Thank you for standing by, welcome to Fubon Financial's year 2021 financial results. At this time, all participants will be in listen-only mode. Questions will be taken at the end of the presentation. This call is being recorded. If you have any objections, you may disconnect at this time. Now I'll hand the call over to your host, Ms. Amanda Wang, IR Officer of Fubon Financial Holding. You may begin. Okay. Thank you for joining the call today. I am Amanda, welcome to join our full year 2021 results. In the presentation today, we will begin with the Fubon Financial's performance review, followed by Q&A, hosted by President Hans and the senior management team. Firstly, please turn to page four. The milestone of Fubon Financial in year 2021. From the earnings performance, the EPS has been top Taiwan's FHC for the 13th straight year, and the net profit also hit record high in quite a few subsidiaries. In the operational expansion, we can see that Jih Sun Financial Holding, the successful tender offer that will lead to expansion of the further comprehensive financial services. In China, the capital injection has been completed from Taipei Fubon Bank to Fubon Bank China, that will aim for a stronger bonding between the Greater China area. In the ESG area, Fubon set a few achievements in year 2021, including in the TCFD report, that we are the first one among the Taiwan financial sectors to publish the report, we also aggressively support the clients transfer to more eco-friendly practices. Among the global insurance company, we are also honored to be the top three in the Sustainalytics ESG ranking. In page five. Now, this is highlight for Fubon Financial. In terms of the net profit, we grow up by over 60% and reach TWD 144.6 billion. The net profit, the total asset, and also book value per share all reach record high. In Fubon Life, the net profit growth is the key driver behind the holding company's earning growth. In terms of the premium performance, we remain strong at top two, in investment return improvements and also the hedge cost improvement is the key driver behind. In Taipei Fubon Bank, the net profit reached TWD 18.7 billion. On top of that, there is another TWD 1.2 billion of equity investment gain from NAMC. That is reflected under the OCIs, the total asset scale grow 13% YOY, that bring the overall scale up to TWD 3 trillion. In terms of the business momentum in credit card business, that remains strong, asset quality also stable. In page six. Fubon Insurance, its net profit performance is strong. That is up by over 20% with the market share gain that reached 24.6% and grow over 12% on YOY. Net winners are continuously being a leader in the market for the fourth years. In Fubon Securities, the net profit growth of over 60%, and the key driver behind the brokerage fee, mainly due to the strong market turnover and also the market share gain. In Jih Sun Financial Holding, the net profit reached over TWD 4 billion, and that is over 40% growth, mainly also from the brokerage business in the securities subsidiary. In our pro forma basis, we can see the market share in brokerage, margin loans, and sub-brokerage all go up to the top three position. Also in the banking business, the pro forma numbers of branches also reached 179. That will be the top among the private banks. Okay, please turn to page seven. The net profit TWD 144.6 billion. That is up by over 60%. If we further move on to the first two months this year, net profit is also another strong one with over TWD 38 billion, with EPS of over TWD 3 a share. In page eight, the profit by subsidiaries that we can see that Fubon Life has been a key contributor. That is over 70% of the total earnings. While the banking subsidiaries combined represent around 15%. In page nine, the asset growth of over 13%, that bring our total asset to over TWD 10 trillion. Both the asset and also the net worth reach the record high. In page 10, the ROA and ROE as a result, we can see also growth, which reached 1.49% for ROA and 16.88% for ROE in year 2021. In page 11, the market position across our major four subsidiaries, as you can see here, is a strong one. For Fubon Life, we rank among top two, while in Fubon Insurance is among top one, and in the banking and security business, we all rank at a top leading position. In page 12, as we look into year 2022, the opportunities and challenges that we see, including number one is the economy recovery. That should bring in more growth opportunities. Number two is the ESG perspective that Fubon will leverage its financial expertise to help our clients as well as ourselves toward a more low-carbon business model. In the meantime, we are mindful for a few factors, including, number one, the dynamics in the COVID-19 trend, and secondly, the inflation's impact on the economy and also financial market, and thirdly, also the dynamics of the geopolitics. Response in Fubon's perspective, the opportunities that we see mainly from the clients' management including the Jih Sun Financial Holding consolidation opportunity. That offers a unique growth opportunity to broaden the customer base and also the cross-selling opportunity. In the meantime, is that fintech application, that will definitely be another key tool to help us to enhance the customer experience and also efficiency. Going forward, we also continue to look for M&A and strategic alliance opportunity to further expand. In page 13, from the subsidiaries' business growth perspective, out of our major four subsidiaries, firstly, in Fubon Life, the product focus will be on the investment-linked, interest-sensitive insurance, and also protection products. Following in the investment side, we aim for