9% still above the industry average. While the product mix shift is in response to the market condition and also the customer preference, Fubon will continue to maintain relatively decent business quality.
[Company Representative] (Fubon Financial): That will be a positive factor from the SLR abilities perspective. By channel, the FYP from the tied agent grow by over 40%, and from Taipei Fubon Bank also deliver strong growth of over 80%. Together with other affiliate channels under Fubon Financial Holding, including Fubon Securities and P&C, et cetera, the internal channels contribute a total of over 85% of the FIP. This also highlights the strength of Fubon's internal platform and cross-selling capability.
Speaker #1: And together with other affiliate channels under Fubon Financials, including securities and P&C, etc., the internal channels contribute a total of over 85% of the FYP.
Speaker #1: And this also highlights the strength of Fubon's internal platform and cross-selling capability. From the FIPE perspective, it came down by 5.3% year over year, mainly reflecting a higher mix from the single premium and the shorter-term payment product.
[Company Representative] (Fubon Financial): In the FYP perspective, it came down by 5.3% year-over-year, mainly reflect a higher mix from a single premium and the shorter term payment product. Even so, the FYP to FIP ratio of 33.9% still above the industry average. While the product mix shift is in response to the market condition and also the customer preference, Fubon will continue to maintain relatively decent business quality.
Speaker #1: And even so, the FIPE to FIP ratio of 33.9% is still above the industry average, while the product mix shift is in response to market conditions and also customer preference.
Speaker #1: And Fubon will continue to maintain relatively decent business quality. On page 17, from the CSM perspective, the CSM balance reached $428.9 billion as of the end of June 26.
[Company Representative] (Fubon Financial Holding): In page 17, from the CSM perspective. The CSM balance reached TWD 428.9 billion as of end of June 2026. That increase of about 6.4% year to date. The growth was mainly driven by the new business contribution. CSM release that support the underwriting profit with the release rate of about 3.4% in H1. The new business CSM grows at 11.4% year-over-year on the right-hand side bar chart, while the new business CSM margin decline that reflects the increase of the sales in the shorter term payment product. While overall speaking, the CSM balance remain an important indicator for the future insurance service results and the long-term business value. In page 18, it summarize Fubon Life's investment portfolio. Total invested asset reached over TWD 5.4 trillion at the end of June.
[Company Representative] (Fubon Financial): In page 17, from the CSM perspective. The CSM balance reached TWD 428.9 billion as of end of June 2026. That increase of about 6.4% year to date. The growth was mainly driven by the new business contribution. CSM release that support the underwriting profit with the release rate of about 3.4% in H1.
Speaker #1: And that increase of about 6.4% year to date, and the growth was mainly driven by the new business contribution and CSM release that supported the underwriting profit, with the release rate at about 3.4% in the first half.
Speaker #1: The new business CSM grew 11.4% year over year, as shown on the right-hand side bar chart. While the new business CSM margin declined, that reflects the increase in sales of shorter-term payment products.
[Company Representative] (Fubon Financial): The new business CSM grows at 11.4% year-over-year on the right-hand side bar chart, while the new business CSM margin decline that reflects the increase of the sales in the shorter term payment product. While overall speaking, the CSM balance remain an important indicator for the future insurance service results and the long-term business value. In page 18, it summarize Fubon Life's investment portfolio. Total invested asset reached over TWD 5.4 trillion at the end of June.
Speaker #1: While, overall speaking, the CSM balance remains an important indicator for future insurance service results and long-term business value. On page 18, it summarizes Fubon Life's investment portfolio.
Speaker #1: So total invested asset reached over 5.4 trillion, at the end of June. And the fixed income overseas remain the largest asset class, that is about half of the total investment.
[Company Representative] (Fubon Financial Holding): The fixed income overseas remain the largest asset class, that is about half of the total investment, followed by the domestic fixed income at 16% and domestic equity at 12.1%. The total investment return reached 9.18%, supported by the strong domestic equity market performance. At the same time is the high cash level of around 5% plus that continue to be a source for Fubon Life to dynamically adjust its asset allocation in response to the market condition. In page 19, we look specifically at overseas fixed income. We continue to focus on investment-grade corporate credit and financial bonds. In terms of region, primarily in North America, followed by the Europe and also the Asia and others. In page 20, this summarize component of the investment income after the cancellation of the overlay approach in 2026. In H1, the recurring investment income was TWD 79.6 billion.
[Company Representative] (Fubon Financial): The fixed income overseas remain the largest asset class, that is about half of the total investment, followed by the domestic fixed income at 16% and domestic equity at 12.1%. The total investment return reached 9.18%, supported by the strong domestic equity market performance. At the same time is the high cash level of around 5% plus that continue to be a source for Fubon Life to dynamically adjust its asset allocation in response to the market condition.
Speaker #1: This was followed by domestic fixed income at 16% and domestic equity at 12.1%. The total investment return reached 9.18%, supported by strong domestic equity market performance.
Speaker #1: And also, at the same time, the high cash level of around 5% plus continues to be a source for Fubon Life to dynamically adjust its asset allocation in response to market conditions.
Speaker #1: On page 19, we look specifically at overseas fixed income. We continue to focus on investment-grade corporate credit and financial bonds. In terms of region, our investments are primarily in North America, followed by Europe, and also Asia and others.
[Company Representative] (Fubon Financial): In page 19, we look specifically at overseas fixed income. We continue to focus on investment-grade corporate credit and financial bonds. In terms of region, primarily in North America, followed by the Europe and also the Asia and others. In page 20, this summarize component of the investment income after the cancellation of the overlay approach in 2026. In H1, the recurring investment income was TWD 79.6 billion.
Speaker #1: On page 20, this summarizes the components of investment income after the cancellation of the overlay approach in '26. In the first half, the recurring investment income was $79.6 billion.
Speaker #1: That was the bulk of the investment income. That was $138.3 billion, with the return at 5.35%. And further, if we include the FEOCI disposal gains before tax, that was $99.6 billion.
[Company Representative] (Fubon Financial Holding): That was the bulk of the investment income that was TWD 138.3 billion, with the return at 5.35%. Further, if we include in the FVOCI disposal gains before tax, that was TWD 99.6 billion, and the total amount will reach to TWD 37.9 billion. On the return basis, that will translate into 9.18%. Compared to the same period last year, the increase mainly reflect higher gains in the domestic and also overseas equity market, and while the FX related cost came down. In page 21, here we focus on the hedging and also the FX reserve. As the narrowing of the NTD and the US interest rate differential that come in more slowly, so the swap costs improve also become more mildly. While the FX gain and losses, and also the net provision for FX reserve is stable.
[Company Representative] (Fubon Financial): That was the bulk of the investment income that was TWD 138.3 billion, with the return at 5.35%. Further, if we include in the FVOCI disposal gains before tax, that was TWD 99.6 billion, and the total amount will reach to TWD 37.9 billion. On the return basis, that will translate into 9.18%. Compared to the same period last year, the increase mainly reflect higher gains in the domestic and also overseas equity market, and while the FX related cost came down.
Speaker #1: And the total amount will reach $237.9 billion. And on a return basis, that will translate into 9.18%. Compared to the same period last year, the increase mainly reflects higher gains in the domestic and also overseas equity markets.
Speaker #1: And while the FX-related cost came down, on page 21 here we focus on the hedging and also the FX reserve. As the narrowing of the NT and US interest rate differential is coming more slowly.
[Company Representative] (Fubon Financial): In page 21, here we focus on the hedging and also the FX reserve. As the narrowing of the NTD and the US interest rate differential that come in more slowly, so the swap costs improve also become more mildly. While the FX gain and losses, and also the net provision for FX reserve is stable.
Speaker #1: So the swap cost improvement also became more moderate. While the FX, again, losses and also the net provision for FX reserve are stable. And Fubon Life's FX reserve continues to accumulate, reaching over $153 billion in the first half.
[Company Representative] (Fubon Financial Holding): In Fubon Life, the FX reserve continue to accumulate, which it reached over TWD 153 billion in H1. This also remain as the highest level in the industry. We continue to manage the hedge ratio and also the foreign currency exposure prudently. In page 22, in terms of the spread, the cost of liability improved year-over-year, which reflect the adoption of the IFRS 17 under the current rate basis. The spread between investment returns and cost of liability. Also the recurring ones that remain positive. The total investment return, including MVLCI disposal gains, outperformed the same period last year. That brings to a widened spread and same for the recurring yield after hedge and FX provision also widening that reflect a lower hedging ratio and also the reduced hedging costs.