positive spread performance, and in overseas market in Hyundai Life, that will be our key focus. For the company-wide speaking, we see ESG thematic investment and also initiatives will continue to be critical. In Taipei Fubon Bank, the asset growth will be focused on a few areas, including the SME, the retail loans, and also US dollar assets. From fee business, wealth management continue to be the focus, and we would like to further expand our overseas platform in Greater China. In Fubon Bank China, that's also a critical angle to further expand together with Taipei Fubon Bank and Fubon Bank Hong Kong to expand our banking franchise. For Fubon Insurance, to sustain its leading position, the global trends is actually a key area that we continue to develop and also to utilize the digitalization tools. In Fubon Securities, we focus on the online/offline consolidation and also the Fubon Group advantage. Lastly, in the Fubon Securities, the collaboration with Jih Sun, that will be our key focus to generate the synergy. In page 14, specifically on ESG area, we set the four dimensions of key strategies to focus on, i.e., the decarbonization, digitalization, empowerment, and connection. Specifically on decarbonization in the following page, I will share with you our progress. As you can see from the left-hand side of the chart, the green finance outstanding grew by 12% YOY and reached TWD 2.3 trillion. That bring us closer to our year 2025 goal of TWD 2.45 trillion. Out of that, Fubon Life play a critical part in the low carbon investment. From the product offering, Taipei Fubon Bank play a key role in terms of the offshore wind power financing, the introduction of the sustainability-linked loans, and also we offer the first green loan entirely certified by the third party. While in Fubon Insurance, we place the largest insurer of the green energy project in Taiwan. Next, let's move on to page 17. In Fubon Life, the total premium was down by 17.5%, mainly reflect the paid up of the regular pay products, while the FYP continued to grow, as we can see in page 18. It grew by 4.6%, and mainly driven by the interest sensitive and also the investment-linked policy. In the meantime, the foreign currency policy also grew to reflect the total FYP at 47%. Out of the FYP composition, we can also see our investment-linked now accounts for over 45%. In page 19, out of the FYPE, and also the VNB, the change mainly reflects the product mix change, while we expect the growth should recover in year 2022. On page 20, in terms of FYP and FYPE by channel, we continue to focus on our internal channels, i.e., the agent and also bank assurance. On page 21, we will move on to investment portfolio. Total assets were up by 7.5% in year 2021. The allocation mainly toward the overseas fixed income and also equities in both the domestic and overseas markets. All right. Page 22, out of the overseas fixed income portfolio, the change is mainly on the corporate credit that we increased, starting from the first half of the year, and also we have some reduction in the financial bonds that mainly reflect our redemption of the international bonds, especially from Europe issuers. In page 23, the composition of the investment income in Fubon Life, there we can see the return in both before and after hedge increased, mainly due to the capital gain and hedge cost improvement. All the recurring investment income decreased, and we continue to focus on the enhancement of the recurring income going forward. On page 24, the hedge cost in year 2021 reached 71 basis points. That is inclusive of the 11 basis points of the one-off FX reserve provision. While we see the currency swap and MBS costs combined seeking continue to be on low levels. On the recurring return on before and after hedge basis in your lower left-hand side, it declined year-over-year, mainly reflect the USD appreciation and also realized gains, which we expect to see a more stabilized trend going forward. On page 25, in terms of the cost of liability versus investment return, we generate a widening of a positive spread and stands for the breakeven point versus the recurring return. Also, a positive and widening spread. We see the cost of liability shows continuous improvement. It brings down to 3.29% as of end of 2021. We would like to share with you that the 3.29%, the definition is basically based on the policy interest rate that we offer to policyholders. If we follow the same practice as the market peers based on the policy reserve rate to calculate, it will be around 2.95%, and we will continue to update to you going forward. On page 26, in the investment performance in terms of URCG, we can see it go up to TWD 183 billion as of end of December. The quarter-over-quarter appreciation mainly reflects the equity market's strength. While we see the equity to asset ratio or the shareholder equity is outstanding, which is among a leading position among peers. Page 27. In Fubon Hyundai Life, the overall FYP came down by about 10%, mainly due to a high base effect from the strong sales in year 2020 of saving policies through the bank assurance channel, which is subsequently sold in year 2021. While our overall asset continued to grow at around 8%, in the meantime, our spread continued to be widening. That brings our net profit increase meaningfully in year 2021. Next, let's move on to page 29 regarding Taipei Fubon Bank. The top line revenue grew by 0.9%, mainly driven by the NII, which we can see the asset growth of over 7%, the NII growth of over 7% back of the asset growth. While the net fee income decreased by 8%, that mainly due to the wealth management fee and also the increase in the credit card marketing expenses. Okay, page 30. In terms of the credit composition, the overall credit growth is over 12%, mainly driven by the retail loan growth of 16% and corporate loan of over 6%. Page 31, in the corporate loan, the key driver behind is the NT dollar book. That is over 10%, and SME growth is another key driver. That is close to 20% and also accounts for over half of our corporate banking book. In page 32, the retail credit, we can see the mortgage remains decent as over 15% growth. From the personal unsecured loan, the credit loan growth of over 30% is a key driver. In page 33, the deposit mix and LDR. The deposit in TWD is over 8% growth and foreign currency at over 30% growth. That together bring our overall deposit growth at 16%. Mainly due to our NT dollar's strong growth in NT book, our LDR also increased. While the foreign currency's loan, we are more conservative and therefore, the ratio, as you can see from your lower right-hand side, came down to around 53%. Page 34, in terms of the spread, we can see that in the earlier pages, that the NT dollar loan book is a key driver in our net interest income growth and the focus on our asset quality. The net interest spread, as a result, came down by about 5 basis points and NIM down by about 4 basis points in 2021. Page 35, in terms of asset quality, has been stable across the major business lines, while the provisioning increased on a year-over-year basis, mainly due to the general provisions increase because of the loan growth. Page 36, the credit card business, we can see the active cards and also card spending growth both ranked top one in the market, therefore, the market share continued to increase. While the spending activity is among the highest of the top card issuers. Page 37, in terms of the fee income, it came down by about 8%, mainly due to the decrease in the wealth management fee. While we can see the AUM of the wealth management continue to be steadily growth at a 5% growth. Also on a quarter Q4 alone basis, we also see the growth momentum of about 20% YOY, which remains strong. Page 38, the overseas branches, there we see a decline of revenue and therefore, also a decline in the profit contribution, which we also expect to see recovery in 2022. Page 40, we move on to Fubon Insurance. The direct written premium growth of over 12% and bring our scale to over TWD 60 billion, out of which the personal line accounts for over 70% and increased strongly at 16% YOY. On back of that, the COVID-19-related insurance policy is one of the growth driver and that also bring in a new customer base of over 800,000. That will bring us a potential growth opportunity across the whole holding company. On back of the growth, we see our market share reach 24.6%, and the combined ratio continue to improve to 92%. Page 42, we move on to Fubon Securities. The net profit growth reflects the brokerage fee income increase on back of the market turnover growth and also Fubon's market share gain. In the meantime, we focus on the cooperation with Fubon and Zixuan, we expect to see a further growth momentum across the business lines. Page 44, we move on to Fubon Bank Hong Kong. The loan growth of 9% mainly reflect the corporate sector. The net interest margin also expands. On back of that, we see the provisioning improvement, and therefore the net profit shows a meaningful growth, while asset quality remains stable. Page 45, Fubon Bank China, the loan growth of over 14%, on back of that is mainly from the retail loans. While the net interest margin expand by 39 basis points, however, we see a slower treasury income. The net profit still grow at over 17%, while asset quality also remains stable. Going forward, the focus is to further deepen our collaboration among the Taipei Fubon Bank, Fubon Bank China, and Fubon Bank Hong Kong. This will conclude the presentation today. Thank you. Thanks for the presentation. The very beginning, we would like to introduce management team to answer your questions in this call today. Jerry Harn, President of Fubon Financial Holding, will host the meeting. We also have Sophia Wang, head of accounting and finance, and Rick Lo from economic research in Fubon Financial. Roman Cheng, President of Taipei Fubon Bank, Tsai-Ling Chao and Grace Hsu from finance and actuarial division, and Catherine Pao from investment planning in Fubon Life. Rafael Lin from Fubon Insurance, we also have Yi Hua from Fubon Bank China. We open for the Q&A section. Operator, please take questions from the audience. Thank you. You're welcome. Thank you, speakers. Once again, participants, if you would like to ask a question, you may press star followed by the number one. Please unmute your phone and when prompted, please record your name, for it is required to introduce your question. Again, that is star one to ask a question. To cancel your request, you may press star two. Let us give it a moment while we wait for our questions to queue up. I do see a question on the queue. One moment please, sir. Our first question will be from Jamie Wong. Your line is now open, sir. Please go ahead. Yeah. Hi. Thanks for the presentation. Just a couple of questions from me. The first one is, can I confirm your full year loan growth this year is going to be high single-digit? Not sure I hear correctly, during the Chinese session. Specifically, could you comment on the loan growth target for foreign currency loan and also mortgage? The second question is on the recurring yields at Fubon Life. I think I recall you are seeing a possibility for the recurring yields to improve this year, but the final conclusion is actually recurring yields after hedge will be largely flat to slightly increase. What's the implication