[Company Representative] (Fubon Financial): In Fubon Life, the FX reserve continue to accumulate, which it reached over TWD 153 billion in H1. This also remain as the highest level in the industry. We continue to manage the hedge ratio and also the foreign currency exposure prudently. In page 22, in terms of the spread, the cost of liability improved year-over-year, which reflect the adoption of the IFRS 17 under the current rate basis.
Speaker #1: And this also remains at the highest level in the industry. We continue to manage the hedge ratio and foreign currency exposure prudently.
Speaker #1: On page 22, in terms of the spread, the cost of liability improved year over year, which reflects the adoption of IFRS 17 under the current rate basis.
Speaker #1: And the spread between investment returns and cost of liability also the recurring ones that remain positive. And the total investment return including FEOCI disposal gains outperform the same period last year, that bring to a widened spread and send for the recurring yield after hedge and FX provision also widening that reflect a lower hedging ratio and also the reduced hedging cost.
[Company Representative] (Fubon Financial): The spread between investment returns and cost of liability. Also the recurring ones that remain positive. The total investment return, including MVLCI disposal gains, outperformed the same period last year. That brings to a widened spread and same for the recurring yield after hedge and FX provision also widening that reflect a lower hedging ratio and also the reduced hedging costs.
[Company Representative] (Fubon Financial Holding): In page 23, the net worth during H1 was further improved, driven by the net income contribution, higher FVOCI's asset on back of the equity market, and also a lower insurance account liability due to the higher risk-free rate in Taiwan and US. The adjusted basis of the net worth also shows the adjusted equity to asset ratio of 21.2%. This shows Fubon Life a solid capital buffer. In page 25, we move on to Taipei Fubon Bank. Fubon Bank delivered a strong revenue growth in H1. The total revenue increased by 25.8%, mainly supported by the net interest income growth of 27% and also the net fee income of over 39%. The NII growth reflects both the volume and also the margin. While the fee income now accounts for over 30% of the revenue mix, compared to about 22% in 2023.
[Company Representative] (Fubon Financial): In page 23, the net worth during H1 was further improved, driven by the net income contribution, higher FVOCI's asset on back of the equity market, and also a lower insurance account liability due to the higher risk-free rate in Taiwan and US. The adjusted basis of the net worth also shows the adjusted equity to asset ratio of 21.2%. This shows Fubon Life a solid capital buffer.
Speaker #1: On page 23, the net worth during the first half was further improved, driven by the net income contribution, higher FEOCI's asset on the back of the equity market, and also a lower insurance contract liability due to the higher risk-free rate in Taiwan and the US.
Speaker #1: The adjusted basis of the net worth also shows the adjusted equity-to-asset ratio of 21.2%, which demonstrates that Fubon Life has a solid capital buffer. On page 25, we move on to Taipei Fubon Bank.
[Company Representative] (Fubon Financial): In page 25, we move on to Taipei Fubon Bank. Fubon Bank delivered a strong revenue growth in H1. The total revenue increased by 25.8%, mainly supported by the net interest income growth of 27% and also the net fee income of over 39%. The NII growth reflects both the volume and also the margin. While the fee income now accounts for over 30% of the revenue mix, compared to about 22% in 2023.
Speaker #1: Taipei Fubon Bank delivered strong revenue growth in the first half. Total revenue increased by 25.8%, mainly supported by net interest income growth of 27% and net fee income growth of over 39%.
Speaker #1: The NII growth reflects both the volume and also the margin, while the fee income now accounts for over 30% of the revenue mix, compared to about 22% in year '23.
Speaker #1: And also the combination of the balance sheet expansion with stronger fee income continues to improve the bank's earnings quality and the revenue mix.
[Company Representative] (Fubon Financial Holding): The combination of the balance sheet expansion with the stronger fee income continued to improve the bank's earning quality and also the revenue mix. In page 26, the credit balance increased 14.9% year-over-year. Excluding the government lending, we can see both the corporate and retail credit are double-digit growth. That reflects the franchise expansion and also the healthy customer demand across major business lines. In page 27, for corporate credit, the NTD book increased over 8% year-over-year, which is supported by the SME growing at over 11%. The foreign currency book grew even faster at 27% year-over-year and accounts for 38% of the total corporate credit. That is up by more than 3.6 percentage points for the same period last year. That also reflects corporate clients' cross-border funding demand and also the bank's continuous expansion in the foreign currency book.
[Company Representative] (Fubon Financial): The combination of the balance sheet expansion with the stronger fee income continued to improve the bank's earning quality and also the revenue mix. In page 26, the credit balance increased 14.9% year-over-year. Excluding the government lending, we can see both the corporate and retail credit are double-digit growth. That reflects the franchise expansion and also the healthy customer demand across major business lines.
Speaker #1: On page 26, the credit balance increased 14.9% year over year. Excluding government lending, we can see both corporate and retail credit posted double-digit growth.
Speaker #1: And that reflects the franchise expansion and also the healthy customer demand across major business lines. On page 27, for corporate credit, the entity dollar book increased over 8% year-over-year, which is supported by SME growing at over 11%.
[Company Representative] (Fubon Financial): In page 27, for corporate credit, the NTD book increased over 8% year-over-year, which is supported by the SME growing at over 11%. The foreign currency book grew even faster at 27% year-over-year and accounts for 38% of the total corporate credit. That is up by more than 3.6 percentage points for the same period last year. That also reflects corporate clients' cross-border funding demand and also the bank's continuous expansion in the foreign currency book.
Speaker #1: The foreign currency book grew even faster at 27% year over year, and accounts for 38% of the total corporate credit. That is up by more than 3.6 percentage points from the same period last year.
Speaker #1: That also reflects corporate clients' cross-border funding demand, as well as the bank's continuous expansion in its foreign currency book. On page 28, on the retail side, mortgages increased by 11.6% year over year, mainly driven by home equity loans.
[Company Representative] (Fubon Financial Holding): In page 28, on the retail side, the mortgage increased by 11.6% year-over-year, mainly driven by the home equity loans. While other personal lending mainly reflect the unsecured consumer loans growth at over 40% year-over-year growth. The bank continued to emphasize the customer quality, credit discipline, and also the risk-based pricing. In page 29, the deposit perspective. Overall speaking, it remained healthy and increased by over 15% year-over-year, mainly driven by a higher growth in the NTD book. While the foreign currency loan to deposit ratio is up and reached 35.8%. The bank continued to have a stable funding base and support the further loan growth. In page 30, in terms of the margin, net interest margin increased by 12 basis points year-on-year and reached 1.3%, mainly benefiting from the widening of loan deposit spread.
[Company Representative] (Fubon Financial): In page 28, on the retail side, the mortgage increased by 11.6% year-over-year, mainly driven by the home equity loans. While other personal lending mainly reflect the unsecured consumer loans growth at over 40% year-over-year growth. The bank continued to emphasize the customer quality, credit discipline, and also the risk-based pricing.
Speaker #1: While other personal lending may reflect the unsecured consumer loans growth at over 40% year-over-year growth. And the bank continues to emphasize customer quality, credit discipline, and also risk-based pricing.
[Company Representative] (Fubon Financial): In page 29, the deposit perspective. Overall speaking, it remained healthy and increased by over 15% year-over-year, mainly driven by a higher growth in the NTD book. While the foreign currency loan to deposit ratio is up and reached 35.8%. The bank continued to have a stable funding base and support the further loan growth. In page 30, in terms of the margin, net interest margin increased by 12 basis points year-on-year and reached 1.3%, mainly benefiting from the widening of loan deposit spread.
Speaker #1: On page 29, from the deposit perspective, overall speaking, it remains healthy and increased by over 15% year over year, mainly driven by higher growth in the entity dollar book.
Speaker #1: While the foreign currency loan-to-deposit ratio is up and has reached 35.8%, the bank continues to have a stable funding base and supports further loan growth.
Speaker #1: On page 30, in terms of margin, net interest margin increased by 12 bps year on year and reached 1.3%, mainly benefiting from the widening of the loan-deposit spread.
Speaker #1: And this spread increased by 26 basis points year on year and reached 1.48%. That reflects the deposit structure improvement and also loan structure optimization.
[Company Representative] (Fubon Financial Holding): This spread increased by 26 basis points year-on-year and reached 1.48%, that reflects the deposit structure improvement and also the loan structure optimization. Going forward, the bank continued to manage the structure mix and also asset allocation to sustain the margin improvement. In page 31, the asset quality. It remained a benign level, while the NPL and coverage ratio stayed above industry average. While the asset quality across major business lines also shows a stable trend or improvement. The provision mainly reflects the general provision, so the annualized credit cost is about 11 basis points. In page 32, for credit card business. The card spending increased by 13.3% year-over-year, mainly driven by the growth of overseas spending and also the Costco's affinity card spending. The credit card NPL also remained benign and outperformed the industry average.