behind your expectation on hedging costs this year? I think last year you were targeting 70 to 90 basis points, which is actually the final results are pretty in line. Any guidance for this year on the hedging costs? The third question is on net interest margin. I think you mentioned that you are expecting net interest margin to be similar to the 2021 level this year if no rate hike. When you refer to 2021, are you referring to 1.04% for the whole year or 1% as of fourth quarter? If it is 1.04% for the whole year level, what is the catalyst for you to bring your net interest margin from 1% to 1.04% if no rate hikes? The final question is on Russian bonds. I think you do mention that the terms and conditions, you will only accept the US dollar payments. Should we assume that if the Russian government and also the corporates are paying the interest in rubles, then it will result in actual default or actual delinquent from your perspective? Thanks. Okay. Thank you for your question. The indication for the total loan growth for the bank for 2022 will be 10%-15%. The foreign currency loan will increase by 20%-30%, and unsecured individual lending will also increase by 20%-30%. Mortgage loan, around 10%. The NIM growth catalyst, if no rate hike, will mainly from SME lending and personal unsecured lending. Thanks. Okay. About the hedge cost, as you just mentioned that, yes, I think we also behind our thought that the hedging cost actually is on upward trend. The reason that we did not have a specific number for you today, but however, we think if we manage when the FX, the currency trading, if we do very well, then actually it can cover the hedge cost incremental this year. The reason we just tell you that after H2, it could be also increased as well. Another question about the sovereign, and yes, in terms of our current tenure that we only agree on the US dollars. The further ECL taking will be considered then based on the forward or coming credit downgrade in the future, it will be the key. I don't think it will be a significant impact at this moment. Thanks. Can I confirm that you would also expect hedging costs to be largely flat on the year-over-year basis? It should be increased in terms of regular hedge costs. However, overall, including our current foreign reserve, it will be a buffer for us, even our other trading skill like NDF, we will less use it. Even we will use the profit if the other currency is stronger than TWD 20, it will be the other income to compensate the hedge, regular hedge costs increase or expectation this year. Yeah. Overall speaking, it will be flat or even higher. You're subject to the hedge, how we manage it. I see. Thank you. Thank you. Our next question will be from Steven Lam. Your line is now open, sir. Please go ahead. Hi, can you hear me? Hello? Yes, sir, we can. Okay, great. Thank you. Hi, management. Thanks for the time for the questions. Just want to start on the life side. I think in the Chinese call, we kind of touched on the comment on you expect NPV to resume growth in 2022. Can I just get a better understanding on what is driving that? Is it both the volume and the margin? Sorry, we missed the first part of your question. Hi. Can you hear me now? Sorry. Yeah, we can hear you, but it's not very clear. Go ahead, please. Okay. Yeah, I was asking for life NPV. Supposedly, we're assuming a resumption of growth in 2022. Can I ask the contributing factors, for example, is it from a volume size, or it's from margin or a combination of both? Any particular products segment that you think will be a key driver of that? Based on the first two months of data from FYP, it seems like there is some increase going on. Given the current situation, say, the war in Ukraine and the effect on the investment markets, do you assume or do you expect some sort of a slowdown, say, in terms of your customers' appetite for insurance products in investment-linked policies, for example? That's the life side situation. Investment. On the investment, just quickly, I noticed that within the overseas bonds, I know it's short-term changes in the fourth quarter only, but it looks like there has been an increase in allocation quarter on quarter in Asia and coincidentally in the government bonds. Could you highlight any specific investments that you have made in those areas? The second part for investment would be, of course, there's a lot of volatility right now, and it's great that you have disclosed your Russian exposure as of February. If we sort of just look into March and maybe April, what kind of investment outcome could we expect? If there will be some headwinds, would the headwinds mostly from equity or both equity and fixed income? with the widening of credit spreads have an impact to your profit? I guess lastly, for bank, and thank you for your comment earlier on loans. I'll throw a question on fee income. It seems like you have a very strong conviction on strong fee income, right? Mostly it's coming from maybe mutual funds or insurance policies. With the backdrop right now, with the war, again, and maybe Fed rate hike, how should we think about that in terms of the sales of mutual funds and investment-linked policies? Lastly, for bank, I know there could be some market speculation on your potential acquisition of Citibank, but can we have a general view in terms of your strategic thinking about conducting banking business in China versus Hong Kong over the next few years? Sorry for the many questions, but yeah, that will be all. Thank you. Okay. I will comment then on our China strategy. I think despite all the ups and downs globally, we still view China as one of the most important overseas markets for us. For the colossal size of the markets. There's a lot of Taiwanese, both corporate and individual, are operating in the area. I think this is a natural market, I mean, for our banks to invest in the markets. Therefore, we will continue to explore or pursue suitable opportunities to expand our scale. Okay. That's basically our China strategy. Hong Kong is part of our China strategy. Okay. We have a subsidiary in Hong Kong and a branch in Hong Kong. Both are operating okay. Hong Kong will continue to be an important window for China, and also the hub for the regional market. We will also continue to develop business in Hong Kong as well. Particularly the linkage with Taiwan and China. We are continuing to build the networks for this Greater China business opportunity. Okay, that is a quick and short answer for your last questions. We'll have Roman to answer the question on the bank's operation side. Steve, thanks for your question. Regarding your question about our wealth management fee income momentum, let me share with you that our individual customer place total investment and insurance policy related AUM with the bank around TWD 1 trillion assets, while they also place TWD 1.4 trillion AUM asset in terms of the deposit. Deposit AUM still remain high, which reflect our individual customer at this moment tend to be wait and see. Remain there or even increase their AUM mainly in the form of deposit. Yes, we agree with you that the mutual fund investment, because the volatility in the market. The sales momentum tends to be stable while the insurance policy sales for the first two months, which is January and February this year. The insurance policy sales volume increased by 10%. Our fee revenue from the insurance policy sales increased by 33%. For the whole year, we still remain quite on the 10%-15% increase for the wealth management fee revenues. That still depends on the market momentum and the change of the market volatility. Just add one more minor comment. Taiwan is a very liquid and wealthy market, as far as the wealth management business concerns. Given our experience in the past, if the stock market does not perform, the investment, the fixed income type of business will grow. If the investment business fell, the insurance type of business will grow. I mean, from a slightly longer perspective, it always balanced out each other. If you look at the overall wealth management market in Taiwan, no matter what, it grows, one way or the other. We don't have a crystal ball, whether how high the interest rate will goes up to or how the stock market will perform. What we can say is we build a financial holding company platforms, to cope with the change of the entire sort of investment markets. We have the experience and the product capability and channel to cope with the change of the markets. Okay. Okay, I will hand over to our life guy. Hello, about the VNB growth in 2022. Last year, because of the pandemic, our business was impacted, especially the agency channel. Last year, most our business are coming from our bank insurance channel and mostly our unit-linked policies. This year, we expect the business will gradually go back to normal, and the FYP will start to grow. This year, since the stock market was impacted by the war and become very volatile, we will expect some policyholder will shift from a unit-linked policy to most conservative, like traditional saving product or unit whole interest-sensitive product. Especially, everybody expect the interest will go up. We expect some business will shift from unit-linked to interest-sensitive product. Okay. Thank you. We see you are asking the exposure in Asia and other country increase. We can say that the weight in Asia and other went up. Actually, now we are already moderate diversified through EM sovereign issue over the quarter. Over the past year, as you can see from the chart, our exposure to emerging markets is still decreased. About the incremental in the fourth quarter, actually, we increased not only limited to Asia. We are quite widespread across the region and also country. I say that actually it's very diversified as far the emerging markets. The other question about the impact and the headwinds. In our view right now, despite a recent escalation in Asia and Ukraine turmoil, the impact to the global economic so far, we think is quite limited. Because the Fed still pausing to rate hike in face of continuous inflation pressure. I think it's good for us because we can enjoy the benefit of the further rate hike or even as well as the credit spread widen further, we can enhance our return yield at least the moment. About the stock market, in our view right now, just I mentioned in the Chinese section that with the earnings hit record high in the 2021, Taiwan Stock dividend yield is set to increase significantly this year. In our budget, we also raise a little forecast. Taiwan's company possess a competitive advantage and are highly profitable. We think the loss uncertainty will not have a such impact on the Taiwan's stock market. We remain cautious, optimistic toward the domestic stock market. Have we answered all your questions? Yes, certainly. Thank you. That's very helpful. Thank you. Thank you. Thank you. We no longer have any questions on queue, speakers. Please proceed. Go ahead. Thank you, ladies and gentlemen, for your participation in this call today. Welcome to contact our team if you have further questions. Thank you. Thank you. Thank you for your participation. Please let us know if you have any further, and may contact our IR team. We'll answer your question. That concludes today's conference call. Thank you everyone for participating. You may now disconnect.