[Company Representative] (Fubon Financial): This spread increased by 26 basis points year-on-year and reached 1.48%, that reflects the deposit structure improvement and also the loan structure optimization. Going forward, the bank continued to manage the structure mix and also asset allocation to sustain the margin improvement. In page 31, the asset quality. It remained a benign level, while the NPL and coverage ratio stayed above industry average.
Speaker #1: And going forward, the bank will continue to manage the structure mix and also asset allocation to sustain the margin improvement. On page 31, the asset quality remains at a benign level, while the NPL and coverage ratio stay above the industry average.
Speaker #1: While the asset quality across major business lines also shows a stable trend or improvement, the provisions mainly reflect the general provision. So, the annualized credit cost is about 11 basis points.
[Company Representative] (Fubon Financial): While the asset quality across major business lines also shows a stable trend or improvement. The provision mainly reflects the general provision, so the annualized credit cost is about 11 basis points. In page 32, for credit card business. The card spending increased by 13.3% year-over-year, mainly driven by the growth of overseas spending and also the Costco's affinity card spending. The credit card NPL also remained benign and outperformed the industry average.
Speaker #1: On page 32, for the credit card business, card spending increased by 13.3% year over year, mainly driven by the growth of overseas spending and also co-branded (affinity) card spending.
Speaker #1: The credit card NPL also remains benign and outperforms the industry average. On page 33, the fee income shows strong momentum. Total fee income is up by 39.5% year over year; the growth is across all business lines.
[Company Representative] (Fubon Financial Holding): In page 33, the fee income shows a strong momentum. The total fee up by 39.5% year-over-year. The growth is across all business lines. While the main contributor, the wealth management fee, increased even higher at 44.2% year-over-year. They also reflect growth across the board. That also support the bank's strategic focus to deepen the customer's engagement to expand the wealth management capabilities. In page 34, the overseas branch operation. We continue to expand regionally, so we can see the deposit and loans at the overseas branches in Hong Kong, Vietnam, and Singapore together, that increased by 24.8% in deposits and 32% for loans. The bank continued to deepen the coverage of Taiwanese corporate and also the regional market. Additionally, the new branches in Tokyo, it start operation in May, and followed by Sydney branch in July.
[Company Representative] (Fubon Financial): In page 33, the fee income shows a strong momentum. The total fee up by 39.5% year-over-year. The growth is across all business lines. While the main contributor, the wealth management fee, increased even higher at 44.2% year-over-year. They also reflect growth across the board. That also support the bank's strategic focus to deepen the customer's engagement to expand the wealth management capabilities.
Speaker #1: While the main contributor, the wealth management fee, increased even higher at 44.2% year over year, that also reflects growth across the board. And that also supports the bank's strategic focus to deepen customer engagement and expand the wealth management capabilities.
Speaker #1: On page 34, the overseas branch operation continues to expand regionally. We can see that deposits and loans at our overseas branches in Hong Kong, Vietnam, and Singapore increased by 24.8% for deposits and 32% for loans.
[Company Representative] (Fubon Financial): In page 34, the overseas branch operation. We continue to expand regionally, so we can see the deposit and loans at the overseas branches in Hong Kong, Vietnam, and Singapore together, that increased by 24.8% in deposits and 32% for loans. The bank continued to deepen the coverage of Taiwanese corporate and also the regional market. Additionally, the new branches in Tokyo, it start operation in May, and followed by Sydney branch in July.
Speaker #1: And the bank continues to deepen the coverage of Taiwanese corporates and also the regional market. Additionally, the new branch in Tokyo started operation in May, followed by the Sydney branch in July.
Speaker #1: For the India branch, we aim to commence operations by the end of this year. This development will further strengthen the bank's overseas services, capabilities, and also the cross-border banking franchise.
[Company Representative] (Fubon Financial Holding): While the India branch, we aim to commence the operation by end of this year. This development will further strengthen the bank's overseas services capability and also the cross-border banking franchise. Next, let's move on to page 36 regarding Fubon Securities. Fubon Securities deliver a very strong H1 result, while its net income reached over TWD 11 billion. That is up by over 170% year-on-year. That is also higher than the full year 2025's earning and reached a record high. The result is supported by the strong trading activity and also the record high index level in Taiwan market. While the company also maintain the top 3 market share in all major business, including brokerage, margin loans, and security lending.
[Company Representative] (Fubon Financial): While the India branch, we aim to commence the operation by end of this year. This development will further strengthen the bank's overseas services capability and also the cross-border banking franchise. Next, let's move on to page 36 regarding Fubon Securities. Fubon Securities deliver a very strong H1 result, while its net income reached over TWD 11 billion. That is up by over 170% year-on-year.
Speaker #1: Next, let's move on to page 36 regarding Fubon Securities. Fubon Securities delivered a very strong first half result, with net income reaching over $11 billion, up by over 170% year on year.
Speaker #1: That is also higher than the four-year '25 earning and reached a record high. The result is supported by strong trading activity and also the record-high index level in the Taiwan market.
[Company Representative] (Fubon Financial): That is also higher than the full year 2025's earning and reached a record high. The result is supported by the strong trading activity and also the record high index level in Taiwan market. While the company also maintain the top 3 market share in all major business, including brokerage, margin loans, and security lending.
Speaker #1: While the company also maintains the top three market share in all major businesses, including brokerage, margin loans, and security lending. And going forward, Fubon Securities will continue to focus on lifting its market share in the core business lines and promoting wealth management transformation, while optimizing the digital service platform.
[Company Representative] (Fubon Financial Holding): Going forward, Fubon Securities continue to focus on lift its market share in the core business lines and promote wealth management transformation, while optimize the digital service platform. In page 38, it summarize Fubon Insurance, the P&C business key metrics. In the H1, the direct written premium market share of 24.9% and also the net combined ratio of 86.9%. While the financial performance, the insurance service result of TWD 4.8 billion, and also the financial result of about TWD 1.9 billion. The net income, including the FVOCI disposal gains, that would reach a total of TWD 7.4 billion. The net worth will be over TWD 38 billion, and also the equity to asset ratio of 29.8%, that indicate a solid capital position. In page 39, Fubon Insurance continue to maintain its decent top 1 market position, while the net combined ratio continue to improve.
[Company Representative] (Fubon Financial): Going forward, Fubon Securities continue to focus on lift its market share in the core business lines and promote wealth management transformation, while optimize the digital service platform. In page 38, it summarize Fubon Insurance, the P&C business key metrics. In the H1, the direct written premium market share of 24.9% and also the net combined ratio of 86.9%. While the financial performance, the insurance service result of TWD 4.8 billion, and also the financial result of about TWD 1.9 billion.
Speaker #1: On page 38, it summarizes Fubon's insurance—the P&C business key metrics. In the first half, the direct written premium market share was 24.9%, and the net combined ratio was 86.9%.
Speaker #1: And while the financial performance—the insurance service result of $4.8 billion, and also the financial result of about $1.9 billion. And the net income, including the FEOCI disposal gains, would reach a total of $7.4 billion.
[Company Representative] (Fubon Financial): The net income, including the FVOCI disposal gains, that would reach a total of TWD 7.4 billion. The net worth will be over TWD 38 billion, and also the equity to asset ratio of 29.8%, that indicate a solid capital position. In page 39, Fubon Insurance continue to maintain its decent top 1 market position, while the net combined ratio continue to improve.
Speaker #1: The net worth will be over $38 billion, and also the equity-to-asset ratio is 29.8%. That indicates a solid capital position. On page 39, Fubon Insurance continues to maintain its strong number-one market position, while the net combined ratio continues to improve.
Speaker #1: And as we can see here, it further decreased to 86.9%, compared to 89.4% a year ago. That reflects the continuous optimization of the business mix and also the risk control.
[Company Representative] (Fubon Financial Holding): As we can see here, it further down to 86.9% compared to 89.4% a year ago. They reflect the continuous optimization of the business mix and also the risk control. In page 41, we further move on to the overseas banking operation. So here is the Fubon Bank (Hong Kong). Its loan and deposit are both growing at double digit, with the loan increased by 29% year-on-year, mainly driven by the corporate and financial institution lending. Deposits increased by 19% plus year-on-year, and mainly supported by the retail deposit. The net interest margin was 1.7%, slightly down year-on-year by 2 bps, while the net income increased by over 24%, mainly driven by the scale expansion. Its asset quality, we can see the NPL further improved, and overall speaking, it continue to maintain a decent asset quality.
[Company Representative] (Fubon Financial): As we can see here, it further down to 86.9% compared to 89.4% a year ago. They reflect the continuous optimization of the business mix and also the risk control. In page 41, we further move on to the overseas banking operation. So here is the Fubon Bank (Hong Kong). Its loan and deposit are both growing at double digit, with the loan increased by 29% year-on-year, mainly driven by the corporate and financial institution lending.
Speaker #1: On page 41, we further move on to the overseas banking operations. Here is Fubon Bank Hong Kong. Its loans and deposits are both growing at double digits.
Speaker #1: With the loan increase by 29% year on year, mainly driven by the corporate and financial institution lending. Deposits increase by 99% plus year on year and mainly supported by the retail deposit.
[Company Representative] (Fubon Financial): Deposits increased by 19% plus year-on-year, and mainly supported by the retail deposit. The net interest margin was 1.7%, slightly down year-on-year by 2 bps, while the net income increased by over 24%, mainly driven by the scale expansion. Its asset quality, we can see the NPL further improved, and overall speaking, it continue to maintain a decent asset quality.
Speaker #1: The net interest margin was 1.7%, slightly down year on year by two bps, while the net income increased by over 24%, mainly driven by the scale expansion.
Speaker #1: And its asset quality, we can see the NPL further improved and overall speaking, it continues to maintain a decent asset quality. In Fubon Bank China, the loan and deposit also grew at double digits, with the loan increasing by 15.6% year on year, mainly driven by corporate and also retail.
[Company Representative] (Fubon Financial Holding): In Fubon Bank China, the loan and the deposit also growing at double digit, with the loan increased by 15.6% year on year, and mainly driven by the corporate and also the retail. The deposit increased by 17.4%, driven by mainly the corporate side. A net interest margin increase of 15 basis point that reflect the growth of the online retail lending and also the reduction in USD deposit. While the NIM including swap came down by 9 bps year on year, mainly due to the narrowing of interest rate differential between RMB and also the US. The overall net income increased by over 26% year over year, driven by the higher net interest income and also a lower provision, while its asset quality remains stable. This conclude the presentation for the H1 2026 result.
[Company Representative] (Fubon Financial): In Fubon Bank China, the loan and the deposit also growing at double digit, with the loan increased by 15.6% year on year, and mainly driven by the corporate and also the retail. The deposit increased by 17.4%, driven by mainly the corporate side. A net interest margin increase of 15 basis point that reflect the growth of the online retail lending and also the reduction in USD deposit.
Speaker #1: The deposit increased by 17.4%, driven mainly by the corporate side. Net interest margin increased by 15 basis points, reflecting the growth of online retail lending and also the reduction in US dollar deposits.
Speaker #1: While the NIM including swap came down by 9 bps on the year, mainly due to the narrowing of the interest rate differential between RMB and also the US.
[Company Representative] (Fubon Financial): While the NIM including swap came down by 9 bps year on year, mainly due to the narrowing of interest rate differential between RMB and also the US. The overall net income increased by over 26% year over year, driven by the higher net interest income and also a lower provision, while its asset quality remains stable. This conclude the presentation for the H1 2026 result.
Speaker #1: The overall net income increased by over 26% year over year, driven by higher net interest income and also a lower provision, while its asset quality remains stable.
Speaker #1: So, this concludes the presentation for the first half 26 results. If you have any questions, please visit the investor relations section of the Fubon website, where you can submit your question through the analyst meeting page by text. Alternatively, please feel free to contact Fubon's IR team at ir@fubon.com or call us at your convenience.
[Company Representative] (Fubon Financial Holding): If you have any questions, please visit the investor relations section of the Fubon's website, and there you can submit the question through the analyst meeting page by text. Or please feel free to contact Fubon's IR team at ir@fubon.com and/or call us at your convenience. Thank you, and have a good day.
[Company Representative] (Fubon Financial): If you have any questions, please visit the investor relations section of the Fubon's website, and there you can submit the question through the analyst meeting page by text. Or please feel free to contact Fubon's IR team at ir@fubon.com and/or call us at your convenience. Thank you, and have a good day